10/5/06 Reality In The U.S.
Charlie Brennan, Rocky Mountain News
October 3, 2006
A Denver-area man filed a lawsuit today against a member of the Secret Service for causing him to be arrested after he approached Vice President Dick Cheney in Beaver Creek this summer and criticized him for his policies concerning Iraq.
Attorney David Lane said that on June 16, Steve Howards was walking his 7-year-old son to a piano practice, when he saw Cheney surrounded by a group of people in an outdoor mall area, shaking hands and posing for pictures with several people.
According to the lawsuit filed at U.S. District Court in Denver, Howards and his son walked to about two-to-three feet from where Cheney was standing, and said to the vice president, "I think your policies in Iraq are reprehensible," or words to that effect, then walked on.
Ten minutes later, according to Howards' lawsuit, he and his son were walking back through the same area, when they were approached by Secret Service agent Virgil D. "Gus" Reichle Jr., who asked Howards if he had "assaulted" the vice president. Howards denied doing so, but was nonetheless placed in handcuffs and taken to the Eagle County Jail.
The lawsuit states that the Secret Service agent instructed that Howards should be issued a summons for harassment, but that on July 6 the Eagle County District Attorney's Office dismissed all charges against Howards.
The lawsuit filed today alleges that Howards was arrested in retaliation for having exercised his First Amendment right of free speech, and that his arrest violated his Fourth Amendment protection against unlawful seizure.
Barry Ritholtz: "Cash has outperformed the Dow since January 2000; Even considering reinvested dividends; cash STILL out performs the Dow. The Dow's Real (inflation adjusted) performance, even with dividends reinvested, is significantly below breakeven.
The Commerce Department reported Wednesday that new orders were basically unchanged in August at $403.6 billion following a 1 percent decline in July. The weakness in August reflected big declines in demand for computers and commercial aircraft. The ISM nonmanufacturing index fell to 52.9% from 57.0% in August. New orders rose to 57.2% from 52.1%. The employment index rose to 53.6% from 51.4%. The price index plunged to 56.7% from 72.4% in the previous month.
Wal-Mart Stores Inc. announced Wednesday it has lowered its estimated increase in September sales at stores open at least a year to 1.3 percent from 1.8 percent.
The Mortgage Bankers Association said its market composite index, a measure of loan application volume, rose 11.9 percent to a seasonally adjusted 633.9 from a week earlier.
The American Petroleum Institute said crude supplies rose 2.7 million barrels for the week ended Sept. 29. The Energy Department had reported a climb of 3.3 million barrels. Motor gasoline supplies inventories were down 2.8 million barrels, the API said, contrary to the 1.2 million-barrel climb reported by the government. Distillate stocks fell by 3 million barrels, the API said, vs. the Energy Department's reported 200,000 million-barrel rise.
Marsoft:"The dry bulk rally continued over the past month, with freight rates climbing steadily across the board. The Baltic Dry Index gained about 10% over the past month, topping 4.200 for the first time since early 2005. The Panamax sector was the star performer over the past month, with the Baltic Panamax TC index climbing from $28,000 per day in mid-August to $33,000 per day in mid-September. The other sectors also saw relatively healthy gains. Cape rates, as measured by the Baltic Cape TC index, averaged about $55,000 per day in late August and early September, before jumping above $60,000 per day in mid-September. Likewise, after hovering near $27,000 per day in late August and early September, the Baltic Supramax TC Index rose to $30,000 per day during the second half of September.
Most signs continue to point to booming global steel production as the catalyst behind the dry bulk market’s latest surge. After growing at a 15% annual pace in July, global steel output slowed only slightly in August, growing at a still-impressive 11% pace. The gains continued to be broad-based with European output rising by 9% and North American output up by 10%. But Asian production once again led the way, increasing by 13% compared to a year ago.
Meanwhile, Chinese steel production grew at a 17% pace in August, down from the 19% growth registered in the first seven months of 2006. But this mild slowdown did not prevent Chinese iron ore imports from leaping to a new record-high in August. They totaled nearly 33 million tonnes during the month, about 20% above the average monthly level so far this year. This surge in Chinese iron ore imports has been a key factor in lifting dry bulk freight rates recently, although it is likely that iron ore imports into the rest of the world have also been relatively high.
In addition to a robust iron ore trade, the grain trade appears to have also contributed to the recent runup in the dry bulk freight rates. In particular, U.S. corn and soybean exports in the first half of September were running at nearly twice the year-earlier pace, with shipments to Asia especially strong.
Port delays in Australia have also been rising again recently, contributing to the increase in freight rates. In particular, demurrage at Newcastle has increased due to a combination of strong demand and poor weather conditions."
November crude rose 73 cents to close at $59.41 a barrel. November natural gas added 23.6 cents to close at $5.995 per million British thermal units.
Bernanke: "I think I would estimate that slowing housing construction will probably take about a percentage point off growth in the second half of the year and probably something going into next year as well."
December gold fell $13.50, or 2.3%, to $568 an ounce Wednesday. December silver fell by 29.5 cents to $10.75 an ounce. December copper lost 8 cents to $3.2025 a pound.
Wednesday, October 04, 2006
Monday, October 02, 2006
Prospects
10/4/06 Prospects
From Bloomberg: Michael Hoover, who manages $475 million at U.S. Trust Co.'s Excelsior Energy and Natural Resources Fund, which gained an average 20 percent a year during the past five years. ``China is going to be the engine for growth. It's the second-largest consumer of oil and the faster grower, and they import 23 percent of the world's copper. We think it's going to stay very strong.''
Oil will rise 10 percent to average $75 a barrel next year as China buys more fuel to keep its economy from slowing, says James Gutman, senior commodity analyst at Goldman Sachs Group Inc. A weaker dollar will spur U.S. inflation and send gold up 15 percentto $700 an ounce in the next 12 months, says Michael Lewis, head of commodity research at Deutsche Bank AG.
With Ford Motor Co. eliminating tens of thousands of jobs, U.S. corporate layoff announcements surged by 54% to 100,315 in September, according to Challenger Gray & Christmas released Tuesday. The 100,315 figure for layoff announcements was the most seen since January.
Banta Corp. said Tuesday it's rejecting an unsolicited buyout offer of $47 a share from Cenveo Inc. The Menasha, Wis. printing firm said it's hiring UBS to explore strategic alternatives to maximize shareholder value. Cenveo Inc. after Tuesday's closing bell said it has increased its offer for Banta Corp. to $50 a share.
December gold dropped $15.60, or 2.6%, to $587.70 an ounce in early Tuesday morning trading, the contract's weakest level since Sept. 21. December silver fell by 44 cents, or 3.7%, to $11.21 an ounce and December copper traded at $3.31 a pound, down 11.95 cents, or 3.5%. Meanwhile, crude traded down to $59.70 a barrel.
The comparative cost advantage of taking your business to low-wage countries such as China or India, where unit labor costs in manufacturing are 20 percent lower than in the U.S., are often not the bargain they seem when wages are adjusted for low productivity, according to a report released today by The Conference Board.
This is also true of decisions to locate in Mexico, Central and Eastern Europe rather than in North America and Western Europe.
Conoco's Highlights - Third-Quarter 2006 vs. Second-Quarter 2006
-- Exploration and Production
-- Crude oil prices similar to second quarter.
-- Lower U.S. natural gas prices.
-- Lower worldwide production.
-- Results negatively impacted by recent tax legislation and
revised depreciation, depletion and amortization rates.
-- Refining and Marketing
-- Significantly lower worldwide refining margins.
-- Significantly higher worldwide marketing margins.
-- Improved refining capacity utilization rate in the
mid-90-percent range.
-- Significantly lower turnaround activity.
-- Loss from impairment of certain assets held for sale.
-- LUKOIL Investment
-- Ownership of approximately 19 percent at quarter end.
-- Midstream and Chemicals
-- Midstream and Chemicals results expected to be improved
from the previous quarter.
-- Corporate and Other
-- Corporate expenses anticipated to be lower than the
previous quarter.
-- Debt balance of approximately $27.8 billion.
-- Benefit from hurricane-related insurance impacts.
With the shares trading around the $57 level, I continue to believe they offer an
extraordinary value for intermediate and long-term investors. It's well to remember that you should consider buying straw hats in the winter and not in the summer.
Ford Motor Co. on Tuesday reported a 4.7% rise in September U.S. sales, with mid-size sedans like the Ford Fusion along with a bounce in its flagship F-Series pickup driving the improvement. GM posted a 3.1% decline in September U.S. light vehicle sales and car sales fell 6.4%. GM also cut its fourth-quarter production target by 2% to 1.11 million vehicles.
December gold fell $21.80 to close at a nearly four-month low of $581.50 an ounce. December silver dropped 59.5 cents, or 5.1%, to end at $11.045 an ounce and December copper fell 14.7 cents, or 4.3%, to end at a three-month low of $3.2825 a pound.
November crude dropped $2.35 to close at $58.68 a barrel Tuesday. The contract marked its weakest closing level since late July 2005. November natural gas bucked the trend in energies to close 11.6 cents higher at $5.759 per million British thermal units.
One new name I added yesterday was Hugoton Royalty Trust. The stock is selling under $25 near the 52 week low of $24.30. It yields 6.6% and there has been consistent insider buying all year with no sales. The most recent purchase was only about 3 weeks ago at 8% higher levels.
OPEC President Nigeria called on its fellow OPEC countries to make deeper output cuts on Tuesday as prices tumbled to an 8-month low below $59 a barrel and the tide showed no sign of turning.
Nigeria and Venezuela have already made voluntary reductions to their production from October 1 but the cuts, representing less than one percent of OPEC supply, have failed to halt the steepest drop in oil prices in 15 years.
Valero Energy Corp. after Tuesday's closing bell said it expects to report third quarter earnings of $2.25 to $2.35 per share, a record for the period. Valero said the outlook excludes a $132 million pretax gain on the July sale of 40% of the company's interest in Valero L.P. Analysts polled by Thomson Financial currently expect the company to report, on average, earnings of $2.44 per share. In August, Valero projected third-quarter earnings would come in above second-quarter results and "substantially higher" than analysts' estimate.
"Despite the recent weakness in gasoline margins, distillate margins and sour crude discounts remain very good," said Chief Executive Bill Klesse, in a statement. "The seasonal fall in gasoline margins was more severe than we had expected. However, we believe that with the commencement of fall maintenance in both the U.S. and Europe, and with the falling retail pump prices supporting continued strong gasoline demand, the picture for gasoline margins is improving." The company also noted it bought back 10 million shares during the quarter.
The Dow Jones Industrial Average rose 57 points surpassing its previous all-time closing high of 11,722.98 made on Jan. 14 2000. One might note that the Dow then and now do not have the same composition of 30 companies.
The summer of 2006 was the second warmest in the continental U.S. since records began in 1895, according to the NOAA National Climatic Data Center. Despite some rainfall last month in parts of the country, moderate to extreme drought conditions continue in about 40 percent of the country.
From Bloomberg: Michael Hoover, who manages $475 million at U.S. Trust Co.'s Excelsior Energy and Natural Resources Fund, which gained an average 20 percent a year during the past five years. ``China is going to be the engine for growth. It's the second-largest consumer of oil and the faster grower, and they import 23 percent of the world's copper. We think it's going to stay very strong.''
Oil will rise 10 percent to average $75 a barrel next year as China buys more fuel to keep its economy from slowing, says James Gutman, senior commodity analyst at Goldman Sachs Group Inc. A weaker dollar will spur U.S. inflation and send gold up 15 percentto $700 an ounce in the next 12 months, says Michael Lewis, head of commodity research at Deutsche Bank AG.
With Ford Motor Co. eliminating tens of thousands of jobs, U.S. corporate layoff announcements surged by 54% to 100,315 in September, according to Challenger Gray & Christmas released Tuesday. The 100,315 figure for layoff announcements was the most seen since January.
Banta Corp. said Tuesday it's rejecting an unsolicited buyout offer of $47 a share from Cenveo Inc. The Menasha, Wis. printing firm said it's hiring UBS to explore strategic alternatives to maximize shareholder value. Cenveo Inc. after Tuesday's closing bell said it has increased its offer for Banta Corp. to $50 a share.
December gold dropped $15.60, or 2.6%, to $587.70 an ounce in early Tuesday morning trading, the contract's weakest level since Sept. 21. December silver fell by 44 cents, or 3.7%, to $11.21 an ounce and December copper traded at $3.31 a pound, down 11.95 cents, or 3.5%. Meanwhile, crude traded down to $59.70 a barrel.
The comparative cost advantage of taking your business to low-wage countries such as China or India, where unit labor costs in manufacturing are 20 percent lower than in the U.S., are often not the bargain they seem when wages are adjusted for low productivity, according to a report released today by The Conference Board.
This is also true of decisions to locate in Mexico, Central and Eastern Europe rather than in North America and Western Europe.
Conoco's Highlights - Third-Quarter 2006 vs. Second-Quarter 2006
-- Exploration and Production
-- Crude oil prices similar to second quarter.
-- Lower U.S. natural gas prices.
-- Lower worldwide production.
-- Results negatively impacted by recent tax legislation and
revised depreciation, depletion and amortization rates.
-- Refining and Marketing
-- Significantly lower worldwide refining margins.
-- Significantly higher worldwide marketing margins.
-- Improved refining capacity utilization rate in the
mid-90-percent range.
-- Significantly lower turnaround activity.
-- Loss from impairment of certain assets held for sale.
-- LUKOIL Investment
-- Ownership of approximately 19 percent at quarter end.
-- Midstream and Chemicals
-- Midstream and Chemicals results expected to be improved
from the previous quarter.
-- Corporate and Other
-- Corporate expenses anticipated to be lower than the
previous quarter.
-- Debt balance of approximately $27.8 billion.
-- Benefit from hurricane-related insurance impacts.
With the shares trading around the $57 level, I continue to believe they offer an
extraordinary value for intermediate and long-term investors. It's well to remember that you should consider buying straw hats in the winter and not in the summer.
Ford Motor Co. on Tuesday reported a 4.7% rise in September U.S. sales, with mid-size sedans like the Ford Fusion along with a bounce in its flagship F-Series pickup driving the improvement. GM posted a 3.1% decline in September U.S. light vehicle sales and car sales fell 6.4%. GM also cut its fourth-quarter production target by 2% to 1.11 million vehicles.
December gold fell $21.80 to close at a nearly four-month low of $581.50 an ounce. December silver dropped 59.5 cents, or 5.1%, to end at $11.045 an ounce and December copper fell 14.7 cents, or 4.3%, to end at a three-month low of $3.2825 a pound.
November crude dropped $2.35 to close at $58.68 a barrel Tuesday. The contract marked its weakest closing level since late July 2005. November natural gas bucked the trend in energies to close 11.6 cents higher at $5.759 per million British thermal units.
One new name I added yesterday was Hugoton Royalty Trust. The stock is selling under $25 near the 52 week low of $24.30. It yields 6.6% and there has been consistent insider buying all year with no sales. The most recent purchase was only about 3 weeks ago at 8% higher levels.
OPEC President Nigeria called on its fellow OPEC countries to make deeper output cuts on Tuesday as prices tumbled to an 8-month low below $59 a barrel and the tide showed no sign of turning.
Nigeria and Venezuela have already made voluntary reductions to their production from October 1 but the cuts, representing less than one percent of OPEC supply, have failed to halt the steepest drop in oil prices in 15 years.
Valero Energy Corp. after Tuesday's closing bell said it expects to report third quarter earnings of $2.25 to $2.35 per share, a record for the period. Valero said the outlook excludes a $132 million pretax gain on the July sale of 40% of the company's interest in Valero L.P. Analysts polled by Thomson Financial currently expect the company to report, on average, earnings of $2.44 per share. In August, Valero projected third-quarter earnings would come in above second-quarter results and "substantially higher" than analysts' estimate.
"Despite the recent weakness in gasoline margins, distillate margins and sour crude discounts remain very good," said Chief Executive Bill Klesse, in a statement. "The seasonal fall in gasoline margins was more severe than we had expected. However, we believe that with the commencement of fall maintenance in both the U.S. and Europe, and with the falling retail pump prices supporting continued strong gasoline demand, the picture for gasoline margins is improving." The company also noted it bought back 10 million shares during the quarter.
The Dow Jones Industrial Average rose 57 points surpassing its previous all-time closing high of 11,722.98 made on Jan. 14 2000. One might note that the Dow then and now do not have the same composition of 30 companies.
The summer of 2006 was the second warmest in the continental U.S. since records began in 1895, according to the NOAA National Climatic Data Center. Despite some rainfall last month in parts of the country, moderate to extreme drought conditions continue in about 40 percent of the country.
Well To Remember
10/3/06 Well To Remember
John Hussman: "The total amount of bank reserves in the U.S. banking system is just $43 billion, and that's all the FOMC is responsible for controlling. In an economy with a GDP of $13 trillion and a public debt of over $8 trillion, the Fed Funds rate is based on $43 billion of dough...the Fed is a lot like a little boy who waves his arms whenever he hears music playing, so people come to believe he's actually conducting the band...Except in times of financial crises, when people are trying to convert their deposits into cash and the Fed has a truly legitimate role as a “lender of last resort,” the Fed's moves are essentially irrelevant...To believe that the Fed's actions control the economy is just plain superstition. The only reason to pay attention to the Fed is that other investors are not rid of this superstition."
Harrah's Entertainment Inc. said its board has received a $81-a-share buyout offer from Apollo Management and Texas Pacific Group. Harrah's said its board established a special committee consisting of all nonmanagement directors to review the proposal. The committee hired UBS Securities LLC as its financial adviser and Kaye Scholer LLP as its legal adviser. Harrah's said there is no assurance that it will enter into this or any other transaction.
Wal-Mart's September same store sales rose 1.8%. This was slightly below their forecast for a 1% to 3% increase.
Gilead Sciences Inc. agreed to acquire Myogen Inc. in a cash deal valued at about $2.5 billion or $52.50 a share. This works out to about a 50% premium over the Friday close. Myogen's ambrisentan is a late-stage product candidate for the potential treatment of pulmonary arterial hypertension.
Factory activity in the United States decelerated in September, the Institute for Supply Management reported Friday. The ISM index fell to 52.9% in September from 54.5% in August. This is the lowest level since May 2005. New orders unchanged at 54.2% in September. The employment index dropped to 49.4% from 54.0%. The price index dropped sharply to 61.0% from 73.0%. This is the lowest level since July 2005.
Pending sales of U.S. existing homes rose by 4.3% in August. Pending-home sales are down 14.1% in the past year. The pending-sales index rose 9.2% in the West, 4% in the South and 3.6% in the Northeast. The index was flat in the Midwest.
Gary Lammert: "The world is now entering the natural macroeconomic cycle's time frame of limits and feedback and abrupt asset devaluations marked by discontinuity and non linearity. This disruption is caused by a likewise natural generational consumer saturation - consumers saturated with assets and debts - amplified by excessively, albeit
transiently, Federal Reserve lowered interest rates and, more so, by an unregulated lending industry trapping unwary consumers into too-good-to-be-true debt contracts."
The Commerce Department reported that construction spending rose by 0.3 percent to a seasonally adjusted annual rate of $1.20 trillion. It followed a huge 1 percent decline in July and represented the best showing in five months.
The Mogambo Guru: "Paying a dollar for a single McDonald's hamburger seems like a lot to me, since I can remember when you could get a McDonald's hamburger for 15 cents in 1966.
So, class, put down your books and take out a clean sheet of paper for today's Mogambo Pop Quiz (MPQ). The question is, "If in 1966 I had started to save for my retirement, how much money would I need to save, per day, to buy one hamburger, per day, in the future, knowing that the hamburger is currently selling for 15 cents, but would cost a dollar in 40 years? Since everyone in the class is moaning and whining and scratching their heads, I kindly provide the hint, "Firstly, we note that inflation in the price of the burger has been 670% over 40 years. That's comes out to 4.9% inflation, per year, compounded."
247wallst.com on Marvell Technology: "The lowered sequential revenues of Q2's $574 million down to -10% on a sequential basis, which brings the net down to $516.6 million. Unfortunately, that is shy of the $582.4 million consensus estimate.
The anticipated decline in net revenue is largely due to lower than expected demand from a number of the Company's hard disk drive customers. The Company believes the shortfall of demand is primarily due to a combination of weaker than normal seasonal shipments in the personal computer market as well as excess inventory held by some of its significant storage customers. It also expects a significant increase in its general and administrative expenses in its third quarter of fiscal 2007 due to higher than expected costs related to its previously announced and ongoing internal review by a special committee of its Board of Directors relating to the Company's historical stock option practices and related accounting matters."
John Hussman: "The total amount of bank reserves in the U.S. banking system is just $43 billion, and that's all the FOMC is responsible for controlling. In an economy with a GDP of $13 trillion and a public debt of over $8 trillion, the Fed Funds rate is based on $43 billion of dough...the Fed is a lot like a little boy who waves his arms whenever he hears music playing, so people come to believe he's actually conducting the band...Except in times of financial crises, when people are trying to convert their deposits into cash and the Fed has a truly legitimate role as a “lender of last resort,” the Fed's moves are essentially irrelevant...To believe that the Fed's actions control the economy is just plain superstition. The only reason to pay attention to the Fed is that other investors are not rid of this superstition."
Harrah's Entertainment Inc. said its board has received a $81-a-share buyout offer from Apollo Management and Texas Pacific Group. Harrah's said its board established a special committee consisting of all nonmanagement directors to review the proposal. The committee hired UBS Securities LLC as its financial adviser and Kaye Scholer LLP as its legal adviser. Harrah's said there is no assurance that it will enter into this or any other transaction.
Wal-Mart's September same store sales rose 1.8%. This was slightly below their forecast for a 1% to 3% increase.
Gilead Sciences Inc. agreed to acquire Myogen Inc. in a cash deal valued at about $2.5 billion or $52.50 a share. This works out to about a 50% premium over the Friday close. Myogen's ambrisentan is a late-stage product candidate for the potential treatment of pulmonary arterial hypertension.
Factory activity in the United States decelerated in September, the Institute for Supply Management reported Friday. The ISM index fell to 52.9% in September from 54.5% in August. This is the lowest level since May 2005. New orders unchanged at 54.2% in September. The employment index dropped to 49.4% from 54.0%. The price index dropped sharply to 61.0% from 73.0%. This is the lowest level since July 2005.
Pending sales of U.S. existing homes rose by 4.3% in August. Pending-home sales are down 14.1% in the past year. The pending-sales index rose 9.2% in the West, 4% in the South and 3.6% in the Northeast. The index was flat in the Midwest.
Gary Lammert: "The world is now entering the natural macroeconomic cycle's time frame of limits and feedback and abrupt asset devaluations marked by discontinuity and non linearity. This disruption is caused by a likewise natural generational consumer saturation - consumers saturated with assets and debts - amplified by excessively, albeit
transiently, Federal Reserve lowered interest rates and, more so, by an unregulated lending industry trapping unwary consumers into too-good-to-be-true debt contracts."
The Commerce Department reported that construction spending rose by 0.3 percent to a seasonally adjusted annual rate of $1.20 trillion. It followed a huge 1 percent decline in July and represented the best showing in five months.
The Mogambo Guru: "Paying a dollar for a single McDonald's hamburger seems like a lot to me, since I can remember when you could get a McDonald's hamburger for 15 cents in 1966.
So, class, put down your books and take out a clean sheet of paper for today's Mogambo Pop Quiz (MPQ). The question is, "If in 1966 I had started to save for my retirement, how much money would I need to save, per day, to buy one hamburger, per day, in the future, knowing that the hamburger is currently selling for 15 cents, but would cost a dollar in 40 years? Since everyone in the class is moaning and whining and scratching their heads, I kindly provide the hint, "Firstly, we note that inflation in the price of the burger has been 670% over 40 years. That's comes out to 4.9% inflation, per year, compounded."
247wallst.com on Marvell Technology: "The lowered sequential revenues of Q2's $574 million down to -10% on a sequential basis, which brings the net down to $516.6 million. Unfortunately, that is shy of the $582.4 million consensus estimate.
The anticipated decline in net revenue is largely due to lower than expected demand from a number of the Company's hard disk drive customers. The Company believes the shortfall of demand is primarily due to a combination of weaker than normal seasonal shipments in the personal computer market as well as excess inventory held by some of its significant storage customers. It also expects a significant increase in its general and administrative expenses in its third quarter of fiscal 2007 due to higher than expected costs related to its previously announced and ongoing internal review by a special committee of its Board of Directors relating to the Company's historical stock option practices and related accounting matters."
Sunday, October 01, 2006
Around The Bend
10/2/06 Around The Bend
"The Islamic Republic of Iran supports any effort by OPEC members to strengthen the oil market and return oil prices to an acceptable and logical level," he told Iran's official news agency IRNA. He did not say what an that acceptable level was.
Iranian Oil Minister Kazem Vaziri-Hamaneh said last month that he wanted to see OPEC's basket of crude hold above $60 a barrel, which would equate to about $65 a barrel for U.S. crude.
"Some OPEC members, by decreasing production, are trying to prevent the slide of oil prices," Kazempour Ardebili noted.
Nigeria and Venezuela, both OPEC members, have pledged to cut production.
"I expect growth between 2 percent and 2.5 percent for Germany," Economy Minister Michael Glos was quoted as saying in the Bild am Sonntag newspaper.
George Soros: "With American influence at low ebb, the world is in danger of sliding into a vicious circle of escalating violence. We can escape it only if we Americans repudiate the war on terror as a false metaphor. If we persevere on the wrong course, the situation will continue to deteriorate. It is not our will that is being tested, but our understanding of reality. It is painful to admit that our current predicaments are brought about by our own misconceptions. However, not admitting it is bound to prove even more painful in the long run. The strength of an open society lies in its ability to recognize and correct its mistakes. That is the test that confronts us."
From earthfiles.com: James Hansen, Ph.D., Atmospheric Physicist, NASA's Goddard Institute for Space Studies, Columbia University, New York City, states in the most recent Proceedings of the National Academy of Sciences: "Earth is now reaching and passing through the warmest levels in the current interglacial period. That means that further global warming of 1 degree Celsius defines a critical level. If warming is kept less than that, effects of global warming may be relatively manageable. During the warmest interglacial periods the Earth was reasonably similar to today. But if further global warming reaches 2 or 3 degrees Celsius, we will likely see changes that make Earth a different planet than the one we know. The last time it was that warm was in the middle Pliocene, about three million years ago, when sea level was estimated to have been about 25 meters (80 feet) higher than today."
Oil Daily stated "after more than three years of war, Iraq's oil sector -- the country's primary source of revenue -- is still plagued by attacks, criminal activity and aging infrastructure. Those problems have cost Iraq about $16 billion in potential export revenues in the last two years alone, according to a US audit report."
Mike Burk: "It is often noted that October is the month of "crashes".
October 87 was the worst single month in OTC history, down 27.9%.
October 78 was the only other October with a double digit decline, down 16.6%.
Over all years the OTC has been up 57% of the time with an average gain of 0.8%.
The best Octobers of all occur during the 2nd year of the Presidential Cycle; up 70% of the time with an average gain of 3.1%.
On average the low for the Presidential Cycle occurs in October of the 2nd year...
Most short and intermediate term indicators are moving downward.
I expect the major indices to be lower on Friday October 6 than they were on Friday September 29."
The central bank says China's economy should grow by 10.5 percent this year, state media reported Sunday, even stronger than the 10 percent predicted last week by the National Bureau of Statistics. The People's Bank of China also projected growth for the first half of 2007 at 9.5 percent, the official Xinhua News Agency said.
China's economy grew 10.2 percent in 2005 and surged by 10.9 percent in the first half of 2006. In my view, with the on-going strong growth in China and India, there will be significant demand in the energy and precious metals sectors.
To think otherwise flies in the face of reality.
I would recommend that all Americans visit the following website: http://loosechange911.com
"The Islamic Republic of Iran supports any effort by OPEC members to strengthen the oil market and return oil prices to an acceptable and logical level," he told Iran's official news agency IRNA. He did not say what an that acceptable level was.
Iranian Oil Minister Kazem Vaziri-Hamaneh said last month that he wanted to see OPEC's basket of crude hold above $60 a barrel, which would equate to about $65 a barrel for U.S. crude.
"Some OPEC members, by decreasing production, are trying to prevent the slide of oil prices," Kazempour Ardebili noted.
Nigeria and Venezuela, both OPEC members, have pledged to cut production.
"I expect growth between 2 percent and 2.5 percent for Germany," Economy Minister Michael Glos was quoted as saying in the Bild am Sonntag newspaper.
George Soros: "With American influence at low ebb, the world is in danger of sliding into a vicious circle of escalating violence. We can escape it only if we Americans repudiate the war on terror as a false metaphor. If we persevere on the wrong course, the situation will continue to deteriorate. It is not our will that is being tested, but our understanding of reality. It is painful to admit that our current predicaments are brought about by our own misconceptions. However, not admitting it is bound to prove even more painful in the long run. The strength of an open society lies in its ability to recognize and correct its mistakes. That is the test that confronts us."
From earthfiles.com: James Hansen, Ph.D., Atmospheric Physicist, NASA's Goddard Institute for Space Studies, Columbia University, New York City, states in the most recent Proceedings of the National Academy of Sciences: "Earth is now reaching and passing through the warmest levels in the current interglacial period. That means that further global warming of 1 degree Celsius defines a critical level. If warming is kept less than that, effects of global warming may be relatively manageable. During the warmest interglacial periods the Earth was reasonably similar to today. But if further global warming reaches 2 or 3 degrees Celsius, we will likely see changes that make Earth a different planet than the one we know. The last time it was that warm was in the middle Pliocene, about three million years ago, when sea level was estimated to have been about 25 meters (80 feet) higher than today."
Oil Daily stated "after more than three years of war, Iraq's oil sector -- the country's primary source of revenue -- is still plagued by attacks, criminal activity and aging infrastructure. Those problems have cost Iraq about $16 billion in potential export revenues in the last two years alone, according to a US audit report."
Mike Burk: "It is often noted that October is the month of "crashes".
October 87 was the worst single month in OTC history, down 27.9%.
October 78 was the only other October with a double digit decline, down 16.6%.
Over all years the OTC has been up 57% of the time with an average gain of 0.8%.
The best Octobers of all occur during the 2nd year of the Presidential Cycle; up 70% of the time with an average gain of 3.1%.
On average the low for the Presidential Cycle occurs in October of the 2nd year...
Most short and intermediate term indicators are moving downward.
I expect the major indices to be lower on Friday October 6 than they were on Friday September 29."
The central bank says China's economy should grow by 10.5 percent this year, state media reported Sunday, even stronger than the 10 percent predicted last week by the National Bureau of Statistics. The People's Bank of China also projected growth for the first half of 2007 at 9.5 percent, the official Xinhua News Agency said.
China's economy grew 10.2 percent in 2005 and surged by 10.9 percent in the first half of 2006. In my view, with the on-going strong growth in China and India, there will be significant demand in the energy and precious metals sectors.
To think otherwise flies in the face of reality.
I would recommend that all Americans visit the following website: http://loosechange911.com
Saturday, September 30, 2006
Patience And Hiding Out
10/1/06 Patience And Hiding Out
John Mauldin: "I expect the stock market to be higher in 5-7 years than it is today. Maybe in less than 5. I simply think I can buy this market at a lower price at some time in the future. I expect to become more or less bullish during this next recession, or at the very least selectively bullish. But for now, I think it will pay to be patient."
Bob Woodward says US troops and their allies are being attacked on average every 15 minutes, and the White House is lying about it.
The Congress approved billions of dollars in new border-security measures and ordered construction of 700 miles of fencing on the US-Mexico border. Of course, they don't have the money for all these approvals. Not a problem. Just issue more debt. Naturally, another $70 billion was approved for Iraq.
Statements from a recovering alcoholic:
_He praised Karzai for naming new Supreme Court judges. But he failed to mention that the Afghan parliament rejected Karzai's nominee for chief justice, a conservative cleric blamed for stalling reform, who favored Islamic laws mandating that adulterers be stoned to death and thieves have their hands amputated.
_He praised Italy for helping to train Afghan judges and prosecutors. Many Western officials and experts say the effort is seriously flawed and that Afghanistan's legal system is in a state of collapse.
_He said the Afghan National Police "have faced problems with corruption and substandard leadership." He contended that Karzai's government began tackling the problem after appointing a new leadership team this summer. But he didn't mention that Karzai named to his team 14 senior police generals whom U.S., European and U.N. officials opposed because of their alleged involvement in human-rights abuses and corruption.
-On another subject, he praised the democracy in Kazakhstan. If that's a democracy, then I'm a transvite.
Brett Steenbarger: "Mental flexibility is perhaps the most underrated trading
virtue."
Mike Shedlock: "Long Summary
A hugely inverted yield curve is suggesting a recession
Mass layoffs are increasing
Unemployment is expected to rise
Homebuilder margins are rapidly shrinking
Everything related to housing seems toxic
Credit spreads are widening
Commodities are dropping
Bankruptcies and foreclosures are rising.
Short Summary
"We are seeing historic, record risk-seeking (bullishness/complacency)" in which "EVERYTHING is bullish, or considered so." (Note: Except for commodity prices themselves and commodity-related stocks)
The stock market is priced for a "Goldilocks" scenario, if not better.
Final Thoughts
There is obviously a major disconnect here
The resolution is guaranteed to be interesting
In the meantime, hiding out in short-term Treasuries is a very good-looking alternative."
Although the Dow, S&P 500, and the Nasdaq had big up moves for the month of September, the VIX was unchanged. This leads me to believe that the VIX may be basing out around the 12 level.
The Market Vane has a bullish consensus of 71% and the UBS Index of Investor Optimism is 74 versus only 53 in August. I'll take the flip side of those numbers.
John Mauldin: "I expect the stock market to be higher in 5-7 years than it is today. Maybe in less than 5. I simply think I can buy this market at a lower price at some time in the future. I expect to become more or less bullish during this next recession, or at the very least selectively bullish. But for now, I think it will pay to be patient."
Bob Woodward says US troops and their allies are being attacked on average every 15 minutes, and the White House is lying about it.
The Congress approved billions of dollars in new border-security measures and ordered construction of 700 miles of fencing on the US-Mexico border. Of course, they don't have the money for all these approvals. Not a problem. Just issue more debt. Naturally, another $70 billion was approved for Iraq.
Statements from a recovering alcoholic:
_He praised Karzai for naming new Supreme Court judges. But he failed to mention that the Afghan parliament rejected Karzai's nominee for chief justice, a conservative cleric blamed for stalling reform, who favored Islamic laws mandating that adulterers be stoned to death and thieves have their hands amputated.
_He praised Italy for helping to train Afghan judges and prosecutors. Many Western officials and experts say the effort is seriously flawed and that Afghanistan's legal system is in a state of collapse.
_He said the Afghan National Police "have faced problems with corruption and substandard leadership." He contended that Karzai's government began tackling the problem after appointing a new leadership team this summer. But he didn't mention that Karzai named to his team 14 senior police generals whom U.S., European and U.N. officials opposed because of their alleged involvement in human-rights abuses and corruption.
-On another subject, he praised the democracy in Kazakhstan. If that's a democracy, then I'm a transvite.
Brett Steenbarger: "Mental flexibility is perhaps the most underrated trading
virtue."
Mike Shedlock: "Long Summary
A hugely inverted yield curve is suggesting a recession
Mass layoffs are increasing
Unemployment is expected to rise
Homebuilder margins are rapidly shrinking
Everything related to housing seems toxic
Credit spreads are widening
Commodities are dropping
Bankruptcies and foreclosures are rising.
Short Summary
"We are seeing historic, record risk-seeking (bullishness/complacency)" in which "EVERYTHING is bullish, or considered so." (Note: Except for commodity prices themselves and commodity-related stocks)
The stock market is priced for a "Goldilocks" scenario, if not better.
Final Thoughts
There is obviously a major disconnect here
The resolution is guaranteed to be interesting
In the meantime, hiding out in short-term Treasuries is a very good-looking alternative."
Although the Dow, S&P 500, and the Nasdaq had big up moves for the month of September, the VIX was unchanged. This leads me to believe that the VIX may be basing out around the 12 level.
The Market Vane has a bullish consensus of 71% and the UBS Index of Investor Optimism is 74 versus only 53 in August. I'll take the flip side of those numbers.
Friday, September 29, 2006
Let's Focus
9/30/06 Let's Focus
I was going to provide some excerpts from Sen. Russ Feingold's speech on the floor of the Senate on the anti-terror bill, which is 243 pages long. Rather than that, hopefully you will take the time to read all of his thoughtful comments. He's a good man with integrity and a good head on his shoulders. Hopefully, he will run for the presidency and win. I'd like to feel positive about pulling the lever in the voting booth.
December gold closed at $604.20 an ounce Friday, down $6.70 for the session and down $30 from the end of August. But the contract still closed 1.5% above its week-ago closing level. December silver fell 19.5 cents to close at $11.54 an ounce, up 2% for the week, but down over 11% for the month. December copper closed at $3.4605 a pound, up 3.25 cents for the day and fractionally higher for the week and month.
Crude and natural gas were down for the month, but reversed a loss and rallied on Friday to show a small gain at the close.
Swift Transportation and Timken both issued earnings warnings. Timken will lay off 700 workers.
Commerce Department said the core PCE index excluding food and energy rose 0.2% in August and 2.5% in the past year, an 11-year high.
The Chicago purchasing managers' index rose to 62.1% in September from 57.1% in August. It's the highest reading in a year. The new orders index rose to 67.3% from 59.6%, while the production index rose to 67.4% from 61.7%.
It is not surprising that the yield on the 10-year Treasury rose to 4.65%. I feel strongly that rates will rise from these levels. As I stated in mid-week, I put my money where my mouth is.
Judge Brandeis: "Our government... teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy."
I was going to provide some excerpts from Sen. Russ Feingold's speech on the floor of the Senate on the anti-terror bill, which is 243 pages long. Rather than that, hopefully you will take the time to read all of his thoughtful comments. He's a good man with integrity and a good head on his shoulders. Hopefully, he will run for the presidency and win. I'd like to feel positive about pulling the lever in the voting booth.
December gold closed at $604.20 an ounce Friday, down $6.70 for the session and down $30 from the end of August. But the contract still closed 1.5% above its week-ago closing level. December silver fell 19.5 cents to close at $11.54 an ounce, up 2% for the week, but down over 11% for the month. December copper closed at $3.4605 a pound, up 3.25 cents for the day and fractionally higher for the week and month.
Crude and natural gas were down for the month, but reversed a loss and rallied on Friday to show a small gain at the close.
Swift Transportation and Timken both issued earnings warnings. Timken will lay off 700 workers.
Commerce Department said the core PCE index excluding food and energy rose 0.2% in August and 2.5% in the past year, an 11-year high.
The Chicago purchasing managers' index rose to 62.1% in September from 57.1% in August. It's the highest reading in a year. The new orders index rose to 67.3% from 59.6%, while the production index rose to 67.4% from 61.7%.
It is not surprising that the yield on the 10-year Treasury rose to 4.65%. I feel strongly that rates will rise from these levels. As I stated in mid-week, I put my money where my mouth is.
Judge Brandeis: "Our government... teaches the whole people by its example. If the government becomes the lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy."
Wednesday, September 27, 2006
Beneath The Surface
9/28/06 Beneath The Surface
During Wednesday's trading, on the surface it was all about the Dow watch. Was the Dow going to make a new all-time high. After all, it might bring investor confidence up and bring the individual back into buying common stocks. Beneath the surface, however, we saw crude trade at $63 a barrel. That may not seem a big deal to many, but it showed that the $60 level held after the shorts tried several times to break that area of price support. The oil service stocks and other energy stocks rallied. I continue to believe the best risk/rewards in this area are BJ Services and Helmerich and Payne.
Beneath the surface lurks the weatherman. The first cold spell is predicted for the midwest. That should awaken the natural gas market as well as heating oil prices.
Beneath the surface gold raised its head and rose to the $603 an ounce level. There are several big players short gold and other metals. They have a short memory- no pun intended. Glamis Gold traded close to $40 as Goldcorp finally found its footing. Patience can be rewarding.
Goldman Sachs lowered its earnings estimates for Lowe's and Home Depot. Beneath the surface there was huge buying in Lowe's $27.50 puts with an expiration date of 1/07. Those puts traded just over 9,000. Considering the amount of puts outstanding for that date and strike price, that's a lot of puts.
Chesapeake Energy Corp said Wednesday it has decided to shut-in a portion of its near-term natural gas production, effective Oct. 1, due to low wellhead natural gas prices, and plans to temporarily shut-in 100 million cubic feet per day of net natural gas production in various areas in the southwestern U.S. until prices rise. The shut-ins represent roughly 6% of its net oil and natural gas production. Chesapeake added that, as a result, it's likely to cut its fourth-quarter production forecast when it releases its third-quarter results. Aubrey McClendon, Chesapeake's chief executive, said in a statement that the company believes "today's low natural gas prices have more to do with temporarily high natural gas storage inventories largely caused by last winter's abnormally warm weather and less to do with any return to a structural oversupply of natural gas."
Bloomberg reported anger over the war in Iraq is fueling Muslim radicalism, and the dispersal of terrorist cells around the world poses a greater risk of attacks on the U.S., according to excerpts of a National Intelligence Assessment.
The four-page document, posted last night on the Web site of the Director of National Intelligence, said that while U.S. counterterrorism efforts have ``seriously damaged'' al-Qaeda's leadership, the terrorist movement is growing and becoming more decentralized. The threat of attacks worldwide will increase if current trends continue, it says. ``We assess that the operational threat from self- radicalized cells will grow in importance to U.S. counterterrorism efforts, particularly abroad but also in the homeland,'' according to the excerpts labeled ``key judgments'' from an April National Intelligence Estimate.
During Wednesday's trading, on the surface it was all about the Dow watch. Was the Dow going to make a new all-time high. After all, it might bring investor confidence up and bring the individual back into buying common stocks. Beneath the surface, however, we saw crude trade at $63 a barrel. That may not seem a big deal to many, but it showed that the $60 level held after the shorts tried several times to break that area of price support. The oil service stocks and other energy stocks rallied. I continue to believe the best risk/rewards in this area are BJ Services and Helmerich and Payne.
Beneath the surface lurks the weatherman. The first cold spell is predicted for the midwest. That should awaken the natural gas market as well as heating oil prices.
Beneath the surface gold raised its head and rose to the $603 an ounce level. There are several big players short gold and other metals. They have a short memory- no pun intended. Glamis Gold traded close to $40 as Goldcorp finally found its footing. Patience can be rewarding.
Goldman Sachs lowered its earnings estimates for Lowe's and Home Depot. Beneath the surface there was huge buying in Lowe's $27.50 puts with an expiration date of 1/07. Those puts traded just over 9,000. Considering the amount of puts outstanding for that date and strike price, that's a lot of puts.
Chesapeake Energy Corp said Wednesday it has decided to shut-in a portion of its near-term natural gas production, effective Oct. 1, due to low wellhead natural gas prices, and plans to temporarily shut-in 100 million cubic feet per day of net natural gas production in various areas in the southwestern U.S. until prices rise. The shut-ins represent roughly 6% of its net oil and natural gas production. Chesapeake added that, as a result, it's likely to cut its fourth-quarter production forecast when it releases its third-quarter results. Aubrey McClendon, Chesapeake's chief executive, said in a statement that the company believes "today's low natural gas prices have more to do with temporarily high natural gas storage inventories largely caused by last winter's abnormally warm weather and less to do with any return to a structural oversupply of natural gas."
Bloomberg reported anger over the war in Iraq is fueling Muslim radicalism, and the dispersal of terrorist cells around the world poses a greater risk of attacks on the U.S., according to excerpts of a National Intelligence Assessment.
The four-page document, posted last night on the Web site of the Director of National Intelligence, said that while U.S. counterterrorism efforts have ``seriously damaged'' al-Qaeda's leadership, the terrorist movement is growing and becoming more decentralized. The threat of attacks worldwide will increase if current trends continue, it says. ``We assess that the operational threat from self- radicalized cells will grow in importance to U.S. counterterrorism efforts, particularly abroad but also in the homeland,'' according to the excerpts labeled ``key judgments'' from an April National Intelligence Estimate.
Tuesday, September 26, 2006
Prospects
9/27/06 Prospects
Manufacturing activity in the central Atlantic region in September grew at a much faster pace than the previous month, the Federal Reserve Bank of Richmond reported Tuesday, as a rebound in factory shipments and a faster pace of growth in new orders helped offset slower employment gains. The Richmond Fed's seasonally-adjusted manufacturing index rose to 9 in September from 3 in August. The Richmond Fed said a survey of manufacturers in the region indicated that raw materials prices rose at an average annual rate of 3.18%, after rising 1.88% in August, while growth in prices of finished goods declined slightly to 2.55% from 2.61% last month. "Looking ahead, contacts were markedly more optimistic about their business prospects for the next six months," the Richmond Fed said. "Firms anticipated faster growth for shipments, new orders and employment, and they bumped up their expectations for capital spending."
The Conference Board said U.S. consumer confidence rebounded in September, helped by lower gasoline prices. The consumer confidence index rose to 104.5 in September after falling to a revised nine-month low of 100.2 in August. Economists forecast the index to rise to 102.7 from the initial August reading of 99.6. The present situation index rose to 127.7 from 123.9, while the expectations index increased to 89.0 from 84.4. Inflation expectations eased in September. Expectations of inflation in the next year fell to 4.9 in September from 5.5 in August. This is the lowest level since March.
Lennar Corp. issued another profit warning, this time for its fiscal fourth quarter, saying a floor hasn't been found to the downturn in the home building sector. Third-quarter ending Aug. 31 net income fell 39% to $207 million, or $1.30 a share, with revenue up 20% to $4.18 billion. The company had previously said earnings would range between $1.25 to $1.35 a share. For the fourth quarter, it sees earnings between $1 and $1.30 a share. Analysts polled by Thomson First Call, on average, expected earnings of $1.60 a share. The market pretty well yawned at the news. The same can be said for than less than robust assessment provided by Lowe's.
Benjamin Graham: "The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase."
The energy (that includes coal) and the precious metals sectors are attempting to find their footing, and that in the face of window dressing by the fund managers this week.
I recommend that investors have at least one-third of their portfolios in these combined sectors. I should also mention that I shorted the 10-year Treasury bond early Tuesday morning. Over the past several weeks I have mentioned some hedges I had placed. Their results could be described as no hits, no runs, no errors. Pretty much a wash.
Steve Saville: "For more than 10 years there has been a strong tendency for the gold sector's intermediate-term trend to reverse direction during October-November. In particular, when the gold sector -- represented in this discussion by the AMEX Gold BUGS Index (HUI) -- trends higher into October-November it will regularly reverse course and trend lower over the ensuing 6-12 months; and when the trend is 'down' going into the October-November period there will often be an upward reversal leading to a 6-12 month rally. This is why an October-November bottom for the current decline is likely and why such an outcome would have intermediate-term BULLISH implications."
OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done."
He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall.
Former Fed Chief Paul Volcker: ``I am a little bit more worried about inflation,'' said Volcker, 79, speaking at a discussion sponsored by the Women's Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker's concerns.
While the inflation rate isn't ``high'' or ``running away,'' Volcker said, ``it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''
Standard Chartered Plc raised its estimate for China's economic growth this year to 10.8 percent, saying government efforts to cool an investment boom aren't working.
The forecast was boosted from 10.2 percent, Shanghai-based economist Stephen Green said in a research note. Green also raised his estimate for 2007 growth to 9.7 percent from 8.9 percent. The new 2006 projection represents the fastest expansion since 1995, when the economy grew 10.9 percent.
Russia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin. "An additional agreement in the contract to build the Bushehr station was signed, which fixes September 2007 as the launch date," Sergei Novikov, a spokesman for Russia's atomic energy agency, told AFP. The plant will actually produce electricity from November next year, he said, while the nuclear fuel for the plant will be delivered no later than March.
Eagle Materials Inc. on Tuesday cut its fiscal 2007 earnings forecast to a range of $3.80 to $4.20 a share from its previous view of $4.40 to $4.70 a share. The Dallas-based building materials company said in a statement the lowered forecast is primarily due to the accelerated decline in housing starts, which has led to weakened business conditions in its gypsum wallboard and paper businesses.
Benjamin Graham: "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."
December gold climbed $1.20 to close at $597.10 an ounce, its strongest closing level since Sept. 11. December silver ended up 17 cents at $11.495 an ounce and December copper tacked on 1.85 cents to close at $3.466 a pound. The silver and copper contracts marked their highest closing level since Sept. 8.
The S&P 500 reached its highest level since February 2001. The Dow is closing in on its all-time high set in 2000.
November crude fell 44 cents to close at $61.01 a barrel with prices trading between $60.60 and $62. October natural gas recovered from a three-year low of $4.38 per million Britisth thermal units to close up 5.1 cents at $4.526.
Abe, Japan's Prime Minister, told reporters it is time to improve Japan's relationship with China and South Korea that deteriorated during the Koizumi administration.
The healthcare cost squeeze is still on. Premiums for job-based health coverage rose 7.7% on average from spring 2005 to spring 2006, down from a 9.2% increase in 2005, according to the Employer Health Benefits Survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums saw their third consecutive year of declining increases, but wages rose 3.8% and inflation increased 3.5%.
Congress is unlikely to approve a bill giving President Bush's warrantless wiretapping program legal status and new restrictions before the November midterm elections, dealing a significant blow to one of the White House's top wartime priorities.
House and Senate versions of the legislation differ too much to bridge the gap by week's end, when Congress recesses until after the Nov. 7 elections, according to two GOP leadership aides who demanded anonymity because the decision had not yet been announced.
Home construction in Tulsa quickened in August after an unusually slow July, boosting year-to-date totals ahead of the 2005 pace once again.
The 382 homes that were started in August was 22 percent above the 313 logged in July, according to data released Monday by New Orders Weekly, a construction tracking service.
Despite persistent talk about possible airline mergers, Continental Airlines wants to stay independent, its chief executive said Tuesday.
Larry Kellner, chairman and chief executive of Houston-based Continental, told investors that the carrier is in good shape to go it alone.
California’s public sector employers are to face a cash crunch over the next 15 years with the cost of healthcare provision for retiring workers forecast to rise to $31bn a year, according to a new report.
The California HealthCare Foundation expects health care costs in the most populous state in the US to rise more than eight fold from $3.9bn this year to $31bn by 2020. The sharp increase will be driven by inflation, increases in life expectancy and an ageing population.
Manufacturing activity in the central Atlantic region in September grew at a much faster pace than the previous month, the Federal Reserve Bank of Richmond reported Tuesday, as a rebound in factory shipments and a faster pace of growth in new orders helped offset slower employment gains. The Richmond Fed's seasonally-adjusted manufacturing index rose to 9 in September from 3 in August. The Richmond Fed said a survey of manufacturers in the region indicated that raw materials prices rose at an average annual rate of 3.18%, after rising 1.88% in August, while growth in prices of finished goods declined slightly to 2.55% from 2.61% last month. "Looking ahead, contacts were markedly more optimistic about their business prospects for the next six months," the Richmond Fed said. "Firms anticipated faster growth for shipments, new orders and employment, and they bumped up their expectations for capital spending."
The Conference Board said U.S. consumer confidence rebounded in September, helped by lower gasoline prices. The consumer confidence index rose to 104.5 in September after falling to a revised nine-month low of 100.2 in August. Economists forecast the index to rise to 102.7 from the initial August reading of 99.6. The present situation index rose to 127.7 from 123.9, while the expectations index increased to 89.0 from 84.4. Inflation expectations eased in September. Expectations of inflation in the next year fell to 4.9 in September from 5.5 in August. This is the lowest level since March.
Lennar Corp. issued another profit warning, this time for its fiscal fourth quarter, saying a floor hasn't been found to the downturn in the home building sector. Third-quarter ending Aug. 31 net income fell 39% to $207 million, or $1.30 a share, with revenue up 20% to $4.18 billion. The company had previously said earnings would range between $1.25 to $1.35 a share. For the fourth quarter, it sees earnings between $1 and $1.30 a share. Analysts polled by Thomson First Call, on average, expected earnings of $1.60 a share. The market pretty well yawned at the news. The same can be said for than less than robust assessment provided by Lowe's.
Benjamin Graham: "The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase."
The energy (that includes coal) and the precious metals sectors are attempting to find their footing, and that in the face of window dressing by the fund managers this week.
I recommend that investors have at least one-third of their portfolios in these combined sectors. I should also mention that I shorted the 10-year Treasury bond early Tuesday morning. Over the past several weeks I have mentioned some hedges I had placed. Their results could be described as no hits, no runs, no errors. Pretty much a wash.
Steve Saville: "For more than 10 years there has been a strong tendency for the gold sector's intermediate-term trend to reverse direction during October-November. In particular, when the gold sector -- represented in this discussion by the AMEX Gold BUGS Index (HUI) -- trends higher into October-November it will regularly reverse course and trend lower over the ensuing 6-12 months; and when the trend is 'down' going into the October-November period there will often be an upward reversal leading to a 6-12 month rally. This is why an October-November bottom for the current decline is likely and why such an outcome would have intermediate-term BULLISH implications."
OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done."
He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall.
Former Fed Chief Paul Volcker: ``I am a little bit more worried about inflation,'' said Volcker, 79, speaking at a discussion sponsored by the Women's Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker's concerns.
While the inflation rate isn't ``high'' or ``running away,'' Volcker said, ``it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''
Standard Chartered Plc raised its estimate for China's economic growth this year to 10.8 percent, saying government efforts to cool an investment boom aren't working.
The forecast was boosted from 10.2 percent, Shanghai-based economist Stephen Green said in a research note. Green also raised his estimate for 2007 growth to 9.7 percent from 8.9 percent. The new 2006 projection represents the fastest expansion since 1995, when the economy grew 10.9 percent.
Russia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin. "An additional agreement in the contract to build the Bushehr station was signed, which fixes September 2007 as the launch date," Sergei Novikov, a spokesman for Russia's atomic energy agency, told AFP. The plant will actually produce electricity from November next year, he said, while the nuclear fuel for the plant will be delivered no later than March.
Eagle Materials Inc. on Tuesday cut its fiscal 2007 earnings forecast to a range of $3.80 to $4.20 a share from its previous view of $4.40 to $4.70 a share. The Dallas-based building materials company said in a statement the lowered forecast is primarily due to the accelerated decline in housing starts, which has led to weakened business conditions in its gypsum wallboard and paper businesses.
Benjamin Graham: "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."
December gold climbed $1.20 to close at $597.10 an ounce, its strongest closing level since Sept. 11. December silver ended up 17 cents at $11.495 an ounce and December copper tacked on 1.85 cents to close at $3.466 a pound. The silver and copper contracts marked their highest closing level since Sept. 8.
The S&P 500 reached its highest level since February 2001. The Dow is closing in on its all-time high set in 2000.
November crude fell 44 cents to close at $61.01 a barrel with prices trading between $60.60 and $62. October natural gas recovered from a three-year low of $4.38 per million Britisth thermal units to close up 5.1 cents at $4.526.
Abe, Japan's Prime Minister, told reporters it is time to improve Japan's relationship with China and South Korea that deteriorated during the Koizumi administration.
The healthcare cost squeeze is still on. Premiums for job-based health coverage rose 7.7% on average from spring 2005 to spring 2006, down from a 9.2% increase in 2005, according to the Employer Health Benefits Survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums saw their third consecutive year of declining increases, but wages rose 3.8% and inflation increased 3.5%.
Congress is unlikely to approve a bill giving President Bush's warrantless wiretapping program legal status and new restrictions before the November midterm elections, dealing a significant blow to one of the White House's top wartime priorities.
House and Senate versions of the legislation differ too much to bridge the gap by week's end, when Congress recesses until after the Nov. 7 elections, according to two GOP leadership aides who demanded anonymity because the decision had not yet been announced.
Home construction in Tulsa quickened in August after an unusually slow July, boosting year-to-date totals ahead of the 2005 pace once again.
The 382 homes that were started in August was 22 percent above the 313 logged in July, according to data released Monday by New Orders Weekly, a construction tracking service.
Despite persistent talk about possible airline mergers, Continental Airlines wants to stay independent, its chief executive said Tuesday.
Larry Kellner, chairman and chief executive of Houston-based Continental, told investors that the carrier is in good shape to go it alone.
California’s public sector employers are to face a cash crunch over the next 15 years with the cost of healthcare provision for retiring workers forecast to rise to $31bn a year, according to a new report.
The California HealthCare Foundation expects health care costs in the most populous state in the US to rise more than eight fold from $3.9bn this year to $31bn by 2020. The sharp increase will be driven by inflation, increases in life expectancy and an ageing population.
Prospects
9/27/06 Prospects
Manufacturing activity in the central Atlantic region in September grew at a much faster pace than the previous month, the Federal Reserve Bank of Richmond reported Tuesday, as a rebound in factory shipments and a faster pace of growth in new orders helped offset slower employment gains. The Richmond Fed's seasonally-adjusted manufacturing index rose to 9 in September from 3 in August. The Richmond Fed said a survey of manufacturers in the region indicated that raw materials prices rose at an average annual rate of 3.18%, after rising 1.88% in August, while growth in prices of finished goods declined slightly to 2.55% from 2.61% last month. "Looking ahead, contacts were markedly more optimistic about their business prospects for the next six months," the Richmond Fed said. "Firms anticipated faster growth for shipments, new orders and employment, and they bumped up their expectations for capital spending."
The Conference Board said U.S. consumer confidence rebounded in September, helped by lower gasoline prices. The consumer confidence index rose to 104.5 in September after falling to a revised nine-month low of 100.2 in August. Economists forecast the index to rise to 102.7 from the initial August reading of 99.6. The present situation index rose to 127.7 from 123.9, while the expectations index increased to 89.0 from 84.4. Inflation expectations eased in September. Expectations of inflation in the next year fell to 4.9 in September from 5.5 in August. This is the lowest level since March.
Lennar Corp. issued another profit warning, this time for its fiscal fourth quarter, saying a floor hasn't been found to the downturn in the home building sector. Third-quarter ending Aug. 31 net income fell 39% to $207 million, or $1.30 a share, with revenue up 20% to $4.18 billion. The company had previously said earnings would range between $1.25 to $1.35 a share. For the fourth quarter, it sees earnings between $1 and $1.30 a share. Analysts polled by Thomson First Call, on average, expected earnings of $1.60 a share. The market pretty well yawned at the news. The same can be said for than less than robust assessment provided by Lowe's.
Benjamin Graham: "The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase."
The energy (that includes coal) and the precious metals sectors are attempting to find their footing, and that in the face of window dressing by the fund managers this week.
I recommend that investors have at least one-third of their portfolios in these combined sectors. I should also mention that I shorted the 10-year Treasury bond early Tuesday morning. Over the past several weeks I have mentioned some hedges I had placed. Their results could be described as no hits, no runs, no errors. Pretty much a wash.
Steve Saville: "For more than 10 years there has been a strong tendency for the gold sector's intermediate-term trend to reverse direction during October-November. In particular, when the gold sector -- represented in this discussion by the AMEX Gold BUGS Index (HUI) -- trends higher into October-November it will regularly reverse course and trend lower over the ensuing 6-12 months; and when the trend is 'down' going into the October-November period there will often be an upward reversal leading to a 6-12 month rally. This is why an October-November bottom for the current decline is likely and why such an outcome would have intermediate-term BULLISH implications."
OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done."
He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall.
Former Fed Chief Paul Volcker: ``I am a little bit more worried about inflation,'' said Volcker, 79, speaking at a discussion sponsored by the Women's Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker's concerns.
While the inflation rate isn't ``high'' or ``running away,'' Volcker said, ``it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''
Standard Chartered Plc raised its estimate for China's economic growth this year to 10.8 percent, saying government efforts to cool an investment boom aren't working.
The forecast was boosted from 10.2 percent, Shanghai-based economist Stephen Green said in a research note. Green also raised his estimate for 2007 growth to 9.7 percent from 8.9 percent. The new 2006 projection represents the fastest expansion since 1995, when the economy grew 10.9 percent.
Russia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin. "An additional agreement in the contract to build the Bushehr station was signed, which fixes September 2007 as the launch date," Sergei Novikov, a spokesman for Russia's atomic energy agency, told AFP. The plant will actually produce electricity from November next year, he said, while the nuclear fuel for the plant will be delivered no later than March.
Eagle Materials Inc. on Tuesday cut its fiscal 2007 earnings forecast to a range of $3.80 to $4.20 a share from its previous view of $4.40 to $4.70 a share. The Dallas-based building materials company said in a statement the lowered forecast is primarily due to the accelerated decline in housing starts, which has led to weakened business conditions in its gypsum wallboard and paper businesses.
Benjamin Graham: "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."
December gold climbed $1.20 to close at $597.10 an ounce, its strongest closing level since Sept. 11. December silver ended up 17 cents at $11.495 an ounce and December copper tacked on 1.85 cents to close at $3.466 a pound. The silver and copper contracts marked their highest closing level since Sept. 8.
The S&P 500 reached its highest level since February 2001. The Dow is closing in on its all-time high set in 2000.
November crude fell 44 cents to close at $61.01 a barrel with prices trading between $60.60 and $62. October natural gas recovered from a three-year low of $4.38 per million Britisth thermal units to close up 5.1 cents at $4.526.
Abe, Japan's Prime Minister, told reporters it is time to improve Japan's relationship with China and South Korea that deteriorated during the Koizumi administration.
The healthcare cost squeeze is still on. Premiums for job-based health coverage rose 7.7% on average from spring 2005 to spring 2006, down from a 9.2% increase in 2005, according to the Employer Health Benefits Survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums saw their third consecutive year of declining increases, but wages rose 3.8% and inflation increased 3.5%.
Congress is unlikely to approve a bill giving President Bush's warrantless wiretapping program legal status and new restrictions before the November midterm elections, dealing a significant blow to one of the White House's top wartime priorities.
House and Senate versions of the legislation differ too much to bridge the gap by week's end, when Congress recesses until after the Nov. 7 elections, according to two GOP leadership aides who demanded anonymity because the decision had not yet been announced.
Home construction in Tulsa quickened in August after an unusually slow July, boosting year-to-date totals ahead of the 2005 pace once again.
The 382 homes that were started in August was 22 percent above the 313 logged in July, according to data released Monday by New Orders Weekly, a construction tracking service.
Despite persistent talk about possible airline mergers, Continental Airlines wants to stay independent, its chief executive said Tuesday.
Larry Kellner, chairman and chief executive of Houston-based Continental, told investors that the carrier is in good shape to go it alone.
California’s public sector employers are to face a cash crunch over the next 15 years with the cost of healthcare provision for retiring workers forecast to rise to $31bn a year, according to a new report.
The California HealthCare Foundation expects health care costs in the most populous state in the US to rise more than eight fold from $3.9bn this year to $31bn by 2020. The sharp increase will be driven by inflation, increases in life expectancy and an ageing population.
Manufacturing activity in the central Atlantic region in September grew at a much faster pace than the previous month, the Federal Reserve Bank of Richmond reported Tuesday, as a rebound in factory shipments and a faster pace of growth in new orders helped offset slower employment gains. The Richmond Fed's seasonally-adjusted manufacturing index rose to 9 in September from 3 in August. The Richmond Fed said a survey of manufacturers in the region indicated that raw materials prices rose at an average annual rate of 3.18%, after rising 1.88% in August, while growth in prices of finished goods declined slightly to 2.55% from 2.61% last month. "Looking ahead, contacts were markedly more optimistic about their business prospects for the next six months," the Richmond Fed said. "Firms anticipated faster growth for shipments, new orders and employment, and they bumped up their expectations for capital spending."
The Conference Board said U.S. consumer confidence rebounded in September, helped by lower gasoline prices. The consumer confidence index rose to 104.5 in September after falling to a revised nine-month low of 100.2 in August. Economists forecast the index to rise to 102.7 from the initial August reading of 99.6. The present situation index rose to 127.7 from 123.9, while the expectations index increased to 89.0 from 84.4. Inflation expectations eased in September. Expectations of inflation in the next year fell to 4.9 in September from 5.5 in August. This is the lowest level since March.
Lennar Corp. issued another profit warning, this time for its fiscal fourth quarter, saying a floor hasn't been found to the downturn in the home building sector. Third-quarter ending Aug. 31 net income fell 39% to $207 million, or $1.30 a share, with revenue up 20% to $4.18 billion. The company had previously said earnings would range between $1.25 to $1.35 a share. For the fourth quarter, it sees earnings between $1 and $1.30 a share. Analysts polled by Thomson First Call, on average, expected earnings of $1.60 a share. The market pretty well yawned at the news. The same can be said for than less than robust assessment provided by Lowe's.
Benjamin Graham: "The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase."
The energy (that includes coal) and the precious metals sectors are attempting to find their footing, and that in the face of window dressing by the fund managers this week.
I recommend that investors have at least one-third of their portfolios in these combined sectors. I should also mention that I shorted the 10-year Treasury bond early Tuesday morning. Over the past several weeks I have mentioned some hedges I had placed. Their results could be described as no hits, no runs, no errors. Pretty much a wash.
Steve Saville: "For more than 10 years there has been a strong tendency for the gold sector's intermediate-term trend to reverse direction during October-November. In particular, when the gold sector -- represented in this discussion by the AMEX Gold BUGS Index (HUI) -- trends higher into October-November it will regularly reverse course and trend lower over the ensuing 6-12 months; and when the trend is 'down' going into the October-November period there will often be an upward reversal leading to a 6-12 month rally. This is why an October-November bottom for the current decline is likely and why such an outcome would have intermediate-term BULLISH implications."
OPEC President Edmund Daukoru said the slide in prices was harming investment and that "something needs to be done."
He told Reuters in Abuja, Nigeria, that members of the exporters' cartel, which pumps a third of the world's oil, were already talking internally about the price fall.
Former Fed Chief Paul Volcker: ``I am a little bit more worried about inflation,'' said Volcker, 79, speaking at a discussion sponsored by the Women's Economic Round Table in New York yesterday. Gerald Corrigan, who served as New York Fed president from 1985 to 1993, said he shared Volcker's concerns.
While the inflation rate isn't ``high'' or ``running away,'' Volcker said, ``it is kind of creeping up, and I am impressed by the degree of pressure, if that is the right word -- psychological pressure, political pressure -- there is not to do anything about it.''
Standard Chartered Plc raised its estimate for China's economic growth this year to 10.8 percent, saying government efforts to cool an investment boom aren't working.
The forecast was boosted from 10.2 percent, Shanghai-based economist Stephen Green said in a research note. Green also raised his estimate for 2007 growth to 9.7 percent from 8.9 percent. The new 2006 projection represents the fastest expansion since 1995, when the economy grew 10.9 percent.
Russia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin. "An additional agreement in the contract to build the Bushehr station was signed, which fixes September 2007 as the launch date," Sergei Novikov, a spokesman for Russia's atomic energy agency, told AFP. The plant will actually produce electricity from November next year, he said, while the nuclear fuel for the plant will be delivered no later than March.
Eagle Materials Inc. on Tuesday cut its fiscal 2007 earnings forecast to a range of $3.80 to $4.20 a share from its previous view of $4.40 to $4.70 a share. The Dallas-based building materials company said in a statement the lowered forecast is primarily due to the accelerated decline in housing starts, which has led to weakened business conditions in its gypsum wallboard and paper businesses.
Benjamin Graham: "Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed."
December gold climbed $1.20 to close at $597.10 an ounce, its strongest closing level since Sept. 11. December silver ended up 17 cents at $11.495 an ounce and December copper tacked on 1.85 cents to close at $3.466 a pound. The silver and copper contracts marked their highest closing level since Sept. 8.
The S&P 500 reached its highest level since February 2001. The Dow is closing in on its all-time high set in 2000.
November crude fell 44 cents to close at $61.01 a barrel with prices trading between $60.60 and $62. October natural gas recovered from a three-year low of $4.38 per million Britisth thermal units to close up 5.1 cents at $4.526.
Abe, Japan's Prime Minister, told reporters it is time to improve Japan's relationship with China and South Korea that deteriorated during the Koizumi administration.
The healthcare cost squeeze is still on. Premiums for job-based health coverage rose 7.7% on average from spring 2005 to spring 2006, down from a 9.2% increase in 2005, according to the Employer Health Benefits Survey released Tuesday by the Kaiser Family Foundation and the Health Research and Educational Trust. Premiums saw their third consecutive year of declining increases, but wages rose 3.8% and inflation increased 3.5%.
Congress is unlikely to approve a bill giving President Bush's warrantless wiretapping program legal status and new restrictions before the November midterm elections, dealing a significant blow to one of the White House's top wartime priorities.
House and Senate versions of the legislation differ too much to bridge the gap by week's end, when Congress recesses until after the Nov. 7 elections, according to two GOP leadership aides who demanded anonymity because the decision had not yet been announced.
Home construction in Tulsa quickened in August after an unusually slow July, boosting year-to-date totals ahead of the 2005 pace once again.
The 382 homes that were started in August was 22 percent above the 313 logged in July, according to data released Monday by New Orders Weekly, a construction tracking service.
Despite persistent talk about possible airline mergers, Continental Airlines wants to stay independent, its chief executive said Tuesday.
Larry Kellner, chairman and chief executive of Houston-based Continental, told investors that the carrier is in good shape to go it alone.
California’s public sector employers are to face a cash crunch over the next 15 years with the cost of healthcare provision for retiring workers forecast to rise to $31bn a year, according to a new report.
The California HealthCare Foundation expects health care costs in the most populous state in the US to rise more than eight fold from $3.9bn this year to $31bn by 2020. The sharp increase will be driven by inflation, increases in life expectancy and an ageing population.
Monday, September 25, 2006
Oil And Gold
9/24/06 Oil And Gold
It's not over until the fat lady sings, and the fat lady is nowhere to be seen.
December gold rose 50 cents to close at $595.90 an ounce Monday, its highest closing level since Sept. 13. Prices staged a complete reversal from the earlier low of $587.50 as oil prices reversed course to climb to a high above $62 a barrel. November crude had declined 65 cents to $59.90 a barrel early in the session on the New York Mercantile Exchange. The contract hadn't traded under the $60 level since late November. December silver tacked on 1.5 cents to end at $11.325 an ounce.
Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 30 years, the National Association of Realtors said Monday. Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said. Sales are down 12.6% in the past year. The median price of an existing home fell 1.7% year-over-year to $225,000. It's the first time since April 1995 that median prices have fallen on a year-over-year basis.
With the weakness in the housing market, the yield on 10-year treasury bonds fell
to 4.55%.
Higher inflation remains a bigger risk for the economy than a sharp slowdown of growth, said Richard Fisher, the president of the Dallas Fed bank on Monday. "I continue to fret more about inflation than I do about growth," Fisher said in a speech prepared for delivery in Monterrey, Mexico. Fisher dismissed the benign August PPI report released last week as unreliable. The best gauges of inflationary pressures "are not yet comforting," he said. Fisher said there was a "serious correction" taking place in the housing sector, but said outside this sector, the economy is "healthy and robust."
Keep an eye on the VIX. It had a range of 11.99 to 13.41 and closed at 12.12
The area around Venezuela's El Tigre, known as the Orinoco Oil Belt, possesses the world's biggest petroleum reserves -- 1.3 trillion barrels of so-called extra-heavy oil. Chevron, Exxon Mobil, ConocoPhillips and dozens of other foreign firms are
here, using recently developed technologies to extractthe tarlike, sulfurous crude and refine it. "Everyone agrees that the Orinoco Belt has the biggest
reserves in the world," said Alberto Quiros, a Chavez critic and former president of Royal Dutch Shell's Venezuela operations. "What Chavez will do with them
is another question, but there's no doubt thatVenezuela will take Saudi Arabia's place as No. 1."
Asked if Iran will stop enrichment and reprocessing activities, Ahmadinejad says, "Why should we agree to that? There is no such provision in the NPT [Nuclear Nonproliferation Treaty]."
Martin Weiss: "According to Time, two recent Pentagon messages are especially significant. The first, a "Prepare to Deploy" order, has been sent to an Aegis-class cruiser, two mine sweepers and two mine hunters. The second, from the Chief of Naval Operations (CNO), requests a review of long-standing U.S. plans to blockade Iranian ports in the Persian Gulf.
The Pentagon's primary focus: The precise spot on the planet we have been focusing your attention on all year long -- the Strait of Hormuz, a 20-mile-wide bottleneck in the Persian Gulf through which roughly 40% of the world's oil must pass each day.
Time's conclusion:
"Coupled with the CNO's request for a blockade review, a deployment of minesweepers to the west coast of Iran would seem to suggest that a much discussed -- but until now largely theoretical -- prospect has become real: that the U.S. may be preparing for war with Iran."
Bloomberg: "Gold may rise for a second week on speculation that European central banks will reduce sales. Eighteen of 27 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on Sept. 21 and Sept. 22 advised buying gold, which rose 2.1 percent last week to $595.40 an ounce in New York. Six people said to sell, and three were neutral. European banks face a deadline of tomorrow to reach their annual gold sales limit of 500 tons, and had shed 380 tons of this year's allotment as of Sept. 19, according to the producer- funded World Gold Council in London. In the week ended Sept. 15, bank sales were the most since June, and gold prices fell the most in two months."
"We have to hire at least around 10,000 people a year to meet our ambition of continued growth," Anders Dahlvig, CEO of the Ikea Group, was quoted as saying in Swedish financial daily Dagens Industri.
There are more than 230 Ikea stores in 33 countries, and sales have more than tripled in the last decade, to 17.3 billion euros ($22.1 billion) in the full-year ending Aug. 31. The company plans to open 24 new stores in the next 12 months in countries including Germany, the United States and Sweden.
The average retail price of gasoline nationwide is now $2.38 a gallon -- the lowest level since March. In sum, prices have declined on avaerage 64 cents a gallon. Unless this is an unusually warm winter, and that is not anticipated, I don't expect the price of gasoline to decline more than another 10 cents a gallon.
Venezuela is planning a South American pipeline, a proposed 12,515-kilometer (7,776-mile) conduit to carry gas to Brazil, Argentina, Uruguay and Paraguay.
The $20 billion continent-spanning pipeline, according to Chavez, will open the way for energy integration "among the brother peoples" of South America, because Venezuela has gas for all these nations and wants to offer them this resource for the "balance of the multipolar world."
Venezuela has the eighth-largest gas reserves in the world and the largest in South America at 150 trillion cubic feet. Recent studies, in fact, have shown that the country's reserves could be even more extensive.
Presently, the U.S. is highly dependent on oil from Venezuela. The U.S. believes Venezuela has nowhere else to go with its oil. Naturally, the Bush Administration is wrong. More and more energy is already being supplied to China. Chavez is looking forward to the day when Venezuela ships no energy to the U.S. It will happen.
Semiconductor maker PMC-Sierra Inc. on Monday reduced its revenue outlook for the third quarter, due to waning demand for the company's communications chip products.
The company lowered its sales guidance to a range of $114 million to $116 million, compared with its earlier estimate of $122 million to $124 million. Revenue totaled $118.8 million in the second quarter this year.
It's not over until the fat lady sings, and the fat lady is nowhere to be seen.
December gold rose 50 cents to close at $595.90 an ounce Monday, its highest closing level since Sept. 13. Prices staged a complete reversal from the earlier low of $587.50 as oil prices reversed course to climb to a high above $62 a barrel. November crude had declined 65 cents to $59.90 a barrel early in the session on the New York Mercantile Exchange. The contract hadn't traded under the $60 level since late November. December silver tacked on 1.5 cents to end at $11.325 an ounce.
Median sales prices of existing homes fell from year-ago levels in August for the first time in 11 years and just the sixth time in the past 30 years, the National Association of Realtors said Monday. Sales of existing homes fell 0.5% in August to a seasonally adjusted annual rate of 6.30 million, the industry group said. Sales are down 12.6% in the past year. The median price of an existing home fell 1.7% year-over-year to $225,000. It's the first time since April 1995 that median prices have fallen on a year-over-year basis.
With the weakness in the housing market, the yield on 10-year treasury bonds fell
to 4.55%.
Higher inflation remains a bigger risk for the economy than a sharp slowdown of growth, said Richard Fisher, the president of the Dallas Fed bank on Monday. "I continue to fret more about inflation than I do about growth," Fisher said in a speech prepared for delivery in Monterrey, Mexico. Fisher dismissed the benign August PPI report released last week as unreliable. The best gauges of inflationary pressures "are not yet comforting," he said. Fisher said there was a "serious correction" taking place in the housing sector, but said outside this sector, the economy is "healthy and robust."
Keep an eye on the VIX. It had a range of 11.99 to 13.41 and closed at 12.12
The area around Venezuela's El Tigre, known as the Orinoco Oil Belt, possesses the world's biggest petroleum reserves -- 1.3 trillion barrels of so-called extra-heavy oil. Chevron, Exxon Mobil, ConocoPhillips and dozens of other foreign firms are
here, using recently developed technologies to extractthe tarlike, sulfurous crude and refine it. "Everyone agrees that the Orinoco Belt has the biggest
reserves in the world," said Alberto Quiros, a Chavez critic and former president of Royal Dutch Shell's Venezuela operations. "What Chavez will do with them
is another question, but there's no doubt thatVenezuela will take Saudi Arabia's place as No. 1."
Asked if Iran will stop enrichment and reprocessing activities, Ahmadinejad says, "Why should we agree to that? There is no such provision in the NPT [Nuclear Nonproliferation Treaty]."
Martin Weiss: "According to Time, two recent Pentagon messages are especially significant. The first, a "Prepare to Deploy" order, has been sent to an Aegis-class cruiser, two mine sweepers and two mine hunters. The second, from the Chief of Naval Operations (CNO), requests a review of long-standing U.S. plans to blockade Iranian ports in the Persian Gulf.
The Pentagon's primary focus: The precise spot on the planet we have been focusing your attention on all year long -- the Strait of Hormuz, a 20-mile-wide bottleneck in the Persian Gulf through which roughly 40% of the world's oil must pass each day.
Time's conclusion:
"Coupled with the CNO's request for a blockade review, a deployment of minesweepers to the west coast of Iran would seem to suggest that a much discussed -- but until now largely theoretical -- prospect has become real: that the U.S. may be preparing for war with Iran."
Bloomberg: "Gold may rise for a second week on speculation that European central banks will reduce sales. Eighteen of 27 traders, investors and analysts surveyed by Bloomberg News from Sydney to Chicago on Sept. 21 and Sept. 22 advised buying gold, which rose 2.1 percent last week to $595.40 an ounce in New York. Six people said to sell, and three were neutral. European banks face a deadline of tomorrow to reach their annual gold sales limit of 500 tons, and had shed 380 tons of this year's allotment as of Sept. 19, according to the producer- funded World Gold Council in London. In the week ended Sept. 15, bank sales were the most since June, and gold prices fell the most in two months."
"We have to hire at least around 10,000 people a year to meet our ambition of continued growth," Anders Dahlvig, CEO of the Ikea Group, was quoted as saying in Swedish financial daily Dagens Industri.
There are more than 230 Ikea stores in 33 countries, and sales have more than tripled in the last decade, to 17.3 billion euros ($22.1 billion) in the full-year ending Aug. 31. The company plans to open 24 new stores in the next 12 months in countries including Germany, the United States and Sweden.
The average retail price of gasoline nationwide is now $2.38 a gallon -- the lowest level since March. In sum, prices have declined on avaerage 64 cents a gallon. Unless this is an unusually warm winter, and that is not anticipated, I don't expect the price of gasoline to decline more than another 10 cents a gallon.
Venezuela is planning a South American pipeline, a proposed 12,515-kilometer (7,776-mile) conduit to carry gas to Brazil, Argentina, Uruguay and Paraguay.
The $20 billion continent-spanning pipeline, according to Chavez, will open the way for energy integration "among the brother peoples" of South America, because Venezuela has gas for all these nations and wants to offer them this resource for the "balance of the multipolar world."
Venezuela has the eighth-largest gas reserves in the world and the largest in South America at 150 trillion cubic feet. Recent studies, in fact, have shown that the country's reserves could be even more extensive.
Presently, the U.S. is highly dependent on oil from Venezuela. The U.S. believes Venezuela has nowhere else to go with its oil. Naturally, the Bush Administration is wrong. More and more energy is already being supplied to China. Chavez is looking forward to the day when Venezuela ships no energy to the U.S. It will happen.
Semiconductor maker PMC-Sierra Inc. on Monday reduced its revenue outlook for the third quarter, due to waning demand for the company's communications chip products.
The company lowered its sales guidance to a range of $114 million to $116 million, compared with its earlier estimate of $122 million to $124 million. Revenue totaled $118.8 million in the second quarter this year.
Saturday, September 23, 2006
It's Time To Buckle Down
9/24/06 It's Time To Buckle Down
On page 52 of Barron's there is an article entitled "Value re-emerges in oil services." The author recommends Weatherford Int'l, a fine company, but not in the class of BJ Services from a management standpoint and its p/e is much higher on 2007 earnings. In addition, they recommend a drilling company, Transocean, another fine company but again not nearly in the same value camp as Diamond Offshore or Helmerich and Payne (where you also get 22% ownership in Atwood Oceanics).
It's time to put up with the quarterly window dressing next week. That's where all the subpar money managers attempt to get rid of all the positions that did poorly this quarter. Better the fund managersshould fire themselves.
Talk about stupidity. The 3-month treasury bills yield more than 30-year treasury bonds. I'll gladly take on this trade.
Doug Noland: "Inevitably, however, there will come a point when The Unrelenting Inflation in the Quantity of Late-Cycle U.S. Debt Instruments Collides with the Grossly Inflated Market Price of Total Dollar Financial Claims. And, sure, U.S. financial sector and bond market dynamics certainly increase the likelihood that this collision manifests in the currency markets. Even assuming that dollar confidence holds in the near-term, there remains the more nebulous issue of a bloated and foolhardy leveraged speculating community faced with the Upshot of Heightened Monetary Disorder, including wild volatility across the spectrum of global financial markets, widening spreads, wildly vacillating marketplace liquidity dynamics, and acute general financial and economic uncertainty. The bond market rally has become destabilizing."
Last week the advance/decline ratio was not very promising and the ARMS index was bearish three out of the five trading days. Yet, on block trades of 10,000 shares or more, a good deal more traded on upticks rather than downticks. It is also well to remember that program trading is comprising greater amounts of the daily volume. At times it can run up to 50%.
Volkmar Hable: "What is risk management? It is the ability to think in losses rather than in profits. Before doing any investment, always determine "How much loss am I willing to take? How much loss can I stand at all?", if the trade / investment should go against you. Determine your maximum loss in absolute hard money, like for example: "I cannot take more than 10000 USD in losses on stock xyz". Most of the money managers that I know have some technical indicator or some piece of fundamental information as exit trigger. However, this does not cut it, and most certainly will not save the day. Experience shows that the markets can go much higher than most people would believe and they can fall much harder than most people would dare to consider. Safeguarding your own performance against these events can be done only by strict risk management in absolute terms of hard money. Respect risk. Trial and error is an integral part of the daily games in the financial markets. How errors are handled separates the losers from the winners."
Addressing the offshore market, Lee Ahlstrom, director of investor relations at Noble Corp., pointed out that most deepwater drilling projects remain profitable even when oil hits $30 or $40 a barrel, let alone Friday's midday price of $60.48 in NYMEX futures.
George Ure: "The whole War on Terror has appeared in the nick of time to give government the set of economic controls necessary to jiggle the economy as desired and keep the public from seeing things. I think of the War on Terror as the modern analogy to the Works Progress Administration and the Civilian Conservation Corp of the last Depression. Thanks to the (almost too convenient) timing of 9/11, however, the positive economic impacts of the War on Terror are infrequently discussed. Without it, the country would have sunk much further into economic malaise before taking definitive action, and only then after much public rancor."
The last time I looked NYC was basically nect door to Philly. The Empire State index was clearly on the upswing while the Philly stunk. The markets only focused on the Philly. Smart investing takes in the whole landscape- not selctive tidbits.
On Friday, most companies in the energy sector took it on the chin. Interestingly,
ExxonMobil was up 13 cents. Chevron was only down 11 cents. ConocoPhillips only declined 17 cents.
Gold had a good day on Friday. Yet, Newmont was down 5 cents and Freeport McMoran was down 82 cents. American Barrick rose 22 cents and Goldcorp only 1 cent. Copper had a decent day but Phelps Dodge declined $1.09. Silver did ok too but Silver Wheaton only managed a gain of 8 cents. The market can certainly be puzzling.
From earthfiles.com: September 19, 2006 - Lowest Arctic Ice Concentration On Record.
"This situation is unlike anything observed in previous record low ice seasons.
If this anomaly trend continues, ‘Northern Sea Route’ between Europe and Asia will be open over longer intervals of time, and it is conceivable we might see attempts at sailing around the world directly across the summer Arctic Ocean within the next 10-20 years." Mark Drinkwater, ESA Oceans/Ice Unit
On page 52 of Barron's there is an article entitled "Value re-emerges in oil services." The author recommends Weatherford Int'l, a fine company, but not in the class of BJ Services from a management standpoint and its p/e is much higher on 2007 earnings. In addition, they recommend a drilling company, Transocean, another fine company but again not nearly in the same value camp as Diamond Offshore or Helmerich and Payne (where you also get 22% ownership in Atwood Oceanics).
It's time to put up with the quarterly window dressing next week. That's where all the subpar money managers attempt to get rid of all the positions that did poorly this quarter. Better the fund managersshould fire themselves.
Talk about stupidity. The 3-month treasury bills yield more than 30-year treasury bonds. I'll gladly take on this trade.
Doug Noland: "Inevitably, however, there will come a point when The Unrelenting Inflation in the Quantity of Late-Cycle U.S. Debt Instruments Collides with the Grossly Inflated Market Price of Total Dollar Financial Claims. And, sure, U.S. financial sector and bond market dynamics certainly increase the likelihood that this collision manifests in the currency markets. Even assuming that dollar confidence holds in the near-term, there remains the more nebulous issue of a bloated and foolhardy leveraged speculating community faced with the Upshot of Heightened Monetary Disorder, including wild volatility across the spectrum of global financial markets, widening spreads, wildly vacillating marketplace liquidity dynamics, and acute general financial and economic uncertainty. The bond market rally has become destabilizing."
Last week the advance/decline ratio was not very promising and the ARMS index was bearish three out of the five trading days. Yet, on block trades of 10,000 shares or more, a good deal more traded on upticks rather than downticks. It is also well to remember that program trading is comprising greater amounts of the daily volume. At times it can run up to 50%.
Volkmar Hable: "What is risk management? It is the ability to think in losses rather than in profits. Before doing any investment, always determine "How much loss am I willing to take? How much loss can I stand at all?", if the trade / investment should go against you. Determine your maximum loss in absolute hard money, like for example: "I cannot take more than 10000 USD in losses on stock xyz". Most of the money managers that I know have some technical indicator or some piece of fundamental information as exit trigger. However, this does not cut it, and most certainly will not save the day. Experience shows that the markets can go much higher than most people would believe and they can fall much harder than most people would dare to consider. Safeguarding your own performance against these events can be done only by strict risk management in absolute terms of hard money. Respect risk. Trial and error is an integral part of the daily games in the financial markets. How errors are handled separates the losers from the winners."
Addressing the offshore market, Lee Ahlstrom, director of investor relations at Noble Corp., pointed out that most deepwater drilling projects remain profitable even when oil hits $30 or $40 a barrel, let alone Friday's midday price of $60.48 in NYMEX futures.
George Ure: "The whole War on Terror has appeared in the nick of time to give government the set of economic controls necessary to jiggle the economy as desired and keep the public from seeing things. I think of the War on Terror as the modern analogy to the Works Progress Administration and the Civilian Conservation Corp of the last Depression. Thanks to the (almost too convenient) timing of 9/11, however, the positive economic impacts of the War on Terror are infrequently discussed. Without it, the country would have sunk much further into economic malaise before taking definitive action, and only then after much public rancor."
The last time I looked NYC was basically nect door to Philly. The Empire State index was clearly on the upswing while the Philly stunk. The markets only focused on the Philly. Smart investing takes in the whole landscape- not selctive tidbits.
On Friday, most companies in the energy sector took it on the chin. Interestingly,
ExxonMobil was up 13 cents. Chevron was only down 11 cents. ConocoPhillips only declined 17 cents.
Gold had a good day on Friday. Yet, Newmont was down 5 cents and Freeport McMoran was down 82 cents. American Barrick rose 22 cents and Goldcorp only 1 cent. Copper had a decent day but Phelps Dodge declined $1.09. Silver did ok too but Silver Wheaton only managed a gain of 8 cents. The market can certainly be puzzling.
From earthfiles.com: September 19, 2006 - Lowest Arctic Ice Concentration On Record.
"This situation is unlike anything observed in previous record low ice seasons.
If this anomaly trend continues, ‘Northern Sea Route’ between Europe and Asia will be open over longer intervals of time, and it is conceivable we might see attempts at sailing around the world directly across the summer Arctic Ocean within the next 10-20 years." Mark Drinkwater, ESA Oceans/Ice Unit
Friday, September 22, 2006
Going Against The Grain
9/23/06 Going Against The Grain
December gold climbed $7.10 to close at a more than one-week high of $595.40 an ounce, up 2.1% for the week. December silver added 6.5 cents to close at $11.31 an ounce, up 4% from the week-ago closing level. And December copper finished Friday at $3.4435 a pound, up 1.2 cents for the session and up 3.8% for the week. In the meantime, yields on treasury bonds plunged once again and that meant the dollar index moved back closer to the 84 level.
The number of rigs drilling for oil and natural gas in North America fell by 105 to 2,134, according to a weekly update by Baker Hughes Inc.
Two months of talks between General Motors Corp., Renault SA and Nissan Motor Co. have resulted in little progress toward a possible alliance, according to the Wall Street Journal and Detroit News.
Peter Schiff: "There are two primary reasons that I still believe oil prices will continue their long-term ascent. First, years of cheap oil, and the false perception that prices would stay low indefinitely, lead producers to under-invest in exploration and development, and consumers to over-utilize energy resources. As a result, it will take a long time for supply and demand to readjust to the new reality, ensuring high prices for years to come.
Second, once Asian central banks finally allow the U.S. dollar to collapse, Asian demand for oil will surge. That is because appreciated local currencies will not only make oil cheaper for Asian consumers to buy, but result in risings living standards throughout the region. As the values of their savings and incomes rise, more affluent Asian consumers will then be able to afford more energy utilizing products. Currently the purchasing power of Asian consumers is being suppressed by their governments' foolish policies of propping up the purchasing power of American consumers."
It is not unusual for me to go against the grain. I've been doing it selectively for about 40 years. When you entertain such a thought, you should know that the stock will go down after you buy it. Only luck makes you buy a stock at the year low, as was the case this week with Foundation Coal at $29.02. That happens rarely. Every now and then, you are able to buy shares in a wonderfully run company with exceptional growth, exceptional long range potential, and results that should produce a conservative p/e ratio of at least 15. BJ Services is such a company. Their fiscal year ends on Sept. 30. They are constantly on the lookout for more engineers and more capital equipment to be used in their field of oil services. There is a 3 month backlog to use their services. They are terrific at what they do and their customers provide repeat business. This has been their experience over the last 130 years or so. If we took a 15 multiple of earnings for the year that begins Oct.1, we'd arrive at a price of $47 or about $19 higher than the current price. Their growth, cash flow, and P/E make high growth Nasdaq stocks look expensive by comparison, and that includes Google. I think all investors should consider BJS for their portfolio. One more thought. BJ Services is a key oil service player in India and Qatar,and has a growing presence in Kazakhstan. In sum, the company has a good nose for international growth markets.
Jim Jubak: "In the long term, the huge U.S. trade deficit, the huge U.S. budget deficit and the finite appetite of foreign investors for U.S. dollars will produce a weaker U.S. dollar and higher U.S. inflation. Gold, the hedge against a falling currency and rising inflation, will earn a place in more and more portfolios. With gold supply expanding only very slowly, gold prices will rise steadily. The great bull market rally in gold will resume after the recent correction."
Thanks to rigzone.com for the following: "Oil and gas drillers, gathered here for the annual meeting of the International Association of Drilling Contractors, continue to revise projected rig activity upward, even in the United States, where gas storage sits at near-record levels, said IADC Chairman Claus Chur.
That optimism has bled into projections for 2007, with rig operators brushing aside worries that energy companies will cut back on drilling should crude or gas prices retreat further. Near-record storage levels in the U.S. have raised concerns that a mild winter or slowing economy could max out storage capacity, causing prices to crash. The oil companies "are not so much focused on the month-to-month gas price," John Lindsay, executive vice president for Helmerich & Payne Inc. (HP), a leading land driller, said on the sidelines of the conference. Helmerich & Payne has seen no tapering off of activity due to recent commodity price declines, he said.
Helmerich and Payne was one of the five companies I mentioned this week reflecting unusual value. I believe Helmerich and Payne should be considered for all portfolios.
November crude closed at a 10-month contract low of $60.55 a barrel Friday, down $1.04 for the session and down 5.4% for the week. October natural gas closed at $4.627 per million British thermal units, down 15.4 cents, or 3.2%, for the day. The contract lost 7.1% for the week.
The benchmark 10-year note closed up 11/32 at 102 06/32 with a yield of 4.598%, its weakest level since March 1 and down from 4.648% late Thursday.
December gold climbed $7.10 to close at a more than one-week high of $595.40 an ounce, up 2.1% for the week. December silver added 6.5 cents to close at $11.31 an ounce, up 4% from the week-ago closing level. And December copper finished Friday at $3.4435 a pound, up 1.2 cents for the session and up 3.8% for the week. In the meantime, yields on treasury bonds plunged once again and that meant the dollar index moved back closer to the 84 level.
The number of rigs drilling for oil and natural gas in North America fell by 105 to 2,134, according to a weekly update by Baker Hughes Inc.
Two months of talks between General Motors Corp., Renault SA and Nissan Motor Co. have resulted in little progress toward a possible alliance, according to the Wall Street Journal and Detroit News.
Peter Schiff: "There are two primary reasons that I still believe oil prices will continue their long-term ascent. First, years of cheap oil, and the false perception that prices would stay low indefinitely, lead producers to under-invest in exploration and development, and consumers to over-utilize energy resources. As a result, it will take a long time for supply and demand to readjust to the new reality, ensuring high prices for years to come.
Second, once Asian central banks finally allow the U.S. dollar to collapse, Asian demand for oil will surge. That is because appreciated local currencies will not only make oil cheaper for Asian consumers to buy, but result in risings living standards throughout the region. As the values of their savings and incomes rise, more affluent Asian consumers will then be able to afford more energy utilizing products. Currently the purchasing power of Asian consumers is being suppressed by their governments' foolish policies of propping up the purchasing power of American consumers."
It is not unusual for me to go against the grain. I've been doing it selectively for about 40 years. When you entertain such a thought, you should know that the stock will go down after you buy it. Only luck makes you buy a stock at the year low, as was the case this week with Foundation Coal at $29.02. That happens rarely. Every now and then, you are able to buy shares in a wonderfully run company with exceptional growth, exceptional long range potential, and results that should produce a conservative p/e ratio of at least 15. BJ Services is such a company. Their fiscal year ends on Sept. 30. They are constantly on the lookout for more engineers and more capital equipment to be used in their field of oil services. There is a 3 month backlog to use their services. They are terrific at what they do and their customers provide repeat business. This has been their experience over the last 130 years or so. If we took a 15 multiple of earnings for the year that begins Oct.1, we'd arrive at a price of $47 or about $19 higher than the current price. Their growth, cash flow, and P/E make high growth Nasdaq stocks look expensive by comparison, and that includes Google. I think all investors should consider BJS for their portfolio. One more thought. BJ Services is a key oil service player in India and Qatar,and has a growing presence in Kazakhstan. In sum, the company has a good nose for international growth markets.
Jim Jubak: "In the long term, the huge U.S. trade deficit, the huge U.S. budget deficit and the finite appetite of foreign investors for U.S. dollars will produce a weaker U.S. dollar and higher U.S. inflation. Gold, the hedge against a falling currency and rising inflation, will earn a place in more and more portfolios. With gold supply expanding only very slowly, gold prices will rise steadily. The great bull market rally in gold will resume after the recent correction."
Thanks to rigzone.com for the following: "Oil and gas drillers, gathered here for the annual meeting of the International Association of Drilling Contractors, continue to revise projected rig activity upward, even in the United States, where gas storage sits at near-record levels, said IADC Chairman Claus Chur.
That optimism has bled into projections for 2007, with rig operators brushing aside worries that energy companies will cut back on drilling should crude or gas prices retreat further. Near-record storage levels in the U.S. have raised concerns that a mild winter or slowing economy could max out storage capacity, causing prices to crash. The oil companies "are not so much focused on the month-to-month gas price," John Lindsay, executive vice president for Helmerich & Payne Inc. (HP), a leading land driller, said on the sidelines of the conference. Helmerich & Payne has seen no tapering off of activity due to recent commodity price declines, he said.
Helmerich and Payne was one of the five companies I mentioned this week reflecting unusual value. I believe Helmerich and Payne should be considered for all portfolios.
November crude closed at a 10-month contract low of $60.55 a barrel Friday, down $1.04 for the session and down 5.4% for the week. October natural gas closed at $4.627 per million British thermal units, down 15.4 cents, or 3.2%, for the day. The contract lost 7.1% for the week.
The benchmark 10-year note closed up 11/32 at 102 06/32 with a yield of 4.598%, its weakest level since March 1 and down from 4.648% late Thursday.
Thursday, September 21, 2006
A Turning Point?
9/22/06 A Turning Point?
Just a reminder. A few days ago I wrote that 9/22 is a reversal day for W.D. Gann. It is also interesting to note that Gary Lammert and his fractal analysis point to 9/22 as a turning point.
Henry To: "The historical correlation between the Canadian dollar and the CRB and the CRB Energy Index has been quite significant (correlation of over 50%) over the last 16 years or so. Consequently, any breakdown of the major commodity indices without the confirmation of the Canadian dollar on the downside should be viewed as suspicious. At the very least, a non-confirmation on the part of the Canadian dollar should at least lead to some kind of bounce in commodities in general. Are we about to see such a bounce - given that the Canadian dollar is still holding on? Particularly in gold or crude oil? This author would not be surprised if either gold or crude oil bounce over the next week or so - but any buying in either gold or silver should be short-term only in nature and should only be bought if sentiment and technical indicators confirm, such as extreme bearish sentiment in the Hulbert Gold Newsletter Sentiment Index (HGNSI), declining assets in the Rydex Precious Metals fund, etc." As I mentioned yesterday, several companies in the energy sector made new 52-week lows on Wednesday.
The dollar weakened to $1.2787 per euro at 3 p.m. in New York from $1.2686 late Wednesday, for its biggest loss since July 26. The U.S. currency fell to 116.35 yen from 117.46 yesterday, the largest decline since July 28.
The Fed Bank of Philadelphia said its index for September fell to -0.4 from 18.5 in August. The median forecast in a Bloomberg survey was for a drop to 14.
Alameda County, California reported a 28.2 percent drop in year-over-year sales and a 1.5 percent drop in home prices -- the first annual price decline since March 2002, DataQuick Information Systems reported Wednesday. In Contra Costa County,California where sales toppled 23.5 percent, the median price was unchanged from last year, the worst performance since November 1999, said DataQuick spokesman Andrew LePage. Solano County, California sales also dropped 34.3 percent, and sales appreciated 1.9 percent, the lowest rate since August 1999. The median price in the Bay Area rose a scant 0.2 percent.
Japan's trade surplus surged in August as automobile shipments to the U.S. rose at the fastest pace in almost a decade, spurring export growth.
The trade surplus widened 96 percent to 200.5 billion yen ($1.7 billion) from a year earlier, the Ministry of Finance said today in Tokyo. Exports rose 17.7 percent, faster than the 16.3 percent median forecast of 13 economists surveyed by Bloomberg.
October natural gas fell 15 cents to close at $4.781 per million British thermal units after a low of $4.60. An Energy Department report Thursday showed more-than-ample supplies of the commodity. The October contract hasn't traded or closed at prices this low since Feb. 2004. Meanwhile, November crude rose 85 cents to close at $61.59 a barrel.
The benchmark 10-year note ended up 22/32 at 101 25/32 with a yield of 4.648%, the highest close since Mar. 16 and down from 4.728% late Wednesday. The 2-year note ended up 6/32 at 100 09/32, yielding 4.716%, keeping the yield curve inverted. Robert Parry, the past president of the SF Fed, said Wednesday he "was surprised by the 10-year rate" and how low it is. I am certainly in that camp.
KB Home said quarterly revenue reached $2.67 billion, compared with $2.53 billion during the same period in the prior year. The company said the revenue growth was driven by a 10% increase in the average selling price, and partly offset by a 3% decrease in unit deliveries. The company's backlog at Aug. 31 totaled 23,878 units, down from 27,744 units at the same time last year. The company expects market conditions for the rest of 2006 and into next year to have an unfavorable impact on year-over-year net income comparisons.
Kurt Richebacher: "In 2005, real disposable incomes of private households in the United States increased $93.8 billion, or 1.2%, while their debts grew $1,208.6 billion, or 11.7%. Total consumer spending on goods, services and new housing accounted for 92% of real GDP growth.
The U.S. economy's recovery from the recession in 2001 has been its slowest in the whole postwar period, and in addition, it has been of a most unusual pattern. Real GDP rose by 11.7% over the four years to 2005. Within this aggregate, residential building soared by 35.6%. Consumption gained 13.4% and government spending 10%. The big laggard in domestic spending was business nonresidential investment, up only 3.6%. Net exports year for year were increasingly negative."
Wal-Mart announced that it will make nearly 300 generic drugs available for only $4 per prescription for up to a 30-day supply at commonly prescribed dosages. The program, to be launched on Friday, will be available to customers and associates of the 65 Wal-Mart, Neighborhood Market and Sam's Club pharmacies in Tampa Bay, Fla. area, and will be expanded to the entire state in January 2007.
Wonders never cease. The VIX rallied .86 and closed at 12.25.
Just a reminder. A few days ago I wrote that 9/22 is a reversal day for W.D. Gann. It is also interesting to note that Gary Lammert and his fractal analysis point to 9/22 as a turning point.
Henry To: "The historical correlation between the Canadian dollar and the CRB and the CRB Energy Index has been quite significant (correlation of over 50%) over the last 16 years or so. Consequently, any breakdown of the major commodity indices without the confirmation of the Canadian dollar on the downside should be viewed as suspicious. At the very least, a non-confirmation on the part of the Canadian dollar should at least lead to some kind of bounce in commodities in general. Are we about to see such a bounce - given that the Canadian dollar is still holding on? Particularly in gold or crude oil? This author would not be surprised if either gold or crude oil bounce over the next week or so - but any buying in either gold or silver should be short-term only in nature and should only be bought if sentiment and technical indicators confirm, such as extreme bearish sentiment in the Hulbert Gold Newsletter Sentiment Index (HGNSI), declining assets in the Rydex Precious Metals fund, etc." As I mentioned yesterday, several companies in the energy sector made new 52-week lows on Wednesday.
The dollar weakened to $1.2787 per euro at 3 p.m. in New York from $1.2686 late Wednesday, for its biggest loss since July 26. The U.S. currency fell to 116.35 yen from 117.46 yesterday, the largest decline since July 28.
The Fed Bank of Philadelphia said its index for September fell to -0.4 from 18.5 in August. The median forecast in a Bloomberg survey was for a drop to 14.
Alameda County, California reported a 28.2 percent drop in year-over-year sales and a 1.5 percent drop in home prices -- the first annual price decline since March 2002, DataQuick Information Systems reported Wednesday. In Contra Costa County,California where sales toppled 23.5 percent, the median price was unchanged from last year, the worst performance since November 1999, said DataQuick spokesman Andrew LePage. Solano County, California sales also dropped 34.3 percent, and sales appreciated 1.9 percent, the lowest rate since August 1999. The median price in the Bay Area rose a scant 0.2 percent.
Japan's trade surplus surged in August as automobile shipments to the U.S. rose at the fastest pace in almost a decade, spurring export growth.
The trade surplus widened 96 percent to 200.5 billion yen ($1.7 billion) from a year earlier, the Ministry of Finance said today in Tokyo. Exports rose 17.7 percent, faster than the 16.3 percent median forecast of 13 economists surveyed by Bloomberg.
October natural gas fell 15 cents to close at $4.781 per million British thermal units after a low of $4.60. An Energy Department report Thursday showed more-than-ample supplies of the commodity. The October contract hasn't traded or closed at prices this low since Feb. 2004. Meanwhile, November crude rose 85 cents to close at $61.59 a barrel.
The benchmark 10-year note ended up 22/32 at 101 25/32 with a yield of 4.648%, the highest close since Mar. 16 and down from 4.728% late Wednesday. The 2-year note ended up 6/32 at 100 09/32, yielding 4.716%, keeping the yield curve inverted. Robert Parry, the past president of the SF Fed, said Wednesday he "was surprised by the 10-year rate" and how low it is. I am certainly in that camp.
KB Home said quarterly revenue reached $2.67 billion, compared with $2.53 billion during the same period in the prior year. The company said the revenue growth was driven by a 10% increase in the average selling price, and partly offset by a 3% decrease in unit deliveries. The company's backlog at Aug. 31 totaled 23,878 units, down from 27,744 units at the same time last year. The company expects market conditions for the rest of 2006 and into next year to have an unfavorable impact on year-over-year net income comparisons.
Kurt Richebacher: "In 2005, real disposable incomes of private households in the United States increased $93.8 billion, or 1.2%, while their debts grew $1,208.6 billion, or 11.7%. Total consumer spending on goods, services and new housing accounted for 92% of real GDP growth.
The U.S. economy's recovery from the recession in 2001 has been its slowest in the whole postwar period, and in addition, it has been of a most unusual pattern. Real GDP rose by 11.7% over the four years to 2005. Within this aggregate, residential building soared by 35.6%. Consumption gained 13.4% and government spending 10%. The big laggard in domestic spending was business nonresidential investment, up only 3.6%. Net exports year for year were increasingly negative."
Wal-Mart announced that it will make nearly 300 generic drugs available for only $4 per prescription for up to a 30-day supply at commonly prescribed dosages. The program, to be launched on Friday, will be available to customers and associates of the 65 Wal-Mart, Neighborhood Market and Sam's Club pharmacies in Tampa Bay, Fla. area, and will be expanded to the entire state in January 2007.
Wonders never cease. The VIX rallied .86 and closed at 12.25.
Tuesday, September 19, 2006
More Surprises
9/20/06 More Surprises
I am not sure what surprises me more- the 44% approval rating for Bush or the 30-year treasuries yielding only 4.85%.
Were you surprised by the coup in Thailand where that country's military overthrew Prime Minister Thaksin Shinawatra on Tuesday and declared a provisional authority loyal to King Bhumibol Adulyadej? Army Commander Gen. Sondhi Boonyaratkalin surrounded Thaksin's offices with tanks and troops and seized control of television stations, the Associated Press reported. Sondhi will serve as acting prime minister, Army spokesman Col. Akarat Chitroj said, according to the AP. Martial law was declared, the constitution revoked, and all troops were ordered not to leave duty stations without permission. Thailand's stock exchange will be closed, as well as banks, schools and government offices on Wednesday, the AP reported.
This should not come as a surprise. A group of Iranian reporters and photographers who were to travel with President Mahmoud Ahmadinejad to New York were refused visas by US State Department officials although they had officially applied for such visas one week earlier, it was reported here Tuesday.
Iran and Venezuela here Sunday signed 29 memoranda of understanding for expansion of bilateral cooperation in various fields on the first day of an official visit by Iranian President Mahmoud Ahmadinejad to this Latin American state. Cooperation in various activities in the field of oil and gas, including exploration and construction of oil rigs and tankers, construction of ships and airplanes, expansion of their aviation industries, establishment of an engineering company for downstream industries, cooperation in maritime trade and setting up of a joint oil trading company were the subjects covered by documents signed by the two countries' officials.
Over the last 46 trading days the VIX has ranged from 19.58 to 10.99. It now sits around 11.50. I would be very surprised if in the next 46 trading days the VIX did not trade at least as high as 17. Thus, going long the 10 call and selling the 15 call makes some sense to me- especially with a time horizon going out to May 2007.
Foundation Coal made a new 52-week low at $29.49. It's down from the high of $57+.
J.P. Morgan Chase CFO Mike Cavanagh said Wednesday that the firm thinks volatility in the trading business at its investment bank is too high, and it wants to lessen it. Judging from the VIX, you wouldn't think there is much volatility coming around the bend.
This year the purchasing power of the dollar has declined by more than 7% on an annualized basis. Now compare that with the rise in the S&P 500. The pundits will tell you that the Dow is only about 500 points from an all-time high reached in 2000.
How much has the dollar fallen since 2000? How much has gold risen? How much has gas at the pump risen? You still feel all giddy? Take a cold shower and look reality in the face. This Administration has plundered the economy with its spending and raising the debt limit four times. There is no free lunch for stupidity.
At Wednesday's close I was able to find 5 uncommon values. Each company's shares made a new 52-week low today and each is down significantly from its 52-week high. In addition, each sells at a big discount to its on-going enterprise value as well as its historical relationship to its cash flow generated per share. The five companies are: ConocoPhillips, BJ Services, Helmerich and Payne (which owns 22% of Atwood Oceanics), Peabody Coal, and Foundation Coal. Not only are they uncommon values, but each has potential as a takeover target. I only consider companies uncommon values when I believe strongly that they will generate 30%+ returns over the next 12 months with limited downside risk. Those selling these stocks will look back at this period and realize the herd mentality did them in-- as it always does.
I am not sure what surprises me more- the 44% approval rating for Bush or the 30-year treasuries yielding only 4.85%.
Were you surprised by the coup in Thailand where that country's military overthrew Prime Minister Thaksin Shinawatra on Tuesday and declared a provisional authority loyal to King Bhumibol Adulyadej? Army Commander Gen. Sondhi Boonyaratkalin surrounded Thaksin's offices with tanks and troops and seized control of television stations, the Associated Press reported. Sondhi will serve as acting prime minister, Army spokesman Col. Akarat Chitroj said, according to the AP. Martial law was declared, the constitution revoked, and all troops were ordered not to leave duty stations without permission. Thailand's stock exchange will be closed, as well as banks, schools and government offices on Wednesday, the AP reported.
This should not come as a surprise. A group of Iranian reporters and photographers who were to travel with President Mahmoud Ahmadinejad to New York were refused visas by US State Department officials although they had officially applied for such visas one week earlier, it was reported here Tuesday.
Iran and Venezuela here Sunday signed 29 memoranda of understanding for expansion of bilateral cooperation in various fields on the first day of an official visit by Iranian President Mahmoud Ahmadinejad to this Latin American state. Cooperation in various activities in the field of oil and gas, including exploration and construction of oil rigs and tankers, construction of ships and airplanes, expansion of their aviation industries, establishment of an engineering company for downstream industries, cooperation in maritime trade and setting up of a joint oil trading company were the subjects covered by documents signed by the two countries' officials.
Over the last 46 trading days the VIX has ranged from 19.58 to 10.99. It now sits around 11.50. I would be very surprised if in the next 46 trading days the VIX did not trade at least as high as 17. Thus, going long the 10 call and selling the 15 call makes some sense to me- especially with a time horizon going out to May 2007.
Foundation Coal made a new 52-week low at $29.49. It's down from the high of $57+.
J.P. Morgan Chase CFO Mike Cavanagh said Wednesday that the firm thinks volatility in the trading business at its investment bank is too high, and it wants to lessen it. Judging from the VIX, you wouldn't think there is much volatility coming around the bend.
This year the purchasing power of the dollar has declined by more than 7% on an annualized basis. Now compare that with the rise in the S&P 500. The pundits will tell you that the Dow is only about 500 points from an all-time high reached in 2000.
How much has the dollar fallen since 2000? How much has gold risen? How much has gas at the pump risen? You still feel all giddy? Take a cold shower and look reality in the face. This Administration has plundered the economy with its spending and raising the debt limit four times. There is no free lunch for stupidity.
At Wednesday's close I was able to find 5 uncommon values. Each company's shares made a new 52-week low today and each is down significantly from its 52-week high. In addition, each sells at a big discount to its on-going enterprise value as well as its historical relationship to its cash flow generated per share. The five companies are: ConocoPhillips, BJ Services, Helmerich and Payne (which owns 22% of Atwood Oceanics), Peabody Coal, and Foundation Coal. Not only are they uncommon values, but each has potential as a takeover target. I only consider companies uncommon values when I believe strongly that they will generate 30%+ returns over the next 12 months with limited downside risk. Those selling these stocks will look back at this period and realize the herd mentality did them in-- as it always does.
Please Take Note
9/20/06 Please Take Note
I want to thank George Ure for providing this information:
"18 September 2006: In an article provided exclusively
to the Northeast Intelligence Network and Canada Free
Press by Dr. Paul Williams and Mr. David Dastych on
Saturday, “final preparations have been made for the
next major attack on the US” identified as “American
Hiroshima,” suggesting the attack will be nuclear in
nature. Since we published that report, confidential
sources in law enforcement positions have privately
confirmed to the Northeast Intelligence Network that a
"disturbing trend" is being reported on both of our
borders – a pattern that is consistent with a
potential nuclear attack scenario against the US.
According to these sources, a "significant and
alarming number" of illegal aliens attempting entry
into the US, caught by border patrol agents, have been
found to be carrying Potassium Iodide tablets, which
are used to protect against exposure to radiation in
emergency situations.*
According to our sources, the illegal aliens who have
been caught have been described as OTMs (other-than
Mexicans), and consist primarily of Chinese and
Iranian nationals on our southern border, and Asians
and others from a variety of Middle Eastern countries
at the US-Canadian border. Law enforcement sources
providing this information to the Northeast
Intelligence Network agreed that this is “a very
recent phenomena,” but one that has increased to
“alarming levels” and is of particular concern to
government officials.
Additional and more specific information will be
contained in the upcoming issue of the HQ INTEL-ALERT
Private Intelligence Report.
*NOTE: An astute and well-educated reader accurately
points out that Potassium Iodate, also referred to as
KI, protects only one organ in the body (the thyroid)
from ONE form of radiation (I-131). And it does so
only if a person takes the tablet BEFORE (or just
after) being exposed to I-131, as the KI fills up the
thyroid gland with "good" salt instead of the
radioactive version."
Tuesday morning there was a reported coup in Thailand with the military taking control of the government.
Stephen Roach: "After three years of extraordinary outperformance, denial over the possibility of a sustained downside adjustment in commodity prices is very much in evidence -- underscoring the time-honored sociology of an asset class that has gone to excess. Meanwhile, China and US-housing-related fundamentals are going the other way -- setting up increasingly tender commodity markets for unpleasant downside surprises on the demand side of the global economy. The herding instincts of institutional investors could well magnify the price declines -- when, and if, they emerge. All this suggests there is still plenty of life left in the time-honored commodity cycle."
The Chrysler group will cut its production by around 90,000 units in the third quarter and around 135,000 in the second half of this year to try to reduce a glut of inventory, the company said today.
In a presentation made available before a conference call, the Chrysler group said deliveries to dealers would fall to around 380,000 units in the third quarter and to 705,000 in the second half. The Chrysler group expected deliveries to rise again in 2007 and subsequent years.
Housing starts plunged 6 percent last month to an annual rate of 1.665 million, the Commerce Department said today in Washington, a steeper slide than economists forecasts. Building permits dropped to an annual rate of 1.722 million from 1.763 million the prior month. Not since May to November 1986 have permits declined seven straight months.
Yahoo! Inc., the most-visited U.S. Web site, said profit and sales this quarter will be at the low end of its forecast on slower advertising demand from automakers and financial services providers. The shares slumped as much as 13 percent.
"We have seen a little bit of weakness in the last three or four weeks,'' Chief Financial Officer Susan Decker said today at a Goldman, Sachs & Co. conference in New York. ``It is having an impact on our quarter." With incentives provided by the GM, Ford, and Chrysler, the prices of autos dropped and so did the profit margins. It should not come as a surprise that advertising would be reduced. The bottomline for my money is that at $25+ the market cap still is close to 20 times the cash from operations. We can do better than that.
Chuck Butler: “The Net Foreign Security Purchases (NFSP) which need to be around $70-75 billion each month to finance the deficit, only amounted to $32.9 billion in July. That's right less than half the amount needed!”
Prices of raw materials and other producers' inputs rose a slim 0.1% in August, the Labor Department said. Excluding food and energy costs, the core PPI fell 0.4%. This is the biggest drop in core PPI since April 2003 and the first two-month decline since late 2002. If you consider the drop in auto prices, the PPI takes on a different view. Of course, the treasury market rallied strongly and the yield on the 30-year declined to 4.86%. It's hard to believe but true. The dollar took a dip but remained well above the most recent lows.
"To slow growth in exports, a better way would be to allow the yuan to gain faster, specifically around 5 percent cumulatively, annually," Zhu Baoliang, deputy director of economic forecasting at the State Information Center, said in an interview. The Center is an affiliate of the National Development and Reform Commission, China's top planning body.
Richard Daughty: "How ridiculous is the fractional-reserve ratio?" I laugh derisively and say "It can only be crudely estimated by the difference between a paltry $798 billion in cash, and the sum total of everything else! Zillions of dollars in assets, created by an equivalent debt! Hahaha! We're freaking doomed! Doomed! Hahaha! Welcome to the insane hell of fractional-reserve banking!"
Crude took a big hit to $61.70 a barrel and gold backtracked $9.60 an ounce. Meanwhile unleaded gas plummeted to $1.49 a gallon. You can expect further drops at the pump.
Cramer makes the point that the market is shifting from oil to tech and says buy Cisco. I did recommend Cisco at $16.50. I don't believe it represents value at $22.50. For my money I can think of a lot more values in the energy patch, and that's for all types of investors. Just because a stock is down from $80 or so, doesn't make Cisco a value at $22.50. That's just my view from the cheap seats.
BJ Services traded at a new 52-week low at $29.86.
Medtronic Inc. said the Food and Drug Administration's orthopedic and rehabilitation devices advisory panel has unanimously recommended approval of its Prestige cervical disc system. The panel's recommendation will be considered by the FDA in its review of the pre-market approval application for the device, Medtronic said.
I want to thank George Ure for providing this information:
"18 September 2006: In an article provided exclusively
to the Northeast Intelligence Network and Canada Free
Press by Dr. Paul Williams and Mr. David Dastych on
Saturday, “final preparations have been made for the
next major attack on the US” identified as “American
Hiroshima,” suggesting the attack will be nuclear in
nature. Since we published that report, confidential
sources in law enforcement positions have privately
confirmed to the Northeast Intelligence Network that a
"disturbing trend" is being reported on both of our
borders – a pattern that is consistent with a
potential nuclear attack scenario against the US.
According to these sources, a "significant and
alarming number" of illegal aliens attempting entry
into the US, caught by border patrol agents, have been
found to be carrying Potassium Iodide tablets, which
are used to protect against exposure to radiation in
emergency situations.*
According to our sources, the illegal aliens who have
been caught have been described as OTMs (other-than
Mexicans), and consist primarily of Chinese and
Iranian nationals on our southern border, and Asians
and others from a variety of Middle Eastern countries
at the US-Canadian border. Law enforcement sources
providing this information to the Northeast
Intelligence Network agreed that this is “a very
recent phenomena,” but one that has increased to
“alarming levels” and is of particular concern to
government officials.
Additional and more specific information will be
contained in the upcoming issue of the HQ INTEL-ALERT
Private Intelligence Report.
*NOTE: An astute and well-educated reader accurately
points out that Potassium Iodate, also referred to as
KI, protects only one organ in the body (the thyroid)
from ONE form of radiation (I-131). And it does so
only if a person takes the tablet BEFORE (or just
after) being exposed to I-131, as the KI fills up the
thyroid gland with "good" salt instead of the
radioactive version."
Tuesday morning there was a reported coup in Thailand with the military taking control of the government.
Stephen Roach: "After three years of extraordinary outperformance, denial over the possibility of a sustained downside adjustment in commodity prices is very much in evidence -- underscoring the time-honored sociology of an asset class that has gone to excess. Meanwhile, China and US-housing-related fundamentals are going the other way -- setting up increasingly tender commodity markets for unpleasant downside surprises on the demand side of the global economy. The herding instincts of institutional investors could well magnify the price declines -- when, and if, they emerge. All this suggests there is still plenty of life left in the time-honored commodity cycle."
The Chrysler group will cut its production by around 90,000 units in the third quarter and around 135,000 in the second half of this year to try to reduce a glut of inventory, the company said today.
In a presentation made available before a conference call, the Chrysler group said deliveries to dealers would fall to around 380,000 units in the third quarter and to 705,000 in the second half. The Chrysler group expected deliveries to rise again in 2007 and subsequent years.
Housing starts plunged 6 percent last month to an annual rate of 1.665 million, the Commerce Department said today in Washington, a steeper slide than economists forecasts. Building permits dropped to an annual rate of 1.722 million from 1.763 million the prior month. Not since May to November 1986 have permits declined seven straight months.
Yahoo! Inc., the most-visited U.S. Web site, said profit and sales this quarter will be at the low end of its forecast on slower advertising demand from automakers and financial services providers. The shares slumped as much as 13 percent.
"We have seen a little bit of weakness in the last three or four weeks,'' Chief Financial Officer Susan Decker said today at a Goldman, Sachs & Co. conference in New York. ``It is having an impact on our quarter." With incentives provided by the GM, Ford, and Chrysler, the prices of autos dropped and so did the profit margins. It should not come as a surprise that advertising would be reduced. The bottomline for my money is that at $25+ the market cap still is close to 20 times the cash from operations. We can do better than that.
Chuck Butler: “The Net Foreign Security Purchases (NFSP) which need to be around $70-75 billion each month to finance the deficit, only amounted to $32.9 billion in July. That's right less than half the amount needed!”
Prices of raw materials and other producers' inputs rose a slim 0.1% in August, the Labor Department said. Excluding food and energy costs, the core PPI fell 0.4%. This is the biggest drop in core PPI since April 2003 and the first two-month decline since late 2002. If you consider the drop in auto prices, the PPI takes on a different view. Of course, the treasury market rallied strongly and the yield on the 30-year declined to 4.86%. It's hard to believe but true. The dollar took a dip but remained well above the most recent lows.
"To slow growth in exports, a better way would be to allow the yuan to gain faster, specifically around 5 percent cumulatively, annually," Zhu Baoliang, deputy director of economic forecasting at the State Information Center, said in an interview. The Center is an affiliate of the National Development and Reform Commission, China's top planning body.
Richard Daughty: "How ridiculous is the fractional-reserve ratio?" I laugh derisively and say "It can only be crudely estimated by the difference between a paltry $798 billion in cash, and the sum total of everything else! Zillions of dollars in assets, created by an equivalent debt! Hahaha! We're freaking doomed! Doomed! Hahaha! Welcome to the insane hell of fractional-reserve banking!"
Crude took a big hit to $61.70 a barrel and gold backtracked $9.60 an ounce. Meanwhile unleaded gas plummeted to $1.49 a gallon. You can expect further drops at the pump.
Cramer makes the point that the market is shifting from oil to tech and says buy Cisco. I did recommend Cisco at $16.50. I don't believe it represents value at $22.50. For my money I can think of a lot more values in the energy patch, and that's for all types of investors. Just because a stock is down from $80 or so, doesn't make Cisco a value at $22.50. That's just my view from the cheap seats.
BJ Services traded at a new 52-week low at $29.86.
Medtronic Inc. said the Food and Drug Administration's orthopedic and rehabilitation devices advisory panel has unanimously recommended approval of its Prestige cervical disc system. The panel's recommendation will be considered by the FDA in its review of the pre-market approval application for the device, Medtronic said.
Monday, September 18, 2006
Trouble Brewing?
9/18/06 Trouble Brewing?
David Bloom, global head of currency strategy at HSBC,
said: "It is the US that we are worried about as the
housing market turns down. The US needs nearly one
trillion dollars of foreign money each year just to
stand still. If people around the rest of the world
start keeping their money at home for any reason, the
dollar will face a serious decline and we think it
will kick in later this year.
"The risk has moved from the outskirts to the heart of
the system, and it's now pressing on the very aorta of
capitalism."
The 12-billion-dollar Indian realty sector is growing at the rate of 30 per cent annually, with the information technology (IT) and business process-outsourcing sectors powering the growth, the joint study by the Federation of Indian Chambers of Commerce and Industry (FICI) and global consultancy firm Ernst and Young said.
IT and business processing outsourcing industries alone will need 367 million square feet of space by 2012-2013, a statement by FICCI quoting the study said.
The study, however, cautioned that this demand was dependent on the growth of the IT sector which faced stiff competition from countries such as Poland and China.
The direction of reform is clear and our determination is firm. We will not backtrack,’ Zhou, governor of the People’s Bank of China, told reporters.
But he said currency reforms would be gradual. Policy makers would take account of China’s ability to adapt to changes in the exchange rate as well as the country’s international responsibilities.
‘We will keep the renminbi’s exchange rate relatively stable at a rational and balanced level,’ said Zhou, speaking during the annual meeting of the International Monetary Fund and World Bank.
China revalued the yuan CNYCFXS, or renminbi, by 2.1 percent against the dollar in July 2005 and scrapped a decade-old dollar peg in favour of a managed float.
Since then, to the frustration of critics who say the currency remains grossly undervalued, the yuan has gained only a further 2 percent.
Under the floating regime, the yuan may rise or fall by 0.3 percent a day from a midpoint rate set every morning by the People’s Bank. The daily band against other major currencies is plus or minus 3.0 percent.
John Hussman: "There's presently no evidence in the quality of market action that investors have adopted a robust speculative mood. Good investments are those based not on hope, but on some foundation of evidence – either of reliable “investment merit” (based on properly normalized valuations), or of measurable “speculative merit” (based on the quality of market action). Taking a significant exposure to market risk without such foundations is like moving into a house built on sand.
The NYSE registered 193 new highs on Friday. This was fewer daily new highs than we observed two weeks ago, and less than half the number registered in early May. Weekly new highs also fell far short of the April-May period. Despite the recent advance in the major indices, the Dow, S&P 500, Nasdaq and Russell 2000 all remain below their April-May highs. Since early April, when our measures of market action shifted from neutral to unfavorable, the S&P 500 has delivered a total return about equal to the return on risk-free Treasury bills (within a fraction of 1%). This simply is not a market that is “running away,” but rather one that is range-bound and now strenuously overbought."
The Administration points to Medicare and Social Security as the main ills for the growing deficit. Our U.S. total public debt is close to $8.5 trillion. Interest on this debt will approach $420 billion in the year ended Sept 30, 2006 and this will be $50+ billion more than in the prior year. Next year it will easily exceed $450 billion. You probably didn't know this. How much gold does the government own? A puny $11 billion worth. You can be fool and think our deficits will decline. What will decline will be the worth of the dollar. In time, you can use it for wallpaper.
I would think twice before you sell or short gold. And that goes for silver too.
The current account shortfall totaled $218.4 billion in the second quarter, larger than Wall Street forecasts of $214 billion, a Commerce Department report showed.
The government also raised its estimate of the first-quarter current account deficit to $213.2 billion from a previously reported $208.7 billion.
The current account is the broadest measure of U.S. trade with the rest of the world, including both trade in goods and investment flows.
Is there trouble brewing?
David Bloom, global head of currency strategy at HSBC,
said: "It is the US that we are worried about as the
housing market turns down. The US needs nearly one
trillion dollars of foreign money each year just to
stand still. If people around the rest of the world
start keeping their money at home for any reason, the
dollar will face a serious decline and we think it
will kick in later this year.
"The risk has moved from the outskirts to the heart of
the system, and it's now pressing on the very aorta of
capitalism."
The 12-billion-dollar Indian realty sector is growing at the rate of 30 per cent annually, with the information technology (IT) and business process-outsourcing sectors powering the growth, the joint study by the Federation of Indian Chambers of Commerce and Industry (FICI) and global consultancy firm Ernst and Young said.
IT and business processing outsourcing industries alone will need 367 million square feet of space by 2012-2013, a statement by FICCI quoting the study said.
The study, however, cautioned that this demand was dependent on the growth of the IT sector which faced stiff competition from countries such as Poland and China.
The direction of reform is clear and our determination is firm. We will not backtrack,’ Zhou, governor of the People’s Bank of China, told reporters.
But he said currency reforms would be gradual. Policy makers would take account of China’s ability to adapt to changes in the exchange rate as well as the country’s international responsibilities.
‘We will keep the renminbi’s exchange rate relatively stable at a rational and balanced level,’ said Zhou, speaking during the annual meeting of the International Monetary Fund and World Bank.
China revalued the yuan CNYCFXS, or renminbi, by 2.1 percent against the dollar in July 2005 and scrapped a decade-old dollar peg in favour of a managed float.
Since then, to the frustration of critics who say the currency remains grossly undervalued, the yuan has gained only a further 2 percent.
Under the floating regime, the yuan may rise or fall by 0.3 percent a day from a midpoint rate set every morning by the People’s Bank. The daily band against other major currencies is plus or minus 3.0 percent.
John Hussman: "There's presently no evidence in the quality of market action that investors have adopted a robust speculative mood. Good investments are those based not on hope, but on some foundation of evidence – either of reliable “investment merit” (based on properly normalized valuations), or of measurable “speculative merit” (based on the quality of market action). Taking a significant exposure to market risk without such foundations is like moving into a house built on sand.
The NYSE registered 193 new highs on Friday. This was fewer daily new highs than we observed two weeks ago, and less than half the number registered in early May. Weekly new highs also fell far short of the April-May period. Despite the recent advance in the major indices, the Dow, S&P 500, Nasdaq and Russell 2000 all remain below their April-May highs. Since early April, when our measures of market action shifted from neutral to unfavorable, the S&P 500 has delivered a total return about equal to the return on risk-free Treasury bills (within a fraction of 1%). This simply is not a market that is “running away,” but rather one that is range-bound and now strenuously overbought."
The Administration points to Medicare and Social Security as the main ills for the growing deficit. Our U.S. total public debt is close to $8.5 trillion. Interest on this debt will approach $420 billion in the year ended Sept 30, 2006 and this will be $50+ billion more than in the prior year. Next year it will easily exceed $450 billion. You probably didn't know this. How much gold does the government own? A puny $11 billion worth. You can be fool and think our deficits will decline. What will decline will be the worth of the dollar. In time, you can use it for wallpaper.
I would think twice before you sell or short gold. And that goes for silver too.
The current account shortfall totaled $218.4 billion in the second quarter, larger than Wall Street forecasts of $214 billion, a Commerce Department report showed.
The government also raised its estimate of the first-quarter current account deficit to $213.2 billion from a previously reported $208.7 billion.
The current account is the broadest measure of U.S. trade with the rest of the world, including both trade in goods and investment flows.
Is there trouble brewing?
Keeping It Real
9/17/06 Keeping It Real
Target Corp.late Monday said it now expects sales at stores open at least a year to rise around 5% in September vs. a previous forecast for a 3% to 5% rise. Same-store sales at the discount retailer rose 5.6% in September of 2005.
Retail gasoline prices plunged 12 cents a gallon last week to average $2.55, the lowest average price since March, the Energy Department said Monday. The 12-cent drop was the biggest decline since last October. Pump prices have fallen by 53 cents, or 17%, in the past six weeks. Even in Marin County, Ca unleaded gas at an Arco station was $2.51.
Meritage Homes Corp. after Monday's closing bell said it sees third-quarter results near or slightly below the lower end of the company's prior view due to "further deterioration in market conditions," and that it will be "difficult to achieve" its outlook for the rest of the year. The Scottsdale, Ariz.-based homebuilder added that July and August preliminary net new orders were 38% lower than during the same period in the prior year, while home closings rose 17%.
Con-way Inc after Monday's closing bell lowered its view for third-quarter earnings per share from continuing operations to a range of $1.10 to $1.15 from its prior outlook of $1.21 to $1.29. The San Mateo, Calif.-based freight transportation company cited issues such as business volumes that are lower than expectation at the company's less-than-truckload operating unit.
The Treasury Department said capital flows skidded to $32.9 billion in July, the smallest inflow since May 2005. Michael Wallace, a strategist at research firm Action Economics stated "The capital inflows were not even really half of the (trade) deficit." Does this concern you?
BP announced Monday afternoon that repair of sub-sea production equipment will delay the start up of production from its Thunder Horse platform in the Gulf of Mexico until at least the middle of 2008. October crude climbed 47 cents to close at $63.80.
December gold climbed $9.80, or 1.7%, to close Monday at a three-session high of $592.80 an ounce.
The confidence of U.S. home builders fell for the eighth straight month in September, dropping to the lowest level since February 1991, the National Association of Home Builders said Monday. The NAHB/Wells Fargo housing market index dropped by three points in September to 30 from a revised 33 in August, indicating that most builders think the housing market is poor. Economists expected the index to fall to 31. A year ago, the index was at 65.
Chief executives at major U.S. corporations were more pessimistic about the economy than anytime since the third quarter of 2003. The Business Roundtable CEO economic outlook index fell to 82.4 in the third quarter from 98.6 in the second quarter. "We believe that we are beginning to see the effects of energy and interest rate pricing pressures reflected in the business outlook," said Harold McGraw, Business Roundtable chairman and the chairman and CEO of The McGraw-Hill Companies. Chief executives "see things slowing down."
Target Corp.late Monday said it now expects sales at stores open at least a year to rise around 5% in September vs. a previous forecast for a 3% to 5% rise. Same-store sales at the discount retailer rose 5.6% in September of 2005.
Retail gasoline prices plunged 12 cents a gallon last week to average $2.55, the lowest average price since March, the Energy Department said Monday. The 12-cent drop was the biggest decline since last October. Pump prices have fallen by 53 cents, or 17%, in the past six weeks. Even in Marin County, Ca unleaded gas at an Arco station was $2.51.
Meritage Homes Corp. after Monday's closing bell said it sees third-quarter results near or slightly below the lower end of the company's prior view due to "further deterioration in market conditions," and that it will be "difficult to achieve" its outlook for the rest of the year. The Scottsdale, Ariz.-based homebuilder added that July and August preliminary net new orders were 38% lower than during the same period in the prior year, while home closings rose 17%.
Con-way Inc after Monday's closing bell lowered its view for third-quarter earnings per share from continuing operations to a range of $1.10 to $1.15 from its prior outlook of $1.21 to $1.29. The San Mateo, Calif.-based freight transportation company cited issues such as business volumes that are lower than expectation at the company's less-than-truckload operating unit.
The Treasury Department said capital flows skidded to $32.9 billion in July, the smallest inflow since May 2005. Michael Wallace, a strategist at research firm Action Economics stated "The capital inflows were not even really half of the (trade) deficit." Does this concern you?
BP announced Monday afternoon that repair of sub-sea production equipment will delay the start up of production from its Thunder Horse platform in the Gulf of Mexico until at least the middle of 2008. October crude climbed 47 cents to close at $63.80.
December gold climbed $9.80, or 1.7%, to close Monday at a three-session high of $592.80 an ounce.
The confidence of U.S. home builders fell for the eighth straight month in September, dropping to the lowest level since February 1991, the National Association of Home Builders said Monday. The NAHB/Wells Fargo housing market index dropped by three points in September to 30 from a revised 33 in August, indicating that most builders think the housing market is poor. Economists expected the index to fall to 31. A year ago, the index was at 65.
Chief executives at major U.S. corporations were more pessimistic about the economy than anytime since the third quarter of 2003. The Business Roundtable CEO economic outlook index fell to 82.4 in the third quarter from 98.6 in the second quarter. "We believe that we are beginning to see the effects of energy and interest rate pricing pressures reflected in the business outlook," said Harold McGraw, Business Roundtable chairman and the chairman and CEO of The McGraw-Hill Companies. Chief executives "see things slowing down."
Saturday, September 16, 2006
Observations
9/17/06 Observations
Rudolph-Riad Younes: "On the surface, the multiples are not a problem. Fifteen to 16 times forward earnings is not something to make anyone panic, although that's at the high end of the historical average. The problem today in the equity market is the level of profit margins. Margins are almost 100% above the historical average. If you think we are going back to the historical average, then you are talking about 30 times earnings. Add to that the global imbalances around the world, and equities are not a very safe place to be."
Barrons columnist Randall Forsyth writes "a reversal in commodities' decline could be about a week away, according to Paul Macrae Montgomery, who publishes the Universal Economics newsletter out of Newport News, Va. He points out that capital and commodities markets tend to reverse their trends on Sept. 22, an observation he attributes to W.D. Gann, whom he describes as a legendary trader."
Doug Noland: "I suggest this evening that we analyze sinking energy and metals prices - along with spiking equities (homebuilders, retailers, financials, etc.) and bond prices - within the context of heightened Monetary Disorder. Market pricing mechanisms - especially those distorted by highly speculative marketplaces - are these days unusually susceptible to bouts of mis-pricing. The general backdrop remains one of extraordinarily abundant liquidity at home and abroad - liquidity supportive of bond prices within a backdrop where housing vulnerability has basically taken the Fed out of the equation. I certainly don't believe lagging energy and commodities markets are today reflective of the robust inflationary biases that permeate global economies. Contrarily, I would expect quiescent bond markets these days to be conducive to continued Credit excess and attendant heightened inflationary pressures."
John Mauldin: "Paul Robinson: What happens when you have 3-plus years without a 10% correction in either the S&P 500 or DJIA? On March 15th, 2006 the market sustained 3 full years without a substantial sell-off from a 6-month high. This long a bull run has occurred only 3 other times in the past 100-plus years of market history and led to an average decline of 18.5% between the 3 occurrences.
In summary, I think it is too early to throw in my bearish towel. A slowdown means that earnings are not going to grow as fast as currently projected. That means some disappointments may (will?) be coming our way in the next few quarters.
Disappointments are the stuff that makes for bear markets. Can we come to the end of a Fed tightening cycle with no pain? A Kinder, Gentler Mr. Market? Now that would be different."
Mike Burk: "The market is overbought going into a seasonally weak week.
I expect the major indices to be lower on Friday September 22 than they were on Friday September 15."
George Ure: "Suppose you have a Federal Budget that is hopelessly bloated. The sucker is sooo big that any person in their right mind would be immediately incensed and reviled by its size. So how do you sell it? You announce the budget is "smaller than expected" and the stoopid sheeple think "Aha! Something good for a chance..." Well, it's never the case. The budget is still bloated, there's as much - or more - pork in it than ever, but because they said it was going to be a $100-trillion dollar hole over x-years, and it's down to only $99.9-trillion - a whole $1-billion in illusory "savings" you are misled into believing things got better. Sort of like backing the guillotine up up an 1/8th of an inch while falling toward your neck - that sort of "improvement" in the situation may sound good, but you're dead shortly no matter what."
Earthfiles.com reports ocean temperatures increased remarkably in the equatorial Pacific during the last two weeks.
"The development of weak El Niño conditions helps explain why this Atlantic hurricane season has been less active than was previously expected. El Niño typically acts to suppress hurricane activity by increasing the vertical wind shear over the Caribbean Sea region. However, at this time the El Niño impacts on Atlantic hurricanes are small. "We are still in the peak months of the Atlantic hurricane season, and conditions remain generally conducive for hurricane formation," said Gerry Bell, NOAA's lead seasonal hurricane forecaster."
Energyintel.com reports "downstream constraints have been one of the main factors -- if not the main factor -- behind record crude oil and products prices over the past few years, and they will ease neither quickly nor cheaply, US-based consultant Turner, Mason & Co. says in a new study looking at crude oil and refining trends over the next 20 years." This observation is a good deal different than political risk and/or speculative positioning. The latter two play a part but not the enduring factor behind the price of oil moving higher over time.
Charles Darwin: "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."
Hedge funds attracted $42.1 billion in investment in the second quarter, the most since 2003, and have returned 7 percent to investors this year through August, according to Chicago-based Hedge Fund Research.
Wireless-equipment firm Symbol Technologies is set to wrap up an auction that could see the sale of the $3.2 billion firm within days, The Wall Street Journal reported on Saturday. One person said that a deal could come in at a roughly $15 a share, which would mark a premium of around 20% to Symbol's trading price Friday.
Rudolph-Riad Younes: "On the surface, the multiples are not a problem. Fifteen to 16 times forward earnings is not something to make anyone panic, although that's at the high end of the historical average. The problem today in the equity market is the level of profit margins. Margins are almost 100% above the historical average. If you think we are going back to the historical average, then you are talking about 30 times earnings. Add to that the global imbalances around the world, and equities are not a very safe place to be."
Barrons columnist Randall Forsyth writes "a reversal in commodities' decline could be about a week away, according to Paul Macrae Montgomery, who publishes the Universal Economics newsletter out of Newport News, Va. He points out that capital and commodities markets tend to reverse their trends on Sept. 22, an observation he attributes to W.D. Gann, whom he describes as a legendary trader."
Doug Noland: "I suggest this evening that we analyze sinking energy and metals prices - along with spiking equities (homebuilders, retailers, financials, etc.) and bond prices - within the context of heightened Monetary Disorder. Market pricing mechanisms - especially those distorted by highly speculative marketplaces - are these days unusually susceptible to bouts of mis-pricing. The general backdrop remains one of extraordinarily abundant liquidity at home and abroad - liquidity supportive of bond prices within a backdrop where housing vulnerability has basically taken the Fed out of the equation. I certainly don't believe lagging energy and commodities markets are today reflective of the robust inflationary biases that permeate global economies. Contrarily, I would expect quiescent bond markets these days to be conducive to continued Credit excess and attendant heightened inflationary pressures."
John Mauldin: "Paul Robinson: What happens when you have 3-plus years without a 10% correction in either the S&P 500 or DJIA? On March 15th, 2006 the market sustained 3 full years without a substantial sell-off from a 6-month high. This long a bull run has occurred only 3 other times in the past 100-plus years of market history and led to an average decline of 18.5% between the 3 occurrences.
In summary, I think it is too early to throw in my bearish towel. A slowdown means that earnings are not going to grow as fast as currently projected. That means some disappointments may (will?) be coming our way in the next few quarters.
Disappointments are the stuff that makes for bear markets. Can we come to the end of a Fed tightening cycle with no pain? A Kinder, Gentler Mr. Market? Now that would be different."
Mike Burk: "The market is overbought going into a seasonally weak week.
I expect the major indices to be lower on Friday September 22 than they were on Friday September 15."
George Ure: "Suppose you have a Federal Budget that is hopelessly bloated. The sucker is sooo big that any person in their right mind would be immediately incensed and reviled by its size. So how do you sell it? You announce the budget is "smaller than expected" and the stoopid sheeple think "Aha! Something good for a chance..." Well, it's never the case. The budget is still bloated, there's as much - or more - pork in it than ever, but because they said it was going to be a $100-trillion dollar hole over x-years, and it's down to only $99.9-trillion - a whole $1-billion in illusory "savings" you are misled into believing things got better. Sort of like backing the guillotine up up an 1/8th of an inch while falling toward your neck - that sort of "improvement" in the situation may sound good, but you're dead shortly no matter what."
Earthfiles.com reports ocean temperatures increased remarkably in the equatorial Pacific during the last two weeks.
"The development of weak El Niño conditions helps explain why this Atlantic hurricane season has been less active than was previously expected. El Niño typically acts to suppress hurricane activity by increasing the vertical wind shear over the Caribbean Sea region. However, at this time the El Niño impacts on Atlantic hurricanes are small. "We are still in the peak months of the Atlantic hurricane season, and conditions remain generally conducive for hurricane formation," said Gerry Bell, NOAA's lead seasonal hurricane forecaster."
Energyintel.com reports "downstream constraints have been one of the main factors -- if not the main factor -- behind record crude oil and products prices over the past few years, and they will ease neither quickly nor cheaply, US-based consultant Turner, Mason & Co. says in a new study looking at crude oil and refining trends over the next 20 years." This observation is a good deal different than political risk and/or speculative positioning. The latter two play a part but not the enduring factor behind the price of oil moving higher over time.
Charles Darwin: "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."
Hedge funds attracted $42.1 billion in investment in the second quarter, the most since 2003, and have returned 7 percent to investors this year through August, according to Chicago-based Hedge Fund Research.
Wireless-equipment firm Symbol Technologies is set to wrap up an auction that could see the sale of the $3.2 billion firm within days, The Wall Street Journal reported on Saturday. One person said that a deal could come in at a roughly $15 a share, which would mark a premium of around 20% to Symbol's trading price Friday.
Friday, September 15, 2006
Keeping It Real
9/16/06 Keeping It Real
Real average weekly earnings fell by 0.5 percent from July to August after
seasonal adjustment, according to preliminary data released today by the Bureau
of Labor Statistics of the U.S. Department of Labor. A 0.3-percent decline in
average weekly hours and a 0.4-percent increase in the Consumer Price Index for
Urban Wage Earners and Clerical Workers were partially offset by 0.1-
percent rise in average hourly earnings.
The bad news on real estate and home prices continues on a daily basis. Maybe you haven't noticed. Centex shares bottomed in mid-July at $42.90, and that was one month after rates topped out on treasury bonds. The stock rallied in early August to 52, and now in mid-Sept. it is up close to $55.
At the beginning of July, in 11 trading days, Wal-Mart shares dropped from 48 1/2 to 42 1/2. The range for July and Aug. was 42 1/2 to 45 1/2. In the last 10 trading days the shares rallied from 44 to 48 1/2. Pretty interesting I think.
Bush: "I don't question the patriotism of those that disagree with me." Keep it real, please!
Barry Ritholtz: "In the past 16 Federal Reserve tightening cycles, there has been one true soft landing in 1994. I continue to look at that not as impossible, but as a low probability event."
October crude climbed 28 cents to $63.50 a barrel in afternoon dealings, reversing course after the contract touched $62.05, its lowest level of the year. December gold fell $3 to close at $583 an ounce, its weakest closing level since mid-June. It ended the week with a loss of more than $34 an ounce, or 5.6%. December silver fell 7.5 cents to end at a two-month low of $10.875 an ounce. The contract, which fell earlier to a nearly three-month low of $10.55, marked a loss of 11.5% for the week. December copper fell 6.3 cents Friday to close at $3.3115 a pound, down 7.2% for the week.
Superior Industries International Inc. said Friday it is closing its manufacturing facility in Johnson City, Tenn., and plans to lay off around 500 workers.
The median consumer price index rose 0.3% (or 3.4% annualized) in August, the Cleveland Federal Reserve Bank said Friday. The median CPI is an alternative method of computing underlying core inflation that does not automatically exclude food and energy prices. Over the past year, the median CPI is up 3.4%, the biggest gain since July 2002. The CPI is up 3.8% in the past 12 months, while the core CPI (which excludes food and energy) has risen 2.8%. Inflation is under control?
The University of Michigan consumer sentiment index rose to 84.4 in September from 82.0 in August. The improvement all came from expectations of the economy six months ahead. The expectations index rose to 77.1 from 68.0 in the previous month. This is the highest since January. The current conditions index fell to 95.7 in September from 103.8 in August. This is the lowest level since October.
Marsh & McLennan said Friday it would cut 750 jobs out of its work force of about 55,000 as part of a move to save $350 million by the end of 2008. Conagra will cut 400 jobs. I would imagine Ford will end up cutting about 40,000+ jobs. Will Chrysler cut some jobs too?
December natural gas rose 9 cents to close at $4.982 per million British thermal units, recovering from its low of $4.81. The contract ended the week with a loss of 12.2%.
Thomas P. Au: "The country (China) has 1.2 billion (or more) people, many of whom are peasants seeking to improve their lives by moving to the cities because of the inherent poverty of the rural areas. Keeping a “critical mass” of them happy is necessary for social and political stability. In order to effect this, it is necessary to have a large pool of low-paying (by world standards) urban opportunities, many of which amount to “make work” positions that are still more remunerative than farmwork. An artificially weak currency is an important ingredient of such a strategy...In 1931, the United States was in a recession that then-President Herbert Hoover reasonably thought would soon end. The impending recovery was derailed by the collapse of the German economy, then the second most important in the world, not only because of its sheer size, but because of its connections to other countries in Europe. China’s economy plays a similar “second most important” role today because of her ties in Asia and elsewhere, and because its swings are larger than those of other, nominally larger, economies such as those of Germany and Japan. If a collapse of the Chinese economy comes hard on the heels of a deep U.S. recession in 2007-2008, the result could be a prolonged slowdown of global growth such as we saw in the 1930s."
Chevron is in talks to join with Chinese petroleum producers on exploration and production projects one year after beating out Cnooc, a Chinese oil company, to acquire Unocal.The company is in discussions with Cnooc, PetroChina and China Petroleum & Chemical, known as Sinopec, "to explore partnership opportunities both inside and outside of China," said Steve Del Regno, managing director of Chevron's liquefied natural gas trading business in Asia. The talks could lead to joint development of oil and gas deposits, he said.
Freescale Semiconductor Inc. agreed to be bought by a private equity consortium for $17.6 billion. Under the terms of deal, the consortium will acquire all of the outstanding Class A and Class B shares of Freescale for $40 per share in cash. The consortium is led by The Blackstone Group, and includes The Carlyle Group, Permira Funds and Texas Pacific Group. Freescale said its board has approved the buyout.
Real average weekly earnings fell by 0.5 percent from July to August after
seasonal adjustment, according to preliminary data released today by the Bureau
of Labor Statistics of the U.S. Department of Labor. A 0.3-percent decline in
average weekly hours and a 0.4-percent increase in the Consumer Price Index for
Urban Wage Earners and Clerical Workers were partially offset by 0.1-
percent rise in average hourly earnings.
The bad news on real estate and home prices continues on a daily basis. Maybe you haven't noticed. Centex shares bottomed in mid-July at $42.90, and that was one month after rates topped out on treasury bonds. The stock rallied in early August to 52, and now in mid-Sept. it is up close to $55.
At the beginning of July, in 11 trading days, Wal-Mart shares dropped from 48 1/2 to 42 1/2. The range for July and Aug. was 42 1/2 to 45 1/2. In the last 10 trading days the shares rallied from 44 to 48 1/2. Pretty interesting I think.
Bush: "I don't question the patriotism of those that disagree with me." Keep it real, please!
Barry Ritholtz: "In the past 16 Federal Reserve tightening cycles, there has been one true soft landing in 1994. I continue to look at that not as impossible, but as a low probability event."
October crude climbed 28 cents to $63.50 a barrel in afternoon dealings, reversing course after the contract touched $62.05, its lowest level of the year. December gold fell $3 to close at $583 an ounce, its weakest closing level since mid-June. It ended the week with a loss of more than $34 an ounce, or 5.6%. December silver fell 7.5 cents to end at a two-month low of $10.875 an ounce. The contract, which fell earlier to a nearly three-month low of $10.55, marked a loss of 11.5% for the week. December copper fell 6.3 cents Friday to close at $3.3115 a pound, down 7.2% for the week.
Superior Industries International Inc. said Friday it is closing its manufacturing facility in Johnson City, Tenn., and plans to lay off around 500 workers.
The median consumer price index rose 0.3% (or 3.4% annualized) in August, the Cleveland Federal Reserve Bank said Friday. The median CPI is an alternative method of computing underlying core inflation that does not automatically exclude food and energy prices. Over the past year, the median CPI is up 3.4%, the biggest gain since July 2002. The CPI is up 3.8% in the past 12 months, while the core CPI (which excludes food and energy) has risen 2.8%. Inflation is under control?
The University of Michigan consumer sentiment index rose to 84.4 in September from 82.0 in August. The improvement all came from expectations of the economy six months ahead. The expectations index rose to 77.1 from 68.0 in the previous month. This is the highest since January. The current conditions index fell to 95.7 in September from 103.8 in August. This is the lowest level since October.
Marsh & McLennan said Friday it would cut 750 jobs out of its work force of about 55,000 as part of a move to save $350 million by the end of 2008. Conagra will cut 400 jobs. I would imagine Ford will end up cutting about 40,000+ jobs. Will Chrysler cut some jobs too?
December natural gas rose 9 cents to close at $4.982 per million British thermal units, recovering from its low of $4.81. The contract ended the week with a loss of 12.2%.
Thomas P. Au: "The country (China) has 1.2 billion (or more) people, many of whom are peasants seeking to improve their lives by moving to the cities because of the inherent poverty of the rural areas. Keeping a “critical mass” of them happy is necessary for social and political stability. In order to effect this, it is necessary to have a large pool of low-paying (by world standards) urban opportunities, many of which amount to “make work” positions that are still more remunerative than farmwork. An artificially weak currency is an important ingredient of such a strategy...In 1931, the United States was in a recession that then-President Herbert Hoover reasonably thought would soon end. The impending recovery was derailed by the collapse of the German economy, then the second most important in the world, not only because of its sheer size, but because of its connections to other countries in Europe. China’s economy plays a similar “second most important” role today because of her ties in Asia and elsewhere, and because its swings are larger than those of other, nominally larger, economies such as those of Germany and Japan. If a collapse of the Chinese economy comes hard on the heels of a deep U.S. recession in 2007-2008, the result could be a prolonged slowdown of global growth such as we saw in the 1930s."
Chevron is in talks to join with Chinese petroleum producers on exploration and production projects one year after beating out Cnooc, a Chinese oil company, to acquire Unocal.The company is in discussions with Cnooc, PetroChina and China Petroleum & Chemical, known as Sinopec, "to explore partnership opportunities both inside and outside of China," said Steve Del Regno, managing director of Chevron's liquefied natural gas trading business in Asia. The talks could lead to joint development of oil and gas deposits, he said.
Freescale Semiconductor Inc. agreed to be bought by a private equity consortium for $17.6 billion. Under the terms of deal, the consortium will acquire all of the outstanding Class A and Class B shares of Freescale for $40 per share in cash. The consortium is led by The Blackstone Group, and includes The Carlyle Group, Permira Funds and Texas Pacific Group. Freescale said its board has approved the buyout.
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