2/25/07 Possible Developments
According to the Financial Times, Kohlberg Kravis Roberts and Texas Pacific Group were on Friday night in advanced talks to acquire TXU, one of America’s largest power companies, in a massive leveraged buy-out that could exceed $40bn including debt. People involved in the negotiations on Friday night described a “dream scenario” in which an agreement could be reached as early as Sunday or Monday morning. But they cautioned that a number of issues still needed to be resolved, which could delay an announcement.
Howard Schultz, chairman of Starbucks, has warned that the world’s largest coffee chain is “watering down” its brand by opening too many “sterile, cookie cutter” stores that lack soul and authenticity.
Vice President Dick Cheney said the U.S. is committed to a diplomatic course to resolve a nuclear dispute with Iran and warned that ``all options are still on the table'' to halt the country's atomic aspirations. It's fair to say all options are on the table to remove Cheney and Bush from office.
In a blunt memo to senior executives, titled “the commoditisation of the Starbucks experience”, Mr Schultz said the company’s expansion from 1,000 stores to 13,000 stores over the past decade had come at a heavy cost.
Doug Noland: "The Fed is not in control of any "general price level" and they certainly aren't in command of Credit Bubble and speculative asset market boom and bust dynamics. Contrast the old banking system where Fed tightening would reduce industry loan portfolio profitability, thereby inducing a general system tightening - to that of the current securities-based system where waning financial profits in one asset class simply induces greater lending, securitizing and speculating elsewhere (one boom and bust leads naturally to the next). And I'll further hypothesize that the more protracted the global Credit boom, the less reliant the world becomes to the U.S. economy and Credit excess. This has important implications for prospective U.S. and global inflation, dynamics increasingly outside the purview of our policymakers. I wouldn't go rambling on about the Fed's lack of control if grossly inflated asset markets weren't so convinced of the polar opposite. Perhaps the greatest Indictment should be reserved for highly over-liquefied and speculative marketplaces."
A top Israeli official Saturday denied a published report that Israel has a plan to attack Iran's nuclear facilities. Deputy Defense Minister MK Ephraim Sneh said Israel is not laying the groundwork to take out Iran's nuclear facilities, despite a report saying so in the British Daily Telegraph, the Jerusalem Post reported. The Telegraph said Israel has asked the United States for permission to fly over Iraq as part of the attack on Iran. The Telegraph quoted an Israeli source saying, "We are planning for every eventuality, and sorting out issues such as these are crucially important. "The only way to do this is to fly through U.S.-controlled air space. If we don't sort these issues out now we could have a situation where American and Israeli war planes start shooting at each other," said the source described.
The Supreme Court of Canada ruled Friday that the procedure used to deport suspected terrorists is unconstitutional.
The court ruled unanimously that detainees under security certificates have the right under Canada's constitution to know the evidence against them and to provide a defense, the Toronto Globe and Mail reported. The justices gave Parliament a year to revise the system, but they said detainees have the right immediately to a bail hearing within 48 hours of detention.
Saturday, February 24, 2007
Friday, February 23, 2007
This Week
2/24/07 This week
The number of rigs drilling for oil and natural gas in North America fell by 25, or 1%, to 2,357, according to a weekly update by Baker Hughes Inc. The number of active oil rigs rose by 11 to 278, while the number of gas rigs fell by one to 1,472. The U.S. rig count rose by eight to 1,754, while the Canadian rig count fell by 33 to 603. The offshore rig count increased by one to 89.
Gold futures closed up $3.70 at $686.70 an ounce on the New York Mercantile Exchange. The contract has gained 2.1% on the week. March silver ended up 34.5 cents at $14.595 an ounce and April platinum closed up $7.60 at $1,237.60. March platinum rose $7.60 at $1,237.60 and March copper finished up 7.4 cents at $2.84 a pound.
With respect to a possible sale of Chrysler, Apollo Management, Blackstone, Carlyle and Cerberus Capital Management were contacted by DaimlerChrysler last week, according to the Financial Times. General Motors has also had talks with Chrysler while others, such as Volkswagen, Hyundai and Renault-Nissan, have said they aren't interested in buying the troubled U.S. automaker.
Four U.S. soldiers were killed Friday in attacks in Iraq, the military said. Three soldiers died Thursday in combat operations in Iraq's al-Anbar province, the military said. Another soldier was killed Thursday by an improvised explosive device in a separate incident near Diwaniyah, a city about 100 miles (160 kilometers) south of Baghdad, the military said in a further statement. Three soldiers were wounded in that attack. The total number of U.S. deaths in the Iraq war totals 3,146. When is the Congress going to call a halt to this insanity?
nearly 800 civilians working under contract to the Pentagon have been killed and more than 3,300 hurt doing jobs normally handled by the U.S. military, according to figures gathered by The Associated Press.
Winston Churchill: “It is a mistake to look too far ahead. Only one link in the chain of destiny can be handled at a time.”
Peter Schiff: "The current Wall Street bull market hype ignores the fact that all the major stock market averages are underperforming the price of gold. For example, year to date, while the Dow is up about 1.5%, the price of gold is up about 8%. Going back to January of 2000, while the Dow is only up about 15%, the price of gold price is up 150%, literally ten times as much. Even if you compare the Dow to gold starting from the Dow's October, 2002 low of about 7,200, the Dow is up about 75% verses 125% for gold. Call me crazy but how can we be in a bull market if investors are making more money owning gold than owing stocks?"
Chrysler Group plans to cut 1,000 salaried jobs by the end of June, the first action under a previously announced turnaround plan that targets a total of 13,000 job cuts, the automaker said on Friday.
Dominion Homes Inc. reported a fourth-quarter net loss of $17 million, or $2.09 a share. In the same quarter last year, the homebuilder posted a net profit of $991,000, or 12 cents a share. Revenue dropped to $54.2 million from $111.5 million. The company delivered 284 homes and sold 131 in the three months ended Dec. 31, compared with 571 homes delivered and 230 sold in the comparable period last year.
Crude for April delivery closed up 19 cents at $61.14 a barrel. Oil ended 2006 at $61.05.
"Enough is enough. If we do not demand impeachment of Bush and Cheney for war crimes, the entire world will be facing endless death and devastation," said supporter Elaine Brower, mother of a U.S. Marine who has served in Afghanistan and Iraq.
"We are allowing our government officials free reign to wreak havoc unless we, the people, get a backbone to stop them," Brower said.
National Impeachment Day is April 28.
International Herald Tribune: "Despite a quadrupling of Iran's oil revenues since 1998, the Islamic Republic's budget has grown eight-fold over the same period. Making matters worse, Iran's oil exports fell to a new low in December, and production is now 500,000 barrels per day below the OPEC quota."
Bush: "If the Iraqi regime is able to produce, buy or steal an amount of highly enriched uranium a little larger than a single softball, it could have a nuclear weapon in less than a year."
The number of rigs drilling for oil and natural gas in North America fell by 25, or 1%, to 2,357, according to a weekly update by Baker Hughes Inc. The number of active oil rigs rose by 11 to 278, while the number of gas rigs fell by one to 1,472. The U.S. rig count rose by eight to 1,754, while the Canadian rig count fell by 33 to 603. The offshore rig count increased by one to 89.
Gold futures closed up $3.70 at $686.70 an ounce on the New York Mercantile Exchange. The contract has gained 2.1% on the week. March silver ended up 34.5 cents at $14.595 an ounce and April platinum closed up $7.60 at $1,237.60. March platinum rose $7.60 at $1,237.60 and March copper finished up 7.4 cents at $2.84 a pound.
With respect to a possible sale of Chrysler, Apollo Management, Blackstone, Carlyle and Cerberus Capital Management were contacted by DaimlerChrysler last week, according to the Financial Times. General Motors has also had talks with Chrysler while others, such as Volkswagen, Hyundai and Renault-Nissan, have said they aren't interested in buying the troubled U.S. automaker.
Four U.S. soldiers were killed Friday in attacks in Iraq, the military said. Three soldiers died Thursday in combat operations in Iraq's al-Anbar province, the military said. Another soldier was killed Thursday by an improvised explosive device in a separate incident near Diwaniyah, a city about 100 miles (160 kilometers) south of Baghdad, the military said in a further statement. Three soldiers were wounded in that attack. The total number of U.S. deaths in the Iraq war totals 3,146. When is the Congress going to call a halt to this insanity?
nearly 800 civilians working under contract to the Pentagon have been killed and more than 3,300 hurt doing jobs normally handled by the U.S. military, according to figures gathered by The Associated Press.
Winston Churchill: “It is a mistake to look too far ahead. Only one link in the chain of destiny can be handled at a time.”
Peter Schiff: "The current Wall Street bull market hype ignores the fact that all the major stock market averages are underperforming the price of gold. For example, year to date, while the Dow is up about 1.5%, the price of gold is up about 8%. Going back to January of 2000, while the Dow is only up about 15%, the price of gold price is up 150%, literally ten times as much. Even if you compare the Dow to gold starting from the Dow's October, 2002 low of about 7,200, the Dow is up about 75% verses 125% for gold. Call me crazy but how can we be in a bull market if investors are making more money owning gold than owing stocks?"
Chrysler Group plans to cut 1,000 salaried jobs by the end of June, the first action under a previously announced turnaround plan that targets a total of 13,000 job cuts, the automaker said on Friday.
Dominion Homes Inc. reported a fourth-quarter net loss of $17 million, or $2.09 a share. In the same quarter last year, the homebuilder posted a net profit of $991,000, or 12 cents a share. Revenue dropped to $54.2 million from $111.5 million. The company delivered 284 homes and sold 131 in the three months ended Dec. 31, compared with 571 homes delivered and 230 sold in the comparable period last year.
Crude for April delivery closed up 19 cents at $61.14 a barrel. Oil ended 2006 at $61.05.
"Enough is enough. If we do not demand impeachment of Bush and Cheney for war crimes, the entire world will be facing endless death and devastation," said supporter Elaine Brower, mother of a U.S. Marine who has served in Afghanistan and Iraq.
"We are allowing our government officials free reign to wreak havoc unless we, the people, get a backbone to stop them," Brower said.
National Impeachment Day is April 28.
International Herald Tribune: "Despite a quadrupling of Iran's oil revenues since 1998, the Islamic Republic's budget has grown eight-fold over the same period. Making matters worse, Iran's oil exports fell to a new low in December, and production is now 500,000 barrels per day below the OPEC quota."
Bush: "If the Iraqi regime is able to produce, buy or steal an amount of highly enriched uranium a little larger than a single softball, it could have a nuclear weapon in less than a year."
Thursday, February 22, 2007
The Cloud
2/23/07 The Cloud
Bronco Drilling had a terrific earnings report for the quarter and for year. The stock is significantly under-appreciated. Here is a link to the report:
http://news.moneycentral.msn.com/ticker/article.aspx?feed=PR&date=20070222&id=6518579
``There are too many soft markets at this stage of the selling season to call a general upturn in the new home market,'' Robert Toll, CEO of Toll Brothers, said in the statement. ``Demand varies greatly from week to week in individual markets.'' Toll forecast earnings of $1.46 to $1.85 a share for fiscal 2007. The company said it will probably deliver 6,000 to 7,000 houses during the year, compared with an earlier forecast of 6,300 to 7,300 properties.
In the fiscal first quarter, Toll wrote down the value of assets by $96.9 million and took a charge of $9 million relating to an acquisition in Detroit in 1999. Excluding the writedowns and charge, earnings fell 27 percent to 72 cents a share. Revenue dropped 19 percent to $1.09 billion.
J.C.Penney said first-quarter profit would be about 99 cents, less than the $1.05 estimated by analysts.
Seasonally adjusted initial jobless claims fell by 27,000 to 332,000 in the week ending Feb. 17, the Labor Department reported Thursday. But the four-week average of new claims rose by 1,250 to 326,250. It's the highest since Dec. 2, 2006. At the same time, the number of people collecting unemployment benefits in the week ending Feb. 10 fell by 45,000 to 2.50 million, the lowest in two weeks. The four-week average of continuing claims rose by 6,750 to 2.52 million, the most since Feb. 4.
Seasonally adjusted initial jobless claims fell by 27,000 to 332,000 in the week ending Feb. 17, the Labor Department reported Thursday. But the four-week average of new claims -- which smoothes out one-time events such as holidays or weather -- rose by 1,250 to 326,250. It's the highest since Dec. 2, 2006. At the same time, the number of people collecting unemployment benefits in the week ending Feb. 10 fell by 45,000 to 2.50 million, the lowest in two weeks. The four-week average of continuing claims rose by 6,750 to 2.52 million, the most since Feb. 4.
“There is a cloud over the vice-president,” Patrick Fitzgerald, special prosecutor, told the jury on Tuesday. “He sent Libby off to the meeting with Judy [Judith Miller, a New York Times reporter] where Plame was discussed. That cloud is something that we just can’t pretend isn’t there.”
From The Int'l Herald Tribune Opinion Page on making martial law easier:
"A disturbing recent phenomenon in Washington is that laws that strike to the heart of American democracy have been passed in the dead of night. So it was with a provision quietly tucked into the enormous defense budget bill at the Bush administration's behest that makes it easier for a president to override local control of law enforcement and declare martial law.
The provision, signed into law in October, weakens two obscure but important bulwarks of liberty. One is the doctrine that bars military forces, including a federalized National Guard, from engaging in law enforcement. Called posse comitatus, it was enshrined in law after the Civil War to preserve the line between civil government and the military. The other is the Insurrection Act of 1807, which provides the major exemptions to posse comitatus. It essentially limits a president's use of the military in law enforcement to putting down lawlessness, insurrection and rebellion, where a state is violating federal law or depriving people of constitutional rights.
The newly enacted provisions upset this careful balance. They shift the focus from making sure that federal laws are enforced to restoring public order.
Beyond cases of actual insurrection, the president may now use military troops as a domestic police force in response to a natural disaster, a disease outbreak, terrorist attack or to any "other condition."
Changes of this magnitude should be made only after a thorough public airing. But these new presidential powers were slipped into the law without hearings or public debate. The president made no mention of the changes when he signed the measure, and neither the White House nor Congress consulted in advance with the country's governors.
There is a bipartisan bill, introduced by Senators Patrick Leahy, Democrat of Vermont, and Christopher Bond, Republican of Missouri, and backed unanimously by the nation's governors, that would repeal the stealthy revisions. Congress should pass it. If changes of this kind are proposed in the future, they must get a full and open debate."
The current farm bill, written in 2002, expires Sept. 30.
A proposal released last month by U.S. Agriculture Secretary Mike Johanns would cut agriculture spending by $18 billion over the next five years.
The Bush administration's plan would cost $87.3 billion over the next five years, not counting food stamps and other nutrition programs, compared to $105 billion spent on farm programs over the past five years.
Most payments go to growers of five major crops — corn, soybeans, wheat, rice and cotton.
Crude inventories rose by 3.7 million barrels to 327.6 million barrels in the week ending Feb. 16, the Energy Information Administration said Thursday. But gasoline inventories fell by 3.1 million barrels to 222.1 million barrels, and distillates, which include heating oil and diesel, fell by 5.0 million barrels to 128.3 million barrels. Oil prices briefly surpassed the $61 a barrel mark Thursday for the first time this year after the U.S. government reported surprisingly large drops in gasoline and heating oil inventories.
Mike Shedlock: "Here's an alarming fact about Sacramento's housing market: About one of every five existing homes on the market is a "short sale." That means the home is worth less than the value of the mortgage, and the lender is willing to accept less than full repayment of the loan to avoid foreclosure, says Tracey Saizan, president of the Sacramento Association of Realtors. That, in turn, puts pressure on the remaining 80% of sellers, who have equity in their homes, to cut prices. The median price in the state capital, one of the most overheated metro areas during the real estate boom, fell 4.3% in December compared with December 2005. "Sellers are having to give concessions and cut prices," Saizan says. "It's all about making the house show the best it can and aggressive pricing."
Venezuela and Argentina will offer a US$1.5 billion (euro1.1 billion) joint bond issue next week.
Gold for April delivery ended down $1 at $683 an ounce on the New York Mercantile Exchange. March silver futures fell 2.3 cents at $14.25 an ounce and April platinum ended down $3.20 at $1,230 an ounce. March palladium closed up $6.55 at $350.70 and March copper rose 11.2 cents at $2.766 a pound.
Bronco Drilling had a terrific earnings report for the quarter and for year. The stock is significantly under-appreciated. Here is a link to the report:
http://news.moneycentral.msn.com/ticker/article.aspx?feed=PR&date=20070222&id=6518579
``There are too many soft markets at this stage of the selling season to call a general upturn in the new home market,'' Robert Toll, CEO of Toll Brothers, said in the statement. ``Demand varies greatly from week to week in individual markets.'' Toll forecast earnings of $1.46 to $1.85 a share for fiscal 2007. The company said it will probably deliver 6,000 to 7,000 houses during the year, compared with an earlier forecast of 6,300 to 7,300 properties.
In the fiscal first quarter, Toll wrote down the value of assets by $96.9 million and took a charge of $9 million relating to an acquisition in Detroit in 1999. Excluding the writedowns and charge, earnings fell 27 percent to 72 cents a share. Revenue dropped 19 percent to $1.09 billion.
J.C.Penney said first-quarter profit would be about 99 cents, less than the $1.05 estimated by analysts.
Seasonally adjusted initial jobless claims fell by 27,000 to 332,000 in the week ending Feb. 17, the Labor Department reported Thursday. But the four-week average of new claims rose by 1,250 to 326,250. It's the highest since Dec. 2, 2006. At the same time, the number of people collecting unemployment benefits in the week ending Feb. 10 fell by 45,000 to 2.50 million, the lowest in two weeks. The four-week average of continuing claims rose by 6,750 to 2.52 million, the most since Feb. 4.
Seasonally adjusted initial jobless claims fell by 27,000 to 332,000 in the week ending Feb. 17, the Labor Department reported Thursday. But the four-week average of new claims -- which smoothes out one-time events such as holidays or weather -- rose by 1,250 to 326,250. It's the highest since Dec. 2, 2006. At the same time, the number of people collecting unemployment benefits in the week ending Feb. 10 fell by 45,000 to 2.50 million, the lowest in two weeks. The four-week average of continuing claims rose by 6,750 to 2.52 million, the most since Feb. 4.
“There is a cloud over the vice-president,” Patrick Fitzgerald, special prosecutor, told the jury on Tuesday. “He sent Libby off to the meeting with Judy [Judith Miller, a New York Times reporter] where Plame was discussed. That cloud is something that we just can’t pretend isn’t there.”
From The Int'l Herald Tribune Opinion Page on making martial law easier:
"A disturbing recent phenomenon in Washington is that laws that strike to the heart of American democracy have been passed in the dead of night. So it was with a provision quietly tucked into the enormous defense budget bill at the Bush administration's behest that makes it easier for a president to override local control of law enforcement and declare martial law.
The provision, signed into law in October, weakens two obscure but important bulwarks of liberty. One is the doctrine that bars military forces, including a federalized National Guard, from engaging in law enforcement. Called posse comitatus, it was enshrined in law after the Civil War to preserve the line between civil government and the military. The other is the Insurrection Act of 1807, which provides the major exemptions to posse comitatus. It essentially limits a president's use of the military in law enforcement to putting down lawlessness, insurrection and rebellion, where a state is violating federal law or depriving people of constitutional rights.
The newly enacted provisions upset this careful balance. They shift the focus from making sure that federal laws are enforced to restoring public order.
Beyond cases of actual insurrection, the president may now use military troops as a domestic police force in response to a natural disaster, a disease outbreak, terrorist attack or to any "other condition."
Changes of this magnitude should be made only after a thorough public airing. But these new presidential powers were slipped into the law without hearings or public debate. The president made no mention of the changes when he signed the measure, and neither the White House nor Congress consulted in advance with the country's governors.
There is a bipartisan bill, introduced by Senators Patrick Leahy, Democrat of Vermont, and Christopher Bond, Republican of Missouri, and backed unanimously by the nation's governors, that would repeal the stealthy revisions. Congress should pass it. If changes of this kind are proposed in the future, they must get a full and open debate."
The current farm bill, written in 2002, expires Sept. 30.
A proposal released last month by U.S. Agriculture Secretary Mike Johanns would cut agriculture spending by $18 billion over the next five years.
The Bush administration's plan would cost $87.3 billion over the next five years, not counting food stamps and other nutrition programs, compared to $105 billion spent on farm programs over the past five years.
Most payments go to growers of five major crops — corn, soybeans, wheat, rice and cotton.
Crude inventories rose by 3.7 million barrels to 327.6 million barrels in the week ending Feb. 16, the Energy Information Administration said Thursday. But gasoline inventories fell by 3.1 million barrels to 222.1 million barrels, and distillates, which include heating oil and diesel, fell by 5.0 million barrels to 128.3 million barrels. Oil prices briefly surpassed the $61 a barrel mark Thursday for the first time this year after the U.S. government reported surprisingly large drops in gasoline and heating oil inventories.
Mike Shedlock: "Here's an alarming fact about Sacramento's housing market: About one of every five existing homes on the market is a "short sale." That means the home is worth less than the value of the mortgage, and the lender is willing to accept less than full repayment of the loan to avoid foreclosure, says Tracey Saizan, president of the Sacramento Association of Realtors. That, in turn, puts pressure on the remaining 80% of sellers, who have equity in their homes, to cut prices. The median price in the state capital, one of the most overheated metro areas during the real estate boom, fell 4.3% in December compared with December 2005. "Sellers are having to give concessions and cut prices," Saizan says. "It's all about making the house show the best it can and aggressive pricing."
Venezuela and Argentina will offer a US$1.5 billion (euro1.1 billion) joint bond issue next week.
Gold for April delivery ended down $1 at $683 an ounce on the New York Mercantile Exchange. March silver futures fell 2.3 cents at $14.25 an ounce and April platinum ended down $3.20 at $1,230 an ounce. March palladium closed up $6.55 at $350.70 and March copper rose 11.2 cents at $2.766 a pound.
Wednesday, February 21, 2007
News
2/22/07 News
Tony Blair announced on Wednesday that Britain will cut the number of UK troops stationed in Iraq by about 1,600 – the first time the UK’s 7100 troop military presence in the country has been reduced since the 2003 invasion.
The Bank of Japan's policy board voted by an 8-to-1 majority to lift its overnight call rate by a quarter percentage point, bringing the benchmark lending rate to 0.5% Wednesday. The BOJ said the Japanese economy is likely to continue expanding moderately, noting that positive trends in production, spending and income continue.
Real average weekly earnings fell by 0.3 percent from December 2006 to January 2007 after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. This decline stemmed from a 0.3 percent decrease in the average weekly hours and a 0.1 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which were partially offset by a 0.2 percent increase in average hourly earnings.
Consumer prices in January rose 0.2 percent, while core prices, which
exclude food and energy costs, climbed 0.3 percent.
Bill Gross is so disenchanted with U.S. debt markets that
he's raised his holdings of cash-equivalent securities to the
highest level in almost two years. Cash equivalents including debt maturing in less than a year accounted for 43 percent of the assets of the $99.9 billion Total Return Fund as of Jan. 31, up from 26 percent at the end of last year and the most since February 2005, according to Pacific Investment Management Co.'s Web site.
Gross, chief investment officer of Newport Beach, California-based Pimco, has repeatedly said U.S. bond markets are too expensive in commentaries on the firm's Web site in the past year. The latest, published Jan. 29, said the prices of assets including bonds ``are increasingly being determined by value insensitive flows and speculative leverage as opposed to fundamentals.''
George Ure: "We are reading about how there is a propane shortage up in Maine. Doctors are in short supply in Alaska. Growth of industry in India has led to a shortage of good managers. And Esso stations in Ontario may run out of fuel this week due to not one, but two, refinery fires."
$3 a gallon gas has arrived in San Francisco. The stations couldn't wait for the summer driving season to begin.
Asda, the British supermarket unit of Wal-Mart Stores Inc , said on Wednesday it would create 8,000 jobs in the UK this year and build a minimum of 18 new stores.
Best Buy plans to open about 130 new stores in the U.S., Canada and China in fiscal 2008. The company estimates its store expansion plan will create about 12,000 retail jobs.
Scott Burns: "The average marginal tax rate on incomes between $20,000 and $500,000 is 40.3%, the median tax rate is 41.8%, and the standard deviation of all of those rates is 5.3 percentage points. Basically, most of us pay about 40%, plus or minus 5.3 percentage points."
Chief Justice Marshall: "The power to tax is the power to destroy." He might have added, if alive today, the power to print money is the power to destroy the value of our currency.
The index of leading economic indicators rose 0.1% in January after rising 0.6% in December and falling 0.1% in November, the Conference Board reported Wednesday. In January, the coincident index increased 0.1%, with three of the four indicators increasing. The lagging index fell 0.1%.
Kazakhstan threatened Wednesday to suspend Chevron Corp.'s license for operations at a giant Caspian Sea oil field and gave the U.S. energy giant a month to come up with a plan to remove hazardous waste.
Federal Reserve officials discussed dropping their inclination to raise interest rates, and rejected the idea because inflation was their ``predominant concern.''
Crude oil closed above $60 a barrel for the first time this year in New York. Crude for April delivery closed up $1.22 at $60.07. Fires and interrupted power supplies trimmed output at refineries in Texas, Pennsylvania, Colorado, Ontario and Delaware over the past two weeks. A pipeline supplying the U.S. Midwest and Northeast cut shipments.
Gold futures rallied to a seven-month high Wednesday. Gold for April delivery closed up $23 at $684 an ounce, its highest close since July 7. Silver futures rose 44.3 cents to $14.273 an ounce, platinum rose $14.10 to $1,233.20 an ounce and palladium was up $4.40 at $344.15 an ounce. Copper ended up 6.85 cents at $2.6545 a pound.
Whole Foods agreed to buy Wild Oats for $18.50 a share.
Corn rose to a 10-year high in Chicago. Ethanol was another brilliant government idea.
Janice Warman and Annunziata Rees-Mogg: "A typical meat-eating, milk-guzzling Westerner consumes as much as a hundred times their own weight in water every day," says Fred Pearce, former New Scientist news editor and author of When The Rivers Run Dry.That's because it takes between 2,000 and 5,000 litres of water to grow one kilogram of rice, 11,000 litres to grow the feed for enough cow for a quarter-pound hamburger, 50 cups of water for a teaspoon of sugar and 140 litres of water to produce just one cup of coffee. The world today grows twice as much food as it did in the 1960s, but uses three times as much water to grow it. Two-thirds of all the water taken from the environment goes to irrigate crops. "This is massively unsustainable, and has led many people to conclude that the apocalypse wasn't averted, only postponed," says Pearce.
Tony Blair announced on Wednesday that Britain will cut the number of UK troops stationed in Iraq by about 1,600 – the first time the UK’s 7100 troop military presence in the country has been reduced since the 2003 invasion.
The Bank of Japan's policy board voted by an 8-to-1 majority to lift its overnight call rate by a quarter percentage point, bringing the benchmark lending rate to 0.5% Wednesday. The BOJ said the Japanese economy is likely to continue expanding moderately, noting that positive trends in production, spending and income continue.
Real average weekly earnings fell by 0.3 percent from December 2006 to January 2007 after seasonal adjustment, according to preliminary data released today by the Bureau of Labor Statistics of the U.S. Department of Labor. This decline stemmed from a 0.3 percent decrease in the average weekly hours and a 0.1 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which were partially offset by a 0.2 percent increase in average hourly earnings.
Consumer prices in January rose 0.2 percent, while core prices, which
exclude food and energy costs, climbed 0.3 percent.
Bill Gross is so disenchanted with U.S. debt markets that
he's raised his holdings of cash-equivalent securities to the
highest level in almost two years. Cash equivalents including debt maturing in less than a year accounted for 43 percent of the assets of the $99.9 billion Total Return Fund as of Jan. 31, up from 26 percent at the end of last year and the most since February 2005, according to Pacific Investment Management Co.'s Web site.
Gross, chief investment officer of Newport Beach, California-based Pimco, has repeatedly said U.S. bond markets are too expensive in commentaries on the firm's Web site in the past year. The latest, published Jan. 29, said the prices of assets including bonds ``are increasingly being determined by value insensitive flows and speculative leverage as opposed to fundamentals.''
George Ure: "We are reading about how there is a propane shortage up in Maine. Doctors are in short supply in Alaska. Growth of industry in India has led to a shortage of good managers. And Esso stations in Ontario may run out of fuel this week due to not one, but two, refinery fires."
$3 a gallon gas has arrived in San Francisco. The stations couldn't wait for the summer driving season to begin.
Asda, the British supermarket unit of Wal-Mart Stores Inc , said on Wednesday it would create 8,000 jobs in the UK this year and build a minimum of 18 new stores.
Best Buy plans to open about 130 new stores in the U.S., Canada and China in fiscal 2008. The company estimates its store expansion plan will create about 12,000 retail jobs.
Scott Burns: "The average marginal tax rate on incomes between $20,000 and $500,000 is 40.3%, the median tax rate is 41.8%, and the standard deviation of all of those rates is 5.3 percentage points. Basically, most of us pay about 40%, plus or minus 5.3 percentage points."
Chief Justice Marshall: "The power to tax is the power to destroy." He might have added, if alive today, the power to print money is the power to destroy the value of our currency.
The index of leading economic indicators rose 0.1% in January after rising 0.6% in December and falling 0.1% in November, the Conference Board reported Wednesday. In January, the coincident index increased 0.1%, with three of the four indicators increasing. The lagging index fell 0.1%.
Kazakhstan threatened Wednesday to suspend Chevron Corp.'s license for operations at a giant Caspian Sea oil field and gave the U.S. energy giant a month to come up with a plan to remove hazardous waste.
Federal Reserve officials discussed dropping their inclination to raise interest rates, and rejected the idea because inflation was their ``predominant concern.''
Crude oil closed above $60 a barrel for the first time this year in New York. Crude for April delivery closed up $1.22 at $60.07. Fires and interrupted power supplies trimmed output at refineries in Texas, Pennsylvania, Colorado, Ontario and Delaware over the past two weeks. A pipeline supplying the U.S. Midwest and Northeast cut shipments.
Gold futures rallied to a seven-month high Wednesday. Gold for April delivery closed up $23 at $684 an ounce, its highest close since July 7. Silver futures rose 44.3 cents to $14.273 an ounce, platinum rose $14.10 to $1,233.20 an ounce and palladium was up $4.40 at $344.15 an ounce. Copper ended up 6.85 cents at $2.6545 a pound.
Whole Foods agreed to buy Wild Oats for $18.50 a share.
Corn rose to a 10-year high in Chicago. Ethanol was another brilliant government idea.
Janice Warman and Annunziata Rees-Mogg: "A typical meat-eating, milk-guzzling Westerner consumes as much as a hundred times their own weight in water every day," says Fred Pearce, former New Scientist news editor and author of When The Rivers Run Dry.That's because it takes between 2,000 and 5,000 litres of water to grow one kilogram of rice, 11,000 litres to grow the feed for enough cow for a quarter-pound hamburger, 50 cups of water for a teaspoon of sugar and 140 litres of water to produce just one cup of coffee. The world today grows twice as much food as it did in the 1960s, but uses three times as much water to grow it. Two-thirds of all the water taken from the environment goes to irrigate crops. "This is massively unsustainable, and has led many people to conclude that the apocalypse wasn't averted, only postponed," says Pearce.
Tuesday, February 20, 2007
More Deals
2/21/07 More Deals
Smart & Final Inc. agreed to be acquired by private equity firm Apollo Management. The deal values shares of the Los Angeles-based warehouse food store operator at $22 each, compared to Friday's close at $19.06.
Warner Music Group Corp. confirmed it's approached EMI Group plc about a possible acquisition. Warner said it made the overture on Jan. 24.
US contingency plans for air strikes on Iran extend beyond nuclear sites and include most of the country's military infrastructure, the BBC has learned.
Crude for March delivery fell $1.32 to $58.07 a barrel. The contract expired today and will be replaced by the April contract, which was down last quoted at $58.85 a barrel.Natural gas prices closed 1.1% higher at $7.58 per million British thermal units.
Gold for April delivery closed down $11.80 at $661 an ounce on the New York Mercantile Exchange. March silver closed down 16 cents at $13.83 an ounce, while April platinum gained 8.70 to close at $1,219.10 an ounce. March palladium ended down $2.05 at $339.75 an ounce. March copper ended down 5.85 cents at $2.586 a pound.
Hewlett-Packard Co.'s first-quarter profit jumped 26 percent as the company benefited from higher sales of laptop computers, printers and printing supplies during a robust holiday spending season.
An extraordinary large amount of BJ Services 2008 30 and 35 calls as well as 2008 22.50 puts traded on Tuesday-- at least 5000 of each.
Smart & Final Inc. agreed to be acquired by private equity firm Apollo Management. The deal values shares of the Los Angeles-based warehouse food store operator at $22 each, compared to Friday's close at $19.06.
Warner Music Group Corp. confirmed it's approached EMI Group plc about a possible acquisition. Warner said it made the overture on Jan. 24.
US contingency plans for air strikes on Iran extend beyond nuclear sites and include most of the country's military infrastructure, the BBC has learned.
Crude for March delivery fell $1.32 to $58.07 a barrel. The contract expired today and will be replaced by the April contract, which was down last quoted at $58.85 a barrel.Natural gas prices closed 1.1% higher at $7.58 per million British thermal units.
Gold for April delivery closed down $11.80 at $661 an ounce on the New York Mercantile Exchange. March silver closed down 16 cents at $13.83 an ounce, while April platinum gained 8.70 to close at $1,219.10 an ounce. March palladium ended down $2.05 at $339.75 an ounce. March copper ended down 5.85 cents at $2.586 a pound.
Hewlett-Packard Co.'s first-quarter profit jumped 26 percent as the company benefited from higher sales of laptop computers, printers and printing supplies during a robust holiday spending season.
An extraordinary large amount of BJ Services 2008 30 and 35 calls as well as 2008 22.50 puts traded on Tuesday-- at least 5000 of each.
Results
2/20/07 Results
Wal-Mart Stores Inc. estimated that for the fiscal 2008 first quarter, it would earn 68 cents to 71 cents a share from continuing operations as U.S. comparable-store sales increase 1% to 3%. For the full fiscal year, Wal-Mart forecasts $3.15 to $3.23 of earnings from continuing operations. The company
reported fiscal fourth-quarter net income rose 9.8% on 11% higher revenue. Earnings from continuing operations rose 8.8%. For the quarter ended Jan. 31, the company earned $3.94 billion, or 95 cents a share, compared with $3.59 billion, or 86 cents, in the year-earlier period. Earnings from continuing operations were 95 cents compared with 87 cents.
In the latest quarter, Home Depot's earnings fell to 50 cents from 60 cents on a comp-sales decline of 6.6%.
Target Corp. expects February sales at stores open at least one year to climb between 4% to 6%, compared to sales in the same month a year ago.
XM shareholders would receive 4.6 Sirius shares for each XM share held, or a 21.7 percent premium based on the two companies' Friday closing prices.
Vulcan Materials to buy Florida Rock in a deal that values Florida Rock ata premium of 45% over Friday's closing prices. The deal, which values Florida Rock shares at $68.03, will pay 70% in cash and supplement that with shares in Vulcan on a pro-rated basis.
Brett Steenbarger: "We've had declining money flow, even as the S&P 500 Index has made new highs.".
Shire Plc, the U.K.'s third-largest drugmaker, agreed to buy New River Pharmaceuticals Inc. for $2.6 billion to gain the rights to attention-deficit drug Vyvanse. Shire will pay $64 a share for Radford, Virginia-based New River.
Jon Hussman: "Advances in overvalued markets are regularly given back at great cost to investors who overstay, and can be avoided at no cost to long-term investors. I believe that there are ways to capture a reasonable portion such advances at controlled risk. But there are also times when the attempt to capture speculative gains in overvalued markets would demand too much precision and leave risks poorly controlled. At those times, investors can and should sleep through them (or at least hedge their portfolios), comfortable that any missed, incremental market gains are unlikely to be retained over time."
Wal-Mart Stores Inc. estimated that for the fiscal 2008 first quarter, it would earn 68 cents to 71 cents a share from continuing operations as U.S. comparable-store sales increase 1% to 3%. For the full fiscal year, Wal-Mart forecasts $3.15 to $3.23 of earnings from continuing operations. The company
reported fiscal fourth-quarter net income rose 9.8% on 11% higher revenue. Earnings from continuing operations rose 8.8%. For the quarter ended Jan. 31, the company earned $3.94 billion, or 95 cents a share, compared with $3.59 billion, or 86 cents, in the year-earlier period. Earnings from continuing operations were 95 cents compared with 87 cents.
In the latest quarter, Home Depot's earnings fell to 50 cents from 60 cents on a comp-sales decline of 6.6%.
Target Corp. expects February sales at stores open at least one year to climb between 4% to 6%, compared to sales in the same month a year ago.
XM shareholders would receive 4.6 Sirius shares for each XM share held, or a 21.7 percent premium based on the two companies' Friday closing prices.
Vulcan Materials to buy Florida Rock in a deal that values Florida Rock ata premium of 45% over Friday's closing prices. The deal, which values Florida Rock shares at $68.03, will pay 70% in cash and supplement that with shares in Vulcan on a pro-rated basis.
Brett Steenbarger: "We've had declining money flow, even as the S&P 500 Index has made new highs.".
Shire Plc, the U.K.'s third-largest drugmaker, agreed to buy New River Pharmaceuticals Inc. for $2.6 billion to gain the rights to attention-deficit drug Vyvanse. Shire will pay $64 a share for Radford, Virginia-based New River.
Jon Hussman: "Advances in overvalued markets are regularly given back at great cost to investors who overstay, and can be avoided at no cost to long-term investors. I believe that there are ways to capture a reasonable portion such advances at controlled risk. But there are also times when the attempt to capture speculative gains in overvalued markets would demand too much precision and leave risks poorly controlled. At those times, investors can and should sleep through them (or at least hedge their portfolios), comfortable that any missed, incremental market gains are unlikely to be retained over time."
Sunday, February 18, 2007
Another Refinery Explosion
2/19/07 Another Refinery Explosion
Valero, the largest refiner in North America, operates 17 refineries, 16 in North America and one in Aruba. The McKee refinery, located in Sunray, is one of six in Texas and has a capacity of 170,000 barrels per day. More than 400 workers were evacuated from the Valero McKee Refinery after Friday's explosion, authorities said.
At least 19 people were injured, but thankfully there were no fatalities.
Eight U.S. service members were killed and 14 wounded when a military helicopter crashed Sunday in southeastern Afghanistan after reporting engine failure, the U.S. military said.
Kentucky, Texas and Ohio are the latest to adopt versions of the tax on companies' sales or profits, levied at a very low rate meant to apply to as broad a swath of corporate earnings as possible. Michigan Gov. Jennifer Granholm has also proposed a version as part of a tax system overhaul.
"There were far too many companies doing profitable business here but not paying their fair share of taxes," said Brad Cowgill, Kentucky state budget director.
The U.S. imported 1.139 million barrels a day from Venezuela in 2006, down 8.2 percent from 1.241 million the previous year, according to the EIA. That's the lowest level since 1994, when the United States imported 1.034 million barrels a day.
A barge holding about 17,000 gallons of crude oil burst into flames Saturday, leaving one person burned and another missing. It took 4 1/2 hours to put out the fire. The accident occurred at Garden Isle Bay near Pass a Loutre -- a waterway heading east through the delta at the tip of the Mississippi River.
Congressman John Conyers, Chair of the House Judiciary Committee, has used the following rhetoric repeatedly in recent weeks:
"George Bush has the habit of firing military leaders who tells him the Iraq war is failing. But let me tell you something. He can't fire you. He can't fire us. But we can fire him! We can fire him!" he will favor impeachment if Bush attacks Iran.
Mike Burk: "The market is overbought and seasonally next week has been flat. I expect the major indices to be lower on Friday February 23 than they were on Friday February 16.
Robert McHugh: "We believe the intermediate-term risks in Bonds have moved away from a decline to a rise in prices, and declining long-term interest rates. This is frightening, as it means we are about to enter another recession, one that could be deeper than we have seen in a long time."
Qatar's $40 billion investment fund is seeking a ``strategic'' stake in J Sainsbury Plc and is studying exactly how much of the U.K. retailer it wants to buy, the Gulf emirate's foreign minister said.
Oil Drum: "The US military is completely addicted to oil. Unsurprisingly, its oil consumption for aircraft, ships, ground vehicles and facilities makes the Pentagon the single largest oil consumer in the world. By the way, according to the 2006 CIA World Factbook rankings there are only 35 countries (out of 210) in the world that consume more oil per day than the Pentagon."
Abraham Lincoln: “I destroy my enemies when I make them my friends.”
Robert Lynd: "The belief in the possibility of a short decisive war appears to be one of the most ancient and dangerous of human illusions."
Valero, the largest refiner in North America, operates 17 refineries, 16 in North America and one in Aruba. The McKee refinery, located in Sunray, is one of six in Texas and has a capacity of 170,000 barrels per day. More than 400 workers were evacuated from the Valero McKee Refinery after Friday's explosion, authorities said.
At least 19 people were injured, but thankfully there were no fatalities.
Eight U.S. service members were killed and 14 wounded when a military helicopter crashed Sunday in southeastern Afghanistan after reporting engine failure, the U.S. military said.
Kentucky, Texas and Ohio are the latest to adopt versions of the tax on companies' sales or profits, levied at a very low rate meant to apply to as broad a swath of corporate earnings as possible. Michigan Gov. Jennifer Granholm has also proposed a version as part of a tax system overhaul.
"There were far too many companies doing profitable business here but not paying their fair share of taxes," said Brad Cowgill, Kentucky state budget director.
The U.S. imported 1.139 million barrels a day from Venezuela in 2006, down 8.2 percent from 1.241 million the previous year, according to the EIA. That's the lowest level since 1994, when the United States imported 1.034 million barrels a day.
A barge holding about 17,000 gallons of crude oil burst into flames Saturday, leaving one person burned and another missing. It took 4 1/2 hours to put out the fire. The accident occurred at Garden Isle Bay near Pass a Loutre -- a waterway heading east through the delta at the tip of the Mississippi River.
Congressman John Conyers, Chair of the House Judiciary Committee, has used the following rhetoric repeatedly in recent weeks:
"George Bush has the habit of firing military leaders who tells him the Iraq war is failing. But let me tell you something. He can't fire you. He can't fire us. But we can fire him! We can fire him!" he will favor impeachment if Bush attacks Iran.
Mike Burk: "The market is overbought and seasonally next week has been flat. I expect the major indices to be lower on Friday February 23 than they were on Friday February 16.
Robert McHugh: "We believe the intermediate-term risks in Bonds have moved away from a decline to a rise in prices, and declining long-term interest rates. This is frightening, as it means we are about to enter another recession, one that could be deeper than we have seen in a long time."
Qatar's $40 billion investment fund is seeking a ``strategic'' stake in J Sainsbury Plc and is studying exactly how much of the U.K. retailer it wants to buy, the Gulf emirate's foreign minister said.
Oil Drum: "The US military is completely addicted to oil. Unsurprisingly, its oil consumption for aircraft, ships, ground vehicles and facilities makes the Pentagon the single largest oil consumer in the world. By the way, according to the 2006 CIA World Factbook rankings there are only 35 countries (out of 210) in the world that consume more oil per day than the Pentagon."
Abraham Lincoln: “I destroy my enemies when I make them my friends.”
Robert Lynd: "The belief in the possibility of a short decisive war appears to be one of the most ancient and dangerous of human illusions."
Saturday, February 17, 2007
Happenings
2/18/07 Happenings
BBVA, Spain’s second-largest bank, on Friday stepped up its push into the US by unveiling an agreed $9.6bn acquisition of Compass Bancshares, a franchise covering six states.
Pertaining to rumors of GM buying Chrysler, a GM source said the company had nothing to say because: "We decided not to comment when something makes no sense."
"Loan officers, mortgage agents, real estate employees, development executives and construction workers are among the array of people who have lost jobs in the East Bay or are wondering when the ax might fall," Northern California's Contra Costa Times reports. "And directly or indirectly, those job losses are tied to a drastic slump in the sales, construction and financing of new homes...Now, a slowdown has arrived and relief has yet to arrive on the horizon."
Carl Swenlin: "Bottom Line: The Rydex Cash Flow Ratio shows that investors have been extremely reluctant to accept the market advance from the summer lows. Until they do, the advance is likely to continue."
George Ure: "You'll see a link to the Minneapolis Federal Reserve's inflation calculator. I want you to click on it because it has now been updated to 2007 data (they should have done a press release, but the effects of harsh economic facts are difficult to predict, so we had to make do with Chairman Ben's comments this week which were about as vanilla as one could hope for).
You'll see that if you plug in 11,723 which was the 2000 Dow high, and then put in 2007 (sort of like asking "What should the Dow be priced at today to have just kept even with inflation?) you'll find we need the Dow to have hit 13,989.99 to have just held its value.
No, that's not likely to make a front page headline in the WSJ or Forbes. After all, what kind of fool editor would proclaim "Dow Loses 8.6% (excluding commission/dividends/etc) Despite Record Highs" except me?"
"Examination of data within the quarter shows home prices stabilizing toward the end," said a statement from David Lereah, the NAR's chief economist. "When we get the figures for this spring, I expect to see a discernable improvement in both sales and prices." This guy is the second coming of Helicopter Ben.
"Doug Noland: "It is my view that, at least for the most part, subprime is not a viable business over the entire life of the business cycle. Invariably during the boom - with cheap finance too readily available and a broadening cadre of aggressive lenders, financiers, and speculators actively pursuing their share of ballooning profits - subprime loans will be under-priced and grossly overextended. There will be dire circumstances. And the more protracted the boom, the greater will be the systemic impact of the mispricing and overexpansion of subprime finance. Inevitably, there is no escaping the reality that the industry is a Ponzi Finance Unit, acutely dependent upon new liquidity to sustain lending volumes and, hence, asset prices, borrower solvency and loan quality. Importantly, amidst Credit Euphoria, the overextension of loans will inflate collateral values (home prices) and boost the general economy. With home prices up, unemployment down, and Credit all around, few will be forced into default and foreclosure. Subprime profits will be distorted both by inflated revenue growth (surging loan volumes, gain on sale at inflated prices, and attractive spreads on retained portfolios) and by artificially low Credit losses. The outstanding performance of subprime securitizations and related derivatives will entice only greater speculator interest and sector liquidity overabundance, pushing up the price (down the yield) of risky mortgages. In the real economy, easy finance and housing price inflation spur overbuilding, overspending, and a misallocation of resources...Wednesday, California originator ResMae filed for bankruptcy after Merrill Lynch sought to return $520 million "worth" of mortgages."
John Mauldin: "The subprime mortgage market is going to be a scandal by the end of this year, as these loans have been packaged and sold as investment-grade bonds by numerous investment banks, mostly to European and Asian institutions. Some of these Collateralized Debt Obligations, or CDOs, are going to default and there is going to be a major wave of lawsuits.So, will there be a recession? I still think so, and I think the culprit is going to be the housing market, which is going to trigger a slowdown in consumer spending, the first such slowdown since 1991."
BBVA, Spain’s second-largest bank, on Friday stepped up its push into the US by unveiling an agreed $9.6bn acquisition of Compass Bancshares, a franchise covering six states.
Pertaining to rumors of GM buying Chrysler, a GM source said the company had nothing to say because: "We decided not to comment when something makes no sense."
"Loan officers, mortgage agents, real estate employees, development executives and construction workers are among the array of people who have lost jobs in the East Bay or are wondering when the ax might fall," Northern California's Contra Costa Times reports. "And directly or indirectly, those job losses are tied to a drastic slump in the sales, construction and financing of new homes...Now, a slowdown has arrived and relief has yet to arrive on the horizon."
Carl Swenlin: "Bottom Line: The Rydex Cash Flow Ratio shows that investors have been extremely reluctant to accept the market advance from the summer lows. Until they do, the advance is likely to continue."
George Ure: "You'll see a link to the Minneapolis Federal Reserve's inflation calculator. I want you to click on it because it has now been updated to 2007 data (they should have done a press release, but the effects of harsh economic facts are difficult to predict, so we had to make do with Chairman Ben's comments this week which were about as vanilla as one could hope for).
You'll see that if you plug in 11,723 which was the 2000 Dow high, and then put in 2007 (sort of like asking "What should the Dow be priced at today to have just kept even with inflation?) you'll find we need the Dow to have hit 13,989.99 to have just held its value.
No, that's not likely to make a front page headline in the WSJ or Forbes. After all, what kind of fool editor would proclaim "Dow Loses 8.6% (excluding commission/dividends/etc) Despite Record Highs" except me?"
"Examination of data within the quarter shows home prices stabilizing toward the end," said a statement from David Lereah, the NAR's chief economist. "When we get the figures for this spring, I expect to see a discernable improvement in both sales and prices." This guy is the second coming of Helicopter Ben.
"Doug Noland: "It is my view that, at least for the most part, subprime is not a viable business over the entire life of the business cycle. Invariably during the boom - with cheap finance too readily available and a broadening cadre of aggressive lenders, financiers, and speculators actively pursuing their share of ballooning profits - subprime loans will be under-priced and grossly overextended. There will be dire circumstances. And the more protracted the boom, the greater will be the systemic impact of the mispricing and overexpansion of subprime finance. Inevitably, there is no escaping the reality that the industry is a Ponzi Finance Unit, acutely dependent upon new liquidity to sustain lending volumes and, hence, asset prices, borrower solvency and loan quality. Importantly, amidst Credit Euphoria, the overextension of loans will inflate collateral values (home prices) and boost the general economy. With home prices up, unemployment down, and Credit all around, few will be forced into default and foreclosure. Subprime profits will be distorted both by inflated revenue growth (surging loan volumes, gain on sale at inflated prices, and attractive spreads on retained portfolios) and by artificially low Credit losses. The outstanding performance of subprime securitizations and related derivatives will entice only greater speculator interest and sector liquidity overabundance, pushing up the price (down the yield) of risky mortgages. In the real economy, easy finance and housing price inflation spur overbuilding, overspending, and a misallocation of resources...Wednesday, California originator ResMae filed for bankruptcy after Merrill Lynch sought to return $520 million "worth" of mortgages."
John Mauldin: "The subprime mortgage market is going to be a scandal by the end of this year, as these loans have been packaged and sold as investment-grade bonds by numerous investment banks, mostly to European and Asian institutions. Some of these Collateralized Debt Obligations, or CDOs, are going to default and there is going to be a major wave of lawsuits.So, will there be a recession? I still think so, and I think the culprit is going to be the housing market, which is going to trigger a slowdown in consumer spending, the first such slowdown since 1991."
Long Overdue
2/17/06 Long Overdue
Goldman Sachs on Friday cut its earnings estimates on Home Depot Inc. for 2007 to $2.77 a share from $2.92 a share, and for 2008 to $3.08 a share from $3.36. These new estimates were long overdue.
The Commerce Department said housing starts last month plunged 14.3% from December levels to a seasonally adjusted annual rate of 1.408 million, the lowest rate for starts since August 1997. Building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago.
Prices paid by producers fell 0.6% in January, while core prices, which exclude food and energy prices, rose 0.2%.
Real estate investment trust Mills Corp. said Friday that Simon Property Group Inc. and hedge fund Farallon Capital Management will acquire the company for $25.25 a share in cash. The group had earlier offered to acquire Mills for $24 a share.
The Philadelphia region's manufacturing weakened in February since orders fell and shipments weakened. The derived composite fell to 49.5 from 53.5. That is the lowest level of the composite since August 2003.
Rigzone: " Worldwide offshore rig utilization inched up slightly this week to 83.6% with 556 of 665 offshore rigs currently under contract. Worldwide rig utilization and the worldwide rig count have been setting highs not reached since the 1980’s."
According to researchers at the University of Michigan on Friday. the consumer sentiment index retreated to 93.3 in February after jumping to 96.9 in January from 91.7 in December. The current conditions index fell to 108.3 in February from 111.3 in January. The expectations index slipped to 83.7 from 87.6 in the previous month.
"This country needs a dramatic change of course in Iraq and it is the responsibility of this Congress to consummate that change," said Rep. John Murtha.
The U.S. warned that militant attacks in Nigeria, Africa's biggest oil producer, may expand to new areas and become more violent. Nigeria is the fifth-biggest U.S. oil supplier. Refineries in Pennsylvania, Delaware and Ontario have slowed output this week because of fires and power outages.
From Oil Drum: "They cannot increase; the only way is for production to go down," said Mohamed Zine, Middle East regional manager for energy analyst firm IHS. "There has been no improvement, nothing," said Zine, whose views on the situation in Iraq are often less dramatic than Chalabi's. "It is getting worse."
Xerox said late Friday it expects 2007 operating cash flows to fall to a range of $1.2 billion to $1.5 billion from $1.6 billion last year.
SanDisk said it is cutting expenses with actions such as reducing its worldwide workforce by up to 10%, or 250 employees, and reducing salaries for all executives, with the chief executive's base pay falling 20%.
Crude for March delivery closed up $1.40 at $59.39 a barrel on the New York Mercantile Exchange. Natural-gas futures were up 21.1 cents at $7.503 per million British thermal units, down 4.1% from a week ago.
Gold for April delivery closed up $1.40 at $672.80 an ounce on the New York Mercantile Exchange. March silver closed up 2.8 cents at $13.99 an ounce. April platinum ended down $6.50 at $1,210.40 an ounce, and March palladium dropped $1 at $341.80 an ounce. March copper closed down 1.95 cents at $2.6445 a pound.
Goldman Sachs on Friday cut its earnings estimates on Home Depot Inc. for 2007 to $2.77 a share from $2.92 a share, and for 2008 to $3.08 a share from $3.36. These new estimates were long overdue.
The Commerce Department said housing starts last month plunged 14.3% from December levels to a seasonally adjusted annual rate of 1.408 million, the lowest rate for starts since August 1997. Building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago.
Prices paid by producers fell 0.6% in January, while core prices, which exclude food and energy prices, rose 0.2%.
Real estate investment trust Mills Corp. said Friday that Simon Property Group Inc. and hedge fund Farallon Capital Management will acquire the company for $25.25 a share in cash. The group had earlier offered to acquire Mills for $24 a share.
The Philadelphia region's manufacturing weakened in February since orders fell and shipments weakened. The derived composite fell to 49.5 from 53.5. That is the lowest level of the composite since August 2003.
Rigzone: " Worldwide offshore rig utilization inched up slightly this week to 83.6% with 556 of 665 offshore rigs currently under contract. Worldwide rig utilization and the worldwide rig count have been setting highs not reached since the 1980’s."
According to researchers at the University of Michigan on Friday. the consumer sentiment index retreated to 93.3 in February after jumping to 96.9 in January from 91.7 in December. The current conditions index fell to 108.3 in February from 111.3 in January. The expectations index slipped to 83.7 from 87.6 in the previous month.
"This country needs a dramatic change of course in Iraq and it is the responsibility of this Congress to consummate that change," said Rep. John Murtha.
The U.S. warned that militant attacks in Nigeria, Africa's biggest oil producer, may expand to new areas and become more violent. Nigeria is the fifth-biggest U.S. oil supplier. Refineries in Pennsylvania, Delaware and Ontario have slowed output this week because of fires and power outages.
From Oil Drum: "They cannot increase; the only way is for production to go down," said Mohamed Zine, Middle East regional manager for energy analyst firm IHS. "There has been no improvement, nothing," said Zine, whose views on the situation in Iraq are often less dramatic than Chalabi's. "It is getting worse."
Xerox said late Friday it expects 2007 operating cash flows to fall to a range of $1.2 billion to $1.5 billion from $1.6 billion last year.
SanDisk said it is cutting expenses with actions such as reducing its worldwide workforce by up to 10%, or 250 employees, and reducing salaries for all executives, with the chief executive's base pay falling 20%.
Crude for March delivery closed up $1.40 at $59.39 a barrel on the New York Mercantile Exchange. Natural-gas futures were up 21.1 cents at $7.503 per million British thermal units, down 4.1% from a week ago.
Gold for April delivery closed up $1.40 at $672.80 an ounce on the New York Mercantile Exchange. March silver closed up 2.8 cents at $13.99 an ounce. April platinum ended down $6.50 at $1,210.40 an ounce, and March palladium dropped $1 at $341.80 an ounce. March copper closed down 1.95 cents at $2.6445 a pound.
Thursday, February 15, 2007
New Threats
2/16/07 New Threats
A Saudi wing of al Qaeda called for attacks on suppliers of oil to the United States around the world, saying targets should not be limited to the Middle East and listing Canada, Venezuela and Mexico as under threat.
The threat appeared in the al Qaeda Organisation in the Arabian Peninsula's e-magazine, Sawt al-Jihad (Voice of Holy War), which was posted on a website used by Islamist militants.
"It is necessary to hit oil interests in all regions which serve the United States, not just in the Middle East. The goal is to cut its supplies or reduce them through any means," it said.
China and Russia are fighting U.S. efforts at the United Nations to prevent Iran from building nuclear bombs while working to strip North Korea of the same weapons.
Diplomats said the international effort to punish Iran has been stymied, chiefly by China and Russia. Russian diplomats said they favor negotiations aimed at persuading Iran to halt nuclear enrichment work, rather than carrying out sanctions right away. Chinese envoys expressed the same view.
Hershey Foods Corp. detailed a three-year plan to change its supply chain operations, saying it expects a total net reduction of about 1,500 jobs.
Proved reserves of natural gas and oil added through drilling replaced 197% of EnCana's North American production for 2006, the company said.
Baker Hughes said that it's expecting revenue outside North America to rise by between 17% and 19% in 2007.
From the Financial Times: "Expectations that the Bank of Japan would raise interest rates soon strengthened on Thursday after fourth quarter GDP figures showed the Japanese economy grew at its fastest pace in nearly three years.
The Japanese economy in the October to December period grew 1.2 per cent from the previous quarter, much stronger than a consensus forecast of a 0.9 per cent increase. It translated to an annualized 4.8 per cent growth, the highest in nearly three years."
Import prices fell 1.2 percent in January after increases of 1.1 percent
and 0.5 percent, respectively, in December and November. A 7.3 percent
decrease in petroleum prices drove the overall January drop, as petroleum
prices resumed a recent downward pattern after increasing 4.6 percent in
December. Nonpetroleum prices were unchanged in January after a 0.5
percent advance the previous month. Prices for nonpetroleum imports rose 1.6
percent over the 12 months ended in January.
Changes in prices for nonpetroleum imports were highlighted by a
turnaround in the index for nonpetroleum industrial supplies and materials
prices, which declined 1.0 percent. The January decrease followed increases
of 1.7 percent and 4.1 percent, respectively, in December and November.
The Federal Reserve Bank of New York's general economic index rose to 24.4 in February from 9.1 the month before, the bank said today. The increase was the largest since July 2005.
George Ure: "an email from a long-time reader/contributor Bruce C who laid an amazing series of emails on me:
"Since the July '06 low, the SPX has run nearly 20%; this 7-mth. rally eclipses the 7-mth. blow-off episodes before the '00 top, the '87 top, and the '73 top.
It required 13 mths. to rally a similar 19-20% to the top in '72-'73; 9-10 mths. in '87; and 12-13 mths. in '00.
Additionally, it took 17-18 mths. for the 19-20% rise and blow off in 1891-93; 16 mths. in 1906-07; 9 mths. in 1919; only 2-3 mths. in 1929; 7 mths. in '36-'37; 17 mths. in '67-'68; 7-8 mths. in '90; and 6-7 mths. in '98.
Thus, we're duplicating, even surpassing, the periods immediately preceding the tops in '19, '37, '68, '73, '87, '90, '98, and '00.
Again, it is "different this time". We might well look back on this 7-mth. period, and the 3-4 years that preceded it, as the last best period for stocks for many years to come, perhaps a decade or more."
George Ure asks: "If the Saudis really have all the oil that's claimed, why would they even think of pursuing a nuclear deal with Russia? " If you are short oil and/or the oil sector, then you might think carefully about this question. In the stock market one should watch the flow of money.
In the Saudi Ghawar oil field, one should watch the flow of water.
U.S. industrial production fell 0.5% in January, the biggest drop since Hurricane Katrina struck the Gulf Coast in September 2005, the Federal Reserve reported Thursday. Capacity utilization fell sharply to 81.2% from 81.8%. Manufacturing output fell 0.7% in January.
Monthly capital flows to the United States reversed in December to the first outflow in a year-and-a-half, the Treasury Department reported Thursday. Monthly capital flows reversed to an outflow of $11 billion in December compared to an inflow of $70.5 billion in November. Net long-term capital inflows, meanwhile, fell to $15.6 billion in December from $84.9 billion in November. This is the lowest inflow since January 2002.
Rigzone reports as an aging generation of workers retires, industry experts say the resulting shortfall in skilled labor could lead to an increase in delays and problems on mega oil and gas projects.
"We're running out of water," said Montana Gov. Brian Schweitzer. "It's getting worse every year as Wyoming is using more and more water our farmers and ranchers who depend on this water for irrigation are having difficulty raising their crops."
The Energy Department said natural-gas inventories fell 259 billion cubic feet for the week ended Feb. 9. Total stocks now stand at 2.088 trillion cubic feet, down 193 billion cubic feet from the year-ago level, but 268 billion cubic feet above the five-year average, the government data said.
The Labor Department reported the number of Americans filing first-time claims for state unemployment benefits rose to 357,000 last week from a revised 313,000 the prior week.
March crude closed at $57.99 a barrel Thursday, ending the session with a loss of one penny after dropping to a low of $56.65 earlier. March natural-gas also recovered from a low of $7.05 to close at $7.292 million British thermal units, up 5.1 cents.
George Friedman (courtesy of John Mauldin) : "Russia is not only a major exporter of energy supplies, it is currently the world's top oil producer. The Russians have a need to maintain robust energy prices, and working with the Iranians and Saudis in some way to achieve this is directly in line with Moscow's interest. To be more specific, the Russians do not want the Saudis increasing oil production."
"Some of the Windows revenue forecasts I've seen are overly aggressive,'' Chief Executive Officer Steve Ballmer said at a meeting with analysts in New York today. ``You shouldn't think of a huge surge in fiscal year `08 relative to `07. There's a few that think we are going to do so much better than PC growth.''
Home prices fell in half of U.S. cities in the fourth quarter as a housing slump forced sellers to accept lower prices, the National Association of Realtors said.
The median price for a single-family home fell in 73 of 149 metropolitan areas studied by the Chicago-based real estate trade group. The national median price for a previously owned house was $219,300 in the fourth quarter, down 2.7 percent from a year earlier when the median price was $225,300, the group said in a report today.
A majority of Americans -- 53 percent -- said the U.S. should withdraw from Iraq, according to Pew. That is up 5 points in the past month and the highest percentage favoring a troop pullout since the war began almost four years ago. Thirty-five percent said the withdrawal should be gradual over the next year or two, and 16 percent said it should be immediate.
Mike Steinhardt: " Very few people have the ability to pick a high, and I don't think that this is the exact moment. One stays long, but one becomes very sensitive. You say to yourself that the next major, major move is going the other way.''
All of the greater Houston area, with the exception of the immediate coast, will experience freezing temperatures overnight.
Temperatures will fall below freezing around midnight, likely falling into the upper 20s, and will remain so until the sun rises Friday, forecasters at the Houston/Galveston office of the National Weather Service said. The record low at Bush Intercontinental Airport for Feb. 16 is 28 degrees, so it could be tied or broken. If the temperature falls below 30 degrees it will be the coldest night of the 2006-2007 winter. Temperatures this month are about 2.2 degrees below normal, and temperatures have been cooler than normal on 25 of the last 31 days.
A Saudi wing of al Qaeda called for attacks on suppliers of oil to the United States around the world, saying targets should not be limited to the Middle East and listing Canada, Venezuela and Mexico as under threat.
The threat appeared in the al Qaeda Organisation in the Arabian Peninsula's e-magazine, Sawt al-Jihad (Voice of Holy War), which was posted on a website used by Islamist militants.
"It is necessary to hit oil interests in all regions which serve the United States, not just in the Middle East. The goal is to cut its supplies or reduce them through any means," it said.
China and Russia are fighting U.S. efforts at the United Nations to prevent Iran from building nuclear bombs while working to strip North Korea of the same weapons.
Diplomats said the international effort to punish Iran has been stymied, chiefly by China and Russia. Russian diplomats said they favor negotiations aimed at persuading Iran to halt nuclear enrichment work, rather than carrying out sanctions right away. Chinese envoys expressed the same view.
Hershey Foods Corp. detailed a three-year plan to change its supply chain operations, saying it expects a total net reduction of about 1,500 jobs.
Proved reserves of natural gas and oil added through drilling replaced 197% of EnCana's North American production for 2006, the company said.
Baker Hughes said that it's expecting revenue outside North America to rise by between 17% and 19% in 2007.
From the Financial Times: "Expectations that the Bank of Japan would raise interest rates soon strengthened on Thursday after fourth quarter GDP figures showed the Japanese economy grew at its fastest pace in nearly three years.
The Japanese economy in the October to December period grew 1.2 per cent from the previous quarter, much stronger than a consensus forecast of a 0.9 per cent increase. It translated to an annualized 4.8 per cent growth, the highest in nearly three years."
Import prices fell 1.2 percent in January after increases of 1.1 percent
and 0.5 percent, respectively, in December and November. A 7.3 percent
decrease in petroleum prices drove the overall January drop, as petroleum
prices resumed a recent downward pattern after increasing 4.6 percent in
December. Nonpetroleum prices were unchanged in January after a 0.5
percent advance the previous month. Prices for nonpetroleum imports rose 1.6
percent over the 12 months ended in January.
Changes in prices for nonpetroleum imports were highlighted by a
turnaround in the index for nonpetroleum industrial supplies and materials
prices, which declined 1.0 percent. The January decrease followed increases
of 1.7 percent and 4.1 percent, respectively, in December and November.
The Federal Reserve Bank of New York's general economic index rose to 24.4 in February from 9.1 the month before, the bank said today. The increase was the largest since July 2005.
George Ure: "an email from a long-time reader/contributor Bruce C who laid an amazing series of emails on me:
"Since the July '06 low, the SPX has run nearly 20%; this 7-mth. rally eclipses the 7-mth. blow-off episodes before the '00 top, the '87 top, and the '73 top.
It required 13 mths. to rally a similar 19-20% to the top in '72-'73; 9-10 mths. in '87; and 12-13 mths. in '00.
Additionally, it took 17-18 mths. for the 19-20% rise and blow off in 1891-93; 16 mths. in 1906-07; 9 mths. in 1919; only 2-3 mths. in 1929; 7 mths. in '36-'37; 17 mths. in '67-'68; 7-8 mths. in '90; and 6-7 mths. in '98.
Thus, we're duplicating, even surpassing, the periods immediately preceding the tops in '19, '37, '68, '73, '87, '90, '98, and '00.
Again, it is "different this time". We might well look back on this 7-mth. period, and the 3-4 years that preceded it, as the last best period for stocks for many years to come, perhaps a decade or more."
George Ure asks: "If the Saudis really have all the oil that's claimed, why would they even think of pursuing a nuclear deal with Russia? " If you are short oil and/or the oil sector, then you might think carefully about this question. In the stock market one should watch the flow of money.
In the Saudi Ghawar oil field, one should watch the flow of water.
U.S. industrial production fell 0.5% in January, the biggest drop since Hurricane Katrina struck the Gulf Coast in September 2005, the Federal Reserve reported Thursday. Capacity utilization fell sharply to 81.2% from 81.8%. Manufacturing output fell 0.7% in January.
Monthly capital flows to the United States reversed in December to the first outflow in a year-and-a-half, the Treasury Department reported Thursday. Monthly capital flows reversed to an outflow of $11 billion in December compared to an inflow of $70.5 billion in November. Net long-term capital inflows, meanwhile, fell to $15.6 billion in December from $84.9 billion in November. This is the lowest inflow since January 2002.
Rigzone reports as an aging generation of workers retires, industry experts say the resulting shortfall in skilled labor could lead to an increase in delays and problems on mega oil and gas projects.
"We're running out of water," said Montana Gov. Brian Schweitzer. "It's getting worse every year as Wyoming is using more and more water our farmers and ranchers who depend on this water for irrigation are having difficulty raising their crops."
The Energy Department said natural-gas inventories fell 259 billion cubic feet for the week ended Feb. 9. Total stocks now stand at 2.088 trillion cubic feet, down 193 billion cubic feet from the year-ago level, but 268 billion cubic feet above the five-year average, the government data said.
The Labor Department reported the number of Americans filing first-time claims for state unemployment benefits rose to 357,000 last week from a revised 313,000 the prior week.
March crude closed at $57.99 a barrel Thursday, ending the session with a loss of one penny after dropping to a low of $56.65 earlier. March natural-gas also recovered from a low of $7.05 to close at $7.292 million British thermal units, up 5.1 cents.
George Friedman (courtesy of John Mauldin) : "Russia is not only a major exporter of energy supplies, it is currently the world's top oil producer. The Russians have a need to maintain robust energy prices, and working with the Iranians and Saudis in some way to achieve this is directly in line with Moscow's interest. To be more specific, the Russians do not want the Saudis increasing oil production."
"Some of the Windows revenue forecasts I've seen are overly aggressive,'' Chief Executive Officer Steve Ballmer said at a meeting with analysts in New York today. ``You shouldn't think of a huge surge in fiscal year `08 relative to `07. There's a few that think we are going to do so much better than PC growth.''
Home prices fell in half of U.S. cities in the fourth quarter as a housing slump forced sellers to accept lower prices, the National Association of Realtors said.
The median price for a single-family home fell in 73 of 149 metropolitan areas studied by the Chicago-based real estate trade group. The national median price for a previously owned house was $219,300 in the fourth quarter, down 2.7 percent from a year earlier when the median price was $225,300, the group said in a report today.
A majority of Americans -- 53 percent -- said the U.S. should withdraw from Iraq, according to Pew. That is up 5 points in the past month and the highest percentage favoring a troop pullout since the war began almost four years ago. Thirty-five percent said the withdrawal should be gradual over the next year or two, and 16 percent said it should be immediate.
Mike Steinhardt: " Very few people have the ability to pick a high, and I don't think that this is the exact moment. One stays long, but one becomes very sensitive. You say to yourself that the next major, major move is going the other way.''
All of the greater Houston area, with the exception of the immediate coast, will experience freezing temperatures overnight.
Temperatures will fall below freezing around midnight, likely falling into the upper 20s, and will remain so until the sun rises Friday, forecasters at the Houston/Galveston office of the National Weather Service said. The record low at Bush Intercontinental Airport for Feb. 16 is 28 degrees, so it could be tied or broken. If the temperature falls below 30 degrees it will be the coldest night of the 2006-2007 winter. Temperatures this month are about 2.2 degrees below normal, and temperatures have been cooler than normal on 25 of the last 31 days.
Wednesday, February 14, 2007
Shifting Sands
2/15/07 Shifting Sands
Tribune Co. after Tuesday's closing bell said the review of strategic alternatives is ongoing, and the media company's board expects to make a decision on a course of action and have an announcement before the end of the first quarter. "The review process has been rigorous and will continue to move forward with the assistance of our outside financial and legal advisors," said William Osborn, Tribune's lead independent director, in a statement.
DaimlerChrysler dropped its long-standing commitment to the Chrysler group today and said it was prepared to review all its options, including finding new partners for its loss-making U.S. arm. The company is
going to cut 13,000 jobs from 2007 to 2009, with 11,000 hourly workers being cut and 2,000 salaried employees losing their jobs.
In the fourth quarter of 2006, there were 1,444 mass layoff events that
resulted in the separation of 255,886 workers from their jobs for at least
31 days, according to preliminary figures released by the U.S. Department
of Labor’s Bureau of Labor Statistics. Both the total number of layoff
events and the number of separations were higher than during the October-
December 2005 time period. (See table A.) The over-the-year increases
in layoffs were most notable in transportation equipment manufacturing,
insurance carriers and related activities, and food and beverage stores.
Fifty-seven percent of all employers reporting an extended layoff in the
fourth quarter of 2006 indicated they would recall some number of workers.
This was the lowest proportion of employers expecting to recall workers for
any fourth quarter since 2002.
A growing body of research is being done exploring the
relationship between the potential of melanocortins to
treat hypertension. This could have a significant impact
on Palatin in future years.
The company is starting a melanocortin 1 receptor agonist program.
Oil Drum points out Matt Simmons thinks that we will peak in oil production this year, because the spare
capacity to replace the collapsing fields of Mexico and the North Sea
is just not there.
Nouriel Roubini: "It now looks like the alleged growth rebound in Q4, from the 2.0% of Q3
to the 3.5% of Q4 was an illusion based on incomplete data. Based on
recent data on inventories for December (much lower than initially
predicted by BEA) and today’s December trade balance figures (much
worse than initially forecasted by BEA) the initial estimate for Q4
growth will be revised downward to 2.0% or at best 2.2%."
Russia will spend at least $11 billion to build the first leg of its oil pipeline to Asia, up from initial estimates of $6.6 billion, pipeline monopoly Transneft said in its eurobond prospectus.
Sol Palha: "When the oil to Gold ratio drops below 9 then it pays to get out of oil and buy Gold. When this ratio trades above 11 the opposite is true; it's good to jump out of gold and buy oil...The current ratio stands at 12.5 and thus it more then makes sense to go long Oil and get out of Gold. What this pattern is basically illustrating is that Oil is now a better investment then Gold."
The U.S. is the main supplier of weapons to the oil-rich kingdom but relations have been strained since the Sept. 11 attacks and Saudi Arabia may be looking to Russia to diversify its military suppliers.
David S. Elliott: "Thus, it is indeed disquieting to note that the volume of water used to obtain Ghawar's oil has been steadily increasing. In fact, on a daily basis, an astounding 7 million barrels of seawater is being injected into the old oil reservoir to increase the oil flow. According to industry experts a few months ago Ghawar was producing 55 percent water -- in other words, more than half of the fluid brought to the surface was not oil.
In fact, a number of signs clearly indicate that Ghawar is in decline. Back in April 2006, a Saudi Aramco spokesman admitted that its mature fields are now declining at a rate of 8 percent per year. This, of course, implies that Ghawar may have peaked. The spokesman went on to say that measures were being taken to offset the decline, but that the only true solution to declining oil supplies is to locate new fields, and it is beyond debate that discoveries have not kept pace with growing global demand. Roughly 80 percent of oil being produced today is from fields discovered before 1973."
The first Iran's Oil Refining Forum is to be held in Tehran on February 17-18 with the participation of 300 domestic and foreign experts in the field of oil refining, IRNA reported. Organized by the National Iranian Oil Refining and Distribution Company (NIORDC), the conference is aimed at attracting foreign sponsors for investments on development of Iran's oil refining industry.
The American Petroleum Institute reported a fall of 372,000 barrels in distillate supplies for the week ended Feb. 9. The Energy Department had reported a decline of 3 million barrels. Motor gasoline supplies were down 603,000 barrels, the API said, vs. the government's reported fall of 2 million. Crude supplies were down 3.4 million barrels, the API said, compared with the government's 600,000-barrel decline.
Noble Energy Inc. said it expects to record year-end 2006 reserves of 834.6 million barrels of oil equivalent. The Houston-based energy company said it sees reserve additions from all sources totaling 122.1 MMBoe, or 179% of 2006 production.
April gold climbed $3.50 to close at $672 an ounce Wednesday March silver gained 5 cents to close at $13.965 an ounce. Over the past several months we have been able to
realize a profit of $100 an ounce in gold. I would recommend booking that profit and investing the profit in crude oil at roughly $58 a barrel.
Masco will cut 8,000 jobs by the end of the first quarter, including 1,000 salaried positions, Chief Executive Officer Richard Manoogian said today on a conference call. Fewer purchases at Lowe's Cos. and Home Depot Inc. and the slowdown in new home construction, which accounts for 40 percent of Masco's sales, hurt revenue in the fourth quarter. This does not sound like the worst of the housing decline is behind us.
The price of West Texas Intermediate, the benchmark U.S. crude, may average $69 this year, Goldman economist James Gutman said Feb. 8. Others like Sanford Bernstein predict oil prices will decline. That's what makes for horse racing, as one might say.
March crude fell $1.06 to close at $58 a barrel Wednesday. March natural gas fell 12.6 cents to close at $7.241 per million British thermal units.
Tribune Co. after Tuesday's closing bell said the review of strategic alternatives is ongoing, and the media company's board expects to make a decision on a course of action and have an announcement before the end of the first quarter. "The review process has been rigorous and will continue to move forward with the assistance of our outside financial and legal advisors," said William Osborn, Tribune's lead independent director, in a statement.
DaimlerChrysler dropped its long-standing commitment to the Chrysler group today and said it was prepared to review all its options, including finding new partners for its loss-making U.S. arm. The company is
going to cut 13,000 jobs from 2007 to 2009, with 11,000 hourly workers being cut and 2,000 salaried employees losing their jobs.
In the fourth quarter of 2006, there were 1,444 mass layoff events that
resulted in the separation of 255,886 workers from their jobs for at least
31 days, according to preliminary figures released by the U.S. Department
of Labor’s Bureau of Labor Statistics. Both the total number of layoff
events and the number of separations were higher than during the October-
December 2005 time period. (See table A.) The over-the-year increases
in layoffs were most notable in transportation equipment manufacturing,
insurance carriers and related activities, and food and beverage stores.
Fifty-seven percent of all employers reporting an extended layoff in the
fourth quarter of 2006 indicated they would recall some number of workers.
This was the lowest proportion of employers expecting to recall workers for
any fourth quarter since 2002.
A growing body of research is being done exploring the
relationship between the potential of melanocortins to
treat hypertension. This could have a significant impact
on Palatin in future years.
The company is starting a melanocortin 1 receptor agonist program.
Oil Drum points out Matt Simmons thinks that we will peak in oil production this year, because the spare
capacity to replace the collapsing fields of Mexico and the North Sea
is just not there.
Nouriel Roubini: "It now looks like the alleged growth rebound in Q4, from the 2.0% of Q3
to the 3.5% of Q4 was an illusion based on incomplete data. Based on
recent data on inventories for December (much lower than initially
predicted by BEA) and today’s December trade balance figures (much
worse than initially forecasted by BEA) the initial estimate for Q4
growth will be revised downward to 2.0% or at best 2.2%."
Russia will spend at least $11 billion to build the first leg of its oil pipeline to Asia, up from initial estimates of $6.6 billion, pipeline monopoly Transneft said in its eurobond prospectus.
Sol Palha: "When the oil to Gold ratio drops below 9 then it pays to get out of oil and buy Gold. When this ratio trades above 11 the opposite is true; it's good to jump out of gold and buy oil...The current ratio stands at 12.5 and thus it more then makes sense to go long Oil and get out of Gold. What this pattern is basically illustrating is that Oil is now a better investment then Gold."
The U.S. is the main supplier of weapons to the oil-rich kingdom but relations have been strained since the Sept. 11 attacks and Saudi Arabia may be looking to Russia to diversify its military suppliers.
David S. Elliott: "Thus, it is indeed disquieting to note that the volume of water used to obtain Ghawar's oil has been steadily increasing. In fact, on a daily basis, an astounding 7 million barrels of seawater is being injected into the old oil reservoir to increase the oil flow. According to industry experts a few months ago Ghawar was producing 55 percent water -- in other words, more than half of the fluid brought to the surface was not oil.
In fact, a number of signs clearly indicate that Ghawar is in decline. Back in April 2006, a Saudi Aramco spokesman admitted that its mature fields are now declining at a rate of 8 percent per year. This, of course, implies that Ghawar may have peaked. The spokesman went on to say that measures were being taken to offset the decline, but that the only true solution to declining oil supplies is to locate new fields, and it is beyond debate that discoveries have not kept pace with growing global demand. Roughly 80 percent of oil being produced today is from fields discovered before 1973."
The first Iran's Oil Refining Forum is to be held in Tehran on February 17-18 with the participation of 300 domestic and foreign experts in the field of oil refining, IRNA reported. Organized by the National Iranian Oil Refining and Distribution Company (NIORDC), the conference is aimed at attracting foreign sponsors for investments on development of Iran's oil refining industry.
The American Petroleum Institute reported a fall of 372,000 barrels in distillate supplies for the week ended Feb. 9. The Energy Department had reported a decline of 3 million barrels. Motor gasoline supplies were down 603,000 barrels, the API said, vs. the government's reported fall of 2 million. Crude supplies were down 3.4 million barrels, the API said, compared with the government's 600,000-barrel decline.
Noble Energy Inc. said it expects to record year-end 2006 reserves of 834.6 million barrels of oil equivalent. The Houston-based energy company said it sees reserve additions from all sources totaling 122.1 MMBoe, or 179% of 2006 production.
April gold climbed $3.50 to close at $672 an ounce Wednesday March silver gained 5 cents to close at $13.965 an ounce. Over the past several months we have been able to
realize a profit of $100 an ounce in gold. I would recommend booking that profit and investing the profit in crude oil at roughly $58 a barrel.
Masco will cut 8,000 jobs by the end of the first quarter, including 1,000 salaried positions, Chief Executive Officer Richard Manoogian said today on a conference call. Fewer purchases at Lowe's Cos. and Home Depot Inc. and the slowdown in new home construction, which accounts for 40 percent of Masco's sales, hurt revenue in the fourth quarter. This does not sound like the worst of the housing decline is behind us.
The price of West Texas Intermediate, the benchmark U.S. crude, may average $69 this year, Goldman economist James Gutman said Feb. 8. Others like Sanford Bernstein predict oil prices will decline. That's what makes for horse racing, as one might say.
March crude fell $1.06 to close at $58 a barrel Wednesday. March natural gas fell 12.6 cents to close at $7.241 per million British thermal units.
Tuesday, February 13, 2007
Events
2/14/07 Events
At the end of trading Monday, Palatin closed at $2.29 per share. Prior to Tuesday's trading this was released: "Palatin Technologies, Inc. announced today that it has priced an underwritten offering of 13.75 million shares of its common stock at $2.00 per share, for $27.5 million in gross proceeds, before commissions and expenses. Palatin expects the net proceeds from the sale of the shares will be approximately $25.5 million. Under the terms of the financing, the underwriter has agreed to purchase the shares from Palatin. All shares of the common stock offered by Palatin are to be issued pursuant to effective shelf registration statements on Form S-3. The closing of the offering is scheduled to occur on or about February 15, 2007 and is subject to customary closing conditions. Pacific Growth Equities, LLC acted as the sole underwriter for this offering."
KB Home swung to a loss of $49.6 million, or 64 cents a share in the fourth quarter driven by previously announced land charges of $343.3 million. In a statement, Chief Executive Jeffrey Mezger said during the second half of 2006, "an oversupply of unsold new and resale homes, reduced affordability, and greater caution among potential homebuyers heightened competition among homebuilders and sellers of existing homes, prompting the aggressive use of price concessions and sales incentives." The result was pressure on profit margins, while results "were further affected by declining land values and the resulting charges we recorded in the fourth quarter to reflect lower land values," the CEO added.
Mills said it has received a definitive offer from Simon and Farallon to acquire the company for $24 a share in cash by means of a tender offer for all outstanding shares of Mills' common stock.
The Commerce Department said the nation's trade gap widened by 5.3% in December to $61.2 billion, exceeding the MarketWatch forecast for an increase to $59.5 billion. The higher-than-expected monthly trade gap is expected to contribute to a downward revision of fourth-quarter growth from an initial projection of 3.5%.
Applebee's is exploring a possible sale or recapitalization.
Barry Ritholtz: "The changes in the GSCI led to a subsequent sell off in the gasoline futures market. After a 5 year run in energy prices, there was a 30% drop in the price of oil after their rebalancing -- and during the 2 months prior to the election. Another lucky coincidence! Another fortuitous coincidence: GS had a blockbuster quarter following the ramp of the markets."
Oil exploration and production costs have climbed 53 percent in the past two years as prices for everything from drilling rigs to labor continue to surge, according to a new price index released Monday.
The Upstream Capital Costs Index, a compilation of nine items central to the oil and gas industry, has been on the rise since 2000, but it spiked sharply beginning in 2005, said Richard Ward, senior director of upstream research for Cambridge Energy Research Associates, which is holding its annual conference in Houston this week. Starting with 100 as the base in 2000, the index rose gradually to 103.9 in 2002, 105.8 in 2003 and 109.5 in 2004. But in 2005 it shot up to 126 and reached 148 by last November.
In the past year, the largest increase came in the cost of leasing offshore drilling rigs, which rose 309.2 percent. Rig contractors are expected to expand their fleets by more than 100 in the next four years, but rates likely won't ease until 2009
Rates for offshore equipment installation vessels, such as heavy-lift cranes that lay undersea pipelines, rose 41 percent in the last year. And rates for engineering and project management staff have grown 23 percent, despite an increase in new design centers in Asia and the Middle East, where labor costs are cheaper.
Coca-Cola Enterprises Inc., the biggest bottler of Coca-Cola Co. beverages, said it will cut about 3,500 jobs as part of a restructuring expected to cost $300 million.
Unit Petroleum Company set new company-records for nearly ever major category: total proved reserves, annual production, and wells drilled and achieved its stated annual goal to replace more than 150% of its production.
Nouriel Roubini points out that Ed Altman argues that the reason behind the very low corporate default rates is not better corporate and economic fundamentals as default rates are well below what fundamentals would predict based on historical data. Rather temporary factors such a surge in liquidity and demand coming from non-traditional lenders (hedge funds and private equity) explains - among other factors - the very low corporate risk spreads and the unprecedented record low default rates. Once these temporary conditions fizzle out - as he expect them to in 2007 - default rates will return to their higher historical averages as predicted by firm and economic fundamentals.
Martin Weiss: "Overall, Latin America's exports to Asia have surged to $47.5 billion, growing by a breakneck pace of 20% per year since 2000. Brazil's trade with China, which was under $20 million in the mid-1970s, has now grown by over one thousand times, to nearly $20 billion. And it's still skyrocketing. With no slowdown in sight. The value of Brazil's iron ore exports have tripled just in the last six years -- from $2.9 billion in 2001 to at least $10 billion this year. And most of that new growth is driven by China."
China's dependency for import oil has risen to 47.0 percent of its annual demand in 2006, an increase of 4.1 percentage points from the previous year, sources with the Ministry of Commerce said on Tuesday.
Last year, China produced 183.68 million tons of crude oil, up 1.7 percent. Its net oil imports amounted to 162.87 million tons, up 19.6 percent. The total net imports included 138.84 million tons of crude oil, up 16.9 percent, and 24.03 million tons of oil products, up 37.9 percent.
Industry observers forecast that in 2007, China's crude oil output will grow only less than two percent, while demand for both crude and oil products will rise six percent or so.
According to the General Administration of Customs, in January China imported 13.69 million tons of crude oil, up 3.5 percent over the same month of last year, and 2.77 million tons of oil products, up 5.7 percent.
The IEA said 2007 global oil demand is expected to rise at almost double the pace from last year on robust demand in China and the Middle East and warned that global consumption may outpace the growth of new oil supplies. This should have been anticipated some time ago but the market price for crude has yet to keep up with reality.
Aon Corp. said on Tuesday that a previously announced restructuring would likely reduce head count by about 3,600 employees.
Rigzone: Baker Hughes' U.S. gas rig count hit a 21-year high of 1,466 in January, and has spent 25 of the last 26 weeks above 1,400 rigs. Despite flat gas prices, the count is likely to hover around 1,370 in 2007, according to Ziff Energy Group, a Calgary-based gas consulting firm.
Leanan on Oil Drum: "Oil and gas production in the North Sea is now expected to be about 10 per cent lower over the next few years than previously thought, according to the leading survey of the state of the industry. The faster than expected decline in production is bad news for Britain’s energy security, increasing the country’s dependence on imported oil and gas, and also for the exchequer."
The Times of London reported that Australia-based mining companies BHP Billiton Ltd. and Rio Tinto PLC are each considering offering to buy Pittsburgh-based Alcoa for $40 billion. Billiton denied the report.
Richard Daughty: "Paul van Eeden writes that to calculate real, inflation-adjusted interest rates, the kind that determine your buying power tomorrow, you combine the two inflations: Monetary inflation and price inflation. Ergo, "Real interest rates should be calculated by subtracting monetary inflation (as calculated by M3, for example) from interest rates. If you did, you would find that real interest rates are negative." Wow! Negative interest rates! Let's see: 4% interest rates minus 11% inflation in the money supply equals (and I can't believe what I am seeing!) a negative 7%! What in the hell are bondholders thinking about, paying these ridiculous prices for bonds in order to lock in these insanely-low interest rates? What in the hell are the central banks thinking about when they create the money to let people borrow money to do that?"
Sony Corp. plans to cut capital expenditures at its semiconductor operations by a “large amount,” a company executive said.
Well Fargo is going to offer its brokerage customers up to 100 free trades, if they keep at least $25,000 in their accounts. Bank of America made a similar offer several months ago.
The full text of an internal European Union document on Iran reveals that officials from the bloc are pessimistic about the chances of stopping Iran from getting enough fissile material for a nuclear bomb.
India's domestic crude oil import requirement may go up to about 85% by 2012 from current level of 70%. At the same time, refining capacity in India is poised to increase by 58% to touch 235 million tonnes in the next 5 years from present level of about 159 million tonnes in view of growing demand of energy and few resources at India`s disposal for harnessing its alternate sources.
As per industry body ASSOCHAM, that present trends indicate that oil will continue to hold an important position as the preferred fuel in the long term.
The chamber is of the view that India’s energy demand would multiply and would rise to the level of 12-13% compared to 7-8% now. It also says that India`s dependence on crude oil will increase as domestic discoveries have not been taking place and at the same time it is unable to harness its alternate sources of energy though it is available in abundance.
April gold climbed $1.20 to close at $668.50 an ounce in New York, but it was below the day's peak of $673.70, which was the contract's highest level since August. March silver ended at $13.915 an ounce, up 1.5%, or 20 cents, for the session. March copper gained 4.3%, or 10.7 cents, to close at $2.5845 a pound.
A winter storm dumped about a foot of snow on the Midwest U.S. as it headed toward the East Coast, impeding travel and prompting advisories in more than 20 states. More than 500 flights have been canceled into and out of Chicago's O'Hare International Airport, a hub for both AMR Corp.'s American Airlines and UAL Corp.'s United Airlines, with some flights delayed as much as two hours from the storm. Snow- covered highways in Illinois, Missouri, Ohio, Iowa and Kansas made conditions hazardous for drivers.``We expect a pretty broad area of heavy snow,'' said Bob Oravec, a meteorologist with the U.S. National Weather Service's Hydrometeorological Prediction Center in Camp Springs, Maryland. By tomorrow, the storm will ``spread out across from the mid- Mississippi Valley into the Midwest and then into part of the northeastern states -- Pennsylvania and upstate New York.''
March crude closed at $59.06 a barrel, gaining $1.25 Tuesday after losing over 3% on Monday. March natural gas tacked on 2%, or 14.1 cents, to end the day at $7.367 per million British thermal units.
At the end of trading Monday, Palatin closed at $2.29 per share. Prior to Tuesday's trading this was released: "Palatin Technologies, Inc. announced today that it has priced an underwritten offering of 13.75 million shares of its common stock at $2.00 per share, for $27.5 million in gross proceeds, before commissions and expenses. Palatin expects the net proceeds from the sale of the shares will be approximately $25.5 million. Under the terms of the financing, the underwriter has agreed to purchase the shares from Palatin. All shares of the common stock offered by Palatin are to be issued pursuant to effective shelf registration statements on Form S-3. The closing of the offering is scheduled to occur on or about February 15, 2007 and is subject to customary closing conditions. Pacific Growth Equities, LLC acted as the sole underwriter for this offering."
KB Home swung to a loss of $49.6 million, or 64 cents a share in the fourth quarter driven by previously announced land charges of $343.3 million. In a statement, Chief Executive Jeffrey Mezger said during the second half of 2006, "an oversupply of unsold new and resale homes, reduced affordability, and greater caution among potential homebuyers heightened competition among homebuilders and sellers of existing homes, prompting the aggressive use of price concessions and sales incentives." The result was pressure on profit margins, while results "were further affected by declining land values and the resulting charges we recorded in the fourth quarter to reflect lower land values," the CEO added.
Mills said it has received a definitive offer from Simon and Farallon to acquire the company for $24 a share in cash by means of a tender offer for all outstanding shares of Mills' common stock.
The Commerce Department said the nation's trade gap widened by 5.3% in December to $61.2 billion, exceeding the MarketWatch forecast for an increase to $59.5 billion. The higher-than-expected monthly trade gap is expected to contribute to a downward revision of fourth-quarter growth from an initial projection of 3.5%.
Applebee's is exploring a possible sale or recapitalization.
Barry Ritholtz: "The changes in the GSCI led to a subsequent sell off in the gasoline futures market. After a 5 year run in energy prices, there was a 30% drop in the price of oil after their rebalancing -- and during the 2 months prior to the election. Another lucky coincidence! Another fortuitous coincidence: GS had a blockbuster quarter following the ramp of the markets."
Oil exploration and production costs have climbed 53 percent in the past two years as prices for everything from drilling rigs to labor continue to surge, according to a new price index released Monday.
The Upstream Capital Costs Index, a compilation of nine items central to the oil and gas industry, has been on the rise since 2000, but it spiked sharply beginning in 2005, said Richard Ward, senior director of upstream research for Cambridge Energy Research Associates, which is holding its annual conference in Houston this week. Starting with 100 as the base in 2000, the index rose gradually to 103.9 in 2002, 105.8 in 2003 and 109.5 in 2004. But in 2005 it shot up to 126 and reached 148 by last November.
In the past year, the largest increase came in the cost of leasing offshore drilling rigs, which rose 309.2 percent. Rig contractors are expected to expand their fleets by more than 100 in the next four years, but rates likely won't ease until 2009
Rates for offshore equipment installation vessels, such as heavy-lift cranes that lay undersea pipelines, rose 41 percent in the last year. And rates for engineering and project management staff have grown 23 percent, despite an increase in new design centers in Asia and the Middle East, where labor costs are cheaper.
Coca-Cola Enterprises Inc., the biggest bottler of Coca-Cola Co. beverages, said it will cut about 3,500 jobs as part of a restructuring expected to cost $300 million.
Unit Petroleum Company set new company-records for nearly ever major category: total proved reserves, annual production, and wells drilled and achieved its stated annual goal to replace more than 150% of its production.
Nouriel Roubini points out that Ed Altman argues that the reason behind the very low corporate default rates is not better corporate and economic fundamentals as default rates are well below what fundamentals would predict based on historical data. Rather temporary factors such a surge in liquidity and demand coming from non-traditional lenders (hedge funds and private equity) explains - among other factors - the very low corporate risk spreads and the unprecedented record low default rates. Once these temporary conditions fizzle out - as he expect them to in 2007 - default rates will return to their higher historical averages as predicted by firm and economic fundamentals.
Martin Weiss: "Overall, Latin America's exports to Asia have surged to $47.5 billion, growing by a breakneck pace of 20% per year since 2000. Brazil's trade with China, which was under $20 million in the mid-1970s, has now grown by over one thousand times, to nearly $20 billion. And it's still skyrocketing. With no slowdown in sight. The value of Brazil's iron ore exports have tripled just in the last six years -- from $2.9 billion in 2001 to at least $10 billion this year. And most of that new growth is driven by China."
China's dependency for import oil has risen to 47.0 percent of its annual demand in 2006, an increase of 4.1 percentage points from the previous year, sources with the Ministry of Commerce said on Tuesday.
Last year, China produced 183.68 million tons of crude oil, up 1.7 percent. Its net oil imports amounted to 162.87 million tons, up 19.6 percent. The total net imports included 138.84 million tons of crude oil, up 16.9 percent, and 24.03 million tons of oil products, up 37.9 percent.
Industry observers forecast that in 2007, China's crude oil output will grow only less than two percent, while demand for both crude and oil products will rise six percent or so.
According to the General Administration of Customs, in January China imported 13.69 million tons of crude oil, up 3.5 percent over the same month of last year, and 2.77 million tons of oil products, up 5.7 percent.
The IEA said 2007 global oil demand is expected to rise at almost double the pace from last year on robust demand in China and the Middle East and warned that global consumption may outpace the growth of new oil supplies. This should have been anticipated some time ago but the market price for crude has yet to keep up with reality.
Aon Corp. said on Tuesday that a previously announced restructuring would likely reduce head count by about 3,600 employees.
Rigzone: Baker Hughes' U.S. gas rig count hit a 21-year high of 1,466 in January, and has spent 25 of the last 26 weeks above 1,400 rigs. Despite flat gas prices, the count is likely to hover around 1,370 in 2007, according to Ziff Energy Group, a Calgary-based gas consulting firm.
Leanan on Oil Drum: "Oil and gas production in the North Sea is now expected to be about 10 per cent lower over the next few years than previously thought, according to the leading survey of the state of the industry. The faster than expected decline in production is bad news for Britain’s energy security, increasing the country’s dependence on imported oil and gas, and also for the exchequer."
The Times of London reported that Australia-based mining companies BHP Billiton Ltd. and Rio Tinto PLC are each considering offering to buy Pittsburgh-based Alcoa for $40 billion. Billiton denied the report.
Richard Daughty: "Paul van Eeden writes that to calculate real, inflation-adjusted interest rates, the kind that determine your buying power tomorrow, you combine the two inflations: Monetary inflation and price inflation. Ergo, "Real interest rates should be calculated by subtracting monetary inflation (as calculated by M3, for example) from interest rates. If you did, you would find that real interest rates are negative." Wow! Negative interest rates! Let's see: 4% interest rates minus 11% inflation in the money supply equals (and I can't believe what I am seeing!) a negative 7%! What in the hell are bondholders thinking about, paying these ridiculous prices for bonds in order to lock in these insanely-low interest rates? What in the hell are the central banks thinking about when they create the money to let people borrow money to do that?"
Sony Corp. plans to cut capital expenditures at its semiconductor operations by a “large amount,” a company executive said.
Well Fargo is going to offer its brokerage customers up to 100 free trades, if they keep at least $25,000 in their accounts. Bank of America made a similar offer several months ago.
The full text of an internal European Union document on Iran reveals that officials from the bloc are pessimistic about the chances of stopping Iran from getting enough fissile material for a nuclear bomb.
India's domestic crude oil import requirement may go up to about 85% by 2012 from current level of 70%. At the same time, refining capacity in India is poised to increase by 58% to touch 235 million tonnes in the next 5 years from present level of about 159 million tonnes in view of growing demand of energy and few resources at India`s disposal for harnessing its alternate sources.
As per industry body ASSOCHAM, that present trends indicate that oil will continue to hold an important position as the preferred fuel in the long term.
The chamber is of the view that India’s energy demand would multiply and would rise to the level of 12-13% compared to 7-8% now. It also says that India`s dependence on crude oil will increase as domestic discoveries have not been taking place and at the same time it is unable to harness its alternate sources of energy though it is available in abundance.
April gold climbed $1.20 to close at $668.50 an ounce in New York, but it was below the day's peak of $673.70, which was the contract's highest level since August. March silver ended at $13.915 an ounce, up 1.5%, or 20 cents, for the session. March copper gained 4.3%, or 10.7 cents, to close at $2.5845 a pound.
A winter storm dumped about a foot of snow on the Midwest U.S. as it headed toward the East Coast, impeding travel and prompting advisories in more than 20 states. More than 500 flights have been canceled into and out of Chicago's O'Hare International Airport, a hub for both AMR Corp.'s American Airlines and UAL Corp.'s United Airlines, with some flights delayed as much as two hours from the storm. Snow- covered highways in Illinois, Missouri, Ohio, Iowa and Kansas made conditions hazardous for drivers.``We expect a pretty broad area of heavy snow,'' said Bob Oravec, a meteorologist with the U.S. National Weather Service's Hydrometeorological Prediction Center in Camp Springs, Maryland. By tomorrow, the storm will ``spread out across from the mid- Mississippi Valley into the Midwest and then into part of the northeastern states -- Pennsylvania and upstate New York.''
March crude closed at $59.06 a barrel, gaining $1.25 Tuesday after losing over 3% on Monday. March natural gas tacked on 2%, or 14.1 cents, to end the day at $7.367 per million British thermal units.
Monday, February 12, 2007
Thoughts
2/13/07 Thoughts
Art Smith, head of John S. Herold research: "I'm in the camp that says we could easily have $80 oil this year."
Ali al-Naimi, Saudi Arabia's oil minister: "If you are asking me are we (OPEC) going to take additional cuts or increase supply, I do not know," the Wall Street Journal quoted Naimi as saying in an interview. "Most probably, if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change."
Warren Buffett: "I think people would be better off if they only had 10 opportunities to buy stocks throughout their lifetime. You know what would happen? They would make sure that each buy was a good one. They would do lots and lots of research before they made the buy. You don¡¯t have to have many 4X growth opportunities to get rich. You don¡¯t need to do too much, but the environment makes you feel like you need to do something all the time...Rationality is the only thing that helps you. One thing that could help would be to write down the reason you are buying a stock before your purchase."
Adeza Biomedical Corp. has agreed to be bought by Cytyc Corp. for $24 a share, or approximately $450 million.
China¡¯s trade surplus reached $15.9bn in January, up from $9.6bn year-on-year, driven by a rise of 33 per cent in the value of exports. China¡¯s trade surplus, according to its own figures, nearly doubled in 2006, to $177bn, and is expected to top $200bn this year, despite recent statements from top leaders that China¡¯s trade should be ¡°basically balanced.¡±
Warren Buffett: "When we invest we ask one question, how long do you have to wait to raise the prices?"
Nawaf Obaid on Nov 9th 2006 in a PowerPoint presentation to the Center for Strategic and International Studies (CSIS) in Washington D.C.:
Slide 3: Saudi Arabia has a production capacity of 11.1 - 11.3 mb/d; exports 8 mb/d; and produces between 8.6 - 9.0 mb/d and 1 - 1.3 mb/d of natural gas liquids.
Slide 6: March 2006 - Aug 2009 estimated sustainable oil production capacity will increase by a net of 1.55 Mb/d. Depletion rate used works out at about 1.8% per annum.
11,000,000 b/d Estimated sustainable capacity in March 2006
+ 2,350,000 b/d Estimated increase in capacity 2006-09
- 800,000 b/d Estimated natural production decline 2005-09
¡Ã– 12,550,000 b/d Estimated sustainable capacity in August 2009
Slide 9: Aug 2009 - 2011 estimated sustainable oil production capacity will increase by a net of 0.9 Mb/d. Depletion rate used works out at about 2.8% per annum over two years.
12,550,000 b/d Estimated sustainable capacity in August 2009
+ 1,400,000 b/d Estimated increase in capacity 2009 - 2011
- 500,000 b/d Estimated natural production decline 2009 - 2011
¡Ã– 13,450,000 b/d Estimated sustainable capacity by 2011
In summary:
Net new capacity to 2009: 1.55 Mb/d
Net new capacity 2009-2011: 0.9 Mb/d
These charts were provided by the Oil Depletion Analysis Centre.
Therefore, the net new capacity offered by Saudi Arabia in the next few years has been grossly overstated.
Toyota Motor Corp. plans to build a new plant by 2010 in southern Indian concentrating on inexpensive, smaller model cars, the Nikkei business daily reported on Monday.
The new plant, which would be built close to the company's first plant in the country near Bangalore, would aim at producing 100,000 cars a year, roughly doubling the firm's output capacity in India.
There is a definitive agreement to take Four Seasons private at $82 a share by Bill Gates and Saudi Prince Alwaleed Bin Talal for $3.8 billion including debt.
SXR Uranium One Inc. agreed to buy UrAsia Energy Ltd. for $3.1 billion, to form the world's second- largest uranium producer as rising demand for nuclear fuel drives prices to records. SXR, owner of South Africa's largest undeveloped uranium deposit, offered C$7.05 ($6.01) a share in stock for Vancouver- based UrAsia, which owns uranium mines in Central Asia.
WCI Communities retained Goldman Sachs to assist it in identifying ways to increase shareholder value. The company said that it expects to generate $1 billion in free cash flow in 2007, and will look at asset sales to help reduce debt. Once the balance sheet is improved, the company will review strategic alternatives.
Tenaris SA, the world's largest maker of seamless steel oil and gas pipes, agreed to buy Hydril for as much as $2.2 billion to gain valves, meters and related equipment used in deepwater drilling and nature reserves. Tenaris, based in Luxembourg, will pay $97 a share in cash for the ordinary and B-class stock of Houston-based Hydril, 17 percent more than the closing price on Feb. 9.
Jim Cramer: " What do Hydril, Hanover Compressor and Universal Compression have in common? Two things. First, they're all in the compression services business for oil and gas. Second, they're all involved in mergers; UC and Hanover are getting together, and today Tenaris, an oil and drilling giant from Europe, buys Hydril. These deals are extraordinary for two reasons: nobody on Wall Street gives a darn about them and the companies are very oriented to natural gas, the pariah part of the energy business (witness the pronounced underperformance of nat gas-linked Nabors and Halliburton). When you consider that General Electric also made an acquisition in this sector a month ago, you would think that there's some froth in these oil and gas suppliers. Just the opposite."
The Wall Street Journal's ad sales rose 5.7 percent on a 7.5 percent increase in advertising volume. Increases in financial and general advertising volume were partially offset by decreases in technology and classified advertising volume. Classified advertising in the Journal fell 1 percent because of fewer real estate ads.
Lamson & Sessions said Monday its board hired Perella Weinberg Partners as financial adviser to explore "a range of strategic and financial alternatives" for the company.
Snow, rain and sleet will move into the Eastern Seaboard tomorrow and become heaviest the following day, according to Casey Crosbie, a meteorologist at the National Storm Prediction Center in Norman, Oklahoma. Travel in Washington and Philadelphia is likely to be impaired because of slippery conditions from freezing rain and sleet, he said.
BJ Process and Pipeline Services announced that it has opened a new base of operations in Doha, Qatar. The base joins BJ PPS facilities throughout the Middle East in Dubai, United Arab Emirates and Damman, Saudi Arabia. It will serve as the centre of operations for all BJ PPS activities in Qatar. "By providing greater support and resources to our clients operating in Qatar, we are firmly focused on achieving consistent, solid growth in this vibrant country," said Lindsay Link, general manager of BJ PPS.
April gold fell $5 to close at $667.30 an ounce Monday. March silver lost 1.4%, or 20 cents, to end the day at $13.715 an ounce and March copper fell by 4.05 cents to close at $2.477 a pound.
Subprime loans that have gone bad are at the highest level in at least six years, according to a Friedman, Billings, Ramsey Group report. The U.S. Mortgage Bankers Association said payments were late on almost 13 percent of subprime loans in the third quarter of 2006.
John Hussman: "With regard to present stock market conditions, it would take a correction of only about 10% in the S&P 500 to put the market behind Treasury bills for the most recent 3-year period."
March crude fell 3.5%, or $2.08, to close at $57.81 a barrel Monday. March natural gas dropped 60.1 cents to close at a two-week low of $7.226 per million British thermal units.
Art Smith, head of John S. Herold research: "I'm in the camp that says we could easily have $80 oil this year."
Ali al-Naimi, Saudi Arabia's oil minister: "If you are asking me are we (OPEC) going to take additional cuts or increase supply, I do not know," the Wall Street Journal quoted Naimi as saying in an interview. "Most probably, if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change."
Warren Buffett: "I think people would be better off if they only had 10 opportunities to buy stocks throughout their lifetime. You know what would happen? They would make sure that each buy was a good one. They would do lots and lots of research before they made the buy. You don¡¯t have to have many 4X growth opportunities to get rich. You don¡¯t need to do too much, but the environment makes you feel like you need to do something all the time...Rationality is the only thing that helps you. One thing that could help would be to write down the reason you are buying a stock before your purchase."
Adeza Biomedical Corp. has agreed to be bought by Cytyc Corp. for $24 a share, or approximately $450 million.
China¡¯s trade surplus reached $15.9bn in January, up from $9.6bn year-on-year, driven by a rise of 33 per cent in the value of exports. China¡¯s trade surplus, according to its own figures, nearly doubled in 2006, to $177bn, and is expected to top $200bn this year, despite recent statements from top leaders that China¡¯s trade should be ¡°basically balanced.¡±
Warren Buffett: "When we invest we ask one question, how long do you have to wait to raise the prices?"
Nawaf Obaid on Nov 9th 2006 in a PowerPoint presentation to the Center for Strategic and International Studies (CSIS) in Washington D.C.:
Slide 3: Saudi Arabia has a production capacity of 11.1 - 11.3 mb/d; exports 8 mb/d; and produces between 8.6 - 9.0 mb/d and 1 - 1.3 mb/d of natural gas liquids.
Slide 6: March 2006 - Aug 2009 estimated sustainable oil production capacity will increase by a net of 1.55 Mb/d. Depletion rate used works out at about 1.8% per annum.
11,000,000 b/d Estimated sustainable capacity in March 2006
+ 2,350,000 b/d Estimated increase in capacity 2006-09
- 800,000 b/d Estimated natural production decline 2005-09
¡Ã– 12,550,000 b/d Estimated sustainable capacity in August 2009
Slide 9: Aug 2009 - 2011 estimated sustainable oil production capacity will increase by a net of 0.9 Mb/d. Depletion rate used works out at about 2.8% per annum over two years.
12,550,000 b/d Estimated sustainable capacity in August 2009
+ 1,400,000 b/d Estimated increase in capacity 2009 - 2011
- 500,000 b/d Estimated natural production decline 2009 - 2011
¡Ã– 13,450,000 b/d Estimated sustainable capacity by 2011
In summary:
Net new capacity to 2009: 1.55 Mb/d
Net new capacity 2009-2011: 0.9 Mb/d
These charts were provided by the Oil Depletion Analysis Centre.
Therefore, the net new capacity offered by Saudi Arabia in the next few years has been grossly overstated.
Toyota Motor Corp. plans to build a new plant by 2010 in southern Indian concentrating on inexpensive, smaller model cars, the Nikkei business daily reported on Monday.
The new plant, which would be built close to the company's first plant in the country near Bangalore, would aim at producing 100,000 cars a year, roughly doubling the firm's output capacity in India.
There is a definitive agreement to take Four Seasons private at $82 a share by Bill Gates and Saudi Prince Alwaleed Bin Talal for $3.8 billion including debt.
SXR Uranium One Inc. agreed to buy UrAsia Energy Ltd. for $3.1 billion, to form the world's second- largest uranium producer as rising demand for nuclear fuel drives prices to records. SXR, owner of South Africa's largest undeveloped uranium deposit, offered C$7.05 ($6.01) a share in stock for Vancouver- based UrAsia, which owns uranium mines in Central Asia.
WCI Communities retained Goldman Sachs to assist it in identifying ways to increase shareholder value. The company said that it expects to generate $1 billion in free cash flow in 2007, and will look at asset sales to help reduce debt. Once the balance sheet is improved, the company will review strategic alternatives.
Tenaris SA, the world's largest maker of seamless steel oil and gas pipes, agreed to buy Hydril for as much as $2.2 billion to gain valves, meters and related equipment used in deepwater drilling and nature reserves. Tenaris, based in Luxembourg, will pay $97 a share in cash for the ordinary and B-class stock of Houston-based Hydril, 17 percent more than the closing price on Feb. 9.
Jim Cramer: " What do Hydril, Hanover Compressor and Universal Compression have in common? Two things. First, they're all in the compression services business for oil and gas. Second, they're all involved in mergers; UC and Hanover are getting together, and today Tenaris, an oil and drilling giant from Europe, buys Hydril. These deals are extraordinary for two reasons: nobody on Wall Street gives a darn about them and the companies are very oriented to natural gas, the pariah part of the energy business (witness the pronounced underperformance of nat gas-linked Nabors and Halliburton). When you consider that General Electric also made an acquisition in this sector a month ago, you would think that there's some froth in these oil and gas suppliers. Just the opposite."
The Wall Street Journal's ad sales rose 5.7 percent on a 7.5 percent increase in advertising volume. Increases in financial and general advertising volume were partially offset by decreases in technology and classified advertising volume. Classified advertising in the Journal fell 1 percent because of fewer real estate ads.
Lamson & Sessions said Monday its board hired Perella Weinberg Partners as financial adviser to explore "a range of strategic and financial alternatives" for the company.
Snow, rain and sleet will move into the Eastern Seaboard tomorrow and become heaviest the following day, according to Casey Crosbie, a meteorologist at the National Storm Prediction Center in Norman, Oklahoma. Travel in Washington and Philadelphia is likely to be impaired because of slippery conditions from freezing rain and sleet, he said.
BJ Process and Pipeline Services announced that it has opened a new base of operations in Doha, Qatar. The base joins BJ PPS facilities throughout the Middle East in Dubai, United Arab Emirates and Damman, Saudi Arabia. It will serve as the centre of operations for all BJ PPS activities in Qatar. "By providing greater support and resources to our clients operating in Qatar, we are firmly focused on achieving consistent, solid growth in this vibrant country," said Lindsay Link, general manager of BJ PPS.
April gold fell $5 to close at $667.30 an ounce Monday. March silver lost 1.4%, or 20 cents, to end the day at $13.715 an ounce and March copper fell by 4.05 cents to close at $2.477 a pound.
Subprime loans that have gone bad are at the highest level in at least six years, according to a Friedman, Billings, Ramsey Group report. The U.S. Mortgage Bankers Association said payments were late on almost 13 percent of subprime loans in the third quarter of 2006.
John Hussman: "With regard to present stock market conditions, it would take a correction of only about 10% in the S&P 500 to put the market behind Treasury bills for the most recent 3-year period."
March crude fell 3.5%, or $2.08, to close at $57.81 a barrel Monday. March natural gas dropped 60.1 cents to close at a two-week low of $7.226 per million British thermal units.
Saturday, February 10, 2007
The Real Deal
2/12/07 The Real Deal
Molly Ivins: "We are the people who run this country. We are the deciders. And every single day, every single one of us needs to step outside and take some action to help stop this war. Raise hell. Think of something to make the ridiculous look ridiculous. Make our troops know we're for them and trying to get them out of there. Hit the streets to protest Bush's proposed surge."
Bush's proposed federal budget includes a cut of approximately $145 million for the Corporation for Public Broadcasting (CPB). That amounts to a cut of 25%.
"The trend towards private equity firms teaming up with management to 'steal' companies from their owners is alarming and we urge you to take a stand to ensure this does not happen at Lear," the chief investment officers of its second-largest shareholder, Pzena Investment Management, wrote to its board of directors this week.
"It makes no sense to me," Richard S. Pzena, one of the authors, told the Free Press on Friday. "I can understand why Carl Icahn wants to buy it at this price. And I also understand why the management wants to go along with it, because he's hiring them, and he's going to pay them a lot of money."
Babu Mandava and Prof Arogyaswami Paulraj founded company Beceem Communications, leader for Mobile WiMAX chipsets, announced a $40 million Series D-round of funding.
Teachers' Private Capital started the round and was later joined by NEC Corporation, a new investor in Beceem, adding to the company's list of strategic investors.
The funding will be used to accelerate the company's existing roadmap toward achieving robust growth in the WiMax market by investing in new product initiatives and strengthening Beceem's development capabilities for next-generation mobile broadband solutions.
The additional funding will also allow Beceem to continue to increase critical resources in support of its growing number of customer engagements.
All of Beceem's existing financial and strategic investors participated in the financing. The list of both new and existing investors in the Series D-round included: Global Catalyst Partners, Intel Capital, Khosla Ventures, KTB Ventures, Mitsui & Co. Technology Investment Group, NEC Corporation, DoCoMo Capital, Samsung Ventures, Sequoia Capital, Teachers' Private Capital, and Walden International.
Obama: "It is time to start bringing our troops home...Proposes troop withdrawal by March, 2008...touts universal health care by 2012.. "The ways of Washington must change." If this is his message, in my view, his run for the presidency is dead on arrival.
Hindalco Industries Ltd., the Mumbai aluminum and copper company, definitively agreed to pay $44.93 a share for Novelis Inc., the world's No. 1 producer of aluminum rolled products, the companies said. In a statement, they valued the deal at $6 billion, including $2.4 billion of debt. Novelis's U.S. shares closed Friday at $38.54; they had soared 24% two weeks ago when Novelis said it was in talks with potential buyers.
"We are witnessing an almost uncontained hyper-use of military force in international relations," Putin said. "One country, the United States, has overstepped its national borders in every way."
Oil Drum's Leanan: "The IEA has decided that non-OPEC output will in fact be some 1.1 million barrels short of what it was previously predicting in 2007. That is a 50% reduction from its previous 2.2 million barrel increase. Now, you might think this is not such a big deal being that we consume around 84.5 million barrels per day. But the IEA only made this forecast last July. It is not like the IEA do not have access to reams of information most mere mortals would love to get their hands on, they have loads of it.
But in 2005 they also predicted a near 2 million barrel increase in non-OPEC output. Then over the course of the year they consistently revised the figure, downwards of course. By the end of 2005 they had decided that rather than 2 million barrels extra per day there was in fact, well, no barrels extra per day."
Robert McHugh: "We've been researching and discovering that almost all the major stock market tops of the past century were marked by a Broadening Top pattern. This pattern, also know as a Megaphone, which also looks like a set of jaws, is uniquely characterized by two mirroring boundary lines. The top boundary line is ascending; the bottom boundary line is descending. What is amazing is that each boundary line has the same slope, one rising, the other falling. We found another one this week: 1965-66's pattern. Pure coincidence, however the 1966 top occurred exactly 21 years ago to the day, February 9th...These patterns were found in 1929, 1957, 1965-66, 1972-73, 1986, 1987, 1998-2000, and now 2004-2007. These were the big-boy tops of the past century. The Jaws of Death pattern. And, the punch line? We have the exact same pattern as these 7 other occurrences right now in the Dow Industrials."
Millions of dollars worth of oil is stolen daily in Iraq because of the absence of oil meters, a basic tool for preventing corruption, according to estimates by classified CIA and State Department reports, the Iraq Study Group Report, a former consultant to a U.S. oil company, and a former State Department advisor to Iraq's Oil Ministry. The annual thefts run into the billions of dollars and help fuel insurgents, sectarian militias, and corrupt officials as well as deprive the Iraqis of much needed money to run their struggling government according the findings of a six-month CBS 11 News investigation. "I would say probably between 200,000 and 500,000 barrels a day are probably unaccounted for in Iraq," says Mikel Morris who worked for the State Department's Iraq Reconstruction Management Organization (IRMO) in Baghdad.
China reports no agreement at the North Korean nuclear talks in Beijing.
A spokesman for the Chinese Foreign Ministry says, after a third day of talks, there are, quote "still fairly big differences among the different parties."
An AP-Ipsos poll found that three-fourths of people surveyed oppose replacing the dollar bill, featuring George Washington, with a dollar coin. People are split evenly on the idea of having both a dollar bill and a dollar coin.
A new version of the coin, paying tribute to American presidents, goes into general circulation Thursday.
Molly Ivins: "We are the people who run this country. We are the deciders. And every single day, every single one of us needs to step outside and take some action to help stop this war. Raise hell. Think of something to make the ridiculous look ridiculous. Make our troops know we're for them and trying to get them out of there. Hit the streets to protest Bush's proposed surge."
Bush's proposed federal budget includes a cut of approximately $145 million for the Corporation for Public Broadcasting (CPB). That amounts to a cut of 25%.
"The trend towards private equity firms teaming up with management to 'steal' companies from their owners is alarming and we urge you to take a stand to ensure this does not happen at Lear," the chief investment officers of its second-largest shareholder, Pzena Investment Management, wrote to its board of directors this week.
"It makes no sense to me," Richard S. Pzena, one of the authors, told the Free Press on Friday. "I can understand why Carl Icahn wants to buy it at this price. And I also understand why the management wants to go along with it, because he's hiring them, and he's going to pay them a lot of money."
Babu Mandava and Prof Arogyaswami Paulraj founded company Beceem Communications, leader for Mobile WiMAX chipsets, announced a $40 million Series D-round of funding.
Teachers' Private Capital started the round and was later joined by NEC Corporation, a new investor in Beceem, adding to the company's list of strategic investors.
The funding will be used to accelerate the company's existing roadmap toward achieving robust growth in the WiMax market by investing in new product initiatives and strengthening Beceem's development capabilities for next-generation mobile broadband solutions.
The additional funding will also allow Beceem to continue to increase critical resources in support of its growing number of customer engagements.
All of Beceem's existing financial and strategic investors participated in the financing. The list of both new and existing investors in the Series D-round included: Global Catalyst Partners, Intel Capital, Khosla Ventures, KTB Ventures, Mitsui & Co. Technology Investment Group, NEC Corporation, DoCoMo Capital, Samsung Ventures, Sequoia Capital, Teachers' Private Capital, and Walden International.
Obama: "It is time to start bringing our troops home...Proposes troop withdrawal by March, 2008...touts universal health care by 2012.. "The ways of Washington must change." If this is his message, in my view, his run for the presidency is dead on arrival.
Hindalco Industries Ltd., the Mumbai aluminum and copper company, definitively agreed to pay $44.93 a share for Novelis Inc., the world's No. 1 producer of aluminum rolled products, the companies said. In a statement, they valued the deal at $6 billion, including $2.4 billion of debt. Novelis's U.S. shares closed Friday at $38.54; they had soared 24% two weeks ago when Novelis said it was in talks with potential buyers.
"We are witnessing an almost uncontained hyper-use of military force in international relations," Putin said. "One country, the United States, has overstepped its national borders in every way."
Oil Drum's Leanan: "The IEA has decided that non-OPEC output will in fact be some 1.1 million barrels short of what it was previously predicting in 2007. That is a 50% reduction from its previous 2.2 million barrel increase. Now, you might think this is not such a big deal being that we consume around 84.5 million barrels per day. But the IEA only made this forecast last July. It is not like the IEA do not have access to reams of information most mere mortals would love to get their hands on, they have loads of it.
But in 2005 they also predicted a near 2 million barrel increase in non-OPEC output. Then over the course of the year they consistently revised the figure, downwards of course. By the end of 2005 they had decided that rather than 2 million barrels extra per day there was in fact, well, no barrels extra per day."
Robert McHugh: "We've been researching and discovering that almost all the major stock market tops of the past century were marked by a Broadening Top pattern. This pattern, also know as a Megaphone, which also looks like a set of jaws, is uniquely characterized by two mirroring boundary lines. The top boundary line is ascending; the bottom boundary line is descending. What is amazing is that each boundary line has the same slope, one rising, the other falling. We found another one this week: 1965-66's pattern. Pure coincidence, however the 1966 top occurred exactly 21 years ago to the day, February 9th...These patterns were found in 1929, 1957, 1965-66, 1972-73, 1986, 1987, 1998-2000, and now 2004-2007. These were the big-boy tops of the past century. The Jaws of Death pattern. And, the punch line? We have the exact same pattern as these 7 other occurrences right now in the Dow Industrials."
Millions of dollars worth of oil is stolen daily in Iraq because of the absence of oil meters, a basic tool for preventing corruption, according to estimates by classified CIA and State Department reports, the Iraq Study Group Report, a former consultant to a U.S. oil company, and a former State Department advisor to Iraq's Oil Ministry. The annual thefts run into the billions of dollars and help fuel insurgents, sectarian militias, and corrupt officials as well as deprive the Iraqis of much needed money to run their struggling government according the findings of a six-month CBS 11 News investigation. "I would say probably between 200,000 and 500,000 barrels a day are probably unaccounted for in Iraq," says Mikel Morris who worked for the State Department's Iraq Reconstruction Management Organization (IRMO) in Baghdad.
China reports no agreement at the North Korean nuclear talks in Beijing.
A spokesman for the Chinese Foreign Ministry says, after a third day of talks, there are, quote "still fairly big differences among the different parties."
An AP-Ipsos poll found that three-fourths of people surveyed oppose replacing the dollar bill, featuring George Washington, with a dollar coin. People are split evenly on the idea of having both a dollar bill and a dollar coin.
A new version of the coin, paying tribute to American presidents, goes into general circulation Thursday.
Research
2/11/07
From the latest BJ Services 10Q: "Warmer than normal winter weather conditions and the declining natural gas prices has caused our North America operations to have lower than earlier forecasted results. Despite this, we expect our Canada Pressure Pumping operations to improve in the second fiscal quarter of 2007 and expect modest improvement in our U.S./Mexico and International Pressure Pumping businesses during the second quarter of fiscal 2007...Operating income from our International Pressure Pumping operations increased 57% for the three months ended December 31, 2006, when compared to the same period in the prior fiscal year...During the latest quarter, year over year, revenue for tubular services rose 46%, process and pipeline services 19%, chemical services 60%, completion tools 22%, and completion fluids 3%...Operating income margin for the Oilfield Services Group during the first quarter of fiscal 2007 remained at 18%, consistent with that seen in the first three months of fiscal 2006...While revenue increased 29% for the three months ended December 31, 2006 compared to the same period in the prior fiscal year, operating income increased 44%." Since mid-Jan. it is no secret that the weather has turned significantly colder across the U.S. and the degree days have risen sharply over this period. It is not a surprise that natural gas has risen from roughly $6 to $8 during this period. In addition, we have seen crude prices rise from $50 to $60. At the same time, there has been little benefit to the oil and gas stocks as a group. BJ Services is no exception. In my view, you buy straw hats in the winter. That would apply to BJ Services. They can pay me now or they can pay me later. I'm patient.
The Organization of the Petroleum Exporting Countries saw 10 of its 11 members produce an average of 26.95 million barrels per day in January, down 50,000 b/d from December, Platts reported on Friday. "Firm prices near $60 mean the group's current production levels are not excessive relative to demand," said John Kingston, global director of oil for Platts.
Shares in Fortress, the private equity and hedge fund manager, soared on their New York debut, nearly doubling in early trading before closing up almost 70 per cent.
Doug Noland: "The bottom line is that the markets are now likely facing a bout of heightened uncertainty. The Credit default swap, CDO, and “credit arbitrage” markets have grown tremendously since the last bout of liquidity ambiguity. How these markets will operate in the event of some general financial sector tumult is all too unclear. That the “liquidity” markets are these days extraordinarily bifurcated between the loose corporate and “prime” mortgage arena and the increasingly tight “non-prime” creates significant uncertainty."
Bloomberg reported that David Walker, the head of the nonpartisan Government Accountability Office, said that while the federal government may balance its books within the next several years, that will do little to improve a long-term budget outlook he likened to ``fiscal cancer.''
Mike Burk: "On Thursday last week the S&P mid cap index (MID) completed a run of 10 consecutive up days, an occurrence seen only twice in the past 15 years...The market is still overbought, however, some of that overbought condition was relieved Friday and seasonality next week is positive. I expect the major indices to be higher on Friday February 16 than they were on Friday February 9."
Marsoft: "After posting spectacular increases in the third quarter of 2006, the dry bulk market continued to make impressive gains in the fourth quarter. By the end of the year, Cape spot rates had doubled relative to their mid-2006 levels, while rates for other bulkers were up by 50-80%. As the new year got underway, most dry bulk indicators remained robust, holding on to their late 2006 gains."
"Bush plans to eliminate the national deficit by 2012, which is fantastic," said Addison Wiggin. "But he only projects to cut the current deficit by 3.7% by the end of his presidency. I guess the other 96.3% will be up to his successor."
Rigzone: "Canada's oil companies are preparing themselves for possible tax increases and environmental controls from a Conservative government under pressure to enforce tougher policies on the industry."
BJ Tubular Services has been awarded a contract by Enventure Global Technology to provide casing make-up services for Enventure’s Solid Expandable Tubular (SET®) liners for approximately 30 wells in India.
The operation will be carried out in various wells and rigs in the Mumbai High Field offshore India. BJ will run depths ranging from 800 to 1,200-ft of Enventure’s openhole SET systems into each of the wells. BJ will provide services from its base in Mumbai, supporting Enventure’s three-year, multi-million dollar contract with a major Indian operator.
Panelists surveyed in the Blue Chip Economic Indicators newsletter said real gross domestic product, the government's broadest measure of economic output, would likely increase by 2.7 percent this year from last year.
From the latest BJ Services 10Q: "Warmer than normal winter weather conditions and the declining natural gas prices has caused our North America operations to have lower than earlier forecasted results. Despite this, we expect our Canada Pressure Pumping operations to improve in the second fiscal quarter of 2007 and expect modest improvement in our U.S./Mexico and International Pressure Pumping businesses during the second quarter of fiscal 2007...Operating income from our International Pressure Pumping operations increased 57% for the three months ended December 31, 2006, when compared to the same period in the prior fiscal year...During the latest quarter, year over year, revenue for tubular services rose 46%, process and pipeline services 19%, chemical services 60%, completion tools 22%, and completion fluids 3%...Operating income margin for the Oilfield Services Group during the first quarter of fiscal 2007 remained at 18%, consistent with that seen in the first three months of fiscal 2006...While revenue increased 29% for the three months ended December 31, 2006 compared to the same period in the prior fiscal year, operating income increased 44%." Since mid-Jan. it is no secret that the weather has turned significantly colder across the U.S. and the degree days have risen sharply over this period. It is not a surprise that natural gas has risen from roughly $6 to $8 during this period. In addition, we have seen crude prices rise from $50 to $60. At the same time, there has been little benefit to the oil and gas stocks as a group. BJ Services is no exception. In my view, you buy straw hats in the winter. That would apply to BJ Services. They can pay me now or they can pay me later. I'm patient.
The Organization of the Petroleum Exporting Countries saw 10 of its 11 members produce an average of 26.95 million barrels per day in January, down 50,000 b/d from December, Platts reported on Friday. "Firm prices near $60 mean the group's current production levels are not excessive relative to demand," said John Kingston, global director of oil for Platts.
Shares in Fortress, the private equity and hedge fund manager, soared on their New York debut, nearly doubling in early trading before closing up almost 70 per cent.
Doug Noland: "The bottom line is that the markets are now likely facing a bout of heightened uncertainty. The Credit default swap, CDO, and “credit arbitrage” markets have grown tremendously since the last bout of liquidity ambiguity. How these markets will operate in the event of some general financial sector tumult is all too unclear. That the “liquidity” markets are these days extraordinarily bifurcated between the loose corporate and “prime” mortgage arena and the increasingly tight “non-prime” creates significant uncertainty."
Bloomberg reported that David Walker, the head of the nonpartisan Government Accountability Office, said that while the federal government may balance its books within the next several years, that will do little to improve a long-term budget outlook he likened to ``fiscal cancer.''
Mike Burk: "On Thursday last week the S&P mid cap index (MID) completed a run of 10 consecutive up days, an occurrence seen only twice in the past 15 years...The market is still overbought, however, some of that overbought condition was relieved Friday and seasonality next week is positive. I expect the major indices to be higher on Friday February 16 than they were on Friday February 9."
Marsoft: "After posting spectacular increases in the third quarter of 2006, the dry bulk market continued to make impressive gains in the fourth quarter. By the end of the year, Cape spot rates had doubled relative to their mid-2006 levels, while rates for other bulkers were up by 50-80%. As the new year got underway, most dry bulk indicators remained robust, holding on to their late 2006 gains."
"Bush plans to eliminate the national deficit by 2012, which is fantastic," said Addison Wiggin. "But he only projects to cut the current deficit by 3.7% by the end of his presidency. I guess the other 96.3% will be up to his successor."
Rigzone: "Canada's oil companies are preparing themselves for possible tax increases and environmental controls from a Conservative government under pressure to enforce tougher policies on the industry."
BJ Tubular Services has been awarded a contract by Enventure Global Technology to provide casing make-up services for Enventure’s Solid Expandable Tubular (SET®) liners for approximately 30 wells in India.
The operation will be carried out in various wells and rigs in the Mumbai High Field offshore India. BJ will run depths ranging from 800 to 1,200-ft of Enventure’s openhole SET systems into each of the wells. BJ will provide services from its base in Mumbai, supporting Enventure’s three-year, multi-million dollar contract with a major Indian operator.
Panelists surveyed in the Blue Chip Economic Indicators newsletter said real gross domestic product, the government's broadest measure of economic output, would likely increase by 2.7 percent this year from last year.
Friday, February 09, 2007
Inappropriate
2/10/07 Inappropriate
From Bloomberg: U.S. Defense Department officials acted inappropriately in preparing pre-war intelligence reports that may have exaggerated links between Iraq and al-Qaeda, the Pentagon inspector general found.
Two offices set up under then-Undersecretary for Policy Douglas Feith before the March, 2003 invasion of Iraq produced reports forming the basis of the key administration pre-war claim that Saddam Hussein was a threat to provide weapons of mass destruction to the terrorist group.
"While such actions were not illegal or unauthorized, the actions in our opinion were inappropriate'' because they didn't ``clearly show the variance with the consensus of the intelligence community,'' said a two-page executive summary of a report delivered to lawmakers yesterday.
"That's not much of a defense,'' said Senate Armed Services Committee Chairman Carl Levin, who requested the review with Kansas Republican Senator Pat Roberts, the former chairman of the Senate Intelligence Committee. ``That's the whole key, these were inappropriate,'' Levin said. ``We never claimed they were illegal."
Since when is appropriate the same as fabricating? Now you see another example of a do-nothing Congress.
Britain and France, the second and third-biggest European economies, racked up record trade deficits last year as an appreciation in the euro and the pound curbed export growth.
Alcatel-Lucent, the world's biggest maker of telecommunications equipment, will increase its planned job cuts by 39 percent to 12,500 after reporting a fourth- quarter loss and declining revenue.
Consumer confidence in February clocked in at 103, according to the RBC Cash Index. That was up from a buoyant 95.3 in January and was the best showing since September 2004. The president's job-approval rating in February sank to 32 percent, matching his lowest-ever marks, according to an AP-Ipsos poll. On the economy, 42 percent approved of the president's stewardship, while 55 percent disapproved, the poll said.
The RBC Expectations Index for February stands at 69.2, dropping morethan 14 points from its January level of 83.8. The downturn in theindex is due largely to a drop in expectations for the economy as awhole and for personal finances. This month, fewer than one in fourAmerican consumers (22 per cent) believe their local economy will bestronger six months from now (compared to 31 per cent in January),and just over one-third (36 per cent) believe their personalfinancial situation will be stronger six months from now (compared to40 per cent last month).
Circuit City is closing 70 stores and laying off 400 employees.
On Thursday evening there was a segment on Kong TV on a nasal mist to increase a woman's libido, Palatin's product in clinical trials. Here's the link.
http://www.king5.com/health/stories/NW_0.. The Company recently completed two Phase 2 clinical studies of bremelanotide in ED patients and is currently conducting additional studies with its strategic development partner, King, and preparing for an end-of-Phase 2 meeting with the FDA.
According to rigzone, Nigeria has asked international oil companies to slash oil production by 370,000 bpd this month and 260,000 barrels a day next month, a source with one company said Friday, raising the prospect of OPEC output cuts accelerating against expectations.
Southwest Airlines Co. on Friday said it will resume service to San Francisco International Airport. The company said it is in talks with the airport and aims to return in early fall.
Lear Corp. said on Friday that it has accepted Carl Icahn's $2.31 billion cash buyout offer and may solicit alternate proposals for 45 days. Lear said shareholders would receive $36 per share under the deal.
When you look at the pieces of the Tribune Co., you realize a good deal of value is there. For example, Tribune's 31% stake in cable TV's Food Network, which analysts have valued as high as $1 billion.
According to TechCrunch, Photobucket has become the No.3 video posting site, behind YouTube (GOOG) and MySpace (NWS). The site is handling 35,000 video uploads a day even though it has only offered the function for the last nine months. And now the site is preparing to launch a technology that, according to TechCrunch, will offer a "tool to allow users to mash up videos, photos and music clips into a timeline, and add titles, transitions and other effects..."
On Friday, crude oil topped $60 a barrel for the first time in five weeks. March crude closed at $59.89 a barrel Friday. Prices ended the day up 18 cents to gain 1.5% for the week. March natural gas fell by 4.4 cents for the session to close at $7.827 per million British thermal units. It was up 4.7% for the week.
China, the world's fourth-largest economy, targets an 8 percent growth rate this year and is becoming more concerned over inflation, according to the central bank's quarterly monetary policy report. China will clamp down on credit growth and keep the increase in M2 money supply at 16 percent, the People's Bank of China said in statement posted on its Web site today.
Paul Petillo: "The Bush budget seeks to save money by cutting the delivery of groceries to over 440,000 needy elderly people. This program costs $20 per month per person or slightly over $100 million."
Brad Setser: "Remember, while investors are borrowing in low-yielding yen to buy high-yielding real, the Brazilians – whether the central bank or the finance ministry – are selling high yielding real debt to buy low-yielding dollars. If every yen that comes into Brazil is bought by the central bank and used to buy dollars, well, the net result is a yen funded purchase of US treasuries. That is the net global flow. The 2 and 20 crowd gets the interest rate on the real and the yen/ real risk. The Brazilian central bank pays the interest rate in real and gets the interest rate on dollars and the dollar/ real risk."
William Poole, the president of the St. Louis Fed: "Many companies made too many loans that were poorly documented and now those are coming home to roost as the mortgage interest rates went up."
April gold rose $9.50 and closed at $672.30 an ounce Friday, marking the contract's highest closing level since August. March silver added 14.5 cents to close at $13.915 an ounce, up 4% for the week. March copper finished at $2.5175 a pound, up 6.7 cents for the day to climb 3.9% for the week.
Tecumseh Products Co. has decided to close its manufacturing facility in New Holstein, Wis. in a two-stage process that will begin in mid-April. The company said it will lay off the 320 workers at the plant, which produces component parts for its gasoline engines.
From Bloomberg: U.S. Defense Department officials acted inappropriately in preparing pre-war intelligence reports that may have exaggerated links between Iraq and al-Qaeda, the Pentagon inspector general found.
Two offices set up under then-Undersecretary for Policy Douglas Feith before the March, 2003 invasion of Iraq produced reports forming the basis of the key administration pre-war claim that Saddam Hussein was a threat to provide weapons of mass destruction to the terrorist group.
"While such actions were not illegal or unauthorized, the actions in our opinion were inappropriate'' because they didn't ``clearly show the variance with the consensus of the intelligence community,'' said a two-page executive summary of a report delivered to lawmakers yesterday.
"That's not much of a defense,'' said Senate Armed Services Committee Chairman Carl Levin, who requested the review with Kansas Republican Senator Pat Roberts, the former chairman of the Senate Intelligence Committee. ``That's the whole key, these were inappropriate,'' Levin said. ``We never claimed they were illegal."
Since when is appropriate the same as fabricating? Now you see another example of a do-nothing Congress.
Britain and France, the second and third-biggest European economies, racked up record trade deficits last year as an appreciation in the euro and the pound curbed export growth.
Alcatel-Lucent, the world's biggest maker of telecommunications equipment, will increase its planned job cuts by 39 percent to 12,500 after reporting a fourth- quarter loss and declining revenue.
Consumer confidence in February clocked in at 103, according to the RBC Cash Index. That was up from a buoyant 95.3 in January and was the best showing since September 2004. The president's job-approval rating in February sank to 32 percent, matching his lowest-ever marks, according to an AP-Ipsos poll. On the economy, 42 percent approved of the president's stewardship, while 55 percent disapproved, the poll said.
The RBC Expectations Index for February stands at 69.2, dropping morethan 14 points from its January level of 83.8. The downturn in theindex is due largely to a drop in expectations for the economy as awhole and for personal finances. This month, fewer than one in fourAmerican consumers (22 per cent) believe their local economy will bestronger six months from now (compared to 31 per cent in January),and just over one-third (36 per cent) believe their personalfinancial situation will be stronger six months from now (compared to40 per cent last month).
Circuit City is closing 70 stores and laying off 400 employees.
On Thursday evening there was a segment on Kong TV on a nasal mist to increase a woman's libido, Palatin's product in clinical trials. Here's the link.
http://www.king5.com/health/stories/NW_0.. The Company recently completed two Phase 2 clinical studies of bremelanotide in ED patients and is currently conducting additional studies with its strategic development partner, King, and preparing for an end-of-Phase 2 meeting with the FDA.
According to rigzone, Nigeria has asked international oil companies to slash oil production by 370,000 bpd this month and 260,000 barrels a day next month, a source with one company said Friday, raising the prospect of OPEC output cuts accelerating against expectations.
Southwest Airlines Co. on Friday said it will resume service to San Francisco International Airport. The company said it is in talks with the airport and aims to return in early fall.
Lear Corp. said on Friday that it has accepted Carl Icahn's $2.31 billion cash buyout offer and may solicit alternate proposals for 45 days. Lear said shareholders would receive $36 per share under the deal.
When you look at the pieces of the Tribune Co., you realize a good deal of value is there. For example, Tribune's 31% stake in cable TV's Food Network, which analysts have valued as high as $1 billion.
According to TechCrunch, Photobucket has become the No.3 video posting site, behind YouTube (GOOG) and MySpace (NWS). The site is handling 35,000 video uploads a day even though it has only offered the function for the last nine months. And now the site is preparing to launch a technology that, according to TechCrunch, will offer a "tool to allow users to mash up videos, photos and music clips into a timeline, and add titles, transitions and other effects..."
On Friday, crude oil topped $60 a barrel for the first time in five weeks. March crude closed at $59.89 a barrel Friday. Prices ended the day up 18 cents to gain 1.5% for the week. March natural gas fell by 4.4 cents for the session to close at $7.827 per million British thermal units. It was up 4.7% for the week.
China, the world's fourth-largest economy, targets an 8 percent growth rate this year and is becoming more concerned over inflation, according to the central bank's quarterly monetary policy report. China will clamp down on credit growth and keep the increase in M2 money supply at 16 percent, the People's Bank of China said in statement posted on its Web site today.
Paul Petillo: "The Bush budget seeks to save money by cutting the delivery of groceries to over 440,000 needy elderly people. This program costs $20 per month per person or slightly over $100 million."
Brad Setser: "Remember, while investors are borrowing in low-yielding yen to buy high-yielding real, the Brazilians – whether the central bank or the finance ministry – are selling high yielding real debt to buy low-yielding dollars. If every yen that comes into Brazil is bought by the central bank and used to buy dollars, well, the net result is a yen funded purchase of US treasuries. That is the net global flow. The 2 and 20 crowd gets the interest rate on the real and the yen/ real risk. The Brazilian central bank pays the interest rate in real and gets the interest rate on dollars and the dollar/ real risk."
William Poole, the president of the St. Louis Fed: "Many companies made too many loans that were poorly documented and now those are coming home to roost as the mortgage interest rates went up."
April gold rose $9.50 and closed at $672.30 an ounce Friday, marking the contract's highest closing level since August. March silver added 14.5 cents to close at $13.915 an ounce, up 4% for the week. March copper finished at $2.5175 a pound, up 6.7 cents for the day to climb 3.9% for the week.
Tecumseh Products Co. has decided to close its manufacturing facility in New Holstein, Wis. in a two-stage process that will begin in mid-April. The company said it will lay off the 320 workers at the plant, which produces component parts for its gasoline engines.
Thursday, February 08, 2007
Same-Store Sales
2/9/07 Same-Store Sales
Cosco's same-store sales for January rose a disappointing 2%.
Wal-Mart sees their U.S. comp sales for February rising between 1-2%.
Nordstrom Inc. said January same-store sales rose 11% over year-earlier levels, and that is most impressive.
Target Corp. said January same-store sales rose 5.1%. The company forecasts Feb results to gain between 4-6%.
The Energy Department said natural-gas inventories fell 224 billion cubic feet for the week ended Feb. 2. Total stocks now stand at 2.347 trillion cubic feet, down 26 billion cubic feet from the year-ago level, but 378 billion cubic feet above the five-year average, the government data said.
Limited Brands Inc. said its January sales at stores open at least one year rose 11%. Excluding the fifth week in January this year and the gift card breakage adjustment from last year, the sales increase from the comparable four-week period last year was 14%. That's quite a performance.
Tribune Co. reported fourth-quarter net income rose 78% on 5.4% higher revenue. Earnings reached $239.1 million, or 99 cents a share, from $134.4 million, or 43 cents, in the year-earlier period. Earnings from continuing operations were 96 cents against 42 cents. The figures reflect charges totaling 3 cents a share and gains totaling 31 cents. A survey of analysts by Thomson First Call produced a consensus estimate of 61 cents for the quarter. Revenue rose to $1.47 billion from $1.39 billion. Thomson's survey estimated revenue at $1.43 billion. "Key factors" in the quarter "were improved results in broadcasting, strong interactive-revenue growth, and excellent expense control," Dennis FitzSimons, chairman, president and chief executive, said in a statement.
Toll Brothers Inc. reported that fiscal 2007 first-quarter home-building revenue fell 19% to $1.09 billion from $1.34 billion in the year-earlier period. The company said the backlog at Jan. 31, the quarter's end, was off 30% from a year earlier, at $4.15 billion. Toll's net signed contracts were valued at $749 million, down 34%. Net of cancellations, first-quarter contracts fell 33% to 1,027 units from 1,544 units in the first quarter of fiscal 2006. And Toll estimated that write-downs for the quarter would range from $60 million to more than $160 million. Chairman and Chief Executive Robert I. Toll said in a statement that "it appears that the pace of cancellations is starting to abate." The rate was 29.8% in the first quarter compared with 36.9% in the fiscal fourth quarter. But "we are still well above the Company's historical average of about 7%," he said.
Forbes article: Nearly one in five men in the U.S. suffer from erectile dysfunction, according to a recent study in the American Journal of Medicine. Some researchers have estimated that as many as 40% of U.S. women have low libido or inability to reach orgasm... Palatin Technology is developing a nose spray, called bremelanotide, to treat men and women with sexual dysfunction. Applied 10 to 15 minutes prior to sex, it travels through the central nervous system to increase blood flow in the penile or vaginal tissue. The company hopes to get FDA approval for men in 2009 and women around 2011. "On the female front, we've got a chance to be first to market," says CEO Carl Spana. "People wonder how many women will come in for treatment, but my gut tells me they will come in."
Heavy snowfall shut five British airports Thursday and forced the cancellation of some train service in England and Wales.
A U.S. military helicopter flying over farmland northwest of Baghdad crashed Wednesday, military officials said, killing all seven people on board. It was the fifth U.S. helicopter lost in the past three weeks and the second to crash in five days. Four U.S. Marines were killed in fighting in Anbar province, the military said Thursday. The Marines, who were assigned to Multi-National Force — West, died Wednesday from wounds sustained due to enemy action in two separate incidents in the insurgent stronghold west of Baghdad, according to a statement.
That brings the number of deaths for U.S. soldiers in Iraq to at least 3114. There has been a surge-- a surge in our troops perishing.
Eastman Kodak now plans to cut a total of 28,000 to 30,000 jobs, up from a prior projection for the layoff of 25,000 to 27,000 employees. The company said it eliminated 1,200 jobs in the fourth quarter, bringing the total-to-date reductions to 23,400 positions.
The number of workers continuing to collect unemployment benefits, meanwhile, fell by 54,000 to 2.49 million, the lowest since Jan. 13. The four-week moving average of continuing claims rose by 20,000 to 2.50 million, the highest since Dec. 16.
The National Weather Service predicted that below-normal temperatures will persist in most of the U.S. through 2/20.
HSBC warned that its US mortgage business would push group bad debt provisions for 2006 $1.75bn (£888m) higher than expected. HSBC said pressure on house prices and rising repayments had prompted it to review its level of bad debt charges. You think the housing market is still bottoming out?
Robert Shiller wonders if a sustained decline in housing prices is in our future.
The chief executive of Mexican state oil monopoly Petroleos Mexicanos on Wednesday said the company expects its Cantarell oil field to produce an average of 1.53 million barrels a day of crude oil in 2007, down from 1.79 million barrels a day in 2006. As Oil Drum points out, Mexican oil production decline means that 4 out of 5 major OECD producers are now in decline (Norway, UK, USA and Mexico), leaving only Canada with growing production.
Cisco Systems Inc. said senior executive Mike Volpi, 40, resigned on Thursday. Volpi, as general manager of the routing and service provider technology group, was responsible for all routing products and the company's strategy for the communications service provider market. He was also a key driver of Cisco's acquisition strategy and led 75 acquisitions between 1994 and 2001. He also was responsible for the Scientific Atlanta acquisition. I view this as a major loss for Cisco.
When the annual averages for 2006 were compared
with annual averages for 2005, productivity rose 2.2 percent in the business sector and 2.1 percent in nonfarm businesses--slightly less than the 2.3-percent gains in both sectors from 2004 to 2005.
Baker Hughes Incorporated announced that the international rig count for January 2007 was 972, up 21 from the 951 counted in December 2006, and up 67 from the 905 counted in January 2006. The international offshore rig count for January 2007 was 276, up 5 from the 271 counted in December 2006 and up 13 from the 263 counted in January 2006. The US rig count for January 2007 was 1,714, down 4 from the 1,718 counted in December 2006 and up 241 from the 1,473 counted in January 2006. The Canadian rig count for January 2007 was 568, up 112 from the 456 counted in December 2006 and down 92 from the 660 counted in January 2006. The worldwide rig count for January 2007 was 3,254, up 129 from the 3,125 counted in December 2006 and up 216 from the 3,038 counted in January 2006.
Brent Budowsky: "What has emerged in evidence so far, is not surprising, but it is astonishing. Vice-President Cheney was so deeply involved and obsessed with discrediting Joe Wilson that the impact and implications are enormous and underestimated.
The Vice President was choreographer of the attack on Wilson. He acted as though he was the deputy White House political director and the deputy White House press secretary. He was organizing meetings, drafting talking points and assigning which staff would talk to which reporter.
This is not what Vice Presidents do. This is more than an attack on his enemy Wilson. Most of us who have had high government positions have faced these situations, and launching a counter-attack could have been done far more discreetly and professionally.
Plus: the naming of the Plame name, at the very least, created harm to national security and was an unpatriotic act. The minute the Vice President, Libby and Rove knew Valerie Plame worked at the CIA in a bureau that insiders would know immediately was highly sensitive that without any doubt triggered red lights, immediately.
When we were writing the original indentities protection law, not one of us could have ever imagined that identity disclosers would be high officials in the U.S. government. The law was aimed at people very hostile to the U.S. who were acting in a manner that helped the KGB.
It was unthinkable to all of us that anyone involved in these disclosures, felonious or not, would be high in the U.S. government. Anyone who goes on television and says otherwise is a liar.
Why?
My theory, with substantial evidence to back it up, is that the danger of Joe Wilson was not the damage that Wilson's view did to the Administration policy. It was the danger that Wilson's work would unravel a long-term, well-planned, highly deceptive campaign that preceded Wilson's involvement to deceive the country to drive us to war.
Prediction: major plea bargaining either has begun, or will begin, before the verdict and watch out if Libby sings in a plea deal.
Prediction: the original defense argument that Libby was a fall guy for others will only anger and inflame the judge and jury. It is no defense to say that others might have committed similar or related crimes and that is the impression this argument created.
Watch this: the sequence of events that could be explosive includes a) the original Cheney deposition to Fitzgerald, then b) testimony on the record of extensive and absurd involvement by the Vice President to the micro-level on the attack against Wilson, leading to c) Cheney's testimony in the trial if it happens.
The prosecutor and jury will compare what Cheney said in the deposition, what facts emerged in the trial and Cheney's testimony at trial. Do not be surprised if the word pardon appears in the press, though the reaction would be as strong as the Saturday Night Massacre in the Nixon years.
The surprise: what will shock people will be when the Senate Intelligence Committee releases its report on pre-war intelligence, which was covered up by the committee's Republican leaders before the elections.
The Senate report will, I predict, show major deceptions that well preceded the events in the Wilson case. This will put the whole case in context. It will turn the spotlight on the misrepresentations prior to Wilson, that will explain the obsessive attack of Cheney and Libby against Wilson.
Fasten your seat belts.
Nobody is out of the woods yet, and these woods are dark and deep."
New Century Financial will need to restate several quarters because of "errors related to its allowance for loan repurchase losses." The company said it now expects 2007 loan production to be 20% below 2006 levels, vs. previous forecasts that it would be flat, as the level of early-payment defaults and loan repurchases have led to tighter underwriting guidelines.
Goldman Sachs has agreed to sell its commodity index to rating agency Standard & Poor's in a deal that some analysts say could change the way traders view the oil markets.
An article worth reading on the peak oil cris:
http://www.fcnp.com/index.php?option=com...
Colbert Report: "The only way to bring democracy to Iraq is to silence it here."
Gold for April delivery closed up $5.50 at $662.80 an ounce on the New York Mercantile Exchange. Silver closed up 6 cents at $13.77 an ounce. Platinum declined $4.70 to end at $1,198.30 an ounce. Palladium closed down $4.20 at $341 an ounce, and copper ended down 0.5 cent at $2.4505 a pound.
March crude rose $2 Thursday to close at $59.71 a barrel, the contract's highest closing level of the year. Occidental Petroleum Corp. said it would be unable to meet commitments to its customers after a fire led to the shutdown of most production from its Elk Hills field in California. There is no timeframe for resuming production at the field, which normally has output of 120,000 barrels of oil equivalent a day, said Occidental spokeswoman Susie Geiger. About 95 percent of output is shut in. Occidental spokeswoman Jan Sieving confirmed in an interview that the company declared force majeure. March natural gas gained 2.1%, or 16.2 cents, to close at $7.871 per million British thermal units.
Cosco's same-store sales for January rose a disappointing 2%.
Wal-Mart sees their U.S. comp sales for February rising between 1-2%.
Nordstrom Inc. said January same-store sales rose 11% over year-earlier levels, and that is most impressive.
Target Corp. said January same-store sales rose 5.1%. The company forecasts Feb results to gain between 4-6%.
The Energy Department said natural-gas inventories fell 224 billion cubic feet for the week ended Feb. 2. Total stocks now stand at 2.347 trillion cubic feet, down 26 billion cubic feet from the year-ago level, but 378 billion cubic feet above the five-year average, the government data said.
Limited Brands Inc. said its January sales at stores open at least one year rose 11%. Excluding the fifth week in January this year and the gift card breakage adjustment from last year, the sales increase from the comparable four-week period last year was 14%. That's quite a performance.
Tribune Co. reported fourth-quarter net income rose 78% on 5.4% higher revenue. Earnings reached $239.1 million, or 99 cents a share, from $134.4 million, or 43 cents, in the year-earlier period. Earnings from continuing operations were 96 cents against 42 cents. The figures reflect charges totaling 3 cents a share and gains totaling 31 cents. A survey of analysts by Thomson First Call produced a consensus estimate of 61 cents for the quarter. Revenue rose to $1.47 billion from $1.39 billion. Thomson's survey estimated revenue at $1.43 billion. "Key factors" in the quarter "were improved results in broadcasting, strong interactive-revenue growth, and excellent expense control," Dennis FitzSimons, chairman, president and chief executive, said in a statement.
Toll Brothers Inc. reported that fiscal 2007 first-quarter home-building revenue fell 19% to $1.09 billion from $1.34 billion in the year-earlier period. The company said the backlog at Jan. 31, the quarter's end, was off 30% from a year earlier, at $4.15 billion. Toll's net signed contracts were valued at $749 million, down 34%. Net of cancellations, first-quarter contracts fell 33% to 1,027 units from 1,544 units in the first quarter of fiscal 2006. And Toll estimated that write-downs for the quarter would range from $60 million to more than $160 million. Chairman and Chief Executive Robert I. Toll said in a statement that "it appears that the pace of cancellations is starting to abate." The rate was 29.8% in the first quarter compared with 36.9% in the fiscal fourth quarter. But "we are still well above the Company's historical average of about 7%," he said.
Forbes article: Nearly one in five men in the U.S. suffer from erectile dysfunction, according to a recent study in the American Journal of Medicine. Some researchers have estimated that as many as 40% of U.S. women have low libido or inability to reach orgasm... Palatin Technology is developing a nose spray, called bremelanotide, to treat men and women with sexual dysfunction. Applied 10 to 15 minutes prior to sex, it travels through the central nervous system to increase blood flow in the penile or vaginal tissue. The company hopes to get FDA approval for men in 2009 and women around 2011. "On the female front, we've got a chance to be first to market," says CEO Carl Spana. "People wonder how many women will come in for treatment, but my gut tells me they will come in."
Heavy snowfall shut five British airports Thursday and forced the cancellation of some train service in England and Wales.
A U.S. military helicopter flying over farmland northwest of Baghdad crashed Wednesday, military officials said, killing all seven people on board. It was the fifth U.S. helicopter lost in the past three weeks and the second to crash in five days. Four U.S. Marines were killed in fighting in Anbar province, the military said Thursday. The Marines, who were assigned to Multi-National Force — West, died Wednesday from wounds sustained due to enemy action in two separate incidents in the insurgent stronghold west of Baghdad, according to a statement.
That brings the number of deaths for U.S. soldiers in Iraq to at least 3114. There has been a surge-- a surge in our troops perishing.
Eastman Kodak now plans to cut a total of 28,000 to 30,000 jobs, up from a prior projection for the layoff of 25,000 to 27,000 employees. The company said it eliminated 1,200 jobs in the fourth quarter, bringing the total-to-date reductions to 23,400 positions.
The number of workers continuing to collect unemployment benefits, meanwhile, fell by 54,000 to 2.49 million, the lowest since Jan. 13. The four-week moving average of continuing claims rose by 20,000 to 2.50 million, the highest since Dec. 16.
The National Weather Service predicted that below-normal temperatures will persist in most of the U.S. through 2/20.
HSBC warned that its US mortgage business would push group bad debt provisions for 2006 $1.75bn (£888m) higher than expected. HSBC said pressure on house prices and rising repayments had prompted it to review its level of bad debt charges. You think the housing market is still bottoming out?
Robert Shiller wonders if a sustained decline in housing prices is in our future.
The chief executive of Mexican state oil monopoly Petroleos Mexicanos on Wednesday said the company expects its Cantarell oil field to produce an average of 1.53 million barrels a day of crude oil in 2007, down from 1.79 million barrels a day in 2006. As Oil Drum points out, Mexican oil production decline means that 4 out of 5 major OECD producers are now in decline (Norway, UK, USA and Mexico), leaving only Canada with growing production.
Cisco Systems Inc. said senior executive Mike Volpi, 40, resigned on Thursday. Volpi, as general manager of the routing and service provider technology group, was responsible for all routing products and the company's strategy for the communications service provider market. He was also a key driver of Cisco's acquisition strategy and led 75 acquisitions between 1994 and 2001. He also was responsible for the Scientific Atlanta acquisition. I view this as a major loss for Cisco.
When the annual averages for 2006 were compared
with annual averages for 2005, productivity rose 2.2 percent in the business sector and 2.1 percent in nonfarm businesses--slightly less than the 2.3-percent gains in both sectors from 2004 to 2005.
Baker Hughes Incorporated announced that the international rig count for January 2007 was 972, up 21 from the 951 counted in December 2006, and up 67 from the 905 counted in January 2006. The international offshore rig count for January 2007 was 276, up 5 from the 271 counted in December 2006 and up 13 from the 263 counted in January 2006. The US rig count for January 2007 was 1,714, down 4 from the 1,718 counted in December 2006 and up 241 from the 1,473 counted in January 2006. The Canadian rig count for January 2007 was 568, up 112 from the 456 counted in December 2006 and down 92 from the 660 counted in January 2006. The worldwide rig count for January 2007 was 3,254, up 129 from the 3,125 counted in December 2006 and up 216 from the 3,038 counted in January 2006.
Brent Budowsky: "What has emerged in evidence so far, is not surprising, but it is astonishing. Vice-President Cheney was so deeply involved and obsessed with discrediting Joe Wilson that the impact and implications are enormous and underestimated.
The Vice President was choreographer of the attack on Wilson. He acted as though he was the deputy White House political director and the deputy White House press secretary. He was organizing meetings, drafting talking points and assigning which staff would talk to which reporter.
This is not what Vice Presidents do. This is more than an attack on his enemy Wilson. Most of us who have had high government positions have faced these situations, and launching a counter-attack could have been done far more discreetly and professionally.
Plus: the naming of the Plame name, at the very least, created harm to national security and was an unpatriotic act. The minute the Vice President, Libby and Rove knew Valerie Plame worked at the CIA in a bureau that insiders would know immediately was highly sensitive that without any doubt triggered red lights, immediately.
When we were writing the original indentities protection law, not one of us could have ever imagined that identity disclosers would be high officials in the U.S. government. The law was aimed at people very hostile to the U.S. who were acting in a manner that helped the KGB.
It was unthinkable to all of us that anyone involved in these disclosures, felonious or not, would be high in the U.S. government. Anyone who goes on television and says otherwise is a liar.
Why?
My theory, with substantial evidence to back it up, is that the danger of Joe Wilson was not the damage that Wilson's view did to the Administration policy. It was the danger that Wilson's work would unravel a long-term, well-planned, highly deceptive campaign that preceded Wilson's involvement to deceive the country to drive us to war.
Prediction: major plea bargaining either has begun, or will begin, before the verdict and watch out if Libby sings in a plea deal.
Prediction: the original defense argument that Libby was a fall guy for others will only anger and inflame the judge and jury. It is no defense to say that others might have committed similar or related crimes and that is the impression this argument created.
Watch this: the sequence of events that could be explosive includes a) the original Cheney deposition to Fitzgerald, then b) testimony on the record of extensive and absurd involvement by the Vice President to the micro-level on the attack against Wilson, leading to c) Cheney's testimony in the trial if it happens.
The prosecutor and jury will compare what Cheney said in the deposition, what facts emerged in the trial and Cheney's testimony at trial. Do not be surprised if the word pardon appears in the press, though the reaction would be as strong as the Saturday Night Massacre in the Nixon years.
The surprise: what will shock people will be when the Senate Intelligence Committee releases its report on pre-war intelligence, which was covered up by the committee's Republican leaders before the elections.
The Senate report will, I predict, show major deceptions that well preceded the events in the Wilson case. This will put the whole case in context. It will turn the spotlight on the misrepresentations prior to Wilson, that will explain the obsessive attack of Cheney and Libby against Wilson.
Fasten your seat belts.
Nobody is out of the woods yet, and these woods are dark and deep."
New Century Financial will need to restate several quarters because of "errors related to its allowance for loan repurchase losses." The company said it now expects 2007 loan production to be 20% below 2006 levels, vs. previous forecasts that it would be flat, as the level of early-payment defaults and loan repurchases have led to tighter underwriting guidelines.
Goldman Sachs has agreed to sell its commodity index to rating agency Standard & Poor's in a deal that some analysts say could change the way traders view the oil markets.
An article worth reading on the peak oil cris:
http://www.fcnp.com/index.php?option=com...
Colbert Report: "The only way to bring democracy to Iraq is to silence it here."
Gold for April delivery closed up $5.50 at $662.80 an ounce on the New York Mercantile Exchange. Silver closed up 6 cents at $13.77 an ounce. Platinum declined $4.70 to end at $1,198.30 an ounce. Palladium closed down $4.20 at $341 an ounce, and copper ended down 0.5 cent at $2.4505 a pound.
March crude rose $2 Thursday to close at $59.71 a barrel, the contract's highest closing level of the year. Occidental Petroleum Corp. said it would be unable to meet commitments to its customers after a fire led to the shutdown of most production from its Elk Hills field in California. There is no timeframe for resuming production at the field, which normally has output of 120,000 barrels of oil equivalent a day, said Occidental spokeswoman Susie Geiger. About 95 percent of output is shut in. Occidental spokeswoman Jan Sieving confirmed in an interview that the company declared force majeure. March natural gas gained 2.1%, or 16.2 cents, to close at $7.871 per million British thermal units.
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