3/15/10 Indices
Mike Burk: "The market is about as over bought as it has ever been.
Two significant, although not major, indices have been up for 13 consecutive days, they are:
The NASDAQ 100 (NDX) up 7.3%, its longest run since January 1992.
The S&P mid cap (MID) up 7.3%, the longest run in its slightly less than 20 year history.
The extreme overbought condition is only a short term negative because all of the major indices and indicators are confirming the high.
Volume is what's been missing from this rally...
Nearly everything that matters confirmed last week's highs. The implications of that are if a cycle top were to begin to develop next Monday, a final top would take 4-6 weeks to develop.
I expect the major averages to be higher on Friday March 19 than they were on Friday March 12."
Chinese Premier Wen Jiabao rebuffed calls for the yuan to appreciate and sought assurances
that the U.S. will protect the value of China’s dollar assets.
“I don’t think the yuan is undervalued,” Wen said at a
press conference in Beijing marking the end of China’s annual
parliamentary meetings. Dollar volatility is a “big” concern
and “I’m still worried” about China’s U.S. currency holdings,
he said.
Wen urged America to “take concrete steps to reassure
investors” about the safety of dollar assets, repeating
concerns that he expressed a year ago, sparked by a growing U.S.
fiscal deficit. Treasury Department figures show China’s
holdings of Treasury securities dropped for a second month in
December to $894.8 billion.
Cnooc to Buy 50% of Argentina Crude Exporter Bridas Corp. for $3.1 Billion
“Dick Fuld is going to be bankrupted and he’s going to spend the rest of his life in court fighting legal battles,” observes Dick Bove of Rochedale Securities in
a phone call this afternoon. Bove, who said he’s having the nine
volumes of the examiner’s report printed and bound, added, “There maybe
others forced to do the same.”
John Hussman: "It should be evident that the recent credit
crisis did not emerge as some unpredictable surprise, but was instead
the very ordinary outcome of extraordinary recklessness. Though the
mounting problems in 2005 were utterly ignored by the stock market for
more than two years after this analysis was published, the fact is that
even with the recent rebound, the S&P 500 remains below where it
was in mid-2005. Overvaluation and reckless lending do not always
translate into near-term market weakness, but they invariably haunt
investors in the form of poor long-term returns."
Apparel company Phillips-Van Heusen Corp said it will buy fashion
brand Tommy Hilfiger in a cash and stock deal for about $3 billion in a
bid to boost its presence in markets like Europe and Asia.Tommy Hilfiger is currently owned by private equity firm Apax Partners.
Walmart is planning for another big weekend, preparing all 24-hour
stores to entertain fans shortly after twilight, Friday evening.
"Twilight-themed" giveaways will go to the first 100 in line.
Additionally some stores will have more giveaways to fans that can
prove their "Twilight trivia" knowledge in the run-up to the midnight
release. Among the many offerings in its Twilight Saga Shops, Walmart
will bring out at midnight the "New Moon Ultimate Fan Edition" -- the
only DVD to be released with a "sneak peek" of "The Twilight Saga:
Eclipse." Last year "Twilight" became one of the most pre-ordered DVD
movies in Walmart history, and the most successful DVD release event.
Net foreign purchases of
long-term securities slowed markedly in January, the Treasury
Department said Monday. Total holdings of equities, notes and bonds
increased a net $19.1 billion in January. This is down from $63.3
billion in the previous month. Including short-term securities and bank
lending data, foreigners sold a net $33.4 billion compared with
purchases of $53.6 billion a month earlier. The Treasury Department said Monday that China's holdings dipped by
$5.8 billion to $889 billion in January compared to December. Japan,
the second largest foreign holder of U.S. government debt, also trimmed
its holdings but by a much smaller $300 million to $765.4 billion.
Rob Hanna: "Some readers may recall that I’ve previously labeled December op-ex week “The Most Wonderful Time of the Year”.
Op-ex week in general is normally pretty good. And while December has
been the most reliable month, both March and April have produced more
profits going back to 1984."
US gas heating demand last week was 16.5% below normal vs. forecast of 28.5% below normal.
The retirement nest egg of an entire
generation is stashed away in this small town along the Ohio River:
$2.5 trillion in IOUs from the federal government, payable to the
Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money
in payroll taxes than it paid out in benefits - billions more each
year.
Not anymore. This year, for the first time since the 1980s, when
Congress last overhauled Social Security, the retirement program is
projected to pay out more in benefits than it collects in taxes -
nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad
the federal government already spent that money over the years on
other programs, preferring to borrow from Social Security rather
than foreign creditors. In return, the Treasury Department issued a
stack of IOUs - in the form of Treasury bonds - which are kept in a
nondescript office building just down the street from Parkersburg's
municipal offices.
Now the government will have to borrow even more money, much of
it abroad, to start paying back the IOUs, and the timing couldn't
be worse. The government is projected to post a record $1.5
trillion budget deficit this year, followed by trillion-dollar
deficits for years to come.
But to
illustrate the government's commitment to repaying Social Security,
the Treasury Department has been issuing special bonds that earn
interest for the retirement program. The bonds are unique because
they are actually printed on paper, while other government bonds
exist only in electronic form.
They are stored in a three-ring binder, locked in the bottom
drawer of a white metal filing cabinet in the Parkersburg offices
of Bureau of Public Debt.
The agency, which is part of the Treasury Department, opened
offices in Parkersburg in the 1950s as part of a plan to locate
important government functions away from Washington, D.C., in case
of an attack during the Cold War.
Michael Lynch: "Natural gas consumption has been on the rise for decades. According to
the BP Statistical Review of World Energy which is published each June,
for 2008, natural gas accounted for 24.1% of total world energy
consumption. For the year 1978, total consumption of natural gas was
1,212 million tonnes of oil equivalent. By 2008, that figure had
increased to 2,726 million tonnes. Consumption has more than doubled in
the last 30 years. A major contributor to consumption growth has been
the liquefied natural gas (LNG) sector which has grown from 150 million
cubic meters in 1994 to 380 million in 2008. Just in the last decade,
shale gas has also become a powerful sector of the market, particularly
in the U.S. Besides the substantial price advantage, natural gas now
has two other important factors that drive consumption. Being a clean
burning fuel is one factor. Realization that natural gas can be a
transportation fuel is the other. Worldwide, over 10 million natural
gas vehicles NGV) are on the road. Asia is the high growth region with
Pakistan, Iran, China, India and Bangladesh leading the way.The U.S.
has been a laggard but this is changing fast as the advantages of
natural gas as vehicle fuel become evident."
The NAHB/Wells Fargo housing market index fell two points to 15 in March, reversing a slight pop in February.
Buyer traffic dropped from 12 to 10, the lowest since March 2009. Current sales fell from 17 to 15. Expected sales fell from 27 to 24, the lowest since April 2009.
The Dow Jones Industrial Average, once off 54 points, finished with a 17-point gain to 10,642. The Standard & Poor's 500 Index, ended up a half-point to 1,151, its best close of the year. But the Nasdaq Composite Index was off about 5 points to 2,362.
Monday, March 15, 2010
Sunday, March 14, 2010
Borrowing
3/13/10 Borrowing
Neither recession nor gadget overload shall slow the mania surrounding the introduction of Apple's iPad mobile computer.
On Friday, the first day that buyers could pre-order the device (it
arrives in stores next month), Apple racked up an estimated 91,000
sales in just the first six hours of availability, putting temporarily
to rest the Internet's persistent "iPad fail" meme. Analysts predict
the first-year sales could reach 5 million.
Doug Noland: "I have asserted that the monetary and fiscal policy response to the
2008 bursting of the Wall Street/Mortgage Finance Bubble fostered the
emergence of the Global Government Finance Bubble. Over the past 6
quarters, Treasury debt has jumped $2.531 TN, or 48%, to $7.782 TN.
During the same period, federally-backed GSE-MBS expanded $624bn, or
13%, to $5.383 TN. Combined “federal” finance ballooned an incredible
$3.155 TN in just 18 months. At the same time, the Federal Reserve’s
balance sheet jumped $1.315 TN, or 138%, to $2.267 TN....The market today perceives that essentially no amount of stimulus or
monetization is out of bounds. The Fed is there as a backstop bid for
debt securities, while the Treasury and Federal Reserve have teamed to
establish a floor under GDP/national income. Market malformations now
lie at the heart of the unfolding Bubble and go a long way toward
explaining the market’s complacency when it comes to the simultaneous
contraction in private-sector Credit and explosion of federal debt and
obligations....As we look forward to 2010 data, I would expect a meaningful uptick in
the rate of system Credit expansion. It is my view that, in a more
normal rate/liquidity environment, it will take in the neighborhood of
$2.0 TN of system Credit growth to sustain our current economic
structure. I expect that – until the debt markets say otherwise – the
majority of this will be “federal” Credit. "
Tim W. Wood: "As equities moved into their January highs, a very short-term Dow
theory non-confirmation developed. The Transports made their January
closing high on January 11th at 4,262.86 while the Industrials pressed
higher marking their January closing high 5 trading days later at
10,725.43. On March 9th the Transports closed above their January high
and this time around the Industrials have lagged. As a result, we now
have another Dow theory non-confirmation that spans a couple of months
in duration. It seems that this latter non-confirmation is getting some
attention.... So, my point here is to warn those that are jumping to
conclusions just because one average beat the other one back above its
previous closing high. Now, if the averages begin to breakdown from
this point and it becomes much more apparent that this non-confirmation
is going to stand, then at that time it will serve to give more merit
to any such downturn. Until such time, this non-confirmation should be
kept in perspective. This is only a warning of caution and is not an
automatic death sentence to the market. It is what develops from here
that will serve to validate or invalidate this non-confirmation.Now,
that all being said, the orthodox Dow theory primary bullish trend
change that occurred in conjunction with the advance out of the March
2009 low still remains intact. However, it is very important to
understand that this bullish primary trend change continues to operate
within the context of a much longer-term secular bear market in
accordance with Dow theory phasing."
Last month the U.S. borrowed two dollars out of every three dollars spent! Revenue was $107 billion, expenditures $328 billion.
Neither recession nor gadget overload shall slow the mania surrounding the introduction of Apple's iPad mobile computer.
On Friday, the first day that buyers could pre-order the device (it
arrives in stores next month), Apple racked up an estimated 91,000
sales in just the first six hours of availability, putting temporarily
to rest the Internet's persistent "iPad fail" meme. Analysts predict
the first-year sales could reach 5 million.
Doug Noland: "I have asserted that the monetary and fiscal policy response to the
2008 bursting of the Wall Street/Mortgage Finance Bubble fostered the
emergence of the Global Government Finance Bubble. Over the past 6
quarters, Treasury debt has jumped $2.531 TN, or 48%, to $7.782 TN.
During the same period, federally-backed GSE-MBS expanded $624bn, or
13%, to $5.383 TN. Combined “federal” finance ballooned an incredible
$3.155 TN in just 18 months. At the same time, the Federal Reserve’s
balance sheet jumped $1.315 TN, or 138%, to $2.267 TN....The market today perceives that essentially no amount of stimulus or
monetization is out of bounds. The Fed is there as a backstop bid for
debt securities, while the Treasury and Federal Reserve have teamed to
establish a floor under GDP/national income. Market malformations now
lie at the heart of the unfolding Bubble and go a long way toward
explaining the market’s complacency when it comes to the simultaneous
contraction in private-sector Credit and explosion of federal debt and
obligations....As we look forward to 2010 data, I would expect a meaningful uptick in
the rate of system Credit expansion. It is my view that, in a more
normal rate/liquidity environment, it will take in the neighborhood of
$2.0 TN of system Credit growth to sustain our current economic
structure. I expect that – until the debt markets say otherwise – the
majority of this will be “federal” Credit. "
Tim W. Wood: "As equities moved into their January highs, a very short-term Dow
theory non-confirmation developed. The Transports made their January
closing high on January 11th at 4,262.86 while the Industrials pressed
higher marking their January closing high 5 trading days later at
10,725.43. On March 9th the Transports closed above their January high
and this time around the Industrials have lagged. As a result, we now
have another Dow theory non-confirmation that spans a couple of months
in duration. It seems that this latter non-confirmation is getting some
attention.... So, my point here is to warn those that are jumping to
conclusions just because one average beat the other one back above its
previous closing high. Now, if the averages begin to breakdown from
this point and it becomes much more apparent that this non-confirmation
is going to stand, then at that time it will serve to give more merit
to any such downturn. Until such time, this non-confirmation should be
kept in perspective. This is only a warning of caution and is not an
automatic death sentence to the market. It is what develops from here
that will serve to validate or invalidate this non-confirmation.Now,
that all being said, the orthodox Dow theory primary bullish trend
change that occurred in conjunction with the advance out of the March
2009 low still remains intact. However, it is very important to
understand that this bullish primary trend change continues to operate
within the context of a much longer-term secular bear market in
accordance with Dow theory phasing."
Last month the U.S. borrowed two dollars out of every three dollars spent! Revenue was $107 billion, expenditures $328 billion.
Saturday, March 13, 2010
Lehman's Collapse
3/12/10 Lehman's Collapse
AccuWeather.com, which just issued its early hurricane season forecast, not only believes that the 2010 season will be more active than last year, but the private company sees the potential for an "extreme season" with an above-normal threat all along the Atlantic and Gulf coasts.
In a 2,200-page report made public on Thursday, examiner Anton
Valukas, chairman of law firm Jenner & Block, reported the results
of his more than year-long investigation into the firm's collapse,
which worsened the global financial crisis.
The examiner said
that while some of Lehman's management's decisions "can be questioned
in retrospect" and the firm's valuation procedures for its assets "may
have been wanting," those responsible for the firm had used their
business judgment and were largely not liable for the firm's collapse.
He did not find that Lehman's directors had explicitly violated their fiduciary duty.
However,
in the report the examiner also revealed explosive allegations about a
gimmick, known as "Repo 105," that was used for the sole purpose of
manipulating Lehman's books.
The examiner concluded that the
gimmick, which dated back to 2001 and was used without telling
investors or regulators, gave the appearance that Lehman was reducing
its overall leverage levels in 2008 when in reality it was not,
partially leading to its collapse.
He also said Lehman could have
potential claims against JPMorgan Chase & Co and Citibank in
connection with demands for collateral and certain changes made to
guaranty agreements in Lehman's final days.
Led by a big gain in
electronics, U.S. retail sales increased a seasonally adjusted 0.3% in
February, despite three major snow storms in the East, the Commerce
Department estimated Friday. Sales have risen in four of the past five
months, and were up 3.9% compared with a year earlier. Most categories
of retailers recorded month-over-month increases. Auto and truck sales
were an exception, falling 2% compared with January. Excluding autos
and trucks, retail sales increased 0.8%.
Economists surveyed by MarketWatch were expecting sales to be
unchanged, and for sales excluding autos to rise 0.1%.
Norwegian fertilizer company Yara International ASA (NO:YAR)
said Friday it will not propose an improvement to the cash merger
agreement signed on Feb. 12 by Yara and U.S.-based Terra Industries
Inc. In March, CF Industries Holdings Inc.
made a better offer to buy Terra. The merger agreement between Yara and
Terra may be terminated under certain circumstances, including if Terra
receives a superior proposal, Yara said. If Terra terminates the merger
agreement under such circumstances, Yara will be entitled to a $123
million break-up fee. "Terra would be a perfect fit to Yara and
attractive at our proposed valuation, but we will not increase our
offer that was first accepted by the Terra board," said Jorgen Ole
Haslestad, president and CEO of Yara International ASA. The "U.S.
remains an attractive market for us and we will continue to search for
opportunities to grow our business in the region," Haslestad said.
Chris Vermeulen: "
Natural Gas - Daily Trading Chart
This chart is actually very attractive looking. Even if you do not understand how to read charts I think it's safe to say this one is a no brainer
I will be closely watching for a potential low risk setup in the coming days.
George Ure: "So if you want a fine zoom-in on irrational, try this one on for size: The Dow has run up from last year about this time being 6,627 to yesterday's close around 10,612.
That's a 60.1% increase for stocks and all this teetering on a retail sales increase of a whopping 3.9% increase from year ago retail sales...but that doesn't take into account whatever monetary inflation is.
Say, you don't think it would be a fine time to look at how much more M1 money is sloshing around the system, do you? Lemme see,Feb 2009 was 1.5621 trillion and this year it's 1.7104 trillion...an increase of 9.5% in M1."
The bulk of 2009's drop in credit card debt
instead came because banks were forced to write off loans consumers
failed to pay, according to an analysis of Federal Reserve data.
Loans are typically charged off by banks once they're 180 days past due, under the assumption that the debt won't be repaid.
U.S. companies increasingly exposed to unwanted takeover attention, FT reports.
Swelling ranks of homeowners who are seriously delinquent but haven't
yet lost their homes may soon lead to a new round of foreclosures.
Middle Class Money Angst Still Apparent in Data
By RANDALL W. FORSYTH
Fed's Flow of Funds numbers again show average Americans' net worth gaining more by mortgage defaults than asset appreciation.
U.S. consumer sentiment dipped
in early March, according to media reports on Friday of the
Reuters/University of Michigan index. Amid signs that the labor market
is approaching a trough but remains frail, the consumer sentiment index
declined to 72.5 in March from 73.6 in February. Economists surveyed by
MarketWatch had been expecting the sentiment index to hit 74 in March.
John Dalt: "Natural gas burns clean and is the
preferred fuel for industrial use. Transportation is as simple as
hooking up to the underground line running down most streets in
America. Natural gas is also used for demand load electrical
generation. Natural gas electrical plants are inexpensive and can be
built quickly. At present prices, electricity produced with natural
gas is cheaper than from coal.
Natural gas storage was down 111 billion
cubic feet (Bcf) last week. Storage is below last year's level dropping
6.4% in the last week. Last year storage dropped 4.2% and the five year
average shows a 1.2% build during the same week. Traders seem stuck in
a view that gas will reappear as UNG fell today after the storage
report was released. Your editor owns UNG, or as I like to call it
"ugh."
Repo 105 Accounting Policy document, according to the report:
"Repos generally cannot be treated as sales in the United
>States because lawyers cannot provide a true sale opinion under U.S.
>law."
The closures of Florida's Old Southern Bank and Louisiana's Statewide Bank on Friday brought the tally of bank failures for the year to 30, according to the Federal Deposit Insurance Corp. Centennial Bank of Conway, Ark., will assume all the $319.7 million in deposits of Old Southern Bank, and buy its $315.6 million in assets. Home Bank of Lafayette, La., will assume Statewide's $208.8 million in deposits and buy its $243.2 million in assets.
New York City's Park Avenue Bank became the 28th bank failure of 2010, according to the Federal Deposit Insurance Corp. Valley National Bank of Wayne, N.J., will assume the $494.5 million in deposits and buy the bank's $520.1 million in assets. The cost to FDIC's Deposit Insurance Fund is estimated at $50.7 million.
The Dow Jones Industrial Average rose 12.85 points to 10,624.69, leaving it 0.6% higher from the week-ago close. The S&P 500 Index fell a quarter of 1 point to 1,149.99, a level that translates into a 1% gain on the week, while the Nasdaq Composite Index fell nearly 1 point to finish at 2,367.66, up 1.8% from the week-ago close.
AccuWeather.com, which just issued its early hurricane season forecast, not only believes that the 2010 season will be more active than last year, but the private company sees the potential for an "extreme season" with an above-normal threat all along the Atlantic and Gulf coasts.
In a 2,200-page report made public on Thursday, examiner Anton
Valukas, chairman of law firm Jenner & Block, reported the results
of his more than year-long investigation into the firm's collapse,
which worsened the global financial crisis.
The examiner said
that while some of Lehman's management's decisions "can be questioned
in retrospect" and the firm's valuation procedures for its assets "may
have been wanting," those responsible for the firm had used their
business judgment and were largely not liable for the firm's collapse.
He did not find that Lehman's directors had explicitly violated their fiduciary duty.
However,
in the report the examiner also revealed explosive allegations about a
gimmick, known as "Repo 105," that was used for the sole purpose of
manipulating Lehman's books.
The examiner concluded that the
gimmick, which dated back to 2001 and was used without telling
investors or regulators, gave the appearance that Lehman was reducing
its overall leverage levels in 2008 when in reality it was not,
partially leading to its collapse.
He also said Lehman could have
potential claims against JPMorgan Chase & Co and Citibank in
connection with demands for collateral and certain changes made to
guaranty agreements in Lehman's final days.
Led by a big gain in
electronics, U.S. retail sales increased a seasonally adjusted 0.3% in
February, despite three major snow storms in the East, the Commerce
Department estimated Friday. Sales have risen in four of the past five
months, and were up 3.9% compared with a year earlier. Most categories
of retailers recorded month-over-month increases. Auto and truck sales
were an exception, falling 2% compared with January. Excluding autos
and trucks, retail sales increased 0.8%.
Economists surveyed by MarketWatch were expecting sales to be
unchanged, and for sales excluding autos to rise 0.1%.
Norwegian fertilizer company Yara International ASA (NO:YAR)
said Friday it will not propose an improvement to the cash merger
agreement signed on Feb. 12 by Yara and U.S.-based Terra Industries
Inc. In March, CF Industries Holdings Inc.
made a better offer to buy Terra. The merger agreement between Yara and
Terra may be terminated under certain circumstances, including if Terra
receives a superior proposal, Yara said. If Terra terminates the merger
agreement under such circumstances, Yara will be entitled to a $123
million break-up fee. "Terra would be a perfect fit to Yara and
attractive at our proposed valuation, but we will not increase our
offer that was first accepted by the Terra board," said Jorgen Ole
Haslestad, president and CEO of Yara International ASA. The "U.S.
remains an attractive market for us and we will continue to search for
opportunities to grow our business in the region," Haslestad said.
Chris Vermeulen: "
Natural Gas - Daily Trading Chart
This chart is actually very attractive looking. Even if you do not understand how to read charts I think it's safe to say this one is a no brainer
I will be closely watching for a potential low risk setup in the coming days.
George Ure: "So if you want a fine zoom-in on irrational, try this one on for size: The Dow has run up from last year about this time being 6,627 to yesterday's close around 10,612.
That's a 60.1% increase for stocks and all this teetering on a retail sales increase of a whopping 3.9% increase from year ago retail sales...but that doesn't take into account whatever monetary inflation is.
Say, you don't think it would be a fine time to look at how much more M1 money is sloshing around the system, do you? Lemme see,Feb 2009 was 1.5621 trillion and this year it's 1.7104 trillion...an increase of 9.5% in M1."
The bulk of 2009's drop in credit card debt
instead came because banks were forced to write off loans consumers
failed to pay, according to an analysis of Federal Reserve data.
Loans are typically charged off by banks once they're 180 days past due, under the assumption that the debt won't be repaid.
U.S. companies increasingly exposed to unwanted takeover attention, FT reports.
Swelling ranks of homeowners who are seriously delinquent but haven't
yet lost their homes may soon lead to a new round of foreclosures.
Middle Class Money Angst Still Apparent in Data
By RANDALL W. FORSYTH
Fed's Flow of Funds numbers again show average Americans' net worth gaining more by mortgage defaults than asset appreciation.
U.S. consumer sentiment dipped
in early March, according to media reports on Friday of the
Reuters/University of Michigan index. Amid signs that the labor market
is approaching a trough but remains frail, the consumer sentiment index
declined to 72.5 in March from 73.6 in February. Economists surveyed by
MarketWatch had been expecting the sentiment index to hit 74 in March.
John Dalt: "Natural gas burns clean and is the
preferred fuel for industrial use. Transportation is as simple as
hooking up to the underground line running down most streets in
America. Natural gas is also used for demand load electrical
generation. Natural gas electrical plants are inexpensive and can be
built quickly. At present prices, electricity produced with natural
gas is cheaper than from coal.
Natural gas storage was down 111 billion
cubic feet (Bcf) last week. Storage is below last year's level dropping
6.4% in the last week. Last year storage dropped 4.2% and the five year
average shows a 1.2% build during the same week. Traders seem stuck in
a view that gas will reappear as UNG fell today after the storage
report was released. Your editor owns UNG, or as I like to call it
"ugh."
Repo 105 Accounting Policy document, according to the report:
"Repos generally cannot be treated as sales in the United
>States because lawyers cannot provide a true sale opinion under U.S.
>law."
The closures of Florida's Old Southern Bank and Louisiana's Statewide Bank on Friday brought the tally of bank failures for the year to 30, according to the Federal Deposit Insurance Corp. Centennial Bank of Conway, Ark., will assume all the $319.7 million in deposits of Old Southern Bank, and buy its $315.6 million in assets. Home Bank of Lafayette, La., will assume Statewide's $208.8 million in deposits and buy its $243.2 million in assets.
New York City's Park Avenue Bank became the 28th bank failure of 2010, according to the Federal Deposit Insurance Corp. Valley National Bank of Wayne, N.J., will assume the $494.5 million in deposits and buy the bank's $520.1 million in assets. The cost to FDIC's Deposit Insurance Fund is estimated at $50.7 million.
The Dow Jones Industrial Average rose 12.85 points to 10,624.69, leaving it 0.6% higher from the week-ago close. The S&P 500 Index fell a quarter of 1 point to 1,149.99, a level that translates into a 1% gain on the week, while the Nasdaq Composite Index fell nearly 1 point to finish at 2,367.66, up 1.8% from the week-ago close.
Thursday, March 11, 2010
Debt Accumulation
3/11/10 Debt Accumulation
Tom Walters, president of gas and power marketing for Exxon Mobil Corp., said ever increasing demand will create a "supply gap."
ZeroHedge: "How is it possible that unprecedented debt accumulation can result in ever declining interest rates, and Treasury auctions, such as today's 10 Year reopening, in which the Bid To Cover hit an all time high? One answer: The Federal Reserve, which through complete domination of the entire capital market courtesy of ZIRP and QE has now turned market logic upside down by 180 degrees. In a normal world, the more money you borrow, the greater the associated risk, and the greater the interest payments on this debt. Not in America though. So can we assume that the Fed can forever keep rates on debt at record low levels? No. Which begs the question: what happens when interest rates do finally start going up? "
The number of people applying
for unemployment benefits fell by 6,000 in the latest week, the second
decline in a row. In the week ended March 6, initial claims fell to a
seasonally adjusted 462,000 from a revised 468,000 in the prior week,
the Labor Department reported Thursday. Economists surveyed by
MarketWatch were expecting claims to dip to 460,000. The four-week
average of initial claims rose by 5,000 to 475,500, the highest rate
since November. The number of people continuing to receive regular
unemployment checks climbed 37,000 in the week of Feb. 27 to a
seasonally adjusted 4.56 million. The number of people receiving
extended federal benefits fell 159,000 to 5.53 million, not seasonally
adjusted, in the week of Feb. 20. All told, 11.36 million people were
collecting some type of unemployment benefits in the week of Feb. 20,
not seasonally adjusted.
The U.S. trade deficit narrowed
by 6.6% in January to $37.29 billion, the Commerce Department said
Thursday. The decline in the trade deficit caught economists by
surprise. The consensus forecast of Wall Street economists of a deficit
of $41.0 billion. Both imports and exports fell in January. Imports
fell at a faster pace. The U.S. trade deficit with China narrowed to
$18.30 billion in compared with $20.57 billion in the same month last
year. The government also revised the deficit in December to $39.9
billion from $40.2 billion.
BP Plc has agreed to buy Brazilian, Azeri and Gulf of Mexico fields
from Devon Energy Corp for $7 billion. Devon shares up 2.3 percent to
$73.35 in premarket trading.
Foreclosure filings -- including mortgage default notices, house
auctions and home repossessions by banks -- were reported on 308,524
properties in February, down 2 percent from January, but still up 6
percent from the year-ago month, real estate data firm RealtyTrac said.
"The
6 percent year-over-year increase we saw in February was the smallest
annual increase we've seen since January 2006, when we began
calculating year-over-year increases, but it still marked the 50th
consecutive month of year-over-year increases in foreclosure activity,"
said James J. Saccacio, chief executive officer of RealtyTrac, in a
statement.
The Energy Department on Thursday is expected to report a draw of 108
billion to 112 billion cubic feet of natural gas storage inventories
for the week ended March 5, according to a survey of analysts by
Platts, the energy information arm of McGraw-Hill Cos.If the storage estimate is correct, inventories as of March 5 will
total 1.629 trillion cubic feet, 1.4% above the five-year average and
4% below last year's level.
Natural gas supplies down 111 Bcf -- EIA
China’s inflation reached a 16-
month high, industrial output climbed and new loans exceeded
forecasts, adding to the case for the government to pare back
stimulus measures.
Consumer prices rose 2.7 percent in February from a year
earlier, the National Bureau of Statistics said in Beijing today,
compared with the 2.5 percent median estimate of 29 economists
surveyed by Bloomberg News. Seasonal factors stemming from a
weeklong holiday may have boosted prices. Production rose 20.7
percent in the first two months of 2010, the most in more than
five years.
Premier Wen Jiabao aims to hold full-year inflation around
3 percent after banks flooded the financial system with money to
drive a rebound from the global recession. Gross domestic
product grew 10.7 percent last quarter and central bank Governor Zhou Xiaochuan said March 6 that anti-crisis policies, including
the yuan’s peg to the dollar, must end “sooner or later.”
Facing potential bankruptcy, the board that governs the once
flush-with-cash Kansas City school district is taking the unusual and
contentious step of shuttering almost half its schools.
Chinese property prices were 10.7% higher than a year earlier in February: Govt agency.
Business Week: "Icelandic journalist Iris Erlingsdottir wrote in the Huffington Post,
"While we have been endlessly debating IceSave, our unemployment rate
has continued to climb, the number of insolvencies has continued to
increase, and the number of public services has continued to decrease.
Other scandals of comparable magnitude and abuse of taxpayer money --
but involving only Icelanders -- are being ignored by the Icelandic
media." Change a few nouns -- health care, Citigroup (C, Fortune 500) -- and Erlingsdottir is writing about Washington as Reykjavik.
Just because the crisis has been "managed" doesn't mean it's over. As economist Simon Johnson writes,
"The true fiscal cost arising from our recent financial excesses is the
increase in net government debt held by the private sector. This will
likely amount to around 40 percentage points of GDP." Servicing that
debt will likely affect our promise as a nation, not for years, but decades."
For the second straight year, more hedge funds closed than were
launched in 2009, according to data released today by Hedge Fund
Research. Last year, 1,023 hedge funds closed, compared to 784 that started.
In 2008, 1,471 funds closed while 659 were launched, according to HFR’s
March hedge fund report, which provided analysis of the hedge fund
researcher’s year-end 2009 data.
For the second straight week, just 25% of U.S. voters say the
country is heading in the right direction, according to the latest
Rasmussen Reports national telephone survey. Last week’s finding marked
the lowest level of voter confidence since just before President Obama
took office in January 2009. A
sizable majority (71%) believe the nation is heading down the wrong
track, the highest level of pessimism measured in 14 months.
The Congressional Budget Office is also slated to release its cost assessment of the White House health care bill any day, which could alter the dynamics.
Late Wednesday night, Democrats emerged from a closed door meeting and
said they were close to an agreement on a compromise bill that could
pass both the House and the Senate.
Exxon, the world’s second-largest company, plans to
start 12 new gas and crude projects in the next two years, according to
a presentation the Irving, Texas-based company delivered to analysts
today in New York. Capital spending on wells, floating platforms,
gas-export plants and refineries will rise 3.4 percent this year to $28
billion, according to the presentation.
Chief Executive Officer Rex Tillerson is counting on
a $28.8 billion acquisition of Fort Worth, Texas-based gas producer XTO
Energy Inc. as well as new gas developments from the South Pacific to
the Celtic Sea to counter a 6.7 percent drop in output in the past five
years.
“Everyone would like to find more oil,” says Richard Herbert, an
executive at Talisman Energy, a Canadian firm using a conventional
North Sea oil business to finance heavy investment in North American
shale. “The problem is, where do you go? It’s either in deep water or
in countries that aren’t accessible.” This is forcing big oil companies
to get gassier.
Natural gas for April delivery
was last down 9 cents, or 2%, at $4.47 per million British thermal
units in electronic trade. It earlier rose as high as $4.59 per million
Btus.
The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states dropped by 111 billion cubic feet to about 1.63 trillion cubic feet for the week ended March 5.
The inventory level was 1.2 percent above the five-year average of about 1.61 trillion cubic feet, and 4.2 percent below last year's storage level of about 1.7 trillion cubic feet, according to government data.
Natural gas lost 8.8 cents at $4.471 per 1,000 cubic feet on the New York Mercantile Exchange.
The Dow Jones Industrial Average added 44.51 points, or 0.4%, to 10,611.84. The S&P 500 Index gained 4.63 points, or 0.4%, to 1,150.24. The Nasdaq Composite Index rose 9.51 points, or 0.4%, to 2,368.46.
Tom Walters, president of gas and power marketing for Exxon Mobil Corp., said ever increasing demand will create a "supply gap."
ZeroHedge: "How is it possible that unprecedented debt accumulation can result in ever declining interest rates, and Treasury auctions, such as today's 10 Year reopening, in which the Bid To Cover hit an all time high? One answer: The Federal Reserve, which through complete domination of the entire capital market courtesy of ZIRP and QE has now turned market logic upside down by 180 degrees. In a normal world, the more money you borrow, the greater the associated risk, and the greater the interest payments on this debt. Not in America though. So can we assume that the Fed can forever keep rates on debt at record low levels? No. Which begs the question: what happens when interest rates do finally start going up? "
The number of people applying
for unemployment benefits fell by 6,000 in the latest week, the second
decline in a row. In the week ended March 6, initial claims fell to a
seasonally adjusted 462,000 from a revised 468,000 in the prior week,
the Labor Department reported Thursday. Economists surveyed by
MarketWatch were expecting claims to dip to 460,000. The four-week
average of initial claims rose by 5,000 to 475,500, the highest rate
since November. The number of people continuing to receive regular
unemployment checks climbed 37,000 in the week of Feb. 27 to a
seasonally adjusted 4.56 million. The number of people receiving
extended federal benefits fell 159,000 to 5.53 million, not seasonally
adjusted, in the week of Feb. 20. All told, 11.36 million people were
collecting some type of unemployment benefits in the week of Feb. 20,
not seasonally adjusted.
The U.S. trade deficit narrowed
by 6.6% in January to $37.29 billion, the Commerce Department said
Thursday. The decline in the trade deficit caught economists by
surprise. The consensus forecast of Wall Street economists of a deficit
of $41.0 billion. Both imports and exports fell in January. Imports
fell at a faster pace. The U.S. trade deficit with China narrowed to
$18.30 billion in compared with $20.57 billion in the same month last
year. The government also revised the deficit in December to $39.9
billion from $40.2 billion.
BP Plc has agreed to buy Brazilian, Azeri and Gulf of Mexico fields
from Devon Energy Corp for $7 billion. Devon shares up 2.3 percent to
$73.35 in premarket trading.
Foreclosure filings -- including mortgage default notices, house
auctions and home repossessions by banks -- were reported on 308,524
properties in February, down 2 percent from January, but still up 6
percent from the year-ago month, real estate data firm RealtyTrac said.
"The
6 percent year-over-year increase we saw in February was the smallest
annual increase we've seen since January 2006, when we began
calculating year-over-year increases, but it still marked the 50th
consecutive month of year-over-year increases in foreclosure activity,"
said James J. Saccacio, chief executive officer of RealtyTrac, in a
statement.
The Energy Department on Thursday is expected to report a draw of 108
billion to 112 billion cubic feet of natural gas storage inventories
for the week ended March 5, according to a survey of analysts by
Platts, the energy information arm of McGraw-Hill Cos.If the storage estimate is correct, inventories as of March 5 will
total 1.629 trillion cubic feet, 1.4% above the five-year average and
4% below last year's level.
Natural gas supplies down 111 Bcf -- EIA
China’s inflation reached a 16-
month high, industrial output climbed and new loans exceeded
forecasts, adding to the case for the government to pare back
stimulus measures.
Consumer prices rose 2.7 percent in February from a year
earlier, the National Bureau of Statistics said in Beijing today,
compared with the 2.5 percent median estimate of 29 economists
surveyed by Bloomberg News. Seasonal factors stemming from a
weeklong holiday may have boosted prices. Production rose 20.7
percent in the first two months of 2010, the most in more than
five years.
Premier Wen Jiabao aims to hold full-year inflation around
3 percent after banks flooded the financial system with money to
drive a rebound from the global recession. Gross domestic
product grew 10.7 percent last quarter and central bank Governor Zhou Xiaochuan said March 6 that anti-crisis policies, including
the yuan’s peg to the dollar, must end “sooner or later.”
Facing potential bankruptcy, the board that governs the once
flush-with-cash Kansas City school district is taking the unusual and
contentious step of shuttering almost half its schools.
Chinese property prices were 10.7% higher than a year earlier in February: Govt agency.
Business Week: "Icelandic journalist Iris Erlingsdottir wrote in the Huffington Post,
"While we have been endlessly debating IceSave, our unemployment rate
has continued to climb, the number of insolvencies has continued to
increase, and the number of public services has continued to decrease.
Other scandals of comparable magnitude and abuse of taxpayer money --
but involving only Icelanders -- are being ignored by the Icelandic
media." Change a few nouns -- health care, Citigroup (C, Fortune 500) -- and Erlingsdottir is writing about Washington as Reykjavik.
Just because the crisis has been "managed" doesn't mean it's over. As economist Simon Johnson writes,
"The true fiscal cost arising from our recent financial excesses is the
increase in net government debt held by the private sector. This will
likely amount to around 40 percentage points of GDP." Servicing that
debt will likely affect our promise as a nation, not for years, but decades."
For the second straight year, more hedge funds closed than were
launched in 2009, according to data released today by Hedge Fund
Research. Last year, 1,023 hedge funds closed, compared to 784 that started.
In 2008, 1,471 funds closed while 659 were launched, according to HFR’s
March hedge fund report, which provided analysis of the hedge fund
researcher’s year-end 2009 data.
For the second straight week, just 25% of U.S. voters say the
country is heading in the right direction, according to the latest
Rasmussen Reports national telephone survey. Last week’s finding marked
the lowest level of voter confidence since just before President Obama
took office in January 2009. A
sizable majority (71%) believe the nation is heading down the wrong
track, the highest level of pessimism measured in 14 months.
The Congressional Budget Office is also slated to release its cost assessment of the White House health care bill any day, which could alter the dynamics.
Late Wednesday night, Democrats emerged from a closed door meeting and
said they were close to an agreement on a compromise bill that could
pass both the House and the Senate.
Exxon, the world’s second-largest company, plans to
start 12 new gas and crude projects in the next two years, according to
a presentation the Irving, Texas-based company delivered to analysts
today in New York. Capital spending on wells, floating platforms,
gas-export plants and refineries will rise 3.4 percent this year to $28
billion, according to the presentation.
Chief Executive Officer Rex Tillerson is counting on
a $28.8 billion acquisition of Fort Worth, Texas-based gas producer XTO
Energy Inc. as well as new gas developments from the South Pacific to
the Celtic Sea to counter a 6.7 percent drop in output in the past five
years.
“Everyone would like to find more oil,” says Richard Herbert, an
executive at Talisman Energy, a Canadian firm using a conventional
North Sea oil business to finance heavy investment in North American
shale. “The problem is, where do you go? It’s either in deep water or
in countries that aren’t accessible.” This is forcing big oil companies
to get gassier.
Natural gas for April delivery
was last down 9 cents, or 2%, at $4.47 per million British thermal
units in electronic trade. It earlier rose as high as $4.59 per million
Btus.
The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states dropped by 111 billion cubic feet to about 1.63 trillion cubic feet for the week ended March 5.
The inventory level was 1.2 percent above the five-year average of about 1.61 trillion cubic feet, and 4.2 percent below last year's storage level of about 1.7 trillion cubic feet, according to government data.
Natural gas lost 8.8 cents at $4.471 per 1,000 cubic feet on the New York Mercantile Exchange.
The Dow Jones Industrial Average added 44.51 points, or 0.4%, to 10,611.84. The S&P 500 Index gained 4.63 points, or 0.4%, to 1,150.24. The Nasdaq Composite Index rose 9.51 points, or 0.4%, to 2,368.46.
Wednesday, March 10, 2010
OPEC
3/10/10 OPEC
The Organization of the
Petroleum Exporting Countries said Wednesday it raised its forecast for
global oil demand this year. In its monthly oil report, OPEC said it
now expects world oil demand to grow by 900,000 barrels a day in 2010.
This represents an upward revision of 100,000 barrels a day from the
previous assessment.
The survey of over 70 economists suggests U.S. gross domestic
product will grow at a 2.6 percent annualized rate between January and
March, less than half the pace of the fourth quarter of 2009, when it
expanded at a 5.9 percent rate.
For all of 2009, the world's
biggest economy contracted by 2.4 percent, but the poll predicts it
will grow by 2.9 percent in 2010 on an annual basis.
The Oil Drum: "If employment is inversely proportional to oil prices (it is), and oil
prices are only going to trend up…then employment by necessity is going
down. Because oil is so fundamental to our economy, oil price increases
ripple through the entire economy."
Poor economic data in the US coupled with Europe's debt crisis are
contributing to an increase of the risk of the US economy going through
a double-dip recession, Nouriel Roubini, who predicted the 2007
financial crisis, wrote in a research paper.
China's trade surplus with the United
States in the January-February period shrank by 27 percent to $20.9
billion. The gap with the 27-nation European Union, China's biggest
trading partner, extended by 34 percent to $22.3 billion.
However,
China' s commerce minister, Chen Deming, cautioned Saturday that
despite stronger recent trade, it will be two to three years before
China's exports return to pre-crisis levels.
In 2007, the number of people employed in the US is listed at 146,047,000. In the latest month, the number of people working was 138,641,000. You do the math.
Iron ore shipments from Australia’s Port Hedland, the world’s largest
bulk exporting port, dropped to 13.05 million metric tons in February
from 15.1 million tons in January. Shipments
to China fell to 8.7 million tons, the Port Hedland Authority said on
its Web-site, compared with 11 million tons in the previous month.
Diana Olick: "The problem is prices. Home prices have fallen so far in the hardest
hit areas, the areas where the bulk of the troubled loans are, that
banks would have to write down principal 30 to 50 percent to put
borrowers back in the green. Accounting rules require that banks write
down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they'd all be insolvent. "
Japan's Jan machinery orders fall 3.7%; business spending revival may be slow.
Manufacturing in U.K. unexpectedly plunges as it sees `fragile' economy.
John Dizard: " Policy should be based on material reality, which is that
maintaining, let alone increasing, US use of natural gas will require a
very substantial increase in prices over the present spot and futures
levels. On that point, the shale gas industry people and I are in
agreement. One set of data points might turn out to be revealing. Look
up the “balancing item” in the “natural gas navigator” on the US Energy
Information Administration’s website. This is how the difference
between reported gas storage, and the net of production and
consumption, is explained. For the last report, in December, the
“item”, or unexplained error, is about 100bn cu ft. That is a whole
bunch of gas, as they say out there.
The “item” has been
increasing steadily from the middle of last year. So production is
likely lower, or consumption much higher, than the EIA has been able to
count. Given that production is calculated from a sample of producers
that is probably overweighted to large companies with access to capital
markets, it is probably the case that production is lower than
Washington, or most of Wall Street, thinks. Smaller gas producers,
which are probably under-sampled, will have had their access to debt or
equity proportionately much more restricted than was the case in the
boom years.
If that analysis is correct, the US will run short of low priced gas sooner rather than later.
To
their credit, gas prophets such as Aubrey McClendon, chief executive of
Chesapeake Energy Corp, have been saying that gas at $5 per thousand
cubic foot is not sustainable. In their laudable enthusiasm for their
business, though, they may have understated just how unsustainable the
price is.
Ben Dell, of Bernstein Research in New York, who has,
so to speak, done some of the deepest drilling into the shale gas
industry numbers, believes that the full cost of finding, developing, and operating shale gas wells, and paying an average return on capital to investors, requires a spot gas price of $7.50 to $8 a thousand cubic foot.
As Mr Dell points out, the horizontal drilling rigs that are needed
to drill shale gas wells are in relatively short supply. “We think
there will be a 15 per cent to 20 per cent increase in costs from last
year to this year. That includes the costs of drilling and fracking
[hydraulic fracturing of rock layers holding gas].”
Furthermore,
the producers partially insulated themselves from gas price weakness
over the past year with hedges that are gradually running off. New
hedges have to be put on at lower prices. So revenues will be declining
while costs are increasing. Shale gas is not magic. Production
costs are high, and probably underestimated. An even more gas-dependent
policy will accelerate the coming price rise. For the producers’ sake,
it better."
"Gas will come full circle and we will need to prepare for a
tight market," he said.
Eni is addressing that future need in part by diversifying gas
transit routes, particularly after a dispute between Ukraine and
Russia caused interruptions serious enough to bring Eastern Europe
"to its knees," he said. Eni is the biggest western buyer of
Russian gas.
Eni is a partner of Russian gas giant Gazprom in the
South Stream gas pipeline project, which will transport up to 6
billion cubic feet per day of Russian and central Asian gas under
the Black Sea to the European Union.
Total wholesale inventories slipped 0.2 percent, smaller than the
revised 1 percent drop in December, the department said. December
inventories were previously reported as having dropped 0.8 percent.
The U.S. faces an extended recovery
from the recession even after the government infusion of cash
into stimulus programs and the banking system, said Andrew
Michael Spence, a Nobel laureate in economics.
“Right now the expectations are that somehow the
government can magically restore the economy to balance,”
Spence said in an interview today on Bloomberg Radio. “A more
realistic view is it’s going to take several years.”
The number of openings in January rose about 7.6 percent, to 2.7
million, compared with December, the Labor Department said. That's the
highest total since February 2009.
The report is a sign that the
economy is soon likely to generate consistent job gains. Some
economists expect employers to add up to a net 300,000 jobs in March,
though as many as a third of them could be temporary hiring for the
2010 Census. There are now about 5.5 unemployed people, on average, competing for
each opening. That's still far more than the 1.7 people who were
competing for each opening when the recession began. But it's down from
just over 6 people per opening in December 2009.
Job openings in information technology are also rising. Scot
Melland, CEO of Dice Holdings, said postings on its Dice.com job board
for IT professionals rose 7 percent as of March 1 compared with a year
ago.
"We're not seeing a huge rebound," Melland said. "What we're seeing is a nice steady increase in recruiting activity."
A bill that would extend unemployment benefits and health-care subsidies passed the Senate on Wednesday, and now moves on to the House. The vote was 62-36. The bill would extend through the end of the year jobless benefits for the long-term unemployed. It would also extend through Dec. 31 a 65% subsidy of health-insurance premiums for jobless workers.
The U.S. government recorded a budget deficit of $221 billion in February, the Treasury Department reported Wednesday, even as receipts posted a big increase for the month. Receipts totaled $107.5 billion in February, a 23% increase over last February's total, and marking the first monthly year-over-year increase since April 2008. Outlays were $328 billion in February, up 17% year over year. February was the 17th consecutive month that the government recorded a deficit.
The Dow Jones industrial average edged up 2.95 points, or 0.03 percent, to end at 10,567.33. The Standard & Poor's 500 Index rose 5.16 points, or 0.45 percent, to 1,145.61. The Nasdaq Composite Index gained 18.27 points, or 0.78 percent, to 2,358.95.
The benchmark S&P 500 Index extended its year-long advance and is now up 69.3 percent from its 12-year closing low hit a year ago on March 9.
---
The Organization of the
Petroleum Exporting Countries said Wednesday it raised its forecast for
global oil demand this year. In its monthly oil report, OPEC said it
now expects world oil demand to grow by 900,000 barrels a day in 2010.
This represents an upward revision of 100,000 barrels a day from the
previous assessment.
The survey of over 70 economists suggests U.S. gross domestic
product will grow at a 2.6 percent annualized rate between January and
March, less than half the pace of the fourth quarter of 2009, when it
expanded at a 5.9 percent rate.
For all of 2009, the world's
biggest economy contracted by 2.4 percent, but the poll predicts it
will grow by 2.9 percent in 2010 on an annual basis.
The Oil Drum: "If employment is inversely proportional to oil prices (it is), and oil
prices are only going to trend up…then employment by necessity is going
down. Because oil is so fundamental to our economy, oil price increases
ripple through the entire economy."
Poor economic data in the US coupled with Europe's debt crisis are
contributing to an increase of the risk of the US economy going through
a double-dip recession, Nouriel Roubini, who predicted the 2007
financial crisis, wrote in a research paper.
China's trade surplus with the United
States in the January-February period shrank by 27 percent to $20.9
billion. The gap with the 27-nation European Union, China's biggest
trading partner, extended by 34 percent to $22.3 billion.
However,
China' s commerce minister, Chen Deming, cautioned Saturday that
despite stronger recent trade, it will be two to three years before
China's exports return to pre-crisis levels.
In 2007, the number of people employed in the US is listed at 146,047,000. In the latest month, the number of people working was 138,641,000. You do the math.
Iron ore shipments from Australia’s Port Hedland, the world’s largest
bulk exporting port, dropped to 13.05 million metric tons in February
from 15.1 million tons in January. Shipments
to China fell to 8.7 million tons, the Port Hedland Authority said on
its Web-site, compared with 11 million tons in the previous month.
Diana Olick: "The problem is prices. Home prices have fallen so far in the hardest
hit areas, the areas where the bulk of the troubled loans are, that
banks would have to write down principal 30 to 50 percent to put
borrowers back in the green. Accounting rules require that banks write
down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they'd all be insolvent. "
Japan's Jan machinery orders fall 3.7%; business spending revival may be slow.
Manufacturing in U.K. unexpectedly plunges as it sees `fragile' economy.
John Dizard: " Policy should be based on material reality, which is that
maintaining, let alone increasing, US use of natural gas will require a
very substantial increase in prices over the present spot and futures
levels. On that point, the shale gas industry people and I are in
agreement. One set of data points might turn out to be revealing. Look
up the “balancing item” in the “natural gas navigator” on the US Energy
Information Administration’s website. This is how the difference
between reported gas storage, and the net of production and
consumption, is explained. For the last report, in December, the
“item”, or unexplained error, is about 100bn cu ft. That is a whole
bunch of gas, as they say out there.
The “item” has been
increasing steadily from the middle of last year. So production is
likely lower, or consumption much higher, than the EIA has been able to
count. Given that production is calculated from a sample of producers
that is probably overweighted to large companies with access to capital
markets, it is probably the case that production is lower than
Washington, or most of Wall Street, thinks. Smaller gas producers,
which are probably under-sampled, will have had their access to debt or
equity proportionately much more restricted than was the case in the
boom years.
If that analysis is correct, the US will run short of low priced gas sooner rather than later.
To
their credit, gas prophets such as Aubrey McClendon, chief executive of
Chesapeake Energy Corp, have been saying that gas at $5 per thousand
cubic foot is not sustainable. In their laudable enthusiasm for their
business, though, they may have understated just how unsustainable the
price is.
Ben Dell, of Bernstein Research in New York, who has,
so to speak, done some of the deepest drilling into the shale gas
industry numbers, believes that the full cost of finding, developing, and operating shale gas wells, and paying an average return on capital to investors, requires a spot gas price of $7.50 to $8 a thousand cubic foot.
As Mr Dell points out, the horizontal drilling rigs that are needed
to drill shale gas wells are in relatively short supply. “We think
there will be a 15 per cent to 20 per cent increase in costs from last
year to this year. That includes the costs of drilling and fracking
[hydraulic fracturing of rock layers holding gas].”
Furthermore,
the producers partially insulated themselves from gas price weakness
over the past year with hedges that are gradually running off. New
hedges have to be put on at lower prices. So revenues will be declining
while costs are increasing. Shale gas is not magic. Production
costs are high, and probably underestimated. An even more gas-dependent
policy will accelerate the coming price rise. For the producers’ sake,
it better."
"Gas will come full circle and we will need to prepare for a
tight market," he said.
Eni is addressing that future need in part by diversifying gas
transit routes, particularly after a dispute between Ukraine and
Russia caused interruptions serious enough to bring Eastern Europe
"to its knees," he said. Eni is the biggest western buyer of
Russian gas.
Eni is a partner of Russian gas giant Gazprom in the
South Stream gas pipeline project, which will transport up to 6
billion cubic feet per day of Russian and central Asian gas under
the Black Sea to the European Union.
Total wholesale inventories slipped 0.2 percent, smaller than the
revised 1 percent drop in December, the department said. December
inventories were previously reported as having dropped 0.8 percent.
The U.S. faces an extended recovery
from the recession even after the government infusion of cash
into stimulus programs and the banking system, said Andrew
Michael Spence, a Nobel laureate in economics.
“Right now the expectations are that somehow the
government can magically restore the economy to balance,”
Spence said in an interview today on Bloomberg Radio. “A more
realistic view is it’s going to take several years.”
The number of openings in January rose about 7.6 percent, to 2.7
million, compared with December, the Labor Department said. That's the
highest total since February 2009.
The report is a sign that the
economy is soon likely to generate consistent job gains. Some
economists expect employers to add up to a net 300,000 jobs in March,
though as many as a third of them could be temporary hiring for the
2010 Census. There are now about 5.5 unemployed people, on average, competing for
each opening. That's still far more than the 1.7 people who were
competing for each opening when the recession began. But it's down from
just over 6 people per opening in December 2009.
Job openings in information technology are also rising. Scot
Melland, CEO of Dice Holdings, said postings on its Dice.com job board
for IT professionals rose 7 percent as of March 1 compared with a year
ago.
"We're not seeing a huge rebound," Melland said. "What we're seeing is a nice steady increase in recruiting activity."
A bill that would extend unemployment benefits and health-care subsidies passed the Senate on Wednesday, and now moves on to the House. The vote was 62-36. The bill would extend through the end of the year jobless benefits for the long-term unemployed. It would also extend through Dec. 31 a 65% subsidy of health-insurance premiums for jobless workers.
The U.S. government recorded a budget deficit of $221 billion in February, the Treasury Department reported Wednesday, even as receipts posted a big increase for the month. Receipts totaled $107.5 billion in February, a 23% increase over last February's total, and marking the first monthly year-over-year increase since April 2008. Outlays were $328 billion in February, up 17% year over year. February was the 17th consecutive month that the government recorded a deficit.
The Dow Jones industrial average edged up 2.95 points, or 0.03 percent, to end at 10,567.33. The Standard & Poor's 500 Index rose 5.16 points, or 0.45 percent, to 1,145.61. The Nasdaq Composite Index gained 18.27 points, or 0.78 percent, to 2,358.95.
The benchmark S&P 500 Index extended its year-long advance and is now up 69.3 percent from its 12-year closing low hit a year ago on March 9.
---
Tuesday, March 09, 2010
One Year Anniversary
3/9/10 One Year Anniversary
An index measuring small-business optimism fell 1.3 points to 88.0 in February,
erasing January's gain, according to a monthly survey released Tuesday
by the National Association of Independent businesses. The index is far
below its average, but has gained from 81.0 in March 2009, the
second-lowest reading ever. Small businesses were cutting workers and
prices in an effort to increase sales, the survey said. Fewer
businesses reported problems getting credit, with 9% of firms saying
they couldn't find the credit they need.
Chevron Corp. said it plans to cut 2,000 jobs this year as part of an effort to save
costs in its refining business. First-quarter 2010 charges for
severance are currently estimated to be in the range of $150 million to
$200 million on an after-tax basis. Staff reductions will occur through
2011. Chevron plans to solicit bids for operations in Europe, including
its Pembroke refinery, the Caribbean and select Central America
markets. It's also reviewing operations in Hawaii and Africa, outside
of South Africa.
The 12 year low was set one year ago this week.
George Ure: " The release of the Wizard of Oz came just about 10-years after the 1929 market peak...and here we are, just about smack-dab at the 10-year mark after the Year 2000 market peak and what comes out? Alive in Wonderland.
Not that history replays or repeats precisely, but it does rhyme often enough that a serious student of the market might be asking "Gee, where are things in the great blender of time?"
The Oil Drum: "To the Mexican people, one of the great achievements in their history
was the day their president kicked out foreign oil companies in 1938.
Thus, they celebrate March 18 as a civic holiday.
Yet today, that 72-year-old act has put Mexico in a straitjacket,
one that threatens both the welfare of the country and the oil supply
of the United States.
The national oil company created after the 1938 seizure, Pemex,
is entering a period of turmoil. Oil production in its aging fields is
sagging so rapidly that Mexico, long one of the world’s top
oil-exporting countries, could begin importing oil within the decade.
Mexico is among the three leading foreign suppliers of oil to
the United States, along with Canada and Saudi Arabia. Mexican barrels
can be replaced, but at a cost. It means greater American dependence on
unfriendly countries like Venezuela, unstable countries like Nigeria
and Iraq, and on the oil sands of Canada, an environmentally
destructive form of oil production.
“As you lose Mexican oil, you lose a critical supply,” said
Jeremy M. Martin, director of the energy program at the Institute of
the Americas at the University of California, San Diego. “It’s not just
about energy security but national security, because our neighbor’s
economic and political well-being is largely linked to its capacity to
produce and export oil.”
U.S. employers have toned down their hiring expectations mildly, according to Manpower's Q2 Employment Outlook (.pdf). A net 5% of employers expect to hire in Q2, down from 6% last
quarter, but an improvement from the net -2% reading a year ago.
Bloomberg Reports Roubini Says Cautious China to Limit Yuan Gain to 4%
A sovereign default within the euro zone is possible, Fitch Ratings said on Tuesday.
Brian
Coulton, managing director and head of Europe, Middle East and Africa
sovereigns at Fitch Ratings, said it was possible to have a sovereign
default within the euro currency bloc, but that would not necessarily
mean the break up of the euro zone.
“An index measuring wholesale prices of lentils, rice, vegetables and
other food articles compiled by the commerce ministry rose 17.87
percent in the week ended Feb. 20 from a year earlier, following a
17.58 percent gain the previous week, according to a statement in New
Delhi today.
Another sign of the shifting dynamics in the natural gas world emerged
Monday with the $3.4 billion US joint bid by PetroChina and Royal Dutch
Shell for Australia's Arrow Energy. The prize? Billions of cubic feet
of coal bed methane to be produced, converted to liquefied natural gas
and shipped to Asia.
The Dow Jones Industrial Average rose 11.86 points, or 0.1%, to end at 10,564.38. Up nearly 69% from the year-ago close, the S&P 500 added 1.95 points, or 0.2%, to end at 1,140.45. The Nasdaq rose 8.47 points, or 0.4%, to 2,340.68.
An index measuring small-business optimism fell 1.3 points to 88.0 in February,
erasing January's gain, according to a monthly survey released Tuesday
by the National Association of Independent businesses. The index is far
below its average, but has gained from 81.0 in March 2009, the
second-lowest reading ever. Small businesses were cutting workers and
prices in an effort to increase sales, the survey said. Fewer
businesses reported problems getting credit, with 9% of firms saying
they couldn't find the credit they need.
Chevron Corp. said it plans to cut 2,000 jobs this year as part of an effort to save
costs in its refining business. First-quarter 2010 charges for
severance are currently estimated to be in the range of $150 million to
$200 million on an after-tax basis. Staff reductions will occur through
2011. Chevron plans to solicit bids for operations in Europe, including
its Pembroke refinery, the Caribbean and select Central America
markets. It's also reviewing operations in Hawaii and Africa, outside
of South Africa.
The 12 year low was set one year ago this week.
George Ure: " The release of the Wizard of Oz came just about 10-years after the 1929 market peak...and here we are, just about smack-dab at the 10-year mark after the Year 2000 market peak and what comes out? Alive in Wonderland.
Not that history replays or repeats precisely, but it does rhyme often enough that a serious student of the market might be asking "Gee, where are things in the great blender of time?"
The Oil Drum: "To the Mexican people, one of the great achievements in their history
was the day their president kicked out foreign oil companies in 1938.
Thus, they celebrate March 18 as a civic holiday.
Yet today, that 72-year-old act has put Mexico in a straitjacket,
one that threatens both the welfare of the country and the oil supply
of the United States.
The national oil company created after the 1938 seizure, Pemex,
is entering a period of turmoil. Oil production in its aging fields is
sagging so rapidly that Mexico, long one of the world’s top
oil-exporting countries, could begin importing oil within the decade.
Mexico is among the three leading foreign suppliers of oil to
the United States, along with Canada and Saudi Arabia. Mexican barrels
can be replaced, but at a cost. It means greater American dependence on
unfriendly countries like Venezuela, unstable countries like Nigeria
and Iraq, and on the oil sands of Canada, an environmentally
destructive form of oil production.
“As you lose Mexican oil, you lose a critical supply,” said
Jeremy M. Martin, director of the energy program at the Institute of
the Americas at the University of California, San Diego. “It’s not just
about energy security but national security, because our neighbor’s
economic and political well-being is largely linked to its capacity to
produce and export oil.”
U.S. employers have toned down their hiring expectations mildly, according to Manpower's Q2 Employment Outlook (.pdf). A net 5% of employers expect to hire in Q2, down from 6% last
quarter, but an improvement from the net -2% reading a year ago.
Bloomberg Reports Roubini Says Cautious China to Limit Yuan Gain to 4%
A sovereign default within the euro zone is possible, Fitch Ratings said on Tuesday.
Brian
Coulton, managing director and head of Europe, Middle East and Africa
sovereigns at Fitch Ratings, said it was possible to have a sovereign
default within the euro currency bloc, but that would not necessarily
mean the break up of the euro zone.
“An index measuring wholesale prices of lentils, rice, vegetables and
other food articles compiled by the commerce ministry rose 17.87
percent in the week ended Feb. 20 from a year earlier, following a
17.58 percent gain the previous week, according to a statement in New
Delhi today.
Another sign of the shifting dynamics in the natural gas world emerged
Monday with the $3.4 billion US joint bid by PetroChina and Royal Dutch
Shell for Australia's Arrow Energy. The prize? Billions of cubic feet
of coal bed methane to be produced, converted to liquefied natural gas
and shipped to Asia.
The Dow Jones Industrial Average rose 11.86 points, or 0.1%, to end at 10,564.38. Up nearly 69% from the year-ago close, the S&P 500 added 1.95 points, or 0.2%, to end at 1,140.45. The Nasdaq rose 8.47 points, or 0.4%, to 2,340.68.
Monday, March 08, 2010
Hussman
3/8/10 Hussman
McDonald's Corp.
said Monday that its February comparable sales, or sales at all
restaurants open at least 13 months, rose 4.8%. McDonald's was expected
to see sales gains of 2.1%, according to the average estimate of two
analysts surveyed by FactSet. Same-store sales rose 0.6% in the U.S.,
increased 5.4% in Europe and surged 10.5% in Asia, Middle East and
Africa. Systemwide sales rose 11.2%, or 6.4% excluding the impact of
currency translations.
MetLife Inc. said that it has signed a
definitive agreement to acquire American Life Insurance Co. from American International Group
for around $15.5 billion. The consideration will consist of $6.8
billion in cash and approximately $8.7 billion in MetLife equity
securities, subject to closing adjustments. MetLife expects the cash
portion of the purchase price to be financed through issuing senior
debt and common stock as well as cash on hand. MetLife expects the
transaction to increase its 2011 operating earnings per share by
approximately 45 cents to 55 cents a share. The operating earnings per
share estimate does not include transition and other one-time expenses
estimated at 12 cents a share.
China should step up efforts to build up state reserves of crude oil
and refined fuel to enhance the country's energy security, state media
cited lawmakers as saying.
National crude demand would exceed 550 million tonnes by 2020,
compared with about 400 million tonnes in 2009, National People's
Congress member Chen Geng told the China Energy News in an interview
published on Monday.
John Hussman: "Although the 2010
peak in the Alt-A / Option-ARM reset schedule doesn't occur until July,
with a much larger peak in mid-2011, a small initial round of resets is
already in progress, having started about November of last year. I
would expect that if we are indeed at risk of a second wave of mortgage
defaults and credit strains, it will show up first as a surprising jump
in 30-day mortgage delinquencies in the data we see over the next 2-4
months. I do not expect quarters upon quarters of uncertainty. It may
take longer to observe the full effect of continued mortgage
delinquencies and foreclosures, but we are at about the point where the
data would depart from the market's "all clear" expectations if credit
pressures are likely to resume with force."
Mike Burk: "Last weeks run up was a little too much of a good thing and the market is overbought. However, if you are going to have a strong rally the action last week shows how it should be done with the secondaries leading, new highs expanding and no new lows.
I expect the major averages to be higher on Friday March 12 than they were on Friday March 5."
Nearly 25% of mortgage defaults are due to people who choose to give up their home because they're under water.
Iran said it has started a new production line of highly accurate,
short-range cruise missiles, which would add a new element to the
country's arsenal.
Gen. Ahmad Vahidi told Iranian state TV
Sunday that the cruise missile, called Nasr 1, would be capable of
destroying targets up to 3,000 tons in size.
Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009,
leaving managers with $172 billion in the quickest decrease since 1991,
Investment Company Institute data show. The last time stock managers
held such a small proportion was September 2007, a month before the
S&P 500 began a 57 percent drop, according to data compiled by
Bloomberg.”
The Australian dollar is being
overtaken by the Canadian dollar among commodity currencies as
the safety of Canada’s banking system and ties with the U.S.
economy spur investors to buy the loonie.
Options show demand for the right to sell the so-called
Aussie and buy the Canadian dollar reached the highest last
month in almost a year. A measure of traders’ expectations for
price fluctuations indicates the loonie is the most secure bet
relative to the Australian dollar since July as the global
recovery shows signs of wavering.
The Dow Jones Industrial Average fell 13.68 points, or 0.1%, to 10,552.52. After six sessions of gains, the S&P 500 Index lost less than 1 point to end at 1,138.5. The Nasdaq Composite rose 5.86 points, or 0.3%, to 2,332.21.
McDonald's Corp.
said Monday that its February comparable sales, or sales at all
restaurants open at least 13 months, rose 4.8%. McDonald's was expected
to see sales gains of 2.1%, according to the average estimate of two
analysts surveyed by FactSet. Same-store sales rose 0.6% in the U.S.,
increased 5.4% in Europe and surged 10.5% in Asia, Middle East and
Africa. Systemwide sales rose 11.2%, or 6.4% excluding the impact of
currency translations.
MetLife Inc. said that it has signed a
definitive agreement to acquire American Life Insurance Co. from American International Group
for around $15.5 billion. The consideration will consist of $6.8
billion in cash and approximately $8.7 billion in MetLife equity
securities, subject to closing adjustments. MetLife expects the cash
portion of the purchase price to be financed through issuing senior
debt and common stock as well as cash on hand. MetLife expects the
transaction to increase its 2011 operating earnings per share by
approximately 45 cents to 55 cents a share. The operating earnings per
share estimate does not include transition and other one-time expenses
estimated at 12 cents a share.
China should step up efforts to build up state reserves of crude oil
and refined fuel to enhance the country's energy security, state media
cited lawmakers as saying.
National crude demand would exceed 550 million tonnes by 2020,
compared with about 400 million tonnes in 2009, National People's
Congress member Chen Geng told the China Energy News in an interview
published on Monday.
John Hussman: "Although the 2010
peak in the Alt-A / Option-ARM reset schedule doesn't occur until July,
with a much larger peak in mid-2011, a small initial round of resets is
already in progress, having started about November of last year. I
would expect that if we are indeed at risk of a second wave of mortgage
defaults and credit strains, it will show up first as a surprising jump
in 30-day mortgage delinquencies in the data we see over the next 2-4
months. I do not expect quarters upon quarters of uncertainty. It may
take longer to observe the full effect of continued mortgage
delinquencies and foreclosures, but we are at about the point where the
data would depart from the market's "all clear" expectations if credit
pressures are likely to resume with force."
Mike Burk: "Last weeks run up was a little too much of a good thing and the market is overbought. However, if you are going to have a strong rally the action last week shows how it should be done with the secondaries leading, new highs expanding and no new lows.
I expect the major averages to be higher on Friday March 12 than they were on Friday March 5."
Nearly 25% of mortgage defaults are due to people who choose to give up their home because they're under water.
Iran said it has started a new production line of highly accurate,
short-range cruise missiles, which would add a new element to the
country's arsenal.
Gen. Ahmad Vahidi told Iranian state TV
Sunday that the cruise missile, called Nasr 1, would be capable of
destroying targets up to 3,000 tons in size.
Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009,
leaving managers with $172 billion in the quickest decrease since 1991,
Investment Company Institute data show. The last time stock managers
held such a small proportion was September 2007, a month before the
S&P 500 began a 57 percent drop, according to data compiled by
Bloomberg.”
The Australian dollar is being
overtaken by the Canadian dollar among commodity currencies as
the safety of Canada’s banking system and ties with the U.S.
economy spur investors to buy the loonie.
Options show demand for the right to sell the so-called
Aussie and buy the Canadian dollar reached the highest last
month in almost a year. A measure of traders’ expectations for
price fluctuations indicates the loonie is the most secure bet
relative to the Australian dollar since July as the global
recovery shows signs of wavering.
The Dow Jones Industrial Average fell 13.68 points, or 0.1%, to 10,552.52. After six sessions of gains, the S&P 500 Index lost less than 1 point to end at 1,138.5. The Nasdaq Composite rose 5.86 points, or 0.3%, to 2,332.21.
Saturday, March 06, 2010
CBO
3/6/10 CBO
The CBO, in an annual analysis of the White House budget proposal, said today that under Obama’s plan deficits would never shrink below 4 percent of the economy between now and 2020. The
cumulative deficits would total $9.76 trillion, and debt held by the
public would amount to 90 percent of the nation’s gross domestic
product by 2020, the CBO said.
Regulators shut banks in Maryland,
Illinois, Florida and Utah, pushing the number of U.S. failures
to 26 this year and placing more pressure on the Federal Deposit
Insurance Corp. to dispose of a growing pile of toxic assets.
The FDIC was unable to find buyers for two banks --
Centennial Bank in Ogden, Utah, and Waterfield Bank of
Germantown, Maryland -- according to statements posted on the
agency’s Web site. In the largest of yesterday’s failures by
assets, Boca Raton, Florida-based Sun American Bank was
purchased by First-Citizens Bank & Trust Co.
“Fannie Mae and Freddie Mac bondholders shouldn’t assume the government
will make them whole on their investments as Congress retools the
companies, House Financial Services Committee Chairman Barney Frank
said. ‘Please don’t think this is federally guaranteed, I don’t think
it is, I don’t think it should be, I don’t feel any obligation to bail
you out,’ Frank told reporters… Congress will ‘certainly not’ extend
any new protections to bond and mortgage-security investors beyond what
exists, Frank said. A ‘whole range’ of options is being considered for
investors in the two government-seized companies, ‘from paying nothing
to a haircut to whatever,’ Frank said.”
Doug Noland: "This week marked the one-year anniversary of a historic stock market
rally. The S&P500 enjoys a one-year gain of 66.8%. The broader
market has fared even better. The small cap Russell 2000 and
S&P400 Mid-Caps sport 12-month gains of 90.6% and 87.4%. The past
year also witnessed record junk debt issuance and an amazing turnabout
in financial conditions. Housing markets may be stuck in the mud, but
government-induced reflation has worked wonders for equities, corporate
debt and global risk assets more generally.
Long-time readers may have noticed that awhile back I stopped the
weekly presentation of bank Credit and asset data. For the record,
bank Credit declined $470bn over the past year, or about 5%. I
specifically have not emphasized this bank contraction, believing it
had become a deceptive indicator of financial conditions. Also luring
in those anticipating deflationary conditions, M2 “money supply”
expanded just under 2% over the past year. There has been no reason to
fret a substandard $200bn one-year expansion of narrow “money,” not
with Treasury and agency securities inflating a couple Trillion and the
Fed monetizing a Trillion of MBS.
One year ago, the Federal Reserve held $69bn of mortgage-backed
securities. Their hoard now surpasses $1.027 TN. Over the past year,
Treasury has run deficits of about $1.5 TN. Our government’s
“electronic printing press” has dispersed unprecedented purchasing
power to households and businesses throughout the economy. The Fed’s
Trillion dollar monetization has unleashed unmatched liquidity
throughout the financial markets....Massive U.S. deficits and near-zero interest rates ensure a steady flow
of finance (newly created as well as an ongoing exodus out of
low-yielding instruments) to debt markets around the world. Confidence
runs high that ultra-loose U.S. financial conditions will continue to
underpin Credit expansions globally. Politicians may talk tough, and
they do put on a good show. Meanwhile, markets function with reticent
aplomb, knowing they’ve got policymakers right where they want them."
Adoption of a value-added tax in the U.S. would be a fair, efficient
way to help restore the country's financial health, argues Bloomberg
BusinessWeek's Chris Farrell.
Barron's: "Workers who drew pay for even one hour during their pay period
(typically, two weeks to a month) were counted as employed in February.
Too, the BLS points out, some unknown number of workers could well have
been added for clean-up and repairs after the storm.... While the unemployment rate held at 9.7%, our preferred measure,
which includes the underemployed, edged back up to 16.8%, from the
previous month's 16.5%.
That insightful pair, Philippa Dunne and Doug Henwood, who run the
Liscio Report, deftly sum up the February employment story as "more of
the same -- minor losses that look good compared to the bloodletting of
early 2009, but rather sad compared to a textbook recovery."
Among other less-than-ebullient data they cite, the probability of
someone out of work in January finding a job in February fell to 20.1%,
from 24.5% the previous month. And though the rate at which folks
voluntarily left jobs also declined, from 2.7% to 2.4%, they comment
that, alas, "the hiring strike continues."
China is pushing for the yuan to be added to the basket of currencies
that comprise the IMF's special drawing rights, aiming for its
inclusion in 2015, Japanese daily Sankei Shimbun said on Saturday.
Non-Seasonally Adjusted Consumer credit was actually down by $4 billion.
ZeroHedge: "On a non-seasonally adjusted basis, consumer credit has declined by
$108 billion in the past 12 months. What may be surprising, is that
were one to strip away the contribution from the Federal Government of
$78 billion, the decline would have been almost double, or $187
billion. Furthermore, in January, NSA consumer credit would have
declined by $14 billion had it not been for the... wait for it...
Federal Government, which sourced $10.4 billion in new consumer credit."
China central bank Governor Zhou Xiaochuan said China would eventually
move away from its current exchange rate policies but he gave no
timetable.
The CBO, in an annual analysis of the White House budget proposal, said today that under Obama’s plan deficits would never shrink below 4 percent of the economy between now and 2020. The
cumulative deficits would total $9.76 trillion, and debt held by the
public would amount to 90 percent of the nation’s gross domestic
product by 2020, the CBO said.
Regulators shut banks in Maryland,
Illinois, Florida and Utah, pushing the number of U.S. failures
to 26 this year and placing more pressure on the Federal Deposit
Insurance Corp. to dispose of a growing pile of toxic assets.
The FDIC was unable to find buyers for two banks --
Centennial Bank in Ogden, Utah, and Waterfield Bank of
Germantown, Maryland -- according to statements posted on the
agency’s Web site. In the largest of yesterday’s failures by
assets, Boca Raton, Florida-based Sun American Bank was
purchased by First-Citizens Bank & Trust Co.
“Fannie Mae and Freddie Mac bondholders shouldn’t assume the government
will make them whole on their investments as Congress retools the
companies, House Financial Services Committee Chairman Barney Frank
said. ‘Please don’t think this is federally guaranteed, I don’t think
it is, I don’t think it should be, I don’t feel any obligation to bail
you out,’ Frank told reporters… Congress will ‘certainly not’ extend
any new protections to bond and mortgage-security investors beyond what
exists, Frank said. A ‘whole range’ of options is being considered for
investors in the two government-seized companies, ‘from paying nothing
to a haircut to whatever,’ Frank said.”
Doug Noland: "This week marked the one-year anniversary of a historic stock market
rally. The S&P500 enjoys a one-year gain of 66.8%. The broader
market has fared even better. The small cap Russell 2000 and
S&P400 Mid-Caps sport 12-month gains of 90.6% and 87.4%. The past
year also witnessed record junk debt issuance and an amazing turnabout
in financial conditions. Housing markets may be stuck in the mud, but
government-induced reflation has worked wonders for equities, corporate
debt and global risk assets more generally.
Long-time readers may have noticed that awhile back I stopped the
weekly presentation of bank Credit and asset data. For the record,
bank Credit declined $470bn over the past year, or about 5%. I
specifically have not emphasized this bank contraction, believing it
had become a deceptive indicator of financial conditions. Also luring
in those anticipating deflationary conditions, M2 “money supply”
expanded just under 2% over the past year. There has been no reason to
fret a substandard $200bn one-year expansion of narrow “money,” not
with Treasury and agency securities inflating a couple Trillion and the
Fed monetizing a Trillion of MBS.
One year ago, the Federal Reserve held $69bn of mortgage-backed
securities. Their hoard now surpasses $1.027 TN. Over the past year,
Treasury has run deficits of about $1.5 TN. Our government’s
“electronic printing press” has dispersed unprecedented purchasing
power to households and businesses throughout the economy. The Fed’s
Trillion dollar monetization has unleashed unmatched liquidity
throughout the financial markets....Massive U.S. deficits and near-zero interest rates ensure a steady flow
of finance (newly created as well as an ongoing exodus out of
low-yielding instruments) to debt markets around the world. Confidence
runs high that ultra-loose U.S. financial conditions will continue to
underpin Credit expansions globally. Politicians may talk tough, and
they do put on a good show. Meanwhile, markets function with reticent
aplomb, knowing they’ve got policymakers right where they want them."
Adoption of a value-added tax in the U.S. would be a fair, efficient
way to help restore the country's financial health, argues Bloomberg
BusinessWeek's Chris Farrell.
Barron's: "Workers who drew pay for even one hour during their pay period
(typically, two weeks to a month) were counted as employed in February.
Too, the BLS points out, some unknown number of workers could well have
been added for clean-up and repairs after the storm.... While the unemployment rate held at 9.7%, our preferred measure,
which includes the underemployed, edged back up to 16.8%, from the
previous month's 16.5%.
That insightful pair, Philippa Dunne and Doug Henwood, who run the
Liscio Report, deftly sum up the February employment story as "more of
the same -- minor losses that look good compared to the bloodletting of
early 2009, but rather sad compared to a textbook recovery."
Among other less-than-ebullient data they cite, the probability of
someone out of work in January finding a job in February fell to 20.1%,
from 24.5% the previous month. And though the rate at which folks
voluntarily left jobs also declined, from 2.7% to 2.4%, they comment
that, alas, "the hiring strike continues."
China is pushing for the yuan to be added to the basket of currencies
that comprise the IMF's special drawing rights, aiming for its
inclusion in 2015, Japanese daily Sankei Shimbun said on Saturday.
Non-Seasonally Adjusted Consumer credit was actually down by $4 billion.
ZeroHedge: "On a non-seasonally adjusted basis, consumer credit has declined by
$108 billion in the past 12 months. What may be surprising, is that
were one to strip away the contribution from the Federal Government of
$78 billion, the decline would have been almost double, or $187
billion. Furthermore, in January, NSA consumer credit would have
declined by $14 billion had it not been for the... wait for it...
Federal Government, which sourced $10.4 billion in new consumer credit."
China central bank Governor Zhou Xiaochuan said China would eventually
move away from its current exchange rate policies but he gave no
timetable.
Jobs
3/5/10 Payrolls
U.S. nonfarm payrolls declined
for the 25th time in the past 26 months, falling by 36,000 in February
to 129.5 million, the Labor Department estimated Friday. Job losses
were concentrated in construction, schools, retail and publishing.
Manufacturing jobs rose by 1,000, the second increase in a row. The
unemployment rate was steady at 9.7%. Severe snow storms during the
survey week may have depressed the payroll count, but the Bureau of
Labor Statistics said it could not quantify the impact. Total hours
worked fell by 0.6%, likely due to weather-related shutdowns. The
employment report was better than expected, as economists surveyed by
MarketWatch were forecasting a drop of 90,000. They expected the
unemployment rate to rise to 9.8%.
The Labor Department said job losses for December and January had been
revised to show 35,000 fewer jobs lost than previously reported.
Temporary hiring added 48,000.
The average workweek for all employees slipped to 33.8 hours from 33.9 hours in January.
The number of long-term unemployed (those jobless for 27 weeks and over) was 6.1 million in February and has been about that level since December. About 4 in 10 unemployed persons have been unemployed for 27 weeks or more. Census hiring was 15,000. So 51,000 jobs lost ex-Census.
In February, the civilian labor force participation rate (64.8 percent) and the employment-population ratio (58.5 percent) were little changed.
The CES Birth-Death Model numbers amounted to + 97,000 for Feb.
The economy has lost almost 3.3 million jobs over the last year, and
8.43 million jobs since the beginning of the current employment
recession.
The new millennium has been rough on older workers, who have seen a whopping 331% increase in unemployment over the last decade, according to the AARP.
The
number of unemployed workers older than 55 shot up to 2.1 million in
December from 490,000 in January 2000, according to an analysis of data
from the government Bureau of Labor Statistics by the nonprofit's
Public Policy Institute.Unemployment among workers older than 65 jumped 235%, to 479,000 from 143,000. For
the unemployed over age 55, the average jobless period has expanded
85.6% to 34.7 weeks from 18.7 weeks. The period has stretched 32.7% for
job hunters over age 65, who are now unemployed an average of 32.9
weeks compared to 24.8 weeks in 2000.Many graying workers, AARP said, are now attempting to postpone or come out of retirement.
The US rig count for February 2010 was 1,350, up 83 from the 1,267
counted in January 2010 and up 30 from the 1,320 counted in February
2009.
C.Fred Bergsten: "President Obama has smartly suggested that a new export strategy
could support 2 million very good American jobs, more than created by
his stimulus initiative. The United States already sells about $1.5
trillion worth of goods and services annually to the rest of the world,
which creates about 10 million high-paying jobs. Every $1 billion of
additional exports will produce about 7,000 very good jobs. Robust
export expansion would also reduce our large trade deficits and
resultant need to borrow abroad to finance them. Last week the president suggested an ambitious but realistic goal of
doubling exports over the next five years. An effective US export
strategy must focus on four variables: the exchange rate of the dollar,
trade agreements, our own export controls, and tax policy."
ZeroHedge: "Joseph Stiglitz - former head economist at the International
Monetary Fund (IMF) and a nobel-prize winner - said yesterday that the
very structure of the Federal Reserve system is so fraught with
conflicts that it is "corrupt" and undermines democracy.
Stiglitz said:
If
>we [i.e. the IMF] had seen a governance structure that corresponds to
>our Federal Reserve system, we would have been yelling and screaming
>and saying that country does not deserve any assistance, this is a
>corrupt governing structure."
>
>Michael Panzer: "Interestingly enough, if you look back at the history of the
>relationship between productivity and labor costs, the last time we saw
>a gap between the two as wide as it is now was -- you guessed it -- in
>the 1970s, before the Great Stagflation."
>
>Bill Bonner: "The Greek story is a universal tale… It will soon be played by the UK…and then it will be the US.
>Let us summarize: Innocent fellows are seduced by debt. They fall in
>love with deficits. Debt proves to be an evil temptress. Our heroes are
>ruined.
>Isn’t the story more or less the same in Britain and America too?"
>
>
>Copper demand in China, the world’s largest consumer of the
>metal, is “weak” because of lackluster consumption from the power
>industry, Tongling Nonferrous Metals Group Co. said. “From
>what we learned from our customers, copper demand is now weak,”
>Chairman Wei Jianghong said today in an interview in Beijing. Tongling
>is the country’s second-largest copper smelter. Demand “isn’t very strong,” bigger rival Jiangxi Copper Co. also said today. Slowing
>demand in China may indicate stockpiles in the country may continue to
>climb after reaching the highest level in more than seven years in
>February. “About 60 percent of copper is used in the power
>industry, and our sales to wire-and-cable users reflected that demand
>is rather weak,” Wei said while attending the National People’s
>Congress. “The demand is not very strong in the first place,” Jiangxi
>Copper Chairman Li Yihuang said in Beijing at the congress. “But a lot of people have long positions in the market, so I think in the first half of this year, copper prices will be good.”
>
>
>
>China’s banks are facing increasing
>risk in their lending policies, Premier Wen Jiabao said today in
>his annual report to the country’s legislature.
>“Latent risk in the banking and public finance sectors are
>increasing,” Wen said, according to a copy of his speech
>distributed today at the National People’s Congress meeting.
>
>
>
> * The Obama Health Reform Bill's Dishonesty on Cost. Any
>bill that counts 10 years of taxes but only six years of spending as a
>way to bring down the deficit is dishonest. Hopefully enough
>congressional Democrats will vote against this and start the process
>over again, in a more fiscally responsible way. As Ryan said to the
>president, "[W]e are all representatives of the American people. We all
>do town hall meetings. We all talk to our constituents. And I've got to
>tell you, the American people are engaged. And if you think they want a
>government takeover of healthcare, I would respectfully submit you're
>not listening to them."
Regulators on Friday closed Bank of Illinois, Normal, Ill., and Waterfield Bank, Germantown, Md., bringing the total tally of failed banks to 25 so far this year, the Federal Deposit Insurance Corporation said. The failure of Bank of Illinois marks the third bank closure in the state for this year while Waterfield Bank is the first to be shuttered in Maryland. Heartland Bank and Trust Company will assume all deposits of Bank of Illinois while the FDIC will act as a receiver for Waterfield Bank.
- Sun American Bank of Boca Raton, Fla., became the 23rd bank of the year to fail, according to the Federal Deposit Insurance Corp. on Friday. First Citizens Bank, the primary subsidiary of First Citizens BancShares, will assume the estimated $443.5 million in deposits and purchase the bank's $535.7 million in assets. The bank is also Florida's fourth failure of the year.
The Dow Jones Industrial Average added 122.06 points, or 1.2%, to 10,566.2, leaving it 2.3% higher for the week. The S&P 500 Index climbed 15.73 points, or 1.4%, to 1,138.7, a weekly advance of 3.1%, while the Nasdaq Composite rose 34.04 points, or 1.5%, to 2,326.35, up 3.9% from the week-ago close.
U.S. nonfarm payrolls declined
for the 25th time in the past 26 months, falling by 36,000 in February
to 129.5 million, the Labor Department estimated Friday. Job losses
were concentrated in construction, schools, retail and publishing.
Manufacturing jobs rose by 1,000, the second increase in a row. The
unemployment rate was steady at 9.7%. Severe snow storms during the
survey week may have depressed the payroll count, but the Bureau of
Labor Statistics said it could not quantify the impact. Total hours
worked fell by 0.6%, likely due to weather-related shutdowns. The
employment report was better than expected, as economists surveyed by
MarketWatch were forecasting a drop of 90,000. They expected the
unemployment rate to rise to 9.8%.
The Labor Department said job losses for December and January had been
revised to show 35,000 fewer jobs lost than previously reported.
Temporary hiring added 48,000.
The average workweek for all employees slipped to 33.8 hours from 33.9 hours in January.
The number of long-term unemployed (those jobless for 27 weeks and over) was 6.1 million in February and has been about that level since December. About 4 in 10 unemployed persons have been unemployed for 27 weeks or more. Census hiring was 15,000. So 51,000 jobs lost ex-Census.
In February, the civilian labor force participation rate (64.8 percent) and the employment-population ratio (58.5 percent) were little changed.
The CES Birth-Death Model numbers amounted to + 97,000 for Feb.
The economy has lost almost 3.3 million jobs over the last year, and
8.43 million jobs since the beginning of the current employment
recession.
The new millennium has been rough on older workers, who have seen a whopping 331% increase in unemployment over the last decade, according to the AARP.
The
number of unemployed workers older than 55 shot up to 2.1 million in
December from 490,000 in January 2000, according to an analysis of data
from the government Bureau of Labor Statistics by the nonprofit's
Public Policy Institute.Unemployment among workers older than 65 jumped 235%, to 479,000 from 143,000. For
the unemployed over age 55, the average jobless period has expanded
85.6% to 34.7 weeks from 18.7 weeks. The period has stretched 32.7% for
job hunters over age 65, who are now unemployed an average of 32.9
weeks compared to 24.8 weeks in 2000.Many graying workers, AARP said, are now attempting to postpone or come out of retirement.
The US rig count for February 2010 was 1,350, up 83 from the 1,267
counted in January 2010 and up 30 from the 1,320 counted in February
2009.
C.Fred Bergsten: "President Obama has smartly suggested that a new export strategy
could support 2 million very good American jobs, more than created by
his stimulus initiative. The United States already sells about $1.5
trillion worth of goods and services annually to the rest of the world,
which creates about 10 million high-paying jobs. Every $1 billion of
additional exports will produce about 7,000 very good jobs. Robust
export expansion would also reduce our large trade deficits and
resultant need to borrow abroad to finance them. Last week the president suggested an ambitious but realistic goal of
doubling exports over the next five years. An effective US export
strategy must focus on four variables: the exchange rate of the dollar,
trade agreements, our own export controls, and tax policy."
ZeroHedge: "Joseph Stiglitz - former head economist at the International
Monetary Fund (IMF) and a nobel-prize winner - said yesterday that the
very structure of the Federal Reserve system is so fraught with
conflicts that it is "corrupt" and undermines democracy.
Stiglitz said:
If
>we [i.e. the IMF] had seen a governance structure that corresponds to
>our Federal Reserve system, we would have been yelling and screaming
>and saying that country does not deserve any assistance, this is a
>corrupt governing structure."
>
>Michael Panzer: "Interestingly enough, if you look back at the history of the
>relationship between productivity and labor costs, the last time we saw
>a gap between the two as wide as it is now was -- you guessed it -- in
>the 1970s, before the Great Stagflation."
>
>Bill Bonner: "The Greek story is a universal tale… It will soon be played by the UK…and then it will be the US.
>Let us summarize: Innocent fellows are seduced by debt. They fall in
>love with deficits. Debt proves to be an evil temptress. Our heroes are
>ruined.
>Isn’t the story more or less the same in Britain and America too?"
>
>
>Copper demand in China, the world’s largest consumer of the
>metal, is “weak” because of lackluster consumption from the power
>industry, Tongling Nonferrous Metals Group Co. said. “From
>what we learned from our customers, copper demand is now weak,”
>Chairman Wei Jianghong said today in an interview in Beijing. Tongling
>is the country’s second-largest copper smelter. Demand “isn’t very strong,” bigger rival Jiangxi Copper Co. also said today. Slowing
>demand in China may indicate stockpiles in the country may continue to
>climb after reaching the highest level in more than seven years in
>February. “About 60 percent of copper is used in the power
>industry, and our sales to wire-and-cable users reflected that demand
>is rather weak,” Wei said while attending the National People’s
>Congress. “The demand is not very strong in the first place,” Jiangxi
>Copper Chairman Li Yihuang said in Beijing at the congress. “But a lot of people have long positions in the market, so I think in the first half of this year, copper prices will be good.”
>
>
>
>China’s banks are facing increasing
>risk in their lending policies, Premier Wen Jiabao said today in
>his annual report to the country’s legislature.
>“Latent risk in the banking and public finance sectors are
>increasing,” Wen said, according to a copy of his speech
>distributed today at the National People’s Congress meeting.
>
>
>
> * The Obama Health Reform Bill's Dishonesty on Cost. Any
>bill that counts 10 years of taxes but only six years of spending as a
>way to bring down the deficit is dishonest. Hopefully enough
>congressional Democrats will vote against this and start the process
>over again, in a more fiscally responsible way. As Ryan said to the
>president, "[W]e are all representatives of the American people. We all
>do town hall meetings. We all talk to our constituents. And I've got to
>tell you, the American people are engaged. And if you think they want a
>government takeover of healthcare, I would respectfully submit you're
>not listening to them."
Regulators on Friday closed Bank of Illinois, Normal, Ill., and Waterfield Bank, Germantown, Md., bringing the total tally of failed banks to 25 so far this year, the Federal Deposit Insurance Corporation said. The failure of Bank of Illinois marks the third bank closure in the state for this year while Waterfield Bank is the first to be shuttered in Maryland. Heartland Bank and Trust Company will assume all deposits of Bank of Illinois while the FDIC will act as a receiver for Waterfield Bank.
- Sun American Bank of Boca Raton, Fla., became the 23rd bank of the year to fail, according to the Federal Deposit Insurance Corp. on Friday. First Citizens Bank, the primary subsidiary of First Citizens BancShares, will assume the estimated $443.5 million in deposits and purchase the bank's $535.7 million in assets. The bank is also Florida's fourth failure of the year.
The Dow Jones Industrial Average added 122.06 points, or 1.2%, to 10,566.2, leaving it 2.3% higher for the week. The S&P 500 Index climbed 15.73 points, or 1.4%, to 1,138.7, a weekly advance of 3.1%, while the Nasdaq Composite rose 34.04 points, or 1.5%, to 2,326.35, up 3.9% from the week-ago close.
Thursday, March 04, 2010
Natural Gas
3/4/10 Natural Gas
A withdrawal of 150 billion cubic feet or more in
tomorrow’s report would give gas prices one last boost for the season
and potentially lift futures above $5 per million Btu, John Kilduff said in
a telephone interview.
Industrial demand for natural gas, which represents
about 29 percent of consumption, may also be on the rebound with a
recovery in the U.S. economy.
“Storage used to be 500 billion cubic feet above the
five- year average and now it’s not, so there’s little question that
the market is physically tighter than it used to be,” said Tim Evans,
an energy analyst at Citigroup Global Markets Inc. in New York. “We’ve
been taking the winter premium out of the market, so now it’s more of a
discussion over the appropriate price level than the facts.”
December consumption of natural gas by factories,
refiners, chemical plants and steel mills was 7.4 percent higher than
the previous year, reaching 19.1 billion cubic feet a day from 17.8
billion in 2008, according to the Energy Department’s Natural Gas
Monthly report, released late yesterday.
Power generators also bought more gas in December
than a year earlier, jumping their purchases 9 percent, according to
the report.
“Industrial demand surprised our forecast to the
upside,” James R. Crandell, a commodities research analyst at Barclays
Capital in New York, said in a note to clients.
The number
of people filing for initial unemployment benefits declined by 29,000
in the week ending Feb. 27 to a seasonally adjusted 469,000, the Labor
Department reported Thursday. Initial claims had risen sharply the
previous two weeks, in part because of administrative backlogs, extreme
weather and the holiday. The four-week average of initial claims - a
better gauge of the trend than the volatile weekly number - fell by
3,500 to 470,750. The number of people receiving regular state jobless
benefits declined by 134,000 to a seasonally adjusted 4.5 million. The
total number of people receiving benefits of any kind rose by 145,000
to 11.5 million, not seasonally adjusted.
ZeroHedge: "As for the extremely volatile (and delayed) Emergency Unemployment
Compensation series, that increased by 207,632 in the week ended
February 13. Oddly enough, snow storms were once again implicated, this
time for the decline of claims, even though the data being from the
last week of February saw some pretty dramatic snowfall precisely then.
"
The Greek
government plans to issue a 10-year euro-denominated bond, Dow Jones
Newswires reported on Thursday, citing one of the lead managers of the
deal. Lead managers will be Barclays Capital, HSBC Holdings, National
Bank of Greece, Nomura and Piraeus Bank SA, according to the report.
Price guidance is in the area of 310 basis points over mid-swaps, Dow
Jones reported. The Greek finance ministry's press office told
MarketWatch that there is no official announcement of the bond issue
and the deal cannot be confirmed. The news comes after Greece announced
new austerity measures on Wednesday aiming to save 4.8 billion euros
through cutting spending and raising some taxes.
Q4 Productivity and Costs: +6.9% vs. +6.5% expected and +6.2% prior. Unit labor costs -5.9% vs. -4.9% expected and -4.4% prior.
Barack Obama will host ten House Democrats who voted against the health care bill in November at the White House;
he's obviously trying to persuade them to switch their votes to yes.
One of the ten is Jim Matheson of Utah. The White House just sent out a
press release announcing that today President Obama nominated
Matheson's brother Scott M. Matheson, Jr. to the United States Court of
Appeals for the Tenth Circuit.
Wal-Mart Stores Inc on Thursday said it raised its annual dividend
by 11 percent, citing its strong underlying operations and free cash
flow.
The world's biggest retailer said that for its current
fiscal year, which began on February 1, its board approved an annual
dividend of $1.21 per share, up from $1.09 per share a year ago.
Gartner boosts global PC shipment growth forecast for 2010, and sees worldwide PC spending up 12.2% in 2010
25% Say U.S. Heading In Right Direction, Lowest Since Obama Took Office. Just
25% of U.S. voters now say the country is heading in the right
direction, the lowest level of voter confidence since early January
2009. Correspondingly, the latest Rasmussen Reports national telephone
survey finds that 69% believe the nation is heading down the wrong track, the highest level measured in 14 months.
However, since January 2008 (the recession began a month earlier) 8.4
million Americans lost their jobs. As such, two years ago retail
gasoline was over $3 (with Nymex crude oil averaging $92.93), this last
January Nymex crude averaged $78.40, with retail gasoline around $2.70.
Consequently, back then the EIA estimates refiners earned 7.8 cents on
the dollar, today they earned only 5 cents… and that was with crude oil
below $80. Thus, The Schork Reportprojects
that should WTI head back to $95 and consumers fail to respond (which
seems reasonable), then this summer is shaping up to be rather ugly for
the downstream side of Big Oil’s ledger!
A
forward-looking gauge of home buying declined sharply in January,
dropping to the lowest seasonally adjusted level since last April, an
industry trade group reported Thursday. The pending home sales index
fell a seasonally adjusted 7.6% in January after a revised 0.8% gain in
December. The index remained 8.8% higher than in January 2009. The
index tracks sales contracts signed on previously owned homes.
It would not be appropriate to
introduce the International Monetary Fund as a "supplier of help" for
Greece as the nation attempts to meet its debt commitments, European
Central Bank President Jean-Claude Trichet said in his monthly news
conference Thursday. Trichet praised the IMF for providing Greece with
technical assistance as it attempts to slash its budget deficit.
Trichet said the commitment by European Union leaders last month to
help Greece if needed was "important."
Boosted by demand for new
airplanes, orders for U.S.-made factory goods rose 1.7% in January
after an upwardly revised 1.5% gain in December, the Commerce
Department estimated Thursday. Economists were expecting a 2.5%
increase. Orders for durable goods increased 2.6%, revised down from
the 3% reported last week. Core capital equipment orders -- the best
monthly indicator of business investment -- fell 4.1% after two months
of strong gains. Orders for nondurable goods increased 0.9%, led by
petroleum and food.
A dozen House of Representatives Democrats opposed to abortion are
willing to kill President Barack Obama's healthcare reform plan unless
it satisfies their demand for language barring the procedure.
Natural gas in storage falls 116 bcf: EIA. A Platts survey of analysts
expected a larger withdrawal of 128 to 132 billion cubic feet. Down
ahead of the storage data, natural gas for April delivery fell further
in its wake, with the contract off 12 cents, or 2.5%, to $4.640 per
million British thermal units. Working gas in storage was 1,737 Bcf as of Friday, February 26, 2010,
according to EIA estimates. This represents a net decline of 116 Bcf
from the previous week.
The futures decline sent the $3.5 billion U.S.
Natural Gas Fund, the largest exchange-traded fund in the fuel, to its
lowest price since it started trading almost three years ago.
The fund shed 31 cents, or 3.6 percent, to $8.34 at
12:31 p.m. A close at that price would be the lowest ever for the fund,
which has lost 84 percent of its value since trading began on April 18,
2007.
The Commerce Department said Thursday that factory orders rose 1.7
percent in January, slightly below the 1.8 percent gain economists had
expected. It was the best showing since a 1.8 percent advance in
September.
A measure to give some 57 million elderly people, veterans and
persons with disabilities a $250 check was rejected by the Senate on
Wednesday, a setback for the powerful seniors' lobby.
President Barack Obama has called for Congress to approve the payments to make up for their
benefits not increasing this year, but the Senate defeated it 50 to 47.
The U.S. will make a monumental mistake if it doesn't utilize one of
its most prevalent energy resources, natural gas, energy tycoon Boone
Pickens told CNBC Thursday."You've got 4,000 trillion cubic feet of natural gas—that makes us
number one in the world," Pickens said. "We're going to be fools, we'll
be identified as the dumbest people in the world if we don't capitalize
on this resource and replace OPEC oil."
Natural-gas futures declined
nearly 4% Thursday after the government reported supplies fell less
than anticipated last week, while crude-oil prices also dropped, but
held above $80 a barrel. The natural-gas futures contract for April
delivery fell 18 cents, or 3.8%, to end at $4.58 per million British
thermal units. Crude for April delivery fell 66 cents, or 0.8%, to
$80.21 a barrel on the New York Mercantile Exchange. Gold for April delivery dropped $10.20 an ounce to $1,133.10. The euro slipped to $1.3560 from $1.3708 late on Wednesday.
The Dow Jones Industrial Average rose 47.38 points to 10,444.14, with the index now in the black for the year. Up for a fifth consecutive session, the S&P 500 Index rose 4.18 points to 1,122.97. The Nasdaq Composite Index added 11.63 points to 2,292.31.
A withdrawal of 150 billion cubic feet or more in
tomorrow’s report would give gas prices one last boost for the season
and potentially lift futures above $5 per million Btu, John Kilduff said in
a telephone interview.
Industrial demand for natural gas, which represents
about 29 percent of consumption, may also be on the rebound with a
recovery in the U.S. economy.
“Storage used to be 500 billion cubic feet above the
five- year average and now it’s not, so there’s little question that
the market is physically tighter than it used to be,” said Tim Evans,
an energy analyst at Citigroup Global Markets Inc. in New York. “We’ve
been taking the winter premium out of the market, so now it’s more of a
discussion over the appropriate price level than the facts.”
December consumption of natural gas by factories,
refiners, chemical plants and steel mills was 7.4 percent higher than
the previous year, reaching 19.1 billion cubic feet a day from 17.8
billion in 2008, according to the Energy Department’s Natural Gas
Monthly report, released late yesterday.
Power generators also bought more gas in December
than a year earlier, jumping their purchases 9 percent, according to
the report.
“Industrial demand surprised our forecast to the
upside,” James R. Crandell, a commodities research analyst at Barclays
Capital in New York, said in a note to clients.
The number
of people filing for initial unemployment benefits declined by 29,000
in the week ending Feb. 27 to a seasonally adjusted 469,000, the Labor
Department reported Thursday. Initial claims had risen sharply the
previous two weeks, in part because of administrative backlogs, extreme
weather and the holiday. The four-week average of initial claims - a
better gauge of the trend than the volatile weekly number - fell by
3,500 to 470,750. The number of people receiving regular state jobless
benefits declined by 134,000 to a seasonally adjusted 4.5 million. The
total number of people receiving benefits of any kind rose by 145,000
to 11.5 million, not seasonally adjusted.
ZeroHedge: "As for the extremely volatile (and delayed) Emergency Unemployment
Compensation series, that increased by 207,632 in the week ended
February 13. Oddly enough, snow storms were once again implicated, this
time for the decline of claims, even though the data being from the
last week of February saw some pretty dramatic snowfall precisely then.
"
The Greek
government plans to issue a 10-year euro-denominated bond, Dow Jones
Newswires reported on Thursday, citing one of the lead managers of the
deal. Lead managers will be Barclays Capital, HSBC Holdings, National
Bank of Greece, Nomura and Piraeus Bank SA, according to the report.
Price guidance is in the area of 310 basis points over mid-swaps, Dow
Jones reported. The Greek finance ministry's press office told
MarketWatch that there is no official announcement of the bond issue
and the deal cannot be confirmed. The news comes after Greece announced
new austerity measures on Wednesday aiming to save 4.8 billion euros
through cutting spending and raising some taxes.
Q4 Productivity and Costs: +6.9% vs. +6.5% expected and +6.2% prior. Unit labor costs -5.9% vs. -4.9% expected and -4.4% prior.
Barack Obama will host ten House Democrats who voted against the health care bill in November at the White House;
he's obviously trying to persuade them to switch their votes to yes.
One of the ten is Jim Matheson of Utah. The White House just sent out a
press release announcing that today President Obama nominated
Matheson's brother Scott M. Matheson, Jr. to the United States Court of
Appeals for the Tenth Circuit.
Wal-Mart Stores Inc on Thursday said it raised its annual dividend
by 11 percent, citing its strong underlying operations and free cash
flow.
The world's biggest retailer said that for its current
fiscal year, which began on February 1, its board approved an annual
dividend of $1.21 per share, up from $1.09 per share a year ago.
Gartner boosts global PC shipment growth forecast for 2010, and sees worldwide PC spending up 12.2% in 2010
25% Say U.S. Heading In Right Direction, Lowest Since Obama Took Office. Just
25% of U.S. voters now say the country is heading in the right
direction, the lowest level of voter confidence since early January
2009. Correspondingly, the latest Rasmussen Reports national telephone
survey finds that 69% believe the nation is heading down the wrong track, the highest level measured in 14 months.
However, since January 2008 (the recession began a month earlier) 8.4
million Americans lost their jobs. As such, two years ago retail
gasoline was over $3 (with Nymex crude oil averaging $92.93), this last
January Nymex crude averaged $78.40, with retail gasoline around $2.70.
Consequently, back then the EIA estimates refiners earned 7.8 cents on
the dollar, today they earned only 5 cents… and that was with crude oil
below $80. Thus, The Schork Reportprojects
that should WTI head back to $95 and consumers fail to respond (which
seems reasonable), then this summer is shaping up to be rather ugly for
the downstream side of Big Oil’s ledger!
A
forward-looking gauge of home buying declined sharply in January,
dropping to the lowest seasonally adjusted level since last April, an
industry trade group reported Thursday. The pending home sales index
fell a seasonally adjusted 7.6% in January after a revised 0.8% gain in
December. The index remained 8.8% higher than in January 2009. The
index tracks sales contracts signed on previously owned homes.
It would not be appropriate to
introduce the International Monetary Fund as a "supplier of help" for
Greece as the nation attempts to meet its debt commitments, European
Central Bank President Jean-Claude Trichet said in his monthly news
conference Thursday. Trichet praised the IMF for providing Greece with
technical assistance as it attempts to slash its budget deficit.
Trichet said the commitment by European Union leaders last month to
help Greece if needed was "important."
Boosted by demand for new
airplanes, orders for U.S.-made factory goods rose 1.7% in January
after an upwardly revised 1.5% gain in December, the Commerce
Department estimated Thursday. Economists were expecting a 2.5%
increase. Orders for durable goods increased 2.6%, revised down from
the 3% reported last week. Core capital equipment orders -- the best
monthly indicator of business investment -- fell 4.1% after two months
of strong gains. Orders for nondurable goods increased 0.9%, led by
petroleum and food.
A dozen House of Representatives Democrats opposed to abortion are
willing to kill President Barack Obama's healthcare reform plan unless
it satisfies their demand for language barring the procedure.
Natural gas in storage falls 116 bcf: EIA. A Platts survey of analysts
expected a larger withdrawal of 128 to 132 billion cubic feet. Down
ahead of the storage data, natural gas for April delivery fell further
in its wake, with the contract off 12 cents, or 2.5%, to $4.640 per
million British thermal units. Working gas in storage was 1,737 Bcf as of Friday, February 26, 2010,
according to EIA estimates. This represents a net decline of 116 Bcf
from the previous week.
The futures decline sent the $3.5 billion U.S.
Natural Gas Fund, the largest exchange-traded fund in the fuel, to its
lowest price since it started trading almost three years ago.
The fund shed 31 cents, or 3.6 percent, to $8.34 at
12:31 p.m. A close at that price would be the lowest ever for the fund,
which has lost 84 percent of its value since trading began on April 18,
2007.
The Commerce Department said Thursday that factory orders rose 1.7
percent in January, slightly below the 1.8 percent gain economists had
expected. It was the best showing since a 1.8 percent advance in
September.
A measure to give some 57 million elderly people, veterans and
persons with disabilities a $250 check was rejected by the Senate on
Wednesday, a setback for the powerful seniors' lobby.
President Barack Obama has called for Congress to approve the payments to make up for their
benefits not increasing this year, but the Senate defeated it 50 to 47.
The U.S. will make a monumental mistake if it doesn't utilize one of
its most prevalent energy resources, natural gas, energy tycoon Boone
Pickens told CNBC Thursday."You've got 4,000 trillion cubic feet of natural gas—that makes us
number one in the world," Pickens said. "We're going to be fools, we'll
be identified as the dumbest people in the world if we don't capitalize
on this resource and replace OPEC oil."
Natural-gas futures declined
nearly 4% Thursday after the government reported supplies fell less
than anticipated last week, while crude-oil prices also dropped, but
held above $80 a barrel. The natural-gas futures contract for April
delivery fell 18 cents, or 3.8%, to end at $4.58 per million British
thermal units. Crude for April delivery fell 66 cents, or 0.8%, to
$80.21 a barrel on the New York Mercantile Exchange. Gold for April delivery dropped $10.20 an ounce to $1,133.10. The euro slipped to $1.3560 from $1.3708 late on Wednesday.
The Dow Jones Industrial Average rose 47.38 points to 10,444.14, with the index now in the black for the year. Up for a fifth consecutive session, the S&P 500 Index rose 4.18 points to 1,122.97. The Nasdaq Composite Index added 11.63 points to 2,292.31.
Wednesday, March 03, 2010
Jobs
3/3/10 Jobs
Private-sector firms in the
U.S. eliminated 20,000 jobs in February, the 25th 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
January, a revised 60,000 jobs were lost, compared with the 22,000
originally reported, ADP said. The adverse weather had only a very
small effect on the ADP report due to the methodology used to construct
it, ADP said.
An investment group led by J.P. Morgan Asset Management and Water Asset Management said it's buying SouthWest Water Co.
for $275 million, or $11 a share in cash, a 56% premium to Tuesday's
close. Prior to the closing of the acquisition, members of the
partnership will invest approximately $16 million in 2.7 million newly
issued SouthWest Water shares under a private placement, priced at
$6.00 per share. SouthWest Water intends to use the proceeds to assist
the financing of ongoing utility infrastructure investments.
Banks that are seen as too large to fail should be broken up in order
to make the financial system more stable, Dallas Federal Reserve
President Richard Fisher said on Wednesday.
Costco also said February same-store sales rose 9 percent, including the impact of fuel prices and foreign exchange.
Costco earned $299
million, or 67 cents per share, for its fiscal second quarter, ended
Feb. 14, compared with $239 million, or 55 cents per share, a year
earlier.
Excluding a charge
for employee benefits, Costco earned 70 cents per share. Analysts, on
average, were expecting 72 cents, according to Thomson Reuters I/B/E/S.
Quarterly sales rose 11 percent to $18.36 billion excluding membership fees, which rose 9 percent to $386 million.
Millions of homeowners haven't benefited from the lowest mortgage rates
in nearly a half-century because they can't or won't refinance.
Jamie Dimon, chairman of JP Morgan Chase, has warned American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes.
There were 42,090 layoff intentions announced in
February, down sharply from 71,482 in January and from the 186,350 job
cuts announced in February 2009, job placement firm Challenger, Gray and
Christmas, Inc. said in a report released Wednesday. The data are not
seasonally adjusted.
Layoffs in February were led by the pharmaceutical sector, which
reported 25,857 job reductions in the month. Challenger noted that Merck
had announced a larger number of post-merger layoffs.
"It may be a couple of more months before hiring begins to surge,
but it is clear that employers have shifted away from downsizing and are
poised to start adding workers," said John Challenger, chief executive
officer of Challenger, Gray & Christmas.
"We are seeing more job cuts related to business strategy, as
opposed to cuts stemming from recessionary pressure," he added. "In
other words, we expect more cuts from mergers and acquisitions or from
companies shifting focus from one business area to another."
Of the 42,090 job cut intentions reported in February, 20,068 were
reported to be due to mergers and acquisitions.
In other data released, hiring intentions fell to 8,300 in February
from 31,381 in January and from 14,972 in February 2009. February hiring
plans were led by the electronics sector.
The ISM Services Index for February came in at 53.0, which is above the
reading of 51.0 that had been widely expected and up from the 50.5
that had been posted in January.
The percentage of U.S. home sellers who cut their asking price
declined again in February and sellers made slightly smaller reductions
in prices, real estate website Zillow.com said on Wednesday.
The
median list price of homes, however, fell in January, Zillow said in a
report, which was obtained by Reuters ahead of its scheduled release.
Nearly
one in five homes, or 19.5 percent, listed for sale on the Zillow
website had at least one price reduction as of the end of February,
down from 19.8 percent in January, Zillow said.
Home sellers reduced prices by a median 6.7 percent in February, down from 6.8 percent in January.
The
percentage of homes on the market with price reductions has declined
steadily for much of the past year. In February 2009 more than
one-third, or 33.2 percent, of homes listed on Zillow had a price
reduction, and the median reduction was 8.7 percent.
Crude inventories rose by 4.1 million barrels,
or 1.2 percent, to 341.6 million barrels. That was 3.7 percent below
year-ago levels, the Energy Department's Energy Information
Administration said in its weekly report.
Analysts
expected a build of 1.1 million barrels for the week ended Feb. 26,
according to a survey by Platts, the energy information arm of
McGraw-Hill Cos.
Gasoline
inventories rose by 700,000 barrels, or 0.3 percent, to 231.9 million
barrels. That was higher than analysts' expectations and 7.4 percent
above year-ago levels.
Demand
for gasoline over the four weeks ended Feb. 26 was 0.1 percent higher
than a year earlier, averaging nearly 8.8 million barrels a day.
At
the same time, U.S. refineries ran at 81.9 percent of total capacity on
average, a rise of 0.7 percentage point from the prior week. Analysts
expected capacity to fall to 81.1 percent.
Inventories
of distillate fuel, which include diesel and heating oil, fell by
900,000 barrels to 151.8 million barrels for the week ended Feb. 26.
Analysts expected a decline of 975,000 barrels.
EIA expects this year's annual average natural gas Henry Hub
spot price to be $5.37 per million Btu (MMBtu), a $1.42-per-MMBtu increase over
the 2009 average of $3.95. EIA projects
continuing price increases in 2011, averaging $5.86 per MMBtu for the
year.
Erasing a roughly 60-point climb, the Dow Jones Industrial Average ended at 10,396.76, off 9.22 points or 0.1%. The S&P 500 Index added half a point to end at 1,118.79, while the Nasdaq Composite Index finished almost flat at 2,280.68.
Private-sector firms in the
U.S. eliminated 20,000 jobs in February, the 25th 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
January, a revised 60,000 jobs were lost, compared with the 22,000
originally reported, ADP said. The adverse weather had only a very
small effect on the ADP report due to the methodology used to construct
it, ADP said.
An investment group led by J.P. Morgan Asset Management and Water Asset Management said it's buying SouthWest Water Co.
for $275 million, or $11 a share in cash, a 56% premium to Tuesday's
close. Prior to the closing of the acquisition, members of the
partnership will invest approximately $16 million in 2.7 million newly
issued SouthWest Water shares under a private placement, priced at
$6.00 per share. SouthWest Water intends to use the proceeds to assist
the financing of ongoing utility infrastructure investments.
Banks that are seen as too large to fail should be broken up in order
to make the financial system more stable, Dallas Federal Reserve
President Richard Fisher said on Wednesday.
Costco also said February same-store sales rose 9 percent, including the impact of fuel prices and foreign exchange.
Costco earned $299
million, or 67 cents per share, for its fiscal second quarter, ended
Feb. 14, compared with $239 million, or 55 cents per share, a year
earlier.
Excluding a charge
for employee benefits, Costco earned 70 cents per share. Analysts, on
average, were expecting 72 cents, according to Thomson Reuters I/B/E/S.
Quarterly sales rose 11 percent to $18.36 billion excluding membership fees, which rose 9 percent to $386 million.
Millions of homeowners haven't benefited from the lowest mortgage rates
in nearly a half-century because they can't or won't refinance.
Jamie Dimon, chairman of JP Morgan Chase, has warned American investors should be more worried about the risk of default of the state of California than of Greece's current debt woes.
There were 42,090 layoff intentions announced in
February, down sharply from 71,482 in January and from the 186,350 job
cuts announced in February 2009, job placement firm Challenger, Gray and
Christmas, Inc. said in a report released Wednesday. The data are not
seasonally adjusted.
Layoffs in February were led by the pharmaceutical sector, which
reported 25,857 job reductions in the month. Challenger noted that Merck
had announced a larger number of post-merger layoffs.
"It may be a couple of more months before hiring begins to surge,
but it is clear that employers have shifted away from downsizing and are
poised to start adding workers," said John Challenger, chief executive
officer of Challenger, Gray & Christmas.
"We are seeing more job cuts related to business strategy, as
opposed to cuts stemming from recessionary pressure," he added. "In
other words, we expect more cuts from mergers and acquisitions or from
companies shifting focus from one business area to another."
Of the 42,090 job cut intentions reported in February, 20,068 were
reported to be due to mergers and acquisitions.
In other data released, hiring intentions fell to 8,300 in February
from 31,381 in January and from 14,972 in February 2009. February hiring
plans were led by the electronics sector.
The ISM Services Index for February came in at 53.0, which is above the
reading of 51.0 that had been widely expected and up from the 50.5
that had been posted in January.
The percentage of U.S. home sellers who cut their asking price
declined again in February and sellers made slightly smaller reductions
in prices, real estate website Zillow.com said on Wednesday.
The
median list price of homes, however, fell in January, Zillow said in a
report, which was obtained by Reuters ahead of its scheduled release.
Nearly
one in five homes, or 19.5 percent, listed for sale on the Zillow
website had at least one price reduction as of the end of February,
down from 19.8 percent in January, Zillow said.
Home sellers reduced prices by a median 6.7 percent in February, down from 6.8 percent in January.
The
percentage of homes on the market with price reductions has declined
steadily for much of the past year. In February 2009 more than
one-third, or 33.2 percent, of homes listed on Zillow had a price
reduction, and the median reduction was 8.7 percent.
Crude inventories rose by 4.1 million barrels,
or 1.2 percent, to 341.6 million barrels. That was 3.7 percent below
year-ago levels, the Energy Department's Energy Information
Administration said in its weekly report.
Analysts
expected a build of 1.1 million barrels for the week ended Feb. 26,
according to a survey by Platts, the energy information arm of
McGraw-Hill Cos.
Gasoline
inventories rose by 700,000 barrels, or 0.3 percent, to 231.9 million
barrels. That was higher than analysts' expectations and 7.4 percent
above year-ago levels.
Demand
for gasoline over the four weeks ended Feb. 26 was 0.1 percent higher
than a year earlier, averaging nearly 8.8 million barrels a day.
At
the same time, U.S. refineries ran at 81.9 percent of total capacity on
average, a rise of 0.7 percentage point from the prior week. Analysts
expected capacity to fall to 81.1 percent.
Inventories
of distillate fuel, which include diesel and heating oil, fell by
900,000 barrels to 151.8 million barrels for the week ended Feb. 26.
Analysts expected a decline of 975,000 barrels.
EIA expects this year's annual average natural gas Henry Hub
spot price to be $5.37 per million Btu (MMBtu), a $1.42-per-MMBtu increase over
the 2009 average of $3.95. EIA projects
continuing price increases in 2011, averaging $5.86 per MMBtu for the
year.
Erasing a roughly 60-point climb, the Dow Jones Industrial Average ended at 10,396.76, off 9.22 points or 0.1%. The S&P 500 Index added half a point to end at 1,118.79, while the Nasdaq Composite Index finished almost flat at 2,280.68.
Tuesday, March 02, 2010
Obama
3/2/10 Obama
Obama Eyes Stopping US Drilling
Intelligence Group, Inc. (click for details)
Tuesday, March 2, 2010
Display Printer Friendly Page
The Obama administration is taking steps to close off several parts of
the Intermountain West to industrial activity, including four areas
believed to hold significant oil and natural gas deposits.
If successful, the initiative would block future production of
hydrocarbons in the San Rafael Swell in Utah, the Otero Mesa in New
Mexico, the Vermillion Basin in Colorado, and the Northern Prairie in
Montana.
The US Interior Department is leading the effort and says it is
authorized to take such action under the Antiquities Act of 1906.
Interior officials hope to designate 14 areas as "national monuments,"
which would ban drilling or other activities that may disturb the
landscape. Existing leaseholders would not be affected.
One area targeted for national monument status, the 1.2 million-acre
Otero Mesa in southeastern New Mexico, is believed to hold large
natural gas deposits. The Bush administration allowed companies to
drill some exploratory wells in the region several years ago.
Broader development initiatives have been delayed, however, after a US
appeals court ordered federal agencies last May to conduct preparatory
planning work again to comply better with guidelines outlined in the
National Environmental Policy Act.
Washington Post: "IN AMERICA'S climate debate, one of the most promising developments of
recent months has been the growing recognition in Washington that
natural gas may play a key role in curbing carbon emissions. The
resurgence of gas comes through the discovery of massive deposits in
Appalachian shale formations and elsewhere -- a reserve that offers the
prospect of stable domestic supplies and relatively low prices. Since
burning natural gas produces half the emissions of burning coal,
switching the two fuels could put a significant dent in America's
carbon footprint."
Fertilizer maker CF Industries Holdings Inc relaunched a hostile bid worth $4.75 billion to buy rival Terra Industries in a move to break up Terra's planned takeover by Norway's Yara International.
CF,
which had called off a year-long effort to buy Terra in January, said
it was now offering $47.40 per share in cash and stock for the company
based on Monday's closing prices. Terra shares were up 12.5 percent to
$46.35.
The move is the latest chapter in the battle by fertilizer companies to expand their market shares in the agricultural industry,
which has started to rebound as the global economic crisis fades.
Last month, Terra agreed to be bought by Yara for $4.1 billion in an all-cash deal that valued the company at $41.10 per share.
BP has made a
joint- venture deal with privately held Lewis Energy Group that will
expand the British oil giant's position in the U.S. natural gas
business and find it entering a fast-emerging field in South Texas,
according to a person familiar with the situation.
Under the deal, BP
will take a 50 percent stake in 80,000 acres of the Eagle Ford Shale
play and is acquiring additional acreage in smaller pending deals, the
person said.
Company officials
are expected to announce the venture in London today at BP's annual
strategy presentation to investors and analysts.
Daren Beaudo, a BP
spokesman in Houston, declined to comment. Officials with San
Antonio-based Lewis could not be reached for comment.
The deal would be
the latest in a string of similar moves by major oil companies to enter
or expand in unconventional rock formations in the U.S., where huge
amounts of natural gas have been discovered in recent years.
In December, Exxon
Mobil Corp. said it would acquire Fort Worth's XTO Energy in a deal
valued at $41 billion. A month later, France's Total agreed to pay $2.3
billion for 25 percent of Chesapeake Energy Corp.'s acreage in the
Barnett Shale play in North Texas, and the companies said they may
jointly develop acreage in the Eagle Ford Shale and in several Canadian
natural gas plays.
Royal Dutch Shell,
Norway's Statoil and others have also written big checks for access to
North American shale plays, and so has BP.
In 2008, BP did two
deals with Oklahoma City-based Chesapeake, worth nearly $3.7 billion,
that gave it access to unconventional reserves in Oklahoma and Arkansas.
Oil companies are
looking to expand holdings of natural gas amid stricter environmental
laws and forecasts that use of cleaner-burning fuel will grow in coming
years.
The White House also wants to add $37 billion in taxes on U.S. oil and
natural gas companies, rehashing a proposal to Congress that failed the
first time around. History shows that once drilling costs jump due to
higher taxes, investment starts to dry up.
The board of bankrupt LyondellBasell Industries AF rejected a $14.5
billion bid from Reliance Industries Ltd., an oil refiner and explorer
controlled by India's richest man, two people briefed on the matter
said.
Australia’s central bank resumed
raising interest rates after a one-meeting pause, judging that
faster-than-anticipated economic growth will allay concerns
that European deficits may roil global confidence.
Reserve Bank of Australia Governor Glenn Stevens increased
the benchmark overnight cash rate target to 4 percent from 3.75
percent in Sydney today, as forecast by 14 of 19 economists in a
Bloomberg News survey. The rest saw no change. Stevens said
rates should be closer to “average,” which he last week signaled
may be 75 basis points higher than today’s new level.
The massive earthquake that struck Chile on Saturday may have
shifted the Earth's axis and created shorter days, scientists at NASA
say.
The change is negligible, but permanent: Each day should be
1.26 microseconds shorter, according to preliminary calculations. A
microsecond is one-millionth of a second.
A large quake shifts massive amounts of rock and alters the distribution of mass on the planet.
When
that distribution changes, it changes the rate at which the planet
rotates. And the rotation rate determines the length of a day.
"Any
worldly event that involves the movement of mass affects the Earth's
rotation," Benjamin Fong Chao, of NASA's Goddard Space Flight Center in
Greenbelt, Maryland, said while explaining the phenomenon in 2005.
"Taxpayers filed 142.4 million individual income tax returns for 2008, which was 0.5 percent fewer than the 143.0 million returns filed for 2007. Adjusted gross income (AGI) also declined between 2007 and 2008, falling by 3.7 percent to $8.2 trillion. This was the first time since 2002 that AGI decreased from the previous year. Also between 2007 and 2008, taxable income decreased 5.1 percent to $5.6 trillion, total income tax decreased by 6.2 percent to $1.0 trillion, and total tax liability fell by 6.0 percent to just under $1.1 trillion. "
"It's clear IBM is moving work offshore at a record rate," said Lee Conrad, national field coordinator ofAlliance@IBM.
The
union reported that IBM had cut more than 1,200 jobs in the U.S. and
Canada as of Monday afternoon. Conrad said the total is likely to
increase as more information is collected.
Facing increasing
competition, IBM has been cutting staff for years. The global
technology giant employs an estimated 10,000 in Research Triangle Park.
The New York-based company laid off about 10,400 people last year in
North America, according to Alliance@IBM.
ZeroHedge: "February was not an auspicious start to Obama's record budget
deficit-busting plans. The Daily Treasury Statement for the full month
of February was just released, and it disclosed that while corporate
tax withholdings, net of refunds, actually climbed marginally to $3.4
billion from $(3.4) billion in February 2009, individual tax
withholdings plunged to a multi-year low of $30.7 billion. Combined,
the two items also posted a multi low of $34 billion, less than the
previous recent low from February 2009 when the first leg of the
Greater Depression was allegedly at its zenith."
. OSI Pharmaceuticals Inc. rejected a
$52-a-share hostile takeover bid from Astellas Pharma Inc. as investors
anticipated a higher offer and possible bidding war. OSI “is not
interested in undertaking a sale” at that price, the Melville, New
York-based company said yesterday in response to the $3.5 billion cash
offer from Astellas, Japan’s second-largest drugmaker. If successful,
the tender offer starting today would help Astellas gain treatments for
cancer, a key growth area the Tokyo-based company has identified to
cope with falling sales of its biggest drug Prograf. The takeover
attempt follows Astellas’ failed $1.1 billion offer last year for CV
Therapeutics Inc and analysts say it may face a rival bid from
Roche Holding AG, OSI’s partner for the Tarceva cancer drug.
Winter Storms to Distort US Jobless Figures - Summers.
For the week ended Feb. 27, retail sales fell 0.8% from the week
earlier and eked out a 0.7% gain from a year ago, according to data
from the International Council of Shopping Centers and Goldman Sachs released on Tuesday.
The success of wind power in Texas has come at the expense of natural
gas. If the wind build-out continues, by 2013 the amount of gas
consumed to make electricity could fall by 18.5%, as gas plants sit
idle for longer, according to Tudor Pickering & Holt, a
Houston-based energy investment bank.
Pfizer Inc is set to join the bidding for German generic-drug maker Ratiopharm GmbH, offering as much as 3 billion euros, Bloomberg reported on Tuesday.
The Dow Jones Industrial Average ended at 10,405.98, up 2.19 points. The S&P 500 Index added 2.6 points, or 0.2%, to finish at 1,118.31. The Nasdaq Composite Index climbed 7.22 points, or 0.3%, to 2,280.79.
Obama Eyes Stopping US Drilling
Intelligence Group, Inc. (click for details)
Tuesday, March 2, 2010
Display Printer Friendly Page
The Obama administration is taking steps to close off several parts of
the Intermountain West to industrial activity, including four areas
believed to hold significant oil and natural gas deposits.
If successful, the initiative would block future production of
hydrocarbons in the San Rafael Swell in Utah, the Otero Mesa in New
Mexico, the Vermillion Basin in Colorado, and the Northern Prairie in
Montana.
The US Interior Department is leading the effort and says it is
authorized to take such action under the Antiquities Act of 1906.
Interior officials hope to designate 14 areas as "national monuments,"
which would ban drilling or other activities that may disturb the
landscape. Existing leaseholders would not be affected.
One area targeted for national monument status, the 1.2 million-acre
Otero Mesa in southeastern New Mexico, is believed to hold large
natural gas deposits. The Bush administration allowed companies to
drill some exploratory wells in the region several years ago.
Broader development initiatives have been delayed, however, after a US
appeals court ordered federal agencies last May to conduct preparatory
planning work again to comply better with guidelines outlined in the
National Environmental Policy Act.
Washington Post: "IN AMERICA'S climate debate, one of the most promising developments of
recent months has been the growing recognition in Washington that
natural gas may play a key role in curbing carbon emissions. The
resurgence of gas comes through the discovery of massive deposits in
Appalachian shale formations and elsewhere -- a reserve that offers the
prospect of stable domestic supplies and relatively low prices. Since
burning natural gas produces half the emissions of burning coal,
switching the two fuels could put a significant dent in America's
carbon footprint."
Fertilizer maker CF Industries Holdings Inc relaunched a hostile bid worth $4.75 billion to buy rival Terra Industries in a move to break up Terra's planned takeover by Norway's Yara International
CF,
which had called off a year-long effort to buy Terra in January, said
it was now offering $47.40 per share in cash and stock for the company
based on Monday's closing prices. Terra shares were up 12.5 percent to
$46.35.
The move is the latest chapter in the battle by fertilizer companies to expand their market shares in the agricultural industry,
which has started to rebound as the global economic crisis fades.
Last month, Terra agreed to be bought by Yara for $4.1 billion in an all-cash deal that valued the company at $41.10 per share.
BP has made a
joint- venture deal with privately held Lewis Energy Group that will
expand the British oil giant's position in the U.S. natural gas
business and find it entering a fast-emerging field in South Texas,
according to a person familiar with the situation.
Under the deal, BP
will take a 50 percent stake in 80,000 acres of the Eagle Ford Shale
play and is acquiring additional acreage in smaller pending deals, the
person said.
Company officials
are expected to announce the venture in London today at BP's annual
strategy presentation to investors and analysts.
Daren Beaudo, a BP
spokesman in Houston, declined to comment. Officials with San
Antonio-based Lewis could not be reached for comment.
The deal would be
the latest in a string of similar moves by major oil companies to enter
or expand in unconventional rock formations in the U.S., where huge
amounts of natural gas have been discovered in recent years.
In December, Exxon
Mobil Corp. said it would acquire Fort Worth's XTO Energy in a deal
valued at $41 billion. A month later, France's Total agreed to pay $2.3
billion for 25 percent of Chesapeake Energy Corp.'s acreage in the
Barnett Shale play in North Texas, and the companies said they may
jointly develop acreage in the Eagle Ford Shale and in several Canadian
natural gas plays.
Royal Dutch Shell,
Norway's Statoil and others have also written big checks for access to
North American shale plays, and so has BP.
In 2008, BP did two
deals with Oklahoma City-based Chesapeake, worth nearly $3.7 billion,
that gave it access to unconventional reserves in Oklahoma and Arkansas.
Oil companies are
looking to expand holdings of natural gas amid stricter environmental
laws and forecasts that use of cleaner-burning fuel will grow in coming
years.
The White House also wants to add $37 billion in taxes on U.S. oil and
natural gas companies, rehashing a proposal to Congress that failed the
first time around. History shows that once drilling costs jump due to
higher taxes, investment starts to dry up.
The board of bankrupt LyondellBasell Industries AF rejected a $14.5
billion bid from Reliance Industries Ltd., an oil refiner and explorer
controlled by India's richest man, two people briefed on the matter
said.
Australia’s central bank resumed
raising interest rates after a one-meeting pause, judging that
faster-than-anticipated economic growth will allay concerns
that European deficits may roil global confidence.
Reserve Bank of Australia Governor Glenn Stevens increased
the benchmark overnight cash rate target to 4 percent from 3.75
percent in Sydney today, as forecast by 14 of 19 economists in a
Bloomberg News survey. The rest saw no change. Stevens said
rates should be closer to “average,” which he last week signaled
may be 75 basis points higher than today’s new level.
The massive earthquake that struck Chile on Saturday may have
shifted the Earth's axis and created shorter days, scientists at NASA
say.
The change is negligible, but permanent: Each day should be
1.26 microseconds shorter, according to preliminary calculations. A
microsecond is one-millionth of a second.
A large quake shifts massive amounts of rock and alters the distribution of mass on the planet.
When
that distribution changes, it changes the rate at which the planet
rotates. And the rotation rate determines the length of a day.
"Any
worldly event that involves the movement of mass affects the Earth's
rotation," Benjamin Fong Chao, of NASA's Goddard Space Flight Center in
Greenbelt, Maryland, said while explaining the phenomenon in 2005.
"Taxpayers filed 142.4 million individual income tax returns for 2008, which was 0.5 percent fewer than the 143.0 million returns filed for 2007. Adjusted gross income (AGI) also declined between 2007 and 2008, falling by 3.7 percent to $8.2 trillion. This was the first time since 2002 that AGI decreased from the previous year. Also between 2007 and 2008, taxable income decreased 5.1 percent to $5.6 trillion, total income tax decreased by 6.2 percent to $1.0 trillion, and total tax liability fell by 6.0 percent to just under $1.1 trillion. "
"It's clear IBM is moving work offshore at a record rate," said Lee Conrad, national field coordinator ofAlliance@IBM.
The
union reported that IBM had cut more than 1,200 jobs in the U.S. and
Canada as of Monday afternoon. Conrad said the total is likely to
increase as more information is collected.
Facing increasing
competition, IBM has been cutting staff for years. The global
technology giant employs an estimated 10,000 in Research Triangle Park.
The New York-based company laid off about 10,400 people last year in
North America, according to Alliance@IBM.
ZeroHedge: "February was not an auspicious start to Obama's record budget
deficit-busting plans. The Daily Treasury Statement for the full month
of February was just released, and it disclosed that while corporate
tax withholdings, net of refunds, actually climbed marginally to $3.4
billion from $(3.4) billion in February 2009, individual tax
withholdings plunged to a multi-year low of $30.7 billion. Combined,
the two items also posted a multi low of $34 billion, less than the
previous recent low from February 2009 when the first leg of the
Greater Depression was allegedly at its zenith."
. OSI Pharmaceuticals Inc. rejected a
$52-a-share hostile takeover bid from Astellas Pharma Inc. as investors
anticipated a higher offer and possible bidding war. OSI “is not
interested in undertaking a sale” at that price, the Melville, New
York-based company said yesterday in response to the $3.5 billion cash
offer from Astellas, Japan’s second-largest drugmaker. If successful,
the tender offer starting today would help Astellas gain treatments for
cancer, a key growth area the Tokyo-based company has identified to
cope with falling sales of its biggest drug Prograf. The takeover
attempt follows Astellas’ failed $1.1 billion offer last year for CV
Therapeutics Inc and analysts say it may face a rival bid from
Roche Holding AG, OSI’s partner for the Tarceva cancer drug.
Winter Storms to Distort US Jobless Figures - Summers.
For the week ended Feb. 27, retail sales fell 0.8% from the week
earlier and eked out a 0.7% gain from a year ago, according to data
from the International Council of Shopping Centers and Goldman Sachs released on Tuesday.
The success of wind power in Texas has come at the expense of natural
gas. If the wind build-out continues, by 2013 the amount of gas
consumed to make electricity could fall by 18.5%, as gas plants sit
idle for longer, according to Tudor Pickering & Holt, a
Houston-based energy investment bank.
Pfizer Inc is set to join the bidding for German generic-drug maker Ratiopharm GmbH, offering as much as 3 billion euros, Bloomberg reported on Tuesday.
The Dow Jones Industrial Average ended at 10,405.98, up 2.19 points. The S&P 500 Index added 2.6 points, or 0.2%, to finish at 1,118.31. The Nasdaq Composite Index climbed 7.22 points, or 0.3%, to 2,280.79.
Monday, March 01, 2010
March 1
March 1
Floyd Norris: "More than $1 in every $10 that American banks have
outstanding in loans is lent to a troubled borrower, a ratio far higher
than previously seen in the quarter-century that such numbers have been
compiled."
Mike Burk: "The market comfortably consolidated its mid February gains last week. That consolidation may continue for a few more days, but, the 1st few days of March are seasonally very strong.
I expect the major averages to be higher on Friday March 5 than they were on Friday February 26."
U.S. consumer spending rose 0.5% in January, while income increased 0.1%.
Real disposable income decreased 0.6 percent in January, in contrast to an increase of 0.2 percent in December. Real PCE increased 0.3 percent, compared with an increase of 0.1 percent.
Government wage and salary disbursements increased $6.1 billion, compared with an increase of $2.7 billion. Pay raises for federal civilian and military personnel added $7.1 billion to government payrolls in January.
Prudential Plc, Britain’s biggest
insurer, agreed to buy an Asian life insurance unit from
American International Group Inc. for $35.5 billion in cash and
stock to gain more than 20 million customers in the region.
“Natural gas prices, as if wounded by the
resiliency of domestic production, continue to weaken despite steady
draws on inventories that well exceed last year's pace,” analysts at
Barclays Capital wrote in a note today. Technically,
the charts are bearish, says MF Global’s Mike Fitzpatrick, who expects
$4 natural gas to be tested very soon. Optimists at the U.S. Energy
Information Administration see natural gas futures averaging
$5.37/mmBTU this year.
Germany and France will help bail out Greece by taking 50% of a 30 billion euro offering by the troubled nation.
A winter storm that pummeled New York
City for two days broke a monthly record for snowfall in Central Park
that stood for 114 years, according to the National Weather Service.
China Manufacturing Slows More Sharply Than Expected. The
pace of Chinese manufacturing slowed more sharply than expected last
month, an official survey of purchasing managers showed on Monday.
Output and new orders -- both aggregate and overseas orders -- remained
above the threshold of 50 that indicates an expansion of activity. But
backlogs of orders, employment and stocks of purchases all fell below
the boom-bust line, according to the survey, which is compiled by the
China Federation of Logistics and Purchasing (CFLP) for the National
Bureau of Statistics.
The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows that 25%
of the nation's voters Strongly Approve of the way that Barack Obama is
performing his role as President. Forty-two percent (42%) Strongly
Disapprove giving Obama a Presidential Approval Index rating of -17.
“I’ll tell you one thing, if Speaker
Pelosi rams this bill through the House using a reconciliation process,
they will lose their majority in Congress in November,” House Minority
Whip Eric Cantor (R-Va.) said on NBC’s “Meet the Press.”
March 1 (Bloomberg) -- Federal Reserve Vice Chairman Donald
Kohn said he will leave in June after four decades at the
central bank, where he helped Ben S. Bernanke and Alan Greenspan steer the U.S. through recessions and crises.
Kohn, 67, said he is resigning effective June 23, the end
of his four-year term as vice chairman. History will judge
Chairman Bernanke and the Fed to have met challenges over the
last several years “with great speed, imagination and
effectiveness,” Kohn said in his resignation letter to
President Barack Obama, released today by the Fed.
The departure opens a third vacancy on the seven-member Fed
Board of Governors, giving Obama the chance to pick a majority
of the panel after appointing Daniel Tarullo in 2009.
"Reconciliation cannot be used to pass comprehensive health care
reform," Sen. Kent Conrad, D-North Dakota, chairman of the Budget
Committee, told CBS' "Face the Nation." He added, "It won't work
because it was never designed for that kind of significant legislation."
But
under the scenario Democrats are considering, the procedure could prove
to be the key to enacting the full package of reforms.
To get to
the president's desk, a bill must first win passage in the House of
Representatives and Senate. Last year, the two chambers voted -- and
passed -- different versions of the bill. They differ on key points.
Africa’s biggest gold mines face an indefinite strike
from March 7 unless owner Gold Fields Ltd. resolves a dispute over a
fitness test with South Africa’s largest labor union.
The National Union of Mineworkers threatened to stop
work at all of the company’s operations unless the test for new
recruits is abolished, Johannesburg-based Gold Fields said in a
statement today. Gold Fields is Africa’s third-largest producer of the
precious metal.
South Africa has the world’s deepest and most
dangerous mines, where workers drill the metal out of rock as deep as
2.35 miles (3.8 kilometers) underground in hot, dark and damp
conditions. Some 164 miners died in rockfalls, transportation and other
accidents at the mines last year, the NUM said.
The Institute for Supply Management said Monday its manufacturing index
read 56.5 last month, slightly slower than the 58.4 growth in January.
It was also slower than the 58 level expected by economists polled by
Thomson Reuters.
Spending on
U.S. construction projects fell at a seasonally adjusted rate of 0.6%
in January, the Commerce Department estimated Monday. The decline was
wider than the 0.5% drop expected by economists surveyed by
MarketWatch. Spending in December dropped an unrevised 1.2%.
Residential outlays in January rose 1.1%, while nonresidential outlays
fell 1.4%, and public outlays fell 0.7%.
Exxon Mobil Corp.'s spending exceeded its cash flow in 2009, drawing
down one of the oil industry's largest treasure troves in a year of
weak energy prices.
The Texas oil giant received $29.9 billion in cash from operations
and asset sales last year while spending $53.12 billion in capital
investments and money given to investors via dividends and share
buybacks. Exxon's cash reserves -- padded by years of booming energy
prices -- shrank to $10.7 billion at the end of 2009 from $31.4 billion
at the close of 2008, according to an annual filing Friday with the
Securities and Exchange Commission.“
Caixin: What is your attitude toward China now? Positive or negative?
“Soros: I’m very cautious, until the economy cools off a little. When it does, I will be more optimistic again.
“James Dunne, senior managing principal of Sandler O’Neill, said 300 to
400 banks could be seized this year, especially as institutions start
to deal with deteriorating commercial real estate loans.
“Monetary policy has worked very well,” said Sebastien
Lavoie, an economist at Laurentian Bank Securities in Montreal.
The Bank of Canada estimates consumers will account for more
than half of a 2.9 percent expansion this year.
When the bank raises rates “it won’t be baby steps; it
will be major jumps,” Lavoie said. The first increase could be
three-quarters of a percentage point, he said, and the rate
could reach 3 percent next year, he said.
The main runway at New York's John F. Kennedy International will be
closed for four months starting March 1. Millions of travelers will
experience delays — including some not flying anywhere near the Big
Apple.
With about one-third of JFK's
traffic and half of its departures being diverted to three smaller
runways, planes will wait on longer lines on the ground for takeoffs
and in the air for landings. Delays at one of the nation's largest
airports will ripple to cities across the U.S., including Los Angeles, San Francisco and Orlando.
Two thousand federal transportation workers were furloughed without
pay on Monday, and the Obama administration said they have a Kentucky
senator to blame for it.
Federal reimbursements to states for
highway programs will also be halted, the Transportation Department
said in a statement late Sunday. The reimbursements amount to about
$190 million a day, according to the House Transportation and
Infrastructure Committee.
The furloughs and freeze on payments
were the result of a decision last week by Republican Sen. Jim Bunning
to block passage of legislation that would have extended federal
highway and transit programs, the department said. Those programs
expired at midnight Sunday.
The extension of transportation
programs was part of a larger package of government programs that also
expired Sunday, including unemployment benefits for about 400,000
Americans.
Bunning objected to the $10 billion measure, saying it
would add to the budget deficit. He didn't respond to a request Monday for comment.
Oil futures closed lower Monday,
undercut by a higher dollar, worse-than-expected manufacturing data
that suggested lingering pressure on energy demand, and profit-taking
after the contract topped $80 a barrel. Oil for April delivery closed
New York floor trade at $78.70 a barrel, off 96 cents, or 1.2%. Natural
gas for Aril delivery closed at $4.679 per million British thermal
units, down 13 cents, or 2.8%. The most active heating-oil and
natural-gas futures also closed lower.
The Dow Jones industrials closed up 79 points to 10,404. The Nasdaq Composite Index added 35 points to 2,270, and the Standard & Poor's 500 Index gained 11 points to 1,116. Here's how the market compares with a year ago. On March 2, 2009, the first day of trading in March, the Dow fell a whopping 300 point, or 4.2%, to 6,763. A week later, the blue-chip index bottomed at 6,547.
Floyd Norris: "More than $1 in every $10 that American banks have
outstanding in loans is lent to a troubled borrower, a ratio far higher
than previously seen in the quarter-century that such numbers have been
compiled."
Mike Burk: "The market comfortably consolidated its mid February gains last week. That consolidation may continue for a few more days, but, the 1st few days of March are seasonally very strong.
I expect the major averages to be higher on Friday March 5 than they were on Friday February 26."
U.S. consumer spending rose 0.5% in January, while income increased 0.1%.
Real disposable income decreased 0.6 percent in January, in contrast to an increase of 0.2 percent in December. Real PCE increased 0.3 percent, compared with an increase of 0.1 percent.
Government wage and salary disbursements increased $6.1 billion, compared with an increase of $2.7 billion. Pay raises for federal civilian and military personnel added $7.1 billion to government payrolls in January.
Prudential Plc, Britain’s biggest
insurer, agreed to buy an Asian life insurance unit from
American International Group Inc. for $35.5 billion in cash and
stock to gain more than 20 million customers in the region.
“Natural gas prices, as if wounded by the
resiliency of domestic production, continue to weaken despite steady
draws on inventories that well exceed last year's pace,” analysts at
Barclays Capital wrote in a note today. Technically,
the charts are bearish, says MF Global’s Mike Fitzpatrick, who expects
$4 natural gas to be tested very soon. Optimists at the U.S. Energy
Information Administration see natural gas futures averaging
$5.37/mmBTU this year.
Germany and France will help bail out Greece by taking 50% of a 30 billion euro offering by the troubled nation.
A winter storm that pummeled New York
City for two days broke a monthly record for snowfall in Central Park
that stood for 114 years, according to the National Weather Service.
China Manufacturing Slows More Sharply Than Expected. The
pace of Chinese manufacturing slowed more sharply than expected last
month, an official survey of purchasing managers showed on Monday.
Output and new orders -- both aggregate and overseas orders -- remained
above the threshold of 50 that indicates an expansion of activity. But
backlogs of orders, employment and stocks of purchases all fell below
the boom-bust line, according to the survey, which is compiled by the
China Federation of Logistics and Purchasing (CFLP) for the National
Bureau of Statistics.
The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows that 25%
of the nation's voters Strongly Approve of the way that Barack Obama is
performing his role as President. Forty-two percent (42%) Strongly
Disapprove giving Obama a Presidential Approval Index rating of -17.
“I’ll tell you one thing, if Speaker
Pelosi rams this bill through the House using a reconciliation process,
they will lose their majority in Congress in November,” House Minority
Whip Eric Cantor (R-Va.) said on NBC’s “Meet the Press.”
March 1 (Bloomberg) -- Federal Reserve Vice Chairman Donald
Kohn said he will leave in June after four decades at the
central bank, where he helped Ben S. Bernanke and Alan Greenspan steer the U.S. through recessions and crises.
Kohn, 67, said he is resigning effective June 23, the end
of his four-year term as vice chairman. History will judge
Chairman Bernanke and the Fed to have met challenges over the
last several years “with great speed, imagination and
effectiveness,” Kohn said in his resignation letter to
President Barack Obama, released today by the Fed.
The departure opens a third vacancy on the seven-member Fed
Board of Governors, giving Obama the chance to pick a majority
of the panel after appointing Daniel Tarullo in 2009.
"Reconciliation cannot be used to pass comprehensive health care
reform," Sen. Kent Conrad, D-North Dakota, chairman of the Budget
Committee, told CBS' "Face the Nation." He added, "It won't work
because it was never designed for that kind of significant legislation."
But
under the scenario Democrats are considering, the procedure could prove
to be the key to enacting the full package of reforms.
To get to
the president's desk, a bill must first win passage in the House of
Representatives and Senate. Last year, the two chambers voted -- and
passed -- different versions of the bill. They differ on key points.
Africa’s biggest gold mines face an indefinite strike
from March 7 unless owner Gold Fields Ltd. resolves a dispute over a
fitness test with South Africa’s largest labor union.
The National Union of Mineworkers threatened to stop
work at all of the company’s operations unless the test for new
recruits is abolished, Johannesburg-based Gold Fields said in a
statement today. Gold Fields is Africa’s third-largest producer of the
precious metal.
South Africa has the world’s deepest and most
dangerous mines, where workers drill the metal out of rock as deep as
2.35 miles (3.8 kilometers) underground in hot, dark and damp
conditions. Some 164 miners died in rockfalls, transportation and other
accidents at the mines last year, the NUM said.
The Institute for Supply Management said Monday its manufacturing index
read 56.5 last month, slightly slower than the 58.4 growth in January.
It was also slower than the 58 level expected by economists polled by
Thomson Reuters.
Spending on
U.S. construction projects fell at a seasonally adjusted rate of 0.6%
in January, the Commerce Department estimated Monday. The decline was
wider than the 0.5% drop expected by economists surveyed by
MarketWatch. Spending in December dropped an unrevised 1.2%.
Residential outlays in January rose 1.1%, while nonresidential outlays
fell 1.4%, and public outlays fell 0.7%.
Exxon Mobil Corp.'s spending exceeded its cash flow in 2009, drawing
down one of the oil industry's largest treasure troves in a year of
weak energy prices.
The Texas oil giant received $29.9 billion in cash from operations
and asset sales last year while spending $53.12 billion in capital
investments and money given to investors via dividends and share
buybacks. Exxon's cash reserves -- padded by years of booming energy
prices -- shrank to $10.7 billion at the end of 2009 from $31.4 billion
at the close of 2008, according to an annual filing Friday with the
Securities and Exchange Commission.“
Caixin: What is your attitude toward China now? Positive or negative?
“Soros: I’m very cautious, until the economy cools off a little. When it does, I will be more optimistic again.
“James Dunne, senior managing principal of Sandler O’Neill, said 300 to
400 banks could be seized this year, especially as institutions start
to deal with deteriorating commercial real estate loans.
“Monetary policy has worked very well,” said Sebastien
Lavoie, an economist at Laurentian Bank Securities in Montreal.
The Bank of Canada estimates consumers will account for more
than half of a 2.9 percent expansion this year.
When the bank raises rates “it won’t be baby steps; it
will be major jumps,” Lavoie said. The first increase could be
three-quarters of a percentage point, he said, and the rate
could reach 3 percent next year, he said.
The main runway at New York's John F. Kennedy International will be
closed for four months starting March 1. Millions of travelers will
experience delays — including some not flying anywhere near the Big
Apple.
With about one-third of JFK's
traffic and half of its departures being diverted to three smaller
runways, planes will wait on longer lines on the ground for takeoffs
and in the air for landings. Delays at one of the nation's largest
airports will ripple to cities across the U.S., including Los Angeles, San Francisco and Orlando.
Two thousand federal transportation workers were furloughed without
pay on Monday, and the Obama administration said they have a Kentucky
senator to blame for it.
Federal reimbursements to states for
highway programs will also be halted, the Transportation Department
said in a statement late Sunday. The reimbursements amount to about
$190 million a day, according to the House Transportation and
Infrastructure Committee.
The furloughs and freeze on payments
were the result of a decision last week by Republican Sen. Jim Bunning
to block passage of legislation that would have extended federal
highway and transit programs, the department said. Those programs
expired at midnight Sunday.
The extension of transportation
programs was part of a larger package of government programs that also
expired Sunday, including unemployment benefits for about 400,000
Americans.
Bunning objected to the $10 billion measure, saying it
would add to the budget deficit. He didn't respond to a request Monday for comment.
Oil futures closed lower Monday,
undercut by a higher dollar, worse-than-expected manufacturing data
that suggested lingering pressure on energy demand, and profit-taking
after the contract topped $80 a barrel. Oil for April delivery closed
New York floor trade at $78.70 a barrel, off 96 cents, or 1.2%. Natural
gas for Aril delivery closed at $4.679 per million British thermal
units, down 13 cents, or 2.8%. The most active heating-oil and
natural-gas futures also closed lower.
The Dow Jones industrials closed up 79 points to 10,404. The Nasdaq Composite Index added 35 points to 2,270, and the Standard & Poor's 500 Index gained 11 points to 1,116. Here's how the market compares with a year ago. On March 2, 2009, the first day of trading in March, the Dow fell a whopping 300 point, or 4.2%, to 6,763. A week later, the blue-chip index bottomed at 6,547.
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