4/22/07 Shifting Sands
Lee Iacocca: "You might think I'm getting senile, that I've gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies. Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don't need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions. That's not the promise of America my parents and yours traveled across the ocean for. I've had enough. How about you?...That's the challenge I'm raising in this book. It's a call to action for people who, like me, believe in America. It's not too late, but it's getting pretty close. So let's shake off the horse shit and go to work. Let's tell 'em all we've had enough."
Owners of 168,829 homes in the first three months of 2007 received notice that lenders had filed for foreclosure due to failure to pay loans or liens, Foreclosures.com said.
Bloomberg reported that Texas owes state workers $50 billion in future retirement benefits and refuses to acknowledge the obligation. Texas Comptroller Susan Combs says she won�t follow a new national accounting standard that requires states and cities to disclose the estimated costs of benefits promised to retired workers.
Doug Noland: "During the first quarter, the Liability �Fed Funds and repos� jumped $44.4bn at Citigroup and $56.7bn at JPMorgan. Goldman, Lehman, Bear Stearns, and Morgan Stanley combined for a $100 billion increase in �Repo� Liabilities, a 77% annualized growth rate. It is worth noting that the first quarter increase in �fed funds and repo� from these six institutions alone ($201bn) was larger than total M2 growth ($160bn) during the period. Over the past year, the Liability �fed funds & repo� increased 41% at Citigroup to $393.7bn and 45% at JPMorgan to $219bn. While quarterly earnings leave many questions unanswered, the issue of a historic runaway increase in securities-based finance has been reconfirmed...The leveraging of existing securities (there�s $45 TN of Credit market debt outstanding) � by hedge funds, in broker/dealer and bank �trading accounts� � is likely a major source of current liquidity excess...Sure, as long as Credit expands at the current rapid pace the consumer will undoubtedly keep spending and asset markets will keep inflating. And as long as the Credit Bubble is sustained U.S. financial assets may appear sufficiently enticing to our foreign Creditors (although they must not be that attractive or foreign central banks wouldn�t have been forced into accumulating about $1 TN of reserves the past year). But this is Ponzi Finance at its most extreme. The U.S. financial sector must now balloon rapidly and incessantly to sustain over-consumption; to maintain inflated real estate and securities values; to support corporate earnings and income growth; and, importantly, to support the ever-growing pyramid of financial sector debt obligations. But as we have been witnessing of late, this kind of Credit system expansion creates only more dollar liquidity to add to the global deluge. If only, in Minsky�s language, �Ponzi Finance Units� could live forever. There will, at some point, be a reversal of flows out of Wall Street �finance� that will likely coincide with a flight from the dollar."
The U.S. Dollar Index resides presently at 81.45. Look at where it was one year ago, and then where it was when the Bushies took over. Make a note to see where it is one year from today. Unless you are different from most Americans, most of your wealth is dollar denominated. That's really most unfortunate.
Ty Andros: "As US politician's angle towards the protectionist policies guaranteed to blow up in their faces, dollar holders around the world are voting with their feet. The emerging picture from the economic, monetary and trade flow numbers in the first quarter are unmistakable, and the "VERDICT" is one of "CAPITAL FLIGHT". The noises coming from the salons of Washington DC and the presidential campaign trail make it clear that the United States has no intention of honoring its promises to dollar holders. Those dollar holders are going to be stiffed. So, it's unanimous, everyone is selling at the margin, except the Japanese. The dollar is holding its own versus the Japanese currency, but this could reflect dollar dumping as well, as dollar holders sell Yen and use the money to buy assets denominated in anything but dollars on the buy side. The US is about to undergo a fire sale of epic proportions, destined to go down in history as one of the most flagrant examples of political and monetary moral breakdown ever seen."
The Financial Times reports Al-Qaeda is reaching out from its base in Pakistan to turn militant Islamist groups in the Middle East and Africa into franchises charged with intensifying attacks on western targets, according to European officials and terrorism specialists.
Randall W. Forsyth: "AMERICA'S RETIREMENT FUNDS are a good-news, bad-news story. The biggest corporate pension funds are nearly fully funded for the first time in years. But the bad news is state and municipal pension plans face an unfunded liability of upwards of $1 trillion. And the worse news is the public sector has an additional unfunded liability half again as big for other post-retirement expenses such as health care, a staggering $1.5 trillion."
An Associated Press analysis of federal data shows consumers in the 17 deregulated areas paid an average of 30 percent more for power in 2006 than their counterparts in regulated states. That's up from a 24 percent gap in 1990.
The Oil Drum: "Oil production worldwide peaked months ago, but figures and prices don't reflect that yet because the production of liquids stripped from natural gas has been filling the gap, [Henry Groppe] said. But that potential is peaking, too, which means that "in several years" the world will enter a new era of higher prices. "The only question is how high will prices have to go before there is a decline in usage?" he said.
Daily Reckoning: "Data from the IMF shows that the dollar proportion of Central Bank reserves fell to 64.75% in the fourth quarter of 2006, which doesn't look good, given that the number was 66.75% in the fourth quarter of 2005. To my way of thinking, there is little reason to believe that this trend will change given the talk and actions in the past year by Central Banks."
The US military is building a three-mile concrete wall in the center of Baghdad along the most murderous fault line between Sunni and Shia Muslims.
David Iglesias, the former New Mexico U.S. attorney and one of the eight fired last year: "If I were Congress, I would say, 'If the attorney general doesn't have answers, then who would?' There's enough evidence to indicate that Karl Rove was involved up to his eyeballs." Iglesias said another clue that the White House may have been the driving force is the relative lack of Justice Department documentation for the firings in the 6,000 pages of documents given to Congress.
"If you want to justify getting rid of someone, you should have at least some paper trail," Iglesias said. "There's been a remarkable absence of that. I'm wondering if the paper trail is at the White House."
Ultra Petroleum Corp. reported the largest quarterly production in the company's history. Production for the first quarter of 2007 increased 42 percent to a record 28.5 billion cubic feet equivalent (Bcfe) from the first quarter of 2006. Production in Wyoming alone, at the company's core asset, increased over 50 percent. Currently, Ultra has hedged 100,000 mmbtu/day at $7.41/Mcf or $6.83/mmbtu.
George Ure: "We know that the stock market hit its previous "all time high" with the Dow peak in early 2000. It closed at 11,723. The problem is that there is a lot more money sloshing around the system now compared with then.
I want you to go to the Minneapolis Fed's inflation calculator and plug in the numbers for yourself. Click here and put in the first box "2000" and in the "I bought goods or services for box, enter 11,723.00. For the "Then in " box enter 2007 and press the "Calculate button".
If you can follow simple instructions, you will see $13, 989.99. In other words, to be a new high in terms of purchasing power, the Dow would need to be there: 13,989.99, which means the Dow still has another 1,000+ points to run to event come up to the previous speculative bubble's peak.
Oh sure, you can argue that the comparison doesn't take into account dividends, splits, and what have you. But, I'm telling you that the comparison is fair and that we're not talking about anything other than what it costs to 'buy the Dow'. Besides, if you insist on counting dividends, then I will trot out the commissions charged by brokerage firms."
Tim W. Wood : "Both the Industrials and the Transports pushed into all time new territory this week. As a result it is indisputable that the advance is still alive. But, I still do not believe that the advance is well. Given the relentless resilience of the market, there are times that even I question the data surrounding the 4-year cycle. However, when I remove the emotion and simply look at the raw data, it continues to suggest that there is still an unwinding into the 4-year cycle low somewhere ahead."
Saturday, April 21, 2007
Earnings
4/21/07 Earnings
Schlumberger Ltd. said its first-quarter net income rose to $1.18 billion, or 96 cents a share, from $722.5 million, or 59 cents a share, a year ago. Analysts had been expecting the company to report earnings of 91 cents a share, according to data compiled by Thomson Financial. Sales at the oilfield services company rose to $5.46 billion, from $4.24 billion last year, driven by an acceleration of activity in Europe, Africa, the Middle East and Asia.
SAP AG said Friday that its first-quarter net income rose 10% to 310 million euros, or 0.26 euros a share, from 282 million euros, or 0.23 euros a share. Revenue for the quarter rose 6%, or 11% at constant currencies, to 2.2 billion euros. SAP said it continued to gain market share among core enterprise application vendors in the quarter. SAP also reaffirmed its guidance for 2007 software and software related services revenues to increase in a range of 12% to 14% at constant currencies, with an effective tax rate of 32.5% to 33%.
Kohlberg Kravis Roberts and Alliance Boots's deputy chairman Stefano Pessina said Friday that they have reached agreement with the board of Alliance Boots to make an offer to buy the company at 10.90 pounds per share, or 10.6 billion pounds ($21.3 billion). Pessina holds 15.05% of the pharmacy chain's share capital.
AMD reported a first-quarter net loss of $611 million, or $1.11 a share, compared with a net profit of $184.5 million, or 38 cents a share, in last year's same period. This quarter's results included acquisition and stock option charges of 26 cents a share. For the three months ended March 31, sales fell to $1.23 billion from $1.33 billion. AMD said its gross margin, a key profitability metric for chip firms, fell to 28.1% from 58.5% a year ago.
For the first quarter, McDonalds net income rose to $762.4 million, or 62 cents per share, from $625.3 million, or 49 cents per share, a year earlier. Revenue rose 11 percent to $5.46 billion. Analysts were expecting revenue of $5.43 billion, according to Reuters Estimates.
Pfizer said its 2007 earnings will be below Wall Street expectations due to the unexpectedly swift introduction of cheaper generic forms of its hypertension treatment Norvasc. Pfizer said 2008 revenue will be little changed from 2007, which itself was expected to be flat with last year.
Caterpillar Inc. reported better-than-expected quarterly earnings on Friday and raised its outlook, saying strength in almost all of its businesses was offsetting weakness in residential housing and on-highway engine markets.
While net profit fell to $816 million, or $1.23 a share, from $840 million, or $1.20 a share, last year, the latest results topped the average analyst profit expectation of $1.08 a share.
Google's net income rose to $1.0 billion, or $3.18 a diluted share, from the year-earlier quarter's $592 million, or $1.95 a share. Excluding one-time items and option expenses, profit was $3.68 per share versus $2.29 per share a year before. Consensus estimates from analysts put Google's first-quarter earnings at $3.30 a share, according to Thomson Financial. “The biggest growth areas are clearly going to be in the mobile space,” Eric E. Schmidt, chief executive of Google.
Honeywell raised its 2007 revenue forecast by $700 million to $33.5 billion, and its earnings per share by 15 cents to a range of between $3.00 and $3.10 a share.
David Walker, U.S. Comptroller General: "The federal government's financial condition and fiscal outlook are worse than many may understand. Despite an increase in revenues in fiscal year 2006 of about $255 billion, the federal government reported that it costs exceeded its revenues by $450 billion (i.e., net operating cost) and that its cash outlays exceeded its cash receipts by $248 billion (i.e., unified budget deficit). Further, as of September 30, 2006, the U.S. government reported that it owed (i.e., liabilities) more than it owned (i.e., assets) by almost $9 trillion. In addition, the present value of the government's major reported long-term 'fiscal exposures' - liabilities (e.g., debt), contingencies (e.g., insurance) and social insurance and other commitments and promises (e.g., Social Security, Medicare) - rose from $20 trillion to about $50 trillion in the last 6 years."
American Express increased 69 cents to $59.64. The company said first-quarter net income rose to 87 cents a share from 69 cents a year earlier. Profit topped the 79-cent average estimate of analysts surveyed by Bloomberg.
Analysts estimate profits among S&P 500 members grew 3.1 percent in the January through March period, the slowest since the same quarter in 2002, according to the average of estimates compiled by Bloomberg.
Brett Steenbarger: "The number of S&P 500 stocks making annual highs has not jumped to a new high despite price highs in the average."
Nigeria's Forcados field expected to be back on production by end of May.
Reuters reports that the Nintendo Wii outsold the Microsoft Xbox 360 and Sony Playstation 3 in the US market during March.
According to the WSJ, Italy's UniCredit and France's Societé Generale have resumed merger talks, in a move that could set a new benchmark for banking on the continent.
Barry Ritholtz: Despite a myriad of potential pitfalls facing the market, as we have noted in the past, overly large short selling creates a bid beneath the market. When grateful shorts cover, they prevent any downside momentum from developing. If part of your thesis is investing due to "variant perception" -- the belief that you have figured out something the rest of the investment community hasn't -- then statistically speaking, the short side isn't really the ideal place to be when short interest is at record highs."
The NY Times reported "luxury" home prices on Long Island -- defined as those costing $750,000 to $12.5 million -- have slid over 5% last quarter, as inventory levels doubled from what they were two years ago.
Genesco Inc.received and would review a $46-a-share takeover proposal from Foot Locker Inc., the New York footwear retailer.
Iran still needs several years to be in a position to manufacture enough nuclear fuel through uranium enrichment for industrial use, Gholamreza Aghazadeh, head of Iran's atomic energy agency said.
A group of Sunni tribal leaders in Iraq's beleaguered Anbar province said Thursday that they intend to form a national party to oppose insurgent groups and to revive their role in Iraq's political process.
Vermont senators voted Friday to call for the impeachment of President Bush and Vice President Dick Cheney, saying their actions have raised "serious questions of constitutionality." The resolution says Bush and Cheney's actions in the U.S. and abroad, including in Iraq, "raise serious questions of constitutionality, statutory legality, and abuse of the public trust."
Rep. Ron Paul: "The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation."
Gene Sperling: "While the subprime and exotic mortgage fallout has been grabbing recent housing headlines, another potential story for 2007 may be in the wings: as Americans withdraw less equity from their homes will it mean a big or little hit for growth and consumer spending?"
Doug Wakefield: "We accept as normal that a new car that used to cost $3,000 now costs $30,000, or that a home that used to cost $40,000 now costs $200,000. The fact is that throughout our lifetime, the costs of stamps, milk, health care, auto repairs, and virtually anything else that we consider basic to the American way of life, has been propelled higher by this "dollars supplied at will" machine."
Over the last eight years we have seen the speculation go from the dotcom sector to real estate to commodities to foreign equities to private equity and hedge funds to derivatives- not necessarily in that order. During this period, the dollar has continued to lose value against all major currencies, the U.S. debt levels have soared, the current account deficit has soared, the cost of living has risen faster than wages, and the ability of most Americans to make ends meet has dwindled. In essence, the quality of life for most Americans has diminished.
All Americans can take responsibility for this occurrence. If this trend continues, the U.S. will become a second class nation.
Richard Daughty: "And the only difference between people in real life and, say, Hollywood zombies on the screen, is that the zombies only want to eat my brain. Desperate people in real life want to consume my wallet and everything I own, via the elective and legislative process; or failing that, by just waltzing up here and taking it, via the robbery process."
H&R Block Inc. agreed to sell its money-losing sub-prime mortgage unit to Cerberus Capital Management LP for about 40 percent less than it sought as recently as last month. H&R Block could become a leveraged-buyout candidate, once it completes the sale of its subprime-lending unit, according to Kathleen Shanley, a GimmeCredit analyst.
Shares of Wal-Mart advanced 3% to $49.76, their highest point since late February--just one of the reasons the Dow Jones Industrial Average rallied 155 points to 12,964, a new record close.
May crude rose $1.55 to close at $63.38 a barrel Friday. May natural gas closed at $7.381 per million British thermal units, down 11.1 cents for the day, and down 5.4% for the week.
June gold closed at $695.80 an ounce Friday, its strongest closing level since Feb. 26. May silver climbed 22 cents to close at $13.955 an ounce, down 1% for the week. May copper gained 2.4 cents to end at $3.6105 a pound, up 2.3% from last Friday.
The number of rigs drilling for oil and natural gas in North America rose by 12, or 0.6%, to 1,867, according to a weekly update by Baker Hughes Inc. on Friday. The U.S. rig count rose 11 from last week to 1,769, while the Canadian rig count increased by one to 98. The U.S. offshore rig count was unchanged at 76.
Schlumberger Ltd. said its first-quarter net income rose to $1.18 billion, or 96 cents a share, from $722.5 million, or 59 cents a share, a year ago. Analysts had been expecting the company to report earnings of 91 cents a share, according to data compiled by Thomson Financial. Sales at the oilfield services company rose to $5.46 billion, from $4.24 billion last year, driven by an acceleration of activity in Europe, Africa, the Middle East and Asia.
SAP AG said Friday that its first-quarter net income rose 10% to 310 million euros, or 0.26 euros a share, from 282 million euros, or 0.23 euros a share. Revenue for the quarter rose 6%, or 11% at constant currencies, to 2.2 billion euros. SAP said it continued to gain market share among core enterprise application vendors in the quarter. SAP also reaffirmed its guidance for 2007 software and software related services revenues to increase in a range of 12% to 14% at constant currencies, with an effective tax rate of 32.5% to 33%.
Kohlberg Kravis Roberts and Alliance Boots's deputy chairman Stefano Pessina said Friday that they have reached agreement with the board of Alliance Boots to make an offer to buy the company at 10.90 pounds per share, or 10.6 billion pounds ($21.3 billion). Pessina holds 15.05% of the pharmacy chain's share capital.
AMD reported a first-quarter net loss of $611 million, or $1.11 a share, compared with a net profit of $184.5 million, or 38 cents a share, in last year's same period. This quarter's results included acquisition and stock option charges of 26 cents a share. For the three months ended March 31, sales fell to $1.23 billion from $1.33 billion. AMD said its gross margin, a key profitability metric for chip firms, fell to 28.1% from 58.5% a year ago.
For the first quarter, McDonalds net income rose to $762.4 million, or 62 cents per share, from $625.3 million, or 49 cents per share, a year earlier. Revenue rose 11 percent to $5.46 billion. Analysts were expecting revenue of $5.43 billion, according to Reuters Estimates.
Pfizer said its 2007 earnings will be below Wall Street expectations due to the unexpectedly swift introduction of cheaper generic forms of its hypertension treatment Norvasc. Pfizer said 2008 revenue will be little changed from 2007, which itself was expected to be flat with last year.
Caterpillar Inc. reported better-than-expected quarterly earnings on Friday and raised its outlook, saying strength in almost all of its businesses was offsetting weakness in residential housing and on-highway engine markets.
While net profit fell to $816 million, or $1.23 a share, from $840 million, or $1.20 a share, last year, the latest results topped the average analyst profit expectation of $1.08 a share.
Google's net income rose to $1.0 billion, or $3.18 a diluted share, from the year-earlier quarter's $592 million, or $1.95 a share. Excluding one-time items and option expenses, profit was $3.68 per share versus $2.29 per share a year before. Consensus estimates from analysts put Google's first-quarter earnings at $3.30 a share, according to Thomson Financial. “The biggest growth areas are clearly going to be in the mobile space,” Eric E. Schmidt, chief executive of Google.
Honeywell raised its 2007 revenue forecast by $700 million to $33.5 billion, and its earnings per share by 15 cents to a range of between $3.00 and $3.10 a share.
David Walker, U.S. Comptroller General: "The federal government's financial condition and fiscal outlook are worse than many may understand. Despite an increase in revenues in fiscal year 2006 of about $255 billion, the federal government reported that it costs exceeded its revenues by $450 billion (i.e., net operating cost) and that its cash outlays exceeded its cash receipts by $248 billion (i.e., unified budget deficit). Further, as of September 30, 2006, the U.S. government reported that it owed (i.e., liabilities) more than it owned (i.e., assets) by almost $9 trillion. In addition, the present value of the government's major reported long-term 'fiscal exposures' - liabilities (e.g., debt), contingencies (e.g., insurance) and social insurance and other commitments and promises (e.g., Social Security, Medicare) - rose from $20 trillion to about $50 trillion in the last 6 years."
American Express increased 69 cents to $59.64. The company said first-quarter net income rose to 87 cents a share from 69 cents a year earlier. Profit topped the 79-cent average estimate of analysts surveyed by Bloomberg.
Analysts estimate profits among S&P 500 members grew 3.1 percent in the January through March period, the slowest since the same quarter in 2002, according to the average of estimates compiled by Bloomberg.
Brett Steenbarger: "The number of S&P 500 stocks making annual highs has not jumped to a new high despite price highs in the average."
Nigeria's Forcados field expected to be back on production by end of May.
Reuters reports that the Nintendo Wii outsold the Microsoft Xbox 360 and Sony Playstation 3 in the US market during March.
According to the WSJ, Italy's UniCredit and France's Societé Generale have resumed merger talks, in a move that could set a new benchmark for banking on the continent.
Barry Ritholtz: Despite a myriad of potential pitfalls facing the market, as we have noted in the past, overly large short selling creates a bid beneath the market. When grateful shorts cover, they prevent any downside momentum from developing. If part of your thesis is investing due to "variant perception" -- the belief that you have figured out something the rest of the investment community hasn't -- then statistically speaking, the short side isn't really the ideal place to be when short interest is at record highs."
The NY Times reported "luxury" home prices on Long Island -- defined as those costing $750,000 to $12.5 million -- have slid over 5% last quarter, as inventory levels doubled from what they were two years ago.
Genesco Inc.received and would review a $46-a-share takeover proposal from Foot Locker Inc., the New York footwear retailer.
Iran still needs several years to be in a position to manufacture enough nuclear fuel through uranium enrichment for industrial use, Gholamreza Aghazadeh, head of Iran's atomic energy agency said.
A group of Sunni tribal leaders in Iraq's beleaguered Anbar province said Thursday that they intend to form a national party to oppose insurgent groups and to revive their role in Iraq's political process.
Vermont senators voted Friday to call for the impeachment of President Bush and Vice President Dick Cheney, saying their actions have raised "serious questions of constitutionality." The resolution says Bush and Cheney's actions in the U.S. and abroad, including in Iraq, "raise serious questions of constitutionality, statutory legality, and abuse of the public trust."
Rep. Ron Paul: "The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation."
Gene Sperling: "While the subprime and exotic mortgage fallout has been grabbing recent housing headlines, another potential story for 2007 may be in the wings: as Americans withdraw less equity from their homes will it mean a big or little hit for growth and consumer spending?"
Doug Wakefield: "We accept as normal that a new car that used to cost $3,000 now costs $30,000, or that a home that used to cost $40,000 now costs $200,000. The fact is that throughout our lifetime, the costs of stamps, milk, health care, auto repairs, and virtually anything else that we consider basic to the American way of life, has been propelled higher by this "dollars supplied at will" machine."
Over the last eight years we have seen the speculation go from the dotcom sector to real estate to commodities to foreign equities to private equity and hedge funds to derivatives- not necessarily in that order. During this period, the dollar has continued to lose value against all major currencies, the U.S. debt levels have soared, the current account deficit has soared, the cost of living has risen faster than wages, and the ability of most Americans to make ends meet has dwindled. In essence, the quality of life for most Americans has diminished.
All Americans can take responsibility for this occurrence. If this trend continues, the U.S. will become a second class nation.
Richard Daughty: "And the only difference between people in real life and, say, Hollywood zombies on the screen, is that the zombies only want to eat my brain. Desperate people in real life want to consume my wallet and everything I own, via the elective and legislative process; or failing that, by just waltzing up here and taking it, via the robbery process."
H&R Block Inc. agreed to sell its money-losing sub-prime mortgage unit to Cerberus Capital Management LP for about 40 percent less than it sought as recently as last month. H&R Block could become a leveraged-buyout candidate, once it completes the sale of its subprime-lending unit, according to Kathleen Shanley, a GimmeCredit analyst.
Shares of Wal-Mart advanced 3% to $49.76, their highest point since late February--just one of the reasons the Dow Jones Industrial Average rallied 155 points to 12,964, a new record close.
May crude rose $1.55 to close at $63.38 a barrel Friday. May natural gas closed at $7.381 per million British thermal units, down 11.1 cents for the day, and down 5.4% for the week.
June gold closed at $695.80 an ounce Friday, its strongest closing level since Feb. 26. May silver climbed 22 cents to close at $13.955 an ounce, down 1% for the week. May copper gained 2.4 cents to end at $3.6105 a pound, up 2.3% from last Friday.
The number of rigs drilling for oil and natural gas in North America rose by 12, or 0.6%, to 1,867, according to a weekly update by Baker Hughes Inc. on Friday. The U.S. rig count rose 11 from last week to 1,769, while the Canadian rig count increased by one to 98. The U.S. offshore rig count was unchanged at 76.
Thursday, April 19, 2007
China
4/20/07 China
Tribune, which owns 11 daily newspapers, 23 TV stations and the Chicago Cubs baseball team, said the latest quarter's results were hurt by a non-operating loss of 20 cents per share, related to an adjustment in the value of the company's eight-year-old stock investment in Time Warner. Excluding that item, profit from continuing operations would have totaled 28 cents per share in the latest period.
Texas exporters are selling more and more goods to buyers paying in yuan these days. Last year, Texas exporters sold $150 billion worth of goods overseas and a growing share of those sales were to Chinese buyers, according to a report released Wednesday by the Federal Reserve Bank of Dallas.
“It is rather clear that there are reasons for investors to worry. The new highs are spotty, not broad based,” said Marc Pado, chief market strategist at Cantor Fitzgerald. “The bears need a catalyst and may have gotten one in China’s GDP report, showing an explosive 11.1 per cent gain in the first quarter. The fear is that China will have to raise rates or let its currency appreciate quickly. Stronger Asian currencies raise the fears of an unwinding of the carry trade.”
Comments from China's national statistics bureau that excess liquidity was still a problem and that the economy risked overheating kept investors on alert for a rise in Chinese borrowing costs, supporting the yen which is often seen as a proxy for China's yuan currency.
Amgen said that its anemia drug Aranesp showed no difference in risk of death compared with a placebo in a closely watched study of the medicine in small-cell lung cancer patients.
Altria Chief Financial Officer Dinyar Devitre confirmed that the company is considering the spinoff of its international tobacco business.
Merrill Lynch & Co. said first-quarter profit rose 31 percent, led by the fastest trading gains on Wall Street and higher fees from underwriting stocks and arranging takeovers.
Natural-gas inventories fell by 46 billion cubic feet for the week ended April 13, the Energy Department said Thursday. Total stocks now stand at 1.546 trillion cubic feet, down 217 billion cubic feet from the year-ago level, but 280 billion cubic feet above the five-year average, the government data said.
The Conference Board said its index of leading economic indicators rose by 0.1% in March after falling the two previous months. "The data may be pointing to a softer economy this summer," said Ken Goldstein, labor economist for the private research group. The leading indicators, designed to forecast turning points in the economy, has now fallen 0.1% over the past six months, with just three of the 10 components advancing. In March, six of the 10 leading indicators increased. February's decline was revised lower to 0.6% from a 0.5% drop reported earlier.
"Market conditions in the homebuilding industry continue to be challenging in most of our markets as inventory levels of both new and existing homes remain high, and further increases in the use of sales incentives continue to put pressure on profit margins," said Chairman Donald R. Horton in a statement.
Rio Tinto said Thursday that its share of iron ore production rose by 12% compared to a year ago, reflecting production growth from its iron ore expansion program in Western Australia.
Pulte Homes said it expects net loss from continuing operations of between 34 cents and 38 cents a share for the quarter. It had previously expected results to range from break-even to a loss of 10 cents a share. The results will include between $130 million and $140 million in land-impairment charges. Net new orders fell 21% to 8,499 for the quarter. The company blamed a "challenging" housing market for the shortfall.
Hedge funds globally attracted $60 billion in new money during the first quarter, almost half the amount raised all of last year. The industry now oversees $1.57 trillion.
New Zealand's Scoop Independent News: "The reason why the Bush Administration is trying so hard to avoid testimony under oath before Congress is that once one thread is pulled out in an investigation, another one gets noticed and needs to be probed, and pretty soon all sorts of ugly, hidden crimes are out there for all to see. That way lies impeachment and conviction, and with them the loss of the protections that go with power. And thus the Administration must engage in elaborate cover-ups to keep the truth away from the light of day.
In President Richard Nixon's Watergate travails in the early-1970s, the fear of the Administration was that the Senate investigation of the bugging and break-in of Democratic Headquarters would unravel the various threads leading to what Attorney General John Mitchell termed "the White House horrors" -- i.e., all the other felonies committed, including slush funds to bribe witnesses for their silence, break-ins at doctors' offices, plots and conspiracies to kidnap and maybe even murder opponents, etc.
When that assault on the Constitution and democratic government became known and impeachment hearings were held in the House, Nixon resigned before he could be tried in the Senate.
Certainly, Rove and Cheney and Gonzales and Bush understand the possible consequences of the truth coming out in the various Administration scandals. Just a few months ago, with a compliant Republican-controlled Congress and a docile media, they didn't have to worry about legal ramifications. Now, with bulldog Democrats like Leahy, Waxman, Conyers and others in charge of the investigations, there is every likelihood that the Bush Administration's own "White House Horrors" will be uncovered, and impeachment hearings might likely follow."
May crude fell $1.30 to close at $61.83 a barrel Thursday, the contract's lowest closing level since April 9. This contract goes off the board on Friday. Meanwhile, spot Brent crude is $65.63. May natural gas closed at $7.492 per million British thermal units, down 0.5 cent.
June gold fell $5 to close at $688.30 an ounce, its lowest closing level since April 12. May silver dropped 24 cents to close at $13.735 an ounce and May copper lost 3.25 cents to end at $3.5865 a pound.
The manufacturing sector in the Philadelphia region expanded slowly in April for the third straight month, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed diffusion index was unchanged at 0.2 in April after 0.2 in March. The new orders index rose to 2.8 from 1.9. The shipments index fell to 4.3 from 6.8. The prices paid index rose to 24.3 from 21.8. The future activity index rose to 25.8 from 17.4.
Tribune, which owns 11 daily newspapers, 23 TV stations and the Chicago Cubs baseball team, said the latest quarter's results were hurt by a non-operating loss of 20 cents per share, related to an adjustment in the value of the company's eight-year-old stock investment in Time Warner. Excluding that item, profit from continuing operations would have totaled 28 cents per share in the latest period.
Texas exporters are selling more and more goods to buyers paying in yuan these days. Last year, Texas exporters sold $150 billion worth of goods overseas and a growing share of those sales were to Chinese buyers, according to a report released Wednesday by the Federal Reserve Bank of Dallas.
“It is rather clear that there are reasons for investors to worry. The new highs are spotty, not broad based,” said Marc Pado, chief market strategist at Cantor Fitzgerald. “The bears need a catalyst and may have gotten one in China’s GDP report, showing an explosive 11.1 per cent gain in the first quarter. The fear is that China will have to raise rates or let its currency appreciate quickly. Stronger Asian currencies raise the fears of an unwinding of the carry trade.”
Comments from China's national statistics bureau that excess liquidity was still a problem and that the economy risked overheating kept investors on alert for a rise in Chinese borrowing costs, supporting the yen which is often seen as a proxy for China's yuan currency.
Amgen said that its anemia drug Aranesp showed no difference in risk of death compared with a placebo in a closely watched study of the medicine in small-cell lung cancer patients.
Altria Chief Financial Officer Dinyar Devitre confirmed that the company is considering the spinoff of its international tobacco business.
Merrill Lynch & Co. said first-quarter profit rose 31 percent, led by the fastest trading gains on Wall Street and higher fees from underwriting stocks and arranging takeovers.
Natural-gas inventories fell by 46 billion cubic feet for the week ended April 13, the Energy Department said Thursday. Total stocks now stand at 1.546 trillion cubic feet, down 217 billion cubic feet from the year-ago level, but 280 billion cubic feet above the five-year average, the government data said.
The Conference Board said its index of leading economic indicators rose by 0.1% in March after falling the two previous months. "The data may be pointing to a softer economy this summer," said Ken Goldstein, labor economist for the private research group. The leading indicators, designed to forecast turning points in the economy, has now fallen 0.1% over the past six months, with just three of the 10 components advancing. In March, six of the 10 leading indicators increased. February's decline was revised lower to 0.6% from a 0.5% drop reported earlier.
"Market conditions in the homebuilding industry continue to be challenging in most of our markets as inventory levels of both new and existing homes remain high, and further increases in the use of sales incentives continue to put pressure on profit margins," said Chairman Donald R. Horton in a statement.
Rio Tinto said Thursday that its share of iron ore production rose by 12% compared to a year ago, reflecting production growth from its iron ore expansion program in Western Australia.
Pulte Homes said it expects net loss from continuing operations of between 34 cents and 38 cents a share for the quarter. It had previously expected results to range from break-even to a loss of 10 cents a share. The results will include between $130 million and $140 million in land-impairment charges. Net new orders fell 21% to 8,499 for the quarter. The company blamed a "challenging" housing market for the shortfall.
Hedge funds globally attracted $60 billion in new money during the first quarter, almost half the amount raised all of last year. The industry now oversees $1.57 trillion.
New Zealand's Scoop Independent News: "The reason why the Bush Administration is trying so hard to avoid testimony under oath before Congress is that once one thread is pulled out in an investigation, another one gets noticed and needs to be probed, and pretty soon all sorts of ugly, hidden crimes are out there for all to see. That way lies impeachment and conviction, and with them the loss of the protections that go with power. And thus the Administration must engage in elaborate cover-ups to keep the truth away from the light of day.
In President Richard Nixon's Watergate travails in the early-1970s, the fear of the Administration was that the Senate investigation of the bugging and break-in of Democratic Headquarters would unravel the various threads leading to what Attorney General John Mitchell termed "the White House horrors" -- i.e., all the other felonies committed, including slush funds to bribe witnesses for their silence, break-ins at doctors' offices, plots and conspiracies to kidnap and maybe even murder opponents, etc.
When that assault on the Constitution and democratic government became known and impeachment hearings were held in the House, Nixon resigned before he could be tried in the Senate.
Certainly, Rove and Cheney and Gonzales and Bush understand the possible consequences of the truth coming out in the various Administration scandals. Just a few months ago, with a compliant Republican-controlled Congress and a docile media, they didn't have to worry about legal ramifications. Now, with bulldog Democrats like Leahy, Waxman, Conyers and others in charge of the investigations, there is every likelihood that the Bush Administration's own "White House Horrors" will be uncovered, and impeachment hearings might likely follow."
May crude fell $1.30 to close at $61.83 a barrel Thursday, the contract's lowest closing level since April 9. This contract goes off the board on Friday. Meanwhile, spot Brent crude is $65.63. May natural gas closed at $7.492 per million British thermal units, down 0.5 cent.
June gold fell $5 to close at $688.30 an ounce, its lowest closing level since April 12. May silver dropped 24 cents to close at $13.735 an ounce and May copper lost 3.25 cents to end at $3.5865 a pound.
The manufacturing sector in the Philadelphia region expanded slowly in April for the third straight month, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed diffusion index was unchanged at 0.2 in April after 0.2 in March. The new orders index rose to 2.8 from 1.9. The shipments index fell to 4.3 from 6.8. The prices paid index rose to 24.3 from 21.8. The future activity index rose to 25.8 from 17.4.
Wednesday, April 18, 2007
Happenings
4/19/07 Happenings
The rise in the euro’s value propelled China’s exports to European Union countries past its exports to the United States for the first time in February.
Motorola said its first-quarter earnings fell sharply from the same quarter a year ago and sales also fell as the company struggled with weaker handset sales.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended April 13 dropped 2.5% to 630.6. It was the fifth consecutive weekly decline in demand.
In early Wednesday trading, London Brent crude was down 61 cents to $65.32 a barrel after a fall of $1.32 on Tuesday. That brought the loss to over 5% this week.
Research In Motion, the maker and developer of the Blackberry wireless email system, dropped more than 2% before Wednesday's opening bell on word that the company's Blackberry devices in the Western hemisphere are suffering from a massive system failure that began Tuesday night.
Ticker Sense: "Tuesday's reading of net new highs (285) on the New York Stock Exchange hit its highest levels since December 5th of last year. Some market watchers consider a large increase in the number of new highs to be a sign of market strength. To test this we found each occurrence since mid 2002 where the net number of NYSE stocks hitting a 52 week high reached its highest point in three months. As the chart below details, there have only been two periods where the S&P 500 went into a notable decline (5% or more) in the days immediately following a three month peak in new highs."
Shares of Societe Generale SA, France's third-biggest bank by assets, jumped to a record on speculation among traders and investors that Italy's UniCredit SpA will offer to buy the company.
JPMorgan reported a 55 per cent jump in first quarter net profits and increased its dividend for the first time in six years as it investment bank delivered record results.
Despite a 10-week run-up in pump prices, Americans continue using more gasoline this year than they did in 2006, according to a Department of Energy report last week.
Apache Corp. discovered gas off the coast of Australia. Production tests flowed 85 million cubic feet of gas per day, the Houston-based company said.
A top Chevron Corp. executive said Tuesday the push to displace as much as a fifth of the country's gasoline with ethanol will make it less likely the industry will build new domestic refineries.
Clear Channel’s private equity bidders boosted buyout offer to $39.00 a day ahead of the shareholder vote.
Washington Mutual's Chairman and CEO Kerry Killinger said "unprecedented deterioration" in the subprime segment, which offers loans to borrowers with tarnished credit or low incomes in relation to debt, drove a $113 million loss for WaMu's home-lending unit in the first quarter. That followed a loss of $122 million in the fourth quarter.
Schwab's new and existing customers added $33.5 billion to the accounts during the quarter, the most money to flow into the firm in a three-month stretch since the third quarter of 2000.
Bank of America Chairman and CEO Kenneth Lewis said at a derivatives industry conference that the industry needs to prepare for a "systemic meltdown," as troubles at LTCM and Amaranth weren't enough.
Schlumberger Ltd, Smith International Inc., and Cameron International Corp. were cut to hold from buy by Citigroup, citing valuation.
Seagate reported its third quarter profit fell 23% from the period a year earlier.
Four large bombs exploded across Baghdad on Wednesday, killing at least 127 people and wounding scores as violence climbed toward levels seen before the U.S.-Iraqi campaign to pacify the capital began two months ago.
Russian nuclear contractor Atomstroyexport will not complete the work on Iran’s Bushehr nuclear power plant by the end of 2007, Igor Ivanov, secretary of Russia’s Security Council said. Ivanov sited cash crunch and technical problems as reasons for the delay.
Cleveland congressman Dennis Kucinich sent his Democratic colleagues a two-sentence email announcing imminent plans to introduce "Articles of Impeachment with respect to the conduct of Vice President Cheney."
Crude supplies fell for the first time in three weeks.
The American Petroleum Institute reported a fall of 3.3 million barrels in crude supplies for the week ended April 13. The Energy Department had reported a decline of 1 million barrels. Motor gasoline supplies were down 242,000 barrels, the API said. The government reported a drop of 2.7 million barrels. Distillate supplies were down 711,000, the API said, compared with the government's reported decline of 800,000 barrels.
Victoria Bay Asset Management LLC and the American Stock Exchange said the United States Natural Gas Fund (UNG), an exchange-traded security tied to natural gas, began trading Wednesday. The fund's objective is "to have the changes in percentage terms of the unit's net asset value reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, La., as measured by the changes in the price of the futures contract on natural gas," according to a statement.
"Our margins were better than we expected," eBay Chief Financial Officer Bob Swan said in an interview. Sales at the world's largest online marketplace jumped 27% to $1.78 billion, slightly higher than the $1.72 billion expected by analysts. The growth was in part fueled by a 31% rise in PayPal revenue, while the company's Skype Internet-based phone service saw revenue more than doubled to $79 million.
The Dow broke through both its previous intraday record high and its closing record high, lifted by gains in only 11 of its 30 components.
May reformulated gasoline climbed 2.75 cents to close at $2.0833 a gallon Wednesday. May crude closed at $63.13 a barrel, up 3 cents. May natural gas added 7.9 cents to close at $7.497 per million British thermal units.
June gold rose $1.80 to trade at $694.30 an ounce Wednesday afternoon. May silver was down 2 cents at $14 an ounce. May copper was down 3.45 cents at $3.6425 a pound.
CSX Corp. said on Wednesday that The Children's Investment Fund (TCI), a large activist hedge fund run by Chris Hohn, owns a stake in the railroad company and is planning to buy more shares. CSX shares climbed to a record.
The rise in the euro’s value propelled China’s exports to European Union countries past its exports to the United States for the first time in February.
Motorola said its first-quarter earnings fell sharply from the same quarter a year ago and sales also fell as the company struggled with weaker handset sales.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and purchasing loans, for the week ended April 13 dropped 2.5% to 630.6. It was the fifth consecutive weekly decline in demand.
In early Wednesday trading, London Brent crude was down 61 cents to $65.32 a barrel after a fall of $1.32 on Tuesday. That brought the loss to over 5% this week.
Research In Motion, the maker and developer of the Blackberry wireless email system, dropped more than 2% before Wednesday's opening bell on word that the company's Blackberry devices in the Western hemisphere are suffering from a massive system failure that began Tuesday night.
Ticker Sense: "Tuesday's reading of net new highs (285) on the New York Stock Exchange hit its highest levels since December 5th of last year. Some market watchers consider a large increase in the number of new highs to be a sign of market strength. To test this we found each occurrence since mid 2002 where the net number of NYSE stocks hitting a 52 week high reached its highest point in three months. As the chart below details, there have only been two periods where the S&P 500 went into a notable decline (5% or more) in the days immediately following a three month peak in new highs."
Shares of Societe Generale SA, France's third-biggest bank by assets, jumped to a record on speculation among traders and investors that Italy's UniCredit SpA will offer to buy the company.
JPMorgan reported a 55 per cent jump in first quarter net profits and increased its dividend for the first time in six years as it investment bank delivered record results.
Despite a 10-week run-up in pump prices, Americans continue using more gasoline this year than they did in 2006, according to a Department of Energy report last week.
Apache Corp. discovered gas off the coast of Australia. Production tests flowed 85 million cubic feet of gas per day, the Houston-based company said.
A top Chevron Corp. executive said Tuesday the push to displace as much as a fifth of the country's gasoline with ethanol will make it less likely the industry will build new domestic refineries.
Clear Channel’s private equity bidders boosted buyout offer to $39.00 a day ahead of the shareholder vote.
Washington Mutual's Chairman and CEO Kerry Killinger said "unprecedented deterioration" in the subprime segment, which offers loans to borrowers with tarnished credit or low incomes in relation to debt, drove a $113 million loss for WaMu's home-lending unit in the first quarter. That followed a loss of $122 million in the fourth quarter.
Schwab's new and existing customers added $33.5 billion to the accounts during the quarter, the most money to flow into the firm in a three-month stretch since the third quarter of 2000.
Bank of America Chairman and CEO Kenneth Lewis said at a derivatives industry conference that the industry needs to prepare for a "systemic meltdown," as troubles at LTCM and Amaranth weren't enough.
Schlumberger Ltd, Smith International Inc., and Cameron International Corp. were cut to hold from buy by Citigroup, citing valuation.
Seagate reported its third quarter profit fell 23% from the period a year earlier.
Four large bombs exploded across Baghdad on Wednesday, killing at least 127 people and wounding scores as violence climbed toward levels seen before the U.S.-Iraqi campaign to pacify the capital began two months ago.
Russian nuclear contractor Atomstroyexport will not complete the work on Iran’s Bushehr nuclear power plant by the end of 2007, Igor Ivanov, secretary of Russia’s Security Council said. Ivanov sited cash crunch and technical problems as reasons for the delay.
Cleveland congressman Dennis Kucinich sent his Democratic colleagues a two-sentence email announcing imminent plans to introduce "Articles of Impeachment with respect to the conduct of Vice President Cheney."
Crude supplies fell for the first time in three weeks.
The American Petroleum Institute reported a fall of 3.3 million barrels in crude supplies for the week ended April 13. The Energy Department had reported a decline of 1 million barrels. Motor gasoline supplies were down 242,000 barrels, the API said. The government reported a drop of 2.7 million barrels. Distillate supplies were down 711,000, the API said, compared with the government's reported decline of 800,000 barrels.
Victoria Bay Asset Management LLC and the American Stock Exchange said the United States Natural Gas Fund (UNG), an exchange-traded security tied to natural gas, began trading Wednesday. The fund's objective is "to have the changes in percentage terms of the unit's net asset value reflect the changes in percentage terms of the price of natural gas delivered at the Henry Hub, La., as measured by the changes in the price of the futures contract on natural gas," according to a statement.
"Our margins were better than we expected," eBay Chief Financial Officer Bob Swan said in an interview. Sales at the world's largest online marketplace jumped 27% to $1.78 billion, slightly higher than the $1.72 billion expected by analysts. The growth was in part fueled by a 31% rise in PayPal revenue, while the company's Skype Internet-based phone service saw revenue more than doubled to $79 million.
The Dow broke through both its previous intraday record high and its closing record high, lifted by gains in only 11 of its 30 components.
May reformulated gasoline climbed 2.75 cents to close at $2.0833 a gallon Wednesday. May crude closed at $63.13 a barrel, up 3 cents. May natural gas added 7.9 cents to close at $7.497 per million British thermal units.
June gold rose $1.80 to trade at $694.30 an ounce Wednesday afternoon. May silver was down 2 cents at $14 an ounce. May copper was down 3.45 cents at $3.6425 a pound.
CSX Corp. said on Wednesday that The Children's Investment Fund (TCI), a large activist hedge fund run by Chris Hohn, owns a stake in the railroad company and is planning to buy more shares. CSX shares climbed to a record.
Tuesday, April 17, 2007
Data, Earnings, and Deals
4/18/07 Data, Earnings, and Deals
For the first time in 15 years the pound reached and rose above the $2 level. UK inflation rises at a 3.1% rate.
TD Ameritrade reported a drop in first-quarter profit Tuesday that was more than analysts anticipated and also lowered its profit guidance for the year.
J&J said it earned $3.4 billion, or $1.16 a share, in the first three months of the year, excluding special items, up 14% from the $3 billion, or 99 cents a share, it earned in the same quarter of 2006 and ahead of its own forecast of earnings of $1.04 to $1.06 a share.
Benchmark Brent crude rose in early trading on Tuesday as a leak on a Canadian oil pipeline to the United States helped recoup some losses made on news that Nigeria planned to restart fields shut for a year by militant attacks.
Wells Fargo said first-quarter profit rose 11%, as loan growth and higher net interest margin offset rising credit losses.
Coca Cola reported higher quarterly profit that beat Wall Street estimates as strength in emerging markets such as China and Russia overshadowed weakness in North America. Net income for the first quarter ended March 30 rose 14% to $1.26 billion, or 54 cents a share, from $1.11 billion, or 47 cents a share, a year earlier.
The Consumer Price Index climbed at a 0.6% rate, up from 0.4% in February. It was the largest monthly increase since a matching 0.6 percent rise last April. A 10.6% jump in gasoline prices last month eclipsed a 0.3 percent gain in February and was the largest increase in 1-1/2 years since a 17.4 percent gain in September 2005. But excluding food and energy, consumer prices edged up by a slim 0.1% in March following increases of 0.2% in February and 0.3% in January.
The way I look at the data the compound 3-month rate for food is going up 7.4%, transportation up 8.3%, and energy 22.9%. Should that create cheering?
Richard Daughty: "I sense that you are asking, "How can eggs be up by 25%, and yet the lying government, and the lying Federal Reserve, and their lying collaborators in the lying Congress, the nations' lying universities, and the lying newspapers all say that there is no inflation in prices? What am I, some kind of stupid poopie-head that is supposed to believe that silly crap?" By way of explanation, let me first say (with all due respect) that you are a stupid, ignorant boob and you don't know squat about how to calculate inflation these days. The answer is, obviously, that the Federal Reserve, the government and their ignorant lackeys all say that inflation in egg prices is zero (although the price of eggs is up 25%) because the hedonically-adjusted increase in price (43 cents) is not the price of the egg going up, but is the additional cost of additional benefits that you now receive! As just one example, part of the additional 43 cents is to pay for the benefit of happier chickens, thanks to free-range chickens and less crowding. And if the chickens are happier, see, then the eggs are not affected by, for example, stress hormones, and thus they are, somehow healthier! So, the eggs are of higher quality! So THAT'S the benefit for which you are paying more. It has NOTHING to do with the price of the basic egg, which is, when the price of these benefits is stripped out, completely unchanged in price! Thus, inflation in egg prices is proved to be, after applying officially-sanctioned hedonic adjustments, zero! See how I am doing this? It's easy."
Real average weekly earnings fell by 0.1 percent from February to March
after seasonal adjustment, according to preliminary data released today by the
Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent rise
in both average weekly hours and average hourly earnings was more than offset by
a 0.8 percent increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers.
The Commerce Department said housing starts set an annual pace of 1.518 million units in March compared with a 1.506 million unit pace in February. Economists had forecast March housing starts to drop to a 1.495 million unit pace from February's originally reported 1.525 million units. Building permits, which signal future construction plans, also rose 0.8% to a 1.544 million unit pace. Economists were expecting building permits to register a 1.510 million unit pace, down from the 1.532 million in February. Last month's permits figure was off 25.9% from the March 2006 pace of 2.085 million units. Meanwhile, housing completions were off 25.9% in March from a year ago at a 1.632 million unit pace -- the biggest percentage decline since June 1982.
Industrial production in the U.S. declined last month as warm weather reduced electricity demand. Manufacturing output increased at the fastest pace of the year. The 0.2 percent decrease in production at factories, mines and utilities followed a revised 0.8 percent increase in February, Federal Reserve figures showed today. Capacity utilization, which measures the proportion of plants in use, fell to 81.4 percent, from 81.6 percent in February.
BCE Inc., Canada's largest telephone company, is in talks with Kohlberg Kravis Roberts & Co. and three Canadian pension funds in what would be the country's biggest buyout ever.
According to the Houston Chronicle, Kentucky Agriculture Commissioner Richie Farmer recently asked Gov. Ernie Fletcher to seek federal disaster relief. A statewide crop report issued Monday by the National Agricultural Statistics Services' Kentucky field office reflected the sudden downturn for the wheat crop. According to the report, 64 percent of the wheat was rated poor or very poor. Another 20 percent was considered fair, 15 percent good and 1 percent excellent. Just two weeks ago, slightly more than three-fourths of the crop was rated good or excellent.
The state's barley also was hard hit by the freeze, with 88 percent of the crop rated very poor or poor, according to the crop report Monday.
Homes lost to foreclosures in California shot up to 11,033 in the first quarter, an 81.5 percent climb from 6,078 in the previous quarter, according to DataQuick Information Systems. Foreclosures rocketed 802.1 percent from 1,223 in the first quarter last year but remained below the 1996 peak of 15,418. Statewide, lenders sent 46,760 notices of default to homeowners in the first quarter. That marked a 23.1 percent jump from the previous quarter and a 148 percent jump from a year ago in the same period. Notices of default mark the first stage in the foreclosure process. The number of Bay Area homeowners who failed to pay their mortgages on time more than doubled in the first quarter compared with the same time last year, as home values flattened and fewer homeowners could sell or refinance to escape mortgages they can't afford.
General Motors Corp. said Tuesday that it will spend $4.2 billion on the next generation of its Opel Astra, and chose plants in Germany, Sweden, Poland and Britain to build the new compact vehicle.
The White House on Tuesday said President Bush would veto legislation slated for debate in the Senate that would require the federal government to negotiate prescription-drug prices under Medicare.
Germany's ZEW index showed sentiment among German investors on the outlook for Europe's largest economy improved by more than expected in April.
The ringgit surged to 3.43 against the US dollar, a new high of almost 10 years, due to brisk demand as foreign funds went on to accumulate shares on Bursa Malaysia, dealers said.
The Oil Service Index is up about 15% in 2007.
The Dow has risen 12 out of the last 13 sessions. I urge investors to consider taking advantage of this strength and look to sell January 08 out of the money calls against selective stock holdings.
ConsortiumNews: "Arthur M. Schlesinger Jr. discussed Richard Nixon's expansion and abuse of presidential power in "The Imperial Presidency." Schlesinger said the question of impeachment "was more than whether Congress and the people wanted to deal with the particular iniquities of the Nixon administration. It was whether they wished to rein in the runaway Presidency." Today's runaway Presidency is far from reined in. Bush and Cheney are emboldened by the fact that they've managed to get away with the high crime of lying to Congress in order to dupe the nation into war. They keep escalating the conflict, peddling the same distortions and propaganda they've used all along. Bush and Cheney function as kings. This isn't what America's founders had in mind."
Chris Mayer via Daily Reckoning: "The United States is in recession now. "Last week, MarineMax - the largest recreational boat dealer in the United States - said earnings would come in at 45 to 65 cents. In January… January, mind you… it said it would earn $1.40 to $1.50. Last November - only five months ago - it forecast $2.05 to $2.15. "The reason: Call it fallout from the housing boom. CEO Bill McGill made no effort to hide behind any fig leaves in his conference call: 'While most of our customers [have] the ability to purchase a boat, they have lost their appetite to pull the trigger when uncertainty enters the equation.' "What uncertainty? 'Perceived loss in value of their home, the loss in the investment-property value, or the perceived or actual trickle-down effect that the housing market may have on their own business or their financial picture.' "Note to sellers of big-ticket items: Batten down the hatches, boys! "Last month, I met with John Williams, the sharp economist behind Shadow Government Statistics. Williams is one of the few economists to call the old hag that is the U.S. economy an old hag. "'We are in an inflationary recession now,' he says. "Williams ticks off the data that confirm a recession in progress: Much weaker-than-expected housing starts, retail sales and industrial production. "Also, a weak manufacturing survey, sluggish annual growth in durable goods orders, rising new claims for unemployment insurance, and anemic employment growth. "There is a play book for dealing with this kind of environment, based on old highlight reels from the 1970s. I can sum it up thusly: Buy tangible things; sell paper."
ABN Amro said after Tuesday's Amsterdam close that it's extending exclusive talks to merge with Barclays. The discussions are progressing, but there's no certainty they will lead to a transaction or the form it will take, ABN Amro said. Royal Bank of Scotland, Banco Santander Central Hispano and Fortis have said they're considering a joint bid for ABN Amro.
L'Oreal said it's confident of comparable sales growth between 6% and 8% for the year.
Earnings fell 2 percent at U.S. Bancorp , dropped 3 percent at SunTrust Banks Inc.,and rose 13 percent at Regions Financial Corp., respectively the sixth- to eighth-largest banks. KeyCorp cut its full-year profit forecast, and its shares fell more than 6 percent.
Forecasts called for milder weather to start by week's end, and this could signal reduced demand for the heating fuel.
Martin Weiss: "Just as China has emerged as the world's steel-producing king, it has also become the world's iron-ore glutton. China needs the iron ore to make steel for its construction industry, now the largest in the world, surpassing expenditures of $120 billion annually. China needs the iron ore to help feed the new growth in construction -- 20% in 2006, possibly as much as 25% in 2007. China needs the ore to build residences, highways, railroads, subways and dams. Result: Just in the first three months of this year, China imported 100.2 million tonnes of iron ore, an increase of 23.4% over the previous year. And if this pace continues through year-end, total imports for 2007 will easily exceed 355 million tonnes, a now-defunct forecast made not long ago by the China Iron and Steel Association."
May copper rose 3.9%, or 13.75 cents, to close at $3.677 a pound. June gold fell $2 to close at $692.50 an ounce.
May crude fell 51 cents to close at $63.10 a barrel Tuesday. May reformulated gasoline fell 2.8% to close at a two-week low of $2.0558 a gallon. "You're seeing an unwinding of crack spreads," said Mike Fitzpatrick, vice president, energy risk management, at Fimat USA, commenting on weak products futures. "The Brent is closing the spread with WTI and the potential for Forcados production coming back probably has a lot to do with that."
Google will soon make available free software for creating presentations, as part of its Internet-based offerings designed to compete with Microsoft Corp.'s Office suite. The program, called Google Presents, will compete with Microsoft's PowerPoint application and be available within the next few months.
The private equity owners of the world's largest commercial satellite operator, Intelsat, have been approached by a potential buyer of the company, two sources familiar with the matter said Monday.
Retired Gen. Barry McCaffrey: "The disastrous state of the U.S. military is putting the country in strategic peril."
While Intel gave a second-quarter revenue outlook that was below expectations, it said gross margin for the year would be a full percentage point higher than its initial estimate.
Yahoo Inc. reported an 11 percent fall in quarterly profit, missing Wall Street estimates as a new advertising system aimed at clawing back market share from Google has yet to take hold.
IBM reported that net income rose to $1.84 billion, or $1.21 per share, from $1.71 billion, or $1.08 per share, a year earlier. Revenue climbed to $22.03 billion from $20.66 billion.
The number of U.S. households with a net worth of more than $5 million, excluding their primary residence, surged 23% in 2006 to surpass one million for the first time, according to a survey by Chicago-based Spectrem Group.
Lightstone Group agreed to buy Extended Stay Hotels from Blackstone Group for $8 billion in one of the biggest hotel deals in history.
Catalina Marketing Corp. signed a definitive agreement to be acquired by Hellman & Friedman Capital Partners VI LP, a private-equity firm, for about $1.56 billion, plus the assumption of $136 million in debt.
For the first time in 15 years the pound reached and rose above the $2 level. UK inflation rises at a 3.1% rate.
TD Ameritrade reported a drop in first-quarter profit Tuesday that was more than analysts anticipated and also lowered its profit guidance for the year.
J&J said it earned $3.4 billion, or $1.16 a share, in the first three months of the year, excluding special items, up 14% from the $3 billion, or 99 cents a share, it earned in the same quarter of 2006 and ahead of its own forecast of earnings of $1.04 to $1.06 a share.
Benchmark Brent crude rose in early trading on Tuesday as a leak on a Canadian oil pipeline to the United States helped recoup some losses made on news that Nigeria planned to restart fields shut for a year by militant attacks.
Wells Fargo said first-quarter profit rose 11%, as loan growth and higher net interest margin offset rising credit losses.
Coca Cola reported higher quarterly profit that beat Wall Street estimates as strength in emerging markets such as China and Russia overshadowed weakness in North America. Net income for the first quarter ended March 30 rose 14% to $1.26 billion, or 54 cents a share, from $1.11 billion, or 47 cents a share, a year earlier.
The Consumer Price Index climbed at a 0.6% rate, up from 0.4% in February. It was the largest monthly increase since a matching 0.6 percent rise last April. A 10.6% jump in gasoline prices last month eclipsed a 0.3 percent gain in February and was the largest increase in 1-1/2 years since a 17.4 percent gain in September 2005. But excluding food and energy, consumer prices edged up by a slim 0.1% in March following increases of 0.2% in February and 0.3% in January.
The way I look at the data the compound 3-month rate for food is going up 7.4%, transportation up 8.3%, and energy 22.9%. Should that create cheering?
Richard Daughty: "I sense that you are asking, "How can eggs be up by 25%, and yet the lying government, and the lying Federal Reserve, and their lying collaborators in the lying Congress, the nations' lying universities, and the lying newspapers all say that there is no inflation in prices? What am I, some kind of stupid poopie-head that is supposed to believe that silly crap?" By way of explanation, let me first say (with all due respect) that you are a stupid, ignorant boob and you don't know squat about how to calculate inflation these days. The answer is, obviously, that the Federal Reserve, the government and their ignorant lackeys all say that inflation in egg prices is zero (although the price of eggs is up 25%) because the hedonically-adjusted increase in price (43 cents) is not the price of the egg going up, but is the additional cost of additional benefits that you now receive! As just one example, part of the additional 43 cents is to pay for the benefit of happier chickens, thanks to free-range chickens and less crowding. And if the chickens are happier, see, then the eggs are not affected by, for example, stress hormones, and thus they are, somehow healthier! So, the eggs are of higher quality! So THAT'S the benefit for which you are paying more. It has NOTHING to do with the price of the basic egg, which is, when the price of these benefits is stripped out, completely unchanged in price! Thus, inflation in egg prices is proved to be, after applying officially-sanctioned hedonic adjustments, zero! See how I am doing this? It's easy."
Real average weekly earnings fell by 0.1 percent from February to March
after seasonal adjustment, according to preliminary data released today by the
Bureau of Labor Statistics of the U.S. Department of Labor. A 0.3 percent rise
in both average weekly hours and average hourly earnings was more than offset by
a 0.8 percent increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers.
The Commerce Department said housing starts set an annual pace of 1.518 million units in March compared with a 1.506 million unit pace in February. Economists had forecast March housing starts to drop to a 1.495 million unit pace from February's originally reported 1.525 million units. Building permits, which signal future construction plans, also rose 0.8% to a 1.544 million unit pace. Economists were expecting building permits to register a 1.510 million unit pace, down from the 1.532 million in February. Last month's permits figure was off 25.9% from the March 2006 pace of 2.085 million units. Meanwhile, housing completions were off 25.9% in March from a year ago at a 1.632 million unit pace -- the biggest percentage decline since June 1982.
Industrial production in the U.S. declined last month as warm weather reduced electricity demand. Manufacturing output increased at the fastest pace of the year. The 0.2 percent decrease in production at factories, mines and utilities followed a revised 0.8 percent increase in February, Federal Reserve figures showed today. Capacity utilization, which measures the proportion of plants in use, fell to 81.4 percent, from 81.6 percent in February.
BCE Inc., Canada's largest telephone company, is in talks with Kohlberg Kravis Roberts & Co. and three Canadian pension funds in what would be the country's biggest buyout ever.
According to the Houston Chronicle, Kentucky Agriculture Commissioner Richie Farmer recently asked Gov. Ernie Fletcher to seek federal disaster relief. A statewide crop report issued Monday by the National Agricultural Statistics Services' Kentucky field office reflected the sudden downturn for the wheat crop. According to the report, 64 percent of the wheat was rated poor or very poor. Another 20 percent was considered fair, 15 percent good and 1 percent excellent. Just two weeks ago, slightly more than three-fourths of the crop was rated good or excellent.
The state's barley also was hard hit by the freeze, with 88 percent of the crop rated very poor or poor, according to the crop report Monday.
Homes lost to foreclosures in California shot up to 11,033 in the first quarter, an 81.5 percent climb from 6,078 in the previous quarter, according to DataQuick Information Systems. Foreclosures rocketed 802.1 percent from 1,223 in the first quarter last year but remained below the 1996 peak of 15,418. Statewide, lenders sent 46,760 notices of default to homeowners in the first quarter. That marked a 23.1 percent jump from the previous quarter and a 148 percent jump from a year ago in the same period. Notices of default mark the first stage in the foreclosure process. The number of Bay Area homeowners who failed to pay their mortgages on time more than doubled in the first quarter compared with the same time last year, as home values flattened and fewer homeowners could sell or refinance to escape mortgages they can't afford.
General Motors Corp. said Tuesday that it will spend $4.2 billion on the next generation of its Opel Astra, and chose plants in Germany, Sweden, Poland and Britain to build the new compact vehicle.
The White House on Tuesday said President Bush would veto legislation slated for debate in the Senate that would require the federal government to negotiate prescription-drug prices under Medicare.
Germany's ZEW index showed sentiment among German investors on the outlook for Europe's largest economy improved by more than expected in April.
The ringgit surged to 3.43 against the US dollar, a new high of almost 10 years, due to brisk demand as foreign funds went on to accumulate shares on Bursa Malaysia, dealers said.
The Oil Service Index is up about 15% in 2007.
The Dow has risen 12 out of the last 13 sessions. I urge investors to consider taking advantage of this strength and look to sell January 08 out of the money calls against selective stock holdings.
ConsortiumNews: "Arthur M. Schlesinger Jr. discussed Richard Nixon's expansion and abuse of presidential power in "The Imperial Presidency." Schlesinger said the question of impeachment "was more than whether Congress and the people wanted to deal with the particular iniquities of the Nixon administration. It was whether they wished to rein in the runaway Presidency." Today's runaway Presidency is far from reined in. Bush and Cheney are emboldened by the fact that they've managed to get away with the high crime of lying to Congress in order to dupe the nation into war. They keep escalating the conflict, peddling the same distortions and propaganda they've used all along. Bush and Cheney function as kings. This isn't what America's founders had in mind."
Chris Mayer via Daily Reckoning: "The United States is in recession now. "Last week, MarineMax - the largest recreational boat dealer in the United States - said earnings would come in at 45 to 65 cents. In January… January, mind you… it said it would earn $1.40 to $1.50. Last November - only five months ago - it forecast $2.05 to $2.15. "The reason: Call it fallout from the housing boom. CEO Bill McGill made no effort to hide behind any fig leaves in his conference call: 'While most of our customers [have] the ability to purchase a boat, they have lost their appetite to pull the trigger when uncertainty enters the equation.' "What uncertainty? 'Perceived loss in value of their home, the loss in the investment-property value, or the perceived or actual trickle-down effect that the housing market may have on their own business or their financial picture.' "Note to sellers of big-ticket items: Batten down the hatches, boys! "Last month, I met with John Williams, the sharp economist behind Shadow Government Statistics. Williams is one of the few economists to call the old hag that is the U.S. economy an old hag. "'We are in an inflationary recession now,' he says. "Williams ticks off the data that confirm a recession in progress: Much weaker-than-expected housing starts, retail sales and industrial production. "Also, a weak manufacturing survey, sluggish annual growth in durable goods orders, rising new claims for unemployment insurance, and anemic employment growth. "There is a play book for dealing with this kind of environment, based on old highlight reels from the 1970s. I can sum it up thusly: Buy tangible things; sell paper."
ABN Amro said after Tuesday's Amsterdam close that it's extending exclusive talks to merge with Barclays. The discussions are progressing, but there's no certainty they will lead to a transaction or the form it will take, ABN Amro said. Royal Bank of Scotland, Banco Santander Central Hispano and Fortis have said they're considering a joint bid for ABN Amro.
L'Oreal said it's confident of comparable sales growth between 6% and 8% for the year.
Earnings fell 2 percent at U.S. Bancorp , dropped 3 percent at SunTrust Banks Inc.,and rose 13 percent at Regions Financial Corp., respectively the sixth- to eighth-largest banks. KeyCorp cut its full-year profit forecast, and its shares fell more than 6 percent.
Forecasts called for milder weather to start by week's end, and this could signal reduced demand for the heating fuel.
Martin Weiss: "Just as China has emerged as the world's steel-producing king, it has also become the world's iron-ore glutton. China needs the iron ore to make steel for its construction industry, now the largest in the world, surpassing expenditures of $120 billion annually. China needs the iron ore to help feed the new growth in construction -- 20% in 2006, possibly as much as 25% in 2007. China needs the ore to build residences, highways, railroads, subways and dams. Result: Just in the first three months of this year, China imported 100.2 million tonnes of iron ore, an increase of 23.4% over the previous year. And if this pace continues through year-end, total imports for 2007 will easily exceed 355 million tonnes, a now-defunct forecast made not long ago by the China Iron and Steel Association."
May copper rose 3.9%, or 13.75 cents, to close at $3.677 a pound. June gold fell $2 to close at $692.50 an ounce.
May crude fell 51 cents to close at $63.10 a barrel Tuesday. May reformulated gasoline fell 2.8% to close at a two-week low of $2.0558 a gallon. "You're seeing an unwinding of crack spreads," said Mike Fitzpatrick, vice president, energy risk management, at Fimat USA, commenting on weak products futures. "The Brent is closing the spread with WTI and the potential for Forcados production coming back probably has a lot to do with that."
Google will soon make available free software for creating presentations, as part of its Internet-based offerings designed to compete with Microsoft Corp.'s Office suite. The program, called Google Presents, will compete with Microsoft's PowerPoint application and be available within the next few months.
The private equity owners of the world's largest commercial satellite operator, Intelsat, have been approached by a potential buyer of the company, two sources familiar with the matter said Monday.
Retired Gen. Barry McCaffrey: "The disastrous state of the U.S. military is putting the country in strategic peril."
While Intel gave a second-quarter revenue outlook that was below expectations, it said gross margin for the year would be a full percentage point higher than its initial estimate.
Yahoo Inc. reported an 11 percent fall in quarterly profit, missing Wall Street estimates as a new advertising system aimed at clawing back market share from Google has yet to take hold.
IBM reported that net income rose to $1.84 billion, or $1.21 per share, from $1.71 billion, or $1.08 per share, a year earlier. Revenue climbed to $22.03 billion from $20.66 billion.
The number of U.S. households with a net worth of more than $5 million, excluding their primary residence, surged 23% in 2006 to surpass one million for the first time, according to a survey by Chicago-based Spectrem Group.
Lightstone Group agreed to buy Extended Stay Hotels from Blackstone Group for $8 billion in one of the biggest hotel deals in history.
Catalina Marketing Corp. signed a definitive agreement to be acquired by Hellman & Friedman Capital Partners VI LP, a private-equity firm, for about $1.56 billion, plus the assumption of $136 million in debt.
Monday, April 16, 2007
More Deals
4/17/07 More Deals
Innkeepers USA Trust,
(KPA)
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a hotel real estate investment trust, said on Monday it has agreed to be acquired by an affiliate of Apollo Investment for $17.75 a share in cash. Innkeepers, which owns 74 hotels, said it will pay its first-quarter common share dividend on April 24 and has agreed to suspend any further common share dividends.
The NAHB/Wells Fargo Housing Market Index dropped to 33 in April from 36 in March, its second consecutive monthly fall and its lowest since December when it also came in at 33. The index fell to a 15-year low of 30 last September.
Medical testing company Quest Diagnostics said Monday it will buy diagnostic testing company AmeriPath Inc. for about $1.23 billion in cash. The $2 billion deal includes about $770 million in debt.
A gunman killed at least 33 students and faculty today at Virginia Tech University in the deadliest school shooting in U.S. history. Another 21 people were treated for gunshot wounds and other injuries. Police didn't identify those killed at the college's Blacksburg campus, about 270 miles (434 kilometers) southwest of Washington, though they said the sole shooter was dead.
The 13-nation euro bought $1.3549 by afternoon in Europe after climbing as high as $1.3576 — its highest point since January 2005 and near its record of $1.3667 from December 2004. Meanwhile, the pound is close to the $2 mark. It is wise to maintain an eye on the value of the dollar versus foreign currencies as well as the relationship versus gold, silver, copper, and oil. The rise in the Dow is indeed very misleading when looking at these various comparisons.
June gold climbed $4.60 to close at $694.50 an ounce Monday, marking its strongest closing level since Feb. 26. May silver finished slightly lower, closing at $14.08 an ounce, down 1 cent. May copper added 0.75 cent to close at $3.5395 a pound.
Texas Pacific Group and Warburg Pincus are mulling an initial public offering for Neiman Marcus, Women's Wear Daily reported on Monday.
Fred Hickey: "We have excess PC inventories, excess cell phone inventories, excess auto inventories, excess networking inventories (the Cisco 'Lean' initiative), excess telecom inventories (carrier consolidation), excess PS3 and Xbox game consoles (disappointing sales), excess iPod inventories, excess computer server parts, excess disk drive inventories, excess DRAM inventories, excess microprocessor inventories -- and it will all be cleared during the housing and credit bust, and the first consumer cutbacks in 16 years."
Jas Jain on Silicon Valley home sales and prices: "The combination of 40% increase in supply and 20% decline in sales, YoY, means that over the past 12 months the supply-demand has deteriorated by 75% (1.4/0.8 = 1.75), i.e., the supply is up 75% relative to the demand...currently the median price of sales is 5-10% higher than the median listing price while a year ago it was 5-10% lower. This is strictly due to significantly higher level of sales in the high-priced areas and much lower level of sales in lower-priced areas. This will result in fewer active listings in the higher-priced areas and mounting listings in the lower-priced areas, thus depressing the median listing price...The trend of sales that were initiated in January and February, favoring sales in high-priced areas, has only accelerated based on recent reports...The people who claim that home prices in Silicon Valley CANNOT decline by more than 20% are the same people that said that the leading local tech stocks in 2000 couldn't decline by more than 50%. My prediction of 93.9% decline in CSCO fell short by 3.8% (the actual decline was only 90.1%)."
Daily Reckoning: "Up until last month, the U.S. had imported more goods from our neighbor to the north than from any other country. But with $48.7 billion worth of goods sold to the U.S. in February, China has overtaken Canada as our biggest shipper."
Dan Amoss: "The trend toward heavier, sourer crude oil will directly benefit manufacturers of specialized wellhead equipment. These lower grades of crude make up a steadily rising share of global oil production because just as you'd expect, the sweetest, lowest-hanging fruit in the oil patch tends to be picked and consumed first. More barrels of crude will require upgrading, particularly the abundant, yet barely accessible heavy crude from sources like the Orinoco belt in Venezuela. Technology is what the Venezuelans, the Russians, and the Saudis need, and they will pay up for it. Some of the biggest wealth-creating companies of the next generation will be those that can unlock the value these politically unstable resources - without committing billions in capital to projects that can be seized overnight...If average global depletion is running a little over 4% per year - a fair estimate - the world is likely to have the same oil production capacity in 2012 as it has today."
Overall, capital inflows for February increased to $94.5 billion, up from $79.6 billion in January to mark a second straight monthly increase.
May crude fell 2 cents to close at $63.61 a barrel. Reformulated gasoline's May contract fell 2.9% to close at $2.1157 a gallon. May natural gas fell 3.5%, or 27.1 cents, to end at $7.53 per million British thermal units.
Valero Energy Corp. said it began to restart the gasoline unit at its McKee refinery in Texas.
Construction of a natural gas pipeline between Colombia and Venezuela will be finished by August, Venezuela's energy minister said Sunday.
Innkeepers USA Trust,
(KPA)
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a hotel real estate investment trust, said on Monday it has agreed to be acquired by an affiliate of Apollo Investment for $17.75 a share in cash. Innkeepers, which owns 74 hotels, said it will pay its first-quarter common share dividend on April 24 and has agreed to suspend any further common share dividends.
The NAHB/Wells Fargo Housing Market Index dropped to 33 in April from 36 in March, its second consecutive monthly fall and its lowest since December when it also came in at 33. The index fell to a 15-year low of 30 last September.
Medical testing company Quest Diagnostics said Monday it will buy diagnostic testing company AmeriPath Inc. for about $1.23 billion in cash. The $2 billion deal includes about $770 million in debt.
A gunman killed at least 33 students and faculty today at Virginia Tech University in the deadliest school shooting in U.S. history. Another 21 people were treated for gunshot wounds and other injuries. Police didn't identify those killed at the college's Blacksburg campus, about 270 miles (434 kilometers) southwest of Washington, though they said the sole shooter was dead.
The 13-nation euro bought $1.3549 by afternoon in Europe after climbing as high as $1.3576 — its highest point since January 2005 and near its record of $1.3667 from December 2004. Meanwhile, the pound is close to the $2 mark. It is wise to maintain an eye on the value of the dollar versus foreign currencies as well as the relationship versus gold, silver, copper, and oil. The rise in the Dow is indeed very misleading when looking at these various comparisons.
June gold climbed $4.60 to close at $694.50 an ounce Monday, marking its strongest closing level since Feb. 26. May silver finished slightly lower, closing at $14.08 an ounce, down 1 cent. May copper added 0.75 cent to close at $3.5395 a pound.
Texas Pacific Group and Warburg Pincus are mulling an initial public offering for Neiman Marcus, Women's Wear Daily reported on Monday.
Fred Hickey: "We have excess PC inventories, excess cell phone inventories, excess auto inventories, excess networking inventories (the Cisco 'Lean' initiative), excess telecom inventories (carrier consolidation), excess PS3 and Xbox game consoles (disappointing sales), excess iPod inventories, excess computer server parts, excess disk drive inventories, excess DRAM inventories, excess microprocessor inventories -- and it will all be cleared during the housing and credit bust, and the first consumer cutbacks in 16 years."
Jas Jain on Silicon Valley home sales and prices: "The combination of 40% increase in supply and 20% decline in sales, YoY, means that over the past 12 months the supply-demand has deteriorated by 75% (1.4/0.8 = 1.75), i.e., the supply is up 75% relative to the demand...currently the median price of sales is 5-10% higher than the median listing price while a year ago it was 5-10% lower. This is strictly due to significantly higher level of sales in the high-priced areas and much lower level of sales in lower-priced areas. This will result in fewer active listings in the higher-priced areas and mounting listings in the lower-priced areas, thus depressing the median listing price...The trend of sales that were initiated in January and February, favoring sales in high-priced areas, has only accelerated based on recent reports...The people who claim that home prices in Silicon Valley CANNOT decline by more than 20% are the same people that said that the leading local tech stocks in 2000 couldn't decline by more than 50%. My prediction of 93.9% decline in CSCO fell short by 3.8% (the actual decline was only 90.1%)."
Daily Reckoning: "Up until last month, the U.S. had imported more goods from our neighbor to the north than from any other country. But with $48.7 billion worth of goods sold to the U.S. in February, China has overtaken Canada as our biggest shipper."
Dan Amoss: "The trend toward heavier, sourer crude oil will directly benefit manufacturers of specialized wellhead equipment. These lower grades of crude make up a steadily rising share of global oil production because just as you'd expect, the sweetest, lowest-hanging fruit in the oil patch tends to be picked and consumed first. More barrels of crude will require upgrading, particularly the abundant, yet barely accessible heavy crude from sources like the Orinoco belt in Venezuela. Technology is what the Venezuelans, the Russians, and the Saudis need, and they will pay up for it. Some of the biggest wealth-creating companies of the next generation will be those that can unlock the value these politically unstable resources - without committing billions in capital to projects that can be seized overnight...If average global depletion is running a little over 4% per year - a fair estimate - the world is likely to have the same oil production capacity in 2012 as it has today."
Overall, capital inflows for February increased to $94.5 billion, up from $79.6 billion in January to mark a second straight monthly increase.
May crude fell 2 cents to close at $63.61 a barrel. Reformulated gasoline's May contract fell 2.9% to close at $2.1157 a gallon. May natural gas fell 3.5%, or 27.1 cents, to end at $7.53 per million British thermal units.
Valero Energy Corp. said it began to restart the gasoline unit at its McKee refinery in Texas.
Construction of a natural gas pipeline between Colombia and Venezuela will be finished by August, Venezuela's energy minister said Sunday.
This Coming Week
4/16/07 This Coming Week
Mike Burk: "On average, next week has been remarkably strong. Since 1963 the OTC has been up 82% of the time while the SPX has only been down once, in 1987, giving it a 92% winning record. Both indices have had an average return in excess of 1% for the week."
World Bank President Paul Wolfowitz's hold on his job weakened as the U.K. and Germany declined to join the U.S. in backing him.
GE said it had replaced the senior management team at its mortgage unit, and would reduce its workforce by around 1,000 people, or 40 per cent.
Sallie Mae said on Monday it had accepted a $25 billion takeover bid from two private-investment funds along with JPMorgan Chase & Co. and Bank of America Corp. in one of the largest ever buyouts of a financial company. The deal values Sallie Mae at $60 a share, a 28 percent premium to the company's closing stock price on Friday. The shares were up $8.49, or 18.2 percent, at $55.25 in early New York Stock Exchange trade. J.C. Flowers & Co. and Friedman Fleischer & Lowe, would invest $4.4 billion and own 50.2 percent. Bank of America and JPMorgan will each invest $2.2 billion and own 24.9 percent.
John Hussman: "A recent conversation I had with former Barron's editor Kathryn Welling. While I continue to emphasize that investors need not be "bearish" to hedge risk here, the market has re-established sufficiently tenuous conditions that caution is warranted."
Citigroup Inc. said on Monday that first-quarter profit fell 11 percent, hurt by a restructuring charge, yet results topped forecasts amid a surge in trading gains. Profit declined for a third straight quarter, but shares rose more than 3 percent.
"It was an amazing quarter in capital markets," said Adam Compton, head of U.S. financials research at RCM Global Investors, which oversees about $15 billion. "You have to come away feeling better about Citi. They showed good execution."
Recent troubles — whether economic or legal — are not going to distract the company, wrote Leslie Kratcoski, Beazer Homes vice president.
"Across all of our markets, and no matter what type of market conditions exist, our most important task is to stay focused on the customer."
The buyout groups bidding for U.S. radio operator Clear Channel Communications have suggested sweetening their offer by allowing shareholders to co-invest in the firm, as a key vote on the deal approaches, a source close to the situation said on Sunday. The bidders have suggested a broad package of adjustments to improve the $19 billion offer, the main change being to allow existing shareholders to take a stake in the group following the buyout, a strategy known as a stub.
Retail sales rose by 0.7% as warmer weather and an earlier-than-usual Easter holiday encouraged shoppers in March. Excluding automobiles and parts, sales were up a somewhat smaller-than-expected 0.8%, according to the Commerce Department report. "It's not the breakneck pace we saw earlier in the expansion, but slowing to trend is not a recession," said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Conn.
The New York Fed's "Empire State" general business conditions index for the factory sector edged up to 3.80 in April from 1.85 in March. Economists polled by Reuters had expected an April reading of 7.5.
Mike Burk: "On average, next week has been remarkably strong. Since 1963 the OTC has been up 82% of the time while the SPX has only been down once, in 1987, giving it a 92% winning record. Both indices have had an average return in excess of 1% for the week."
World Bank President Paul Wolfowitz's hold on his job weakened as the U.K. and Germany declined to join the U.S. in backing him.
GE said it had replaced the senior management team at its mortgage unit, and would reduce its workforce by around 1,000 people, or 40 per cent.
Sallie Mae said on Monday it had accepted a $25 billion takeover bid from two private-investment funds along with JPMorgan Chase & Co. and Bank of America Corp. in one of the largest ever buyouts of a financial company. The deal values Sallie Mae at $60 a share, a 28 percent premium to the company's closing stock price on Friday. The shares were up $8.49, or 18.2 percent, at $55.25 in early New York Stock Exchange trade. J.C. Flowers & Co. and Friedman Fleischer & Lowe, would invest $4.4 billion and own 50.2 percent. Bank of America and JPMorgan will each invest $2.2 billion and own 24.9 percent.
John Hussman: "A recent conversation I had with former Barron's editor Kathryn Welling. While I continue to emphasize that investors need not be "bearish" to hedge risk here, the market has re-established sufficiently tenuous conditions that caution is warranted."
Citigroup Inc. said on Monday that first-quarter profit fell 11 percent, hurt by a restructuring charge, yet results topped forecasts amid a surge in trading gains. Profit declined for a third straight quarter, but shares rose more than 3 percent.
"It was an amazing quarter in capital markets," said Adam Compton, head of U.S. financials research at RCM Global Investors, which oversees about $15 billion. "You have to come away feeling better about Citi. They showed good execution."
Recent troubles — whether economic or legal — are not going to distract the company, wrote Leslie Kratcoski, Beazer Homes vice president.
"Across all of our markets, and no matter what type of market conditions exist, our most important task is to stay focused on the customer."
The buyout groups bidding for U.S. radio operator Clear Channel Communications have suggested sweetening their offer by allowing shareholders to co-invest in the firm, as a key vote on the deal approaches, a source close to the situation said on Sunday. The bidders have suggested a broad package of adjustments to improve the $19 billion offer, the main change being to allow existing shareholders to take a stake in the group following the buyout, a strategy known as a stub.
Retail sales rose by 0.7% as warmer weather and an earlier-than-usual Easter holiday encouraged shoppers in March. Excluding automobiles and parts, sales were up a somewhat smaller-than-expected 0.8%, according to the Commerce Department report. "It's not the breakneck pace we saw earlier in the expansion, but slowing to trend is not a recession," said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Conn.
The New York Fed's "Empire State" general business conditions index for the factory sector edged up to 3.80 in April from 1.85 in March. Economists polled by Reuters had expected an April reading of 7.5.
Saturday, April 14, 2007
Takeovers And Rumors
4/15/07 Takeovers And Rumors
After competing bids from Microsoft and Yahoo, Google nailed down the purchase of DoubleClick for $3.1 billion or $2 billion more than the company brought just 2 years ago while still a public company. DoubleClick never got much respect price-wise in the public domain. It's amazing what a bidding war can do for a price.
Here's another bit of amazing that took place the other day. "New Pacific Realty Corp. announced the sale of 9900 Wilshire to an affiliate of The CPC Group for $500 million. The half-billion-dollar price tag for the 7.95 acre site, which is adjacent to the Beverly Hilton Hotel and overlooks the prestigious Los Angeles Country Club, is one of the last remaining major development parcels in the City of Beverly Hills, and believed to be largest price ever paid in North America for a development site in the entitlement phase. New Pacific Realty acquired the site just three years ago for $33.5 million.”
Then there is the normal Friday takeover speculation. Frequently, in the oil patch, it will center on Nabors Industries. This past Friday it was Weatherford International, an oil services company. The shares closed higher at $50 with the April 50 calls having traded 14,303 contracts with the last price at $1.20 and with the April 55 calls trading 6,300 contracts and closing at 35 cents. The last day of trading for April options is next Friday, April 20. Since the beginning of 2007, the shares have risen about 12 points. The company is expected to earn $3.25 in 2007 and $3.75 in 2008. Ten days ago the CEO said he expects improvement in the company's North American markets in the second half of 2007. "I think the North American markets are not bad, but I think they are likely to be better in the second half of the year, Bernard Duroc-Danner, the company's chief executive officer, told investors at the Howard Weil Energy Conference. Duroc-Danner also said he expects the weakness in Canadian markets to improve, and told investors the "travails in Canada are almost behind us."
As I mentioned yesterday, there is also speculation surrounding possible bids in the neighborhood of $20 billion for Sallie Mae.
According to the Financial Times, Chinese customs data showed a record 307,740 tonnes of copper were imported last month, with imports up 58% in the first three months of the year.
Because of the enormous growth in China, on occasion, India falls under the radar. Quietly, India's forex reserves have climbed to $200 billion.
The WSJ reported that GE executives said the company’s WMC mortgage unit has tightened its lending requirements and substantially curtailed its mortgage originations in the wake of the meltdown in the sub-prime mortgage sector.
Doug Noland provided via Bloomberg that 'foreclosures sold at auction now account for 15% of all home sales in California and continue to rise,’ Sean O’Toole, Foreclosure Radar’s chief executive officer and founder, said… ‘Folks with 100% financing and subprime credit are choosing to walk away rather than make payments on a house that’s now 10% under water.’
As foreclosures become a greater share of home sales, it is easy to see that prices of homes are headed down.
Doug Noland: "As tornado warning sirens blare in the background - with the thesis that Financial Arbitrage Capitalism has radically extended the life expectancy of Ponzi Finance Units. Actually, Financial Arbitrage Capitalism is itself ultimately one massive Ponzi Finance Unit. This system is dependent upon continuous Credit excess, expanding leveraged speculation, and asset inflation. Ironically, when financial weakness is revealed in one sector – as it was recently in mortgage finance – the expectation of imminent Federal Reserve easing actually bolsters Ponzi finance dynamics elsewhere. I’ll surmise this evening that when this Ponzi scheme eventually succumbs, it will take a slug of Wall Street finance down with it."
Speculation is growing that Britain's Barclays may abandon its bid for the Dutch bank ABN Amro, CNBC’s Maria Bartiromo reported. Barclays is due to finalize its bid for ABN next week, Bartiromo said, "but sources tell me there is a chance Barclays will pull out" because of "past liability concerns over past money-laundering questions." Meanwhile, Bloomberg reported Royal Bank of Scotland Group Plc may offer to buy ABN Amro Holding NV with Santander Central Hispano SA and Fortis, triggering the largest-ever takeover battle in the financial-services industry.
The euro stands near a two-year peak at $1.3554. The common euro-zone currency's lifetime high stands at $1.3670, according to electronic platform EBS.
Finance ministers and central bankers from the Group of Seven nations said they are confident disparities in global trade and growth are starting to narrow. Does that mean the U.S.share of world trade will continue to decline?
Karl Rove and other White House employees were cautioned in employee manuals, memos and briefings to carefully save any e-mails that might discuss official matters even if those messages came from private e-mail accounts, the White House disclosed Friday.
John Mauldin: "If one converts total outstanding debt into a real number using the GDP deflator, the marginal utility of debt is even worse. In the 1960s, real total debt outstanding in the U.S. "bought" $0.64 in additional real GDP. In the current decade, a dollar of real additional debt now "buys" $0.15 in additional real GDP."
My thanks to Thomas G. Dolan for reminding me of this quote from Will Rogers:
"The difference between death and taxes is death doesn't get worse every time Congress meets."
The deputy director of operations for the US Central Command, Brig. Gen. Robert H. Holmes says the American military has no plan to attack Iran.
Syria and Israel could clinch a peace deal in six months, a Syrian-American businessman at the heart of secret unofficial peace talks said on Thursday after appearing before a top parliamentary panel.
“Peace can be reached in six months if both parties are willing,” Ibrahim (Abe) Suleiman said. “The negotiations are finished. There are only minor things that could be fixed in two or three meetings. Peace is possible now.”
Global Politician Magazine: "The additional US and UK soldiers sent to be bolster NATO troops in Afghanistan fall way short of the numbers required to confront the Pushtoon resistance. The troop numbers have been further exacerbated by America's distrust of the Afghan army-
the army has been intentionally deprived of heavy weaponry-rendering almost useless in any upcoming battle. All of this means that the US will have to bear the brunt of the fighting. This comes as a huge blow- US forces are over stretched in Iraq and there are not enough troops to send to Afghanistan. The situation is rapidly deteriorating in Afghanistan. The assassination attempt on Dick Cheney clearly highlights America's predicament."
After competing bids from Microsoft and Yahoo, Google nailed down the purchase of DoubleClick for $3.1 billion or $2 billion more than the company brought just 2 years ago while still a public company. DoubleClick never got much respect price-wise in the public domain. It's amazing what a bidding war can do for a price.
Here's another bit of amazing that took place the other day. "New Pacific Realty Corp. announced the sale of 9900 Wilshire to an affiliate of The CPC Group for $500 million. The half-billion-dollar price tag for the 7.95 acre site, which is adjacent to the Beverly Hilton Hotel and overlooks the prestigious Los Angeles Country Club, is one of the last remaining major development parcels in the City of Beverly Hills, and believed to be largest price ever paid in North America for a development site in the entitlement phase. New Pacific Realty acquired the site just three years ago for $33.5 million.”
Then there is the normal Friday takeover speculation. Frequently, in the oil patch, it will center on Nabors Industries. This past Friday it was Weatherford International, an oil services company. The shares closed higher at $50 with the April 50 calls having traded 14,303 contracts with the last price at $1.20 and with the April 55 calls trading 6,300 contracts and closing at 35 cents. The last day of trading for April options is next Friday, April 20. Since the beginning of 2007, the shares have risen about 12 points. The company is expected to earn $3.25 in 2007 and $3.75 in 2008. Ten days ago the CEO said he expects improvement in the company's North American markets in the second half of 2007. "I think the North American markets are not bad, but I think they are likely to be better in the second half of the year, Bernard Duroc-Danner, the company's chief executive officer, told investors at the Howard Weil Energy Conference. Duroc-Danner also said he expects the weakness in Canadian markets to improve, and told investors the "travails in Canada are almost behind us."
As I mentioned yesterday, there is also speculation surrounding possible bids in the neighborhood of $20 billion for Sallie Mae.
According to the Financial Times, Chinese customs data showed a record 307,740 tonnes of copper were imported last month, with imports up 58% in the first three months of the year.
Because of the enormous growth in China, on occasion, India falls under the radar. Quietly, India's forex reserves have climbed to $200 billion.
The WSJ reported that GE executives said the company’s WMC mortgage unit has tightened its lending requirements and substantially curtailed its mortgage originations in the wake of the meltdown in the sub-prime mortgage sector.
Doug Noland provided via Bloomberg that 'foreclosures sold at auction now account for 15% of all home sales in California and continue to rise,’ Sean O’Toole, Foreclosure Radar’s chief executive officer and founder, said… ‘Folks with 100% financing and subprime credit are choosing to walk away rather than make payments on a house that’s now 10% under water.’
As foreclosures become a greater share of home sales, it is easy to see that prices of homes are headed down.
Doug Noland: "As tornado warning sirens blare in the background - with the thesis that Financial Arbitrage Capitalism has radically extended the life expectancy of Ponzi Finance Units. Actually, Financial Arbitrage Capitalism is itself ultimately one massive Ponzi Finance Unit. This system is dependent upon continuous Credit excess, expanding leveraged speculation, and asset inflation. Ironically, when financial weakness is revealed in one sector – as it was recently in mortgage finance – the expectation of imminent Federal Reserve easing actually bolsters Ponzi finance dynamics elsewhere. I’ll surmise this evening that when this Ponzi scheme eventually succumbs, it will take a slug of Wall Street finance down with it."
Speculation is growing that Britain's Barclays may abandon its bid for the Dutch bank ABN Amro, CNBC’s Maria Bartiromo reported. Barclays is due to finalize its bid for ABN next week, Bartiromo said, "but sources tell me there is a chance Barclays will pull out" because of "past liability concerns over past money-laundering questions." Meanwhile, Bloomberg reported Royal Bank of Scotland Group Plc may offer to buy ABN Amro Holding NV with Santander Central Hispano SA and Fortis, triggering the largest-ever takeover battle in the financial-services industry.
The euro stands near a two-year peak at $1.3554. The common euro-zone currency's lifetime high stands at $1.3670, according to electronic platform EBS.
Finance ministers and central bankers from the Group of Seven nations said they are confident disparities in global trade and growth are starting to narrow. Does that mean the U.S.share of world trade will continue to decline?
Karl Rove and other White House employees were cautioned in employee manuals, memos and briefings to carefully save any e-mails that might discuss official matters even if those messages came from private e-mail accounts, the White House disclosed Friday.
John Mauldin: "If one converts total outstanding debt into a real number using the GDP deflator, the marginal utility of debt is even worse. In the 1960s, real total debt outstanding in the U.S. "bought" $0.64 in additional real GDP. In the current decade, a dollar of real additional debt now "buys" $0.15 in additional real GDP."
My thanks to Thomas G. Dolan for reminding me of this quote from Will Rogers:
"The difference between death and taxes is death doesn't get worse every time Congress meets."
The deputy director of operations for the US Central Command, Brig. Gen. Robert H. Holmes says the American military has no plan to attack Iran.
Syria and Israel could clinch a peace deal in six months, a Syrian-American businessman at the heart of secret unofficial peace talks said on Thursday after appearing before a top parliamentary panel.
“Peace can be reached in six months if both parties are willing,” Ibrahim (Abe) Suleiman said. “The negotiations are finished. There are only minor things that could be fixed in two or three meetings. Peace is possible now.”
Global Politician Magazine: "The additional US and UK soldiers sent to be bolster NATO troops in Afghanistan fall way short of the numbers required to confront the Pushtoon resistance. The troop numbers have been further exacerbated by America's distrust of the Afghan army-
the army has been intentionally deprived of heavy weaponry-rendering almost useless in any upcoming battle. All of this means that the US will have to bear the brunt of the fighting. This comes as a huge blow- US forces are over stretched in Iraq and there are not enough troops to send to Afghanistan. The situation is rapidly deteriorating in Afghanistan. The assassination attempt on Dick Cheney clearly highlights America's predicament."
Friday, April 13, 2007
The Music Goes Round And Round
4/14/07 The Music Goes Round And Round
Merck raised its full-year 2007 outlook, saying it now expects earnings of $2.75 to $2.85 a share, excluding items, and reported per-share earnings of $2.60 to $2.75. Analysts are looking for per-share earnings of $2.66 for the year. The outlook doesn't reflect the establishment of any reserves for any potential liability relating to the Vioxx litigation, Merck noted. On Thursday the shares made a new high. I'd would strongly consider taking profits.
The Financial Times reported Paul Wolfowitz was under pressure to resign as president of the World Bank after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved.
From WTRG: "The U.S. rotary rig count was down 23 rigs to 1,726 for the week of April 6, 2007 and is 9.3 percent higher than last year. The number of rotary rigs drilling for oil is up 12 at 283. The number of rigs targeting oil is 19 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 16.4% percent of total drilling activity. Year-over-year oil exploration in the US is up 4.4 percent. Gas exploration is up 9.5 percent. The weekly average of crude oil spot prices is 3.1 percent lower than last year and natural gas spot prices are 8.3 percent higher. Canadian rig activity* was down 23 at 126 for the week of April 6, 2007 and is 143 lower than last year's rig count.
Samsung Electronics Co., the world's second-largest semiconductor maker, posted a second straight drop in quarterly profit after computer-chip prices extended a slide.
McDonald's Corp. said first-quarter profit rose more than analysts estimated after March sales in Europe jumped the most in at least 13 years. Preliminary net income rose to 62 cents a share, five cents more than the average estimate of 14 analysts. Sales at stores open at least 13 months climbed 6.3 percent. Profit a year earlier was 49 cents. European same-store sales surged 11 percent in March and 8 percent in the quarter, helped by a new McOriental burger in France and a chicken snack wrap in the U.K.
Pier 1 will close about 60 stores in the next year to save $17 million annually and halt eight straight quarterly losses.
Apple is delaying its new Leopard operating system by 3 months due to pulling programmers to work on iPhones.
Alltel Wireless said Thursday it is closing an Issaquah, WA call center and eliminating 260 jobs, moves that come two years after it acquired Bellevue-based Western Wireless in a $4.4 billion deal.
The U.S. trade deficit narrowed by 0.7% in February to $58.4 billion, the Commerce Department said Friday. Exports fell 2.2% to $124 billion, the biggest monthly decline since December 2002. The U.S. trade deficit with China widened to $18.4 billion in compared with $13.8 billion in the same month last year.
George Ure noted "the fact is that there were 31 days in January, and so the "daily burn rate" which is how I look at things, being a refugee corporate operations guy, is $1.9 billion per day for January. The month of February was how many days? 28 Did you say? Then that makes the daily burn rate $2,085,714,285,72 a day."
The trade gap with China is still running 25 percent above the pace set at the beginning of 2006, a year when the imbalance for the entire year soared to $232.5 billion.
The PPI is up 3.2% in the past 12 months, the biggest year-over-year gain since August. The core PPI is up 1.7% in the past year, down from 1.8% in the 12 months ending in February.
Chris Mayer: "The official numbers tell us inflation is less than 3%. Yet calculating inflation using the same methods of before Clinton took office - which was not that long ago - Williams (Shadow Stats) gets inflation closer to 6%! The latter figure is nearer to the experiences of everyday people living in this country, who have to pay for groceries, gasoline, insurance, medical bills and more. This is why Williams says that the average person has a truer sense of price inflation than what the official numbers would have you believe."
Sallie Mae is in talks with private-equity firms in a deal that may be worth more than $20 billion, The New York Times reported Friday, citing people familiar with the matter.
"On May 1 we are going to take control of the oil fields," Hugo Chavez said. "I'm sure no transnational company is going to draw a shotgun, but we will go with the armed forces and the people."
The Chinese central bank said that its foreign-exchange reserves rose $135.7 billion in the first quarter -- more than half the increase for all of last year.
The WSJ reported Cott Corp. a Toronto company that makes private-label drinks for such retailers as Wal-Mart Stores Inc., is talking with private-equity firms about joining its operations with Cadbury Schweppes PLC's beverage arm, a person familiar with the talks said. Cott said it has responded to "interested parties" that have approached the company, and is "exploring the potential benefits of participating in possible industry consolidation."
The Brunei Methanol Co., a joint venture between Brunei's state-owned PB Petrochemical Co. and Japan's Mitsubishi Gas Chemical Co. and Itochu Corp., signed agreements Thursday with other government and corporate parties to build a $400 million methanol production plant.
General Electric Co. reported first-quarter earnings of $4.5 billion, up 2 percent from the same period in 2006. Per-share earnings of 44 cents, and were in line with estimates by analysts polled by Thomson Financial. Revenue of $40.2 billion for the quarter was up by 6 percent from the same period last year.
Barry Ritholtz: "This economy has been stimulus driven -- ultra low rates, deficit spending, tax cuts, ADCS, (2) War spending, printing cash -- all contributed to the cyclical recovery since the 2001 recession. However, this has been anything but organic. Its been largely dependent upon government largesse. As that stimulus fades -- the pig is now mostly through the python -- so too does the economic growth. When your growth is dependent upon cheap money and easy credit, guess what happens when credit tightens and money becomes less easy?"
Richard Daughty: "In short, inflation in food prices, and all other prices, is everywhere you look, which is certainly understandable, since everywhere you look there are central banks creating more money and credit, and governments running budget deficits!"
Henry To: "While the ratio between money market fund assets and the market cap of the S&P 500 is not a great timing indicator - what it does show is the amount of "cushion" that we have in order to insure against a significant market decline. Also, while this indicator is telling us that we are closer to the end of the bull market than the beginning of one, it is also telling us that we are not close to exhaustion just yet. Based on historical experience, this author will not be too concerned about the end of the current bull market until this ratio hits a reading of 15% or below. Finally, given that this ratio has just risen from 17.29% as of February 28, 2007 to 17.44% as of March 31, 2007 (the highest reading since August 2004), chances are that the equity markets will be higher in the weeks and months ahead. For the individual investor who is not leveraged and who is already long, a buy-and-hold strategy (instead of trading around the volatility) still makes the most sense. For now, we will remain 100% long in our DJIA Timing System - although we reserve the right to trim our position should the technicals of the market deteriorate in the days ahead."
I give Henry a good deal of credit. Since Sept 7 of last year, he has put his money where his mouth is. He has been long equities and he has been right.
Cutter & Buck Inc., the Seattle-based sportswear designer, said it has agreed to be acquired by New Wave Group AB for $14.38 a share, or $156.5 million.
U.S. consumer sentiment fell in early April, according to the Reuters/University of Michigan consumer sentiment index released Friday. The index fell to 85.3 from 88.4 in March. It's the lowest since August. The current conditions dropped to 102.4 in April from 103.5 in March. The expectations index fell to 74.3 in April from 78.7 in March. Consumers' expectations for inflation over the next year rose to 3.3% from 3.0%. They expect annual inflation of 3% over the next five years, up from 2.9% in March.
Gold for June delivery closed up $10.20 at $689.90 an ounce on the New York Mercantile Exchange. The contract gained 1.5% on the week. May silver closed up 23.5 cents at $14.090 an ounce, gaining 2.5% on the week. June palladium rose $6.75 at $381.05 an ounce, gaining 6.9% on the week, and July platinum rose $6.90 at $1,286.40 an ounce, gaining 1.6% on the week. May copper rose 3 cents at $3.532 a pound, gaining 4.4% on the week.
Now this is funny!!! Luskin (Rove's lawyer) said Rove didn't know that deleting e-mails from his RNC inbox also deleted them from the RNC's server. That system was changed in 2005. Sometime in 2005, the RNC took action solely to prevent Rove from deleting his e-mails on that server. One reason for specifying Rove, Henry Waxman said, appears to have been pending legal action against him. As Santa might say, "ho ho ho boys and girls."
Rove uses several e-mail accounts, including one with the RNC; one with the White House; and a third, private domain account that is registered to the political consulting company he once owned.
Waxman also said he now has "serious concerns about the White House's compliance with the Presidential Records Act," which requires administrations to keep records of deliberations, decisions and policies. The congressman asked for an inventory of all communications by White House officials on non-government e-mail accounts.
John Conyers: "The White House position seems to be that executive privilege not only applies in the Oval Office, but to the RNC as well."
A guest post by Jeffrey J. Brown on the Oil Drum: "I have been advising for anyone who would listen to voluntarily cut back on their consumption, based on the premise that we were probably headed, in a post-Peak Oil environment, for a prolonged period of deflation in the auto/housing/finance sectors and inflation in food and energy prices...In my opinion, the unfortunate new reality is that we are going to see a growing labor surplus--against the backdrop of deflation in the auto/housing/finance sectors and inflation in food and energy prices. By reducing your expenses now, while you can do it voluntarily, you will at least be better prepared for whatever the future may bring...I recommend that you try to reduce the distance between work and home to as close to zero as possible, and furthermore, that you live in smaller, much more energy efficient housing, preferably close to mass transit lines...We need to once again become a nation of producers. I recommend that you try to become, or work for, a provider of essential goods and services...The biggest risk to family finances is trying to maintain the SUV, suburban mortgage way of life in a period of contracting energy supplies. Beyond that, one of the next biggest risks in my opinion, is excessive and unwise spending--especially debt financed spending--on college education costs."
Crude oil for May delivery fell 22 cents at $63.63 a barrel on the New York Mercantile Exchange. May heating oil fell 0.54 cent at $1.9007 a gallon. May natural-gas futures fell 12.3 cents at $7.801 per million British thermal units.
Peter Schiff: "The dollar is no longer responding to traditional stimulants. This week, despite the apparently "hawkish" tone in the recently released Fed minutes, and trade deficit figures that were slightly less horrific than expected, the dollar nevertheless declined against just about every currency on the planet. As a result, it now teeters dangerously close to the edge of a very large precipice. Looming large is the 80 level of the U.S. Dollar Index which has stood as long term support for almost thirty years. This week, the Index broke below 82, and is sinking fast. When this critical level is breached, look out below. Without any support beneath it, the dollar could literally fall off a cliff."
Merck raised its full-year 2007 outlook, saying it now expects earnings of $2.75 to $2.85 a share, excluding items, and reported per-share earnings of $2.60 to $2.75. Analysts are looking for per-share earnings of $2.66 for the year. The outlook doesn't reflect the establishment of any reserves for any potential liability relating to the Vioxx litigation, Merck noted. On Thursday the shares made a new high. I'd would strongly consider taking profits.
The Financial Times reported Paul Wolfowitz was under pressure to resign as president of the World Bank after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved.
From WTRG: "The U.S. rotary rig count was down 23 rigs to 1,726 for the week of April 6, 2007 and is 9.3 percent higher than last year. The number of rotary rigs drilling for oil is up 12 at 283. The number of rigs targeting oil is 19 rigs higher than last year's level of activity. Rigs currently drilling for oil represent 16.4% percent of total drilling activity. Year-over-year oil exploration in the US is up 4.4 percent. Gas exploration is up 9.5 percent. The weekly average of crude oil spot prices is 3.1 percent lower than last year and natural gas spot prices are 8.3 percent higher. Canadian rig activity* was down 23 at 126 for the week of April 6, 2007 and is 143 lower than last year's rig count.
Samsung Electronics Co., the world's second-largest semiconductor maker, posted a second straight drop in quarterly profit after computer-chip prices extended a slide.
McDonald's Corp. said first-quarter profit rose more than analysts estimated after March sales in Europe jumped the most in at least 13 years. Preliminary net income rose to 62 cents a share, five cents more than the average estimate of 14 analysts. Sales at stores open at least 13 months climbed 6.3 percent. Profit a year earlier was 49 cents. European same-store sales surged 11 percent in March and 8 percent in the quarter, helped by a new McOriental burger in France and a chicken snack wrap in the U.K.
Pier 1 will close about 60 stores in the next year to save $17 million annually and halt eight straight quarterly losses.
Apple is delaying its new Leopard operating system by 3 months due to pulling programmers to work on iPhones.
Alltel Wireless said Thursday it is closing an Issaquah, WA call center and eliminating 260 jobs, moves that come two years after it acquired Bellevue-based Western Wireless in a $4.4 billion deal.
The U.S. trade deficit narrowed by 0.7% in February to $58.4 billion, the Commerce Department said Friday. Exports fell 2.2% to $124 billion, the biggest monthly decline since December 2002. The U.S. trade deficit with China widened to $18.4 billion in compared with $13.8 billion in the same month last year.
George Ure noted "the fact is that there were 31 days in January, and so the "daily burn rate" which is how I look at things, being a refugee corporate operations guy, is $1.9 billion per day for January. The month of February was how many days? 28 Did you say? Then that makes the daily burn rate $2,085,714,285,72 a day."
The trade gap with China is still running 25 percent above the pace set at the beginning of 2006, a year when the imbalance for the entire year soared to $232.5 billion.
The PPI is up 3.2% in the past 12 months, the biggest year-over-year gain since August. The core PPI is up 1.7% in the past year, down from 1.8% in the 12 months ending in February.
Chris Mayer: "The official numbers tell us inflation is less than 3%. Yet calculating inflation using the same methods of before Clinton took office - which was not that long ago - Williams (Shadow Stats) gets inflation closer to 6%! The latter figure is nearer to the experiences of everyday people living in this country, who have to pay for groceries, gasoline, insurance, medical bills and more. This is why Williams says that the average person has a truer sense of price inflation than what the official numbers would have you believe."
Sallie Mae is in talks with private-equity firms in a deal that may be worth more than $20 billion, The New York Times reported Friday, citing people familiar with the matter.
"On May 1 we are going to take control of the oil fields," Hugo Chavez said. "I'm sure no transnational company is going to draw a shotgun, but we will go with the armed forces and the people."
The Chinese central bank said that its foreign-exchange reserves rose $135.7 billion in the first quarter -- more than half the increase for all of last year.
The WSJ reported Cott Corp. a Toronto company that makes private-label drinks for such retailers as Wal-Mart Stores Inc., is talking with private-equity firms about joining its operations with Cadbury Schweppes PLC's beverage arm, a person familiar with the talks said. Cott said it has responded to "interested parties" that have approached the company, and is "exploring the potential benefits of participating in possible industry consolidation."
The Brunei Methanol Co., a joint venture between Brunei's state-owned PB Petrochemical Co. and Japan's Mitsubishi Gas Chemical Co. and Itochu Corp., signed agreements Thursday with other government and corporate parties to build a $400 million methanol production plant.
General Electric Co. reported first-quarter earnings of $4.5 billion, up 2 percent from the same period in 2006. Per-share earnings of 44 cents, and were in line with estimates by analysts polled by Thomson Financial. Revenue of $40.2 billion for the quarter was up by 6 percent from the same period last year.
Barry Ritholtz: "This economy has been stimulus driven -- ultra low rates, deficit spending, tax cuts, ADCS, (2) War spending, printing cash -- all contributed to the cyclical recovery since the 2001 recession. However, this has been anything but organic. Its been largely dependent upon government largesse. As that stimulus fades -- the pig is now mostly through the python -- so too does the economic growth. When your growth is dependent upon cheap money and easy credit, guess what happens when credit tightens and money becomes less easy?"
Richard Daughty: "In short, inflation in food prices, and all other prices, is everywhere you look, which is certainly understandable, since everywhere you look there are central banks creating more money and credit, and governments running budget deficits!"
Henry To: "While the ratio between money market fund assets and the market cap of the S&P 500 is not a great timing indicator - what it does show is the amount of "cushion" that we have in order to insure against a significant market decline. Also, while this indicator is telling us that we are closer to the end of the bull market than the beginning of one, it is also telling us that we are not close to exhaustion just yet. Based on historical experience, this author will not be too concerned about the end of the current bull market until this ratio hits a reading of 15% or below. Finally, given that this ratio has just risen from 17.29% as of February 28, 2007 to 17.44% as of March 31, 2007 (the highest reading since August 2004), chances are that the equity markets will be higher in the weeks and months ahead. For the individual investor who is not leveraged and who is already long, a buy-and-hold strategy (instead of trading around the volatility) still makes the most sense. For now, we will remain 100% long in our DJIA Timing System - although we reserve the right to trim our position should the technicals of the market deteriorate in the days ahead."
I give Henry a good deal of credit. Since Sept 7 of last year, he has put his money where his mouth is. He has been long equities and he has been right.
Cutter & Buck Inc., the Seattle-based sportswear designer, said it has agreed to be acquired by New Wave Group AB for $14.38 a share, or $156.5 million.
U.S. consumer sentiment fell in early April, according to the Reuters/University of Michigan consumer sentiment index released Friday. The index fell to 85.3 from 88.4 in March. It's the lowest since August. The current conditions dropped to 102.4 in April from 103.5 in March. The expectations index fell to 74.3 in April from 78.7 in March. Consumers' expectations for inflation over the next year rose to 3.3% from 3.0%. They expect annual inflation of 3% over the next five years, up from 2.9% in March.
Gold for June delivery closed up $10.20 at $689.90 an ounce on the New York Mercantile Exchange. The contract gained 1.5% on the week. May silver closed up 23.5 cents at $14.090 an ounce, gaining 2.5% on the week. June palladium rose $6.75 at $381.05 an ounce, gaining 6.9% on the week, and July platinum rose $6.90 at $1,286.40 an ounce, gaining 1.6% on the week. May copper rose 3 cents at $3.532 a pound, gaining 4.4% on the week.
Now this is funny!!! Luskin (Rove's lawyer) said Rove didn't know that deleting e-mails from his RNC inbox also deleted them from the RNC's server. That system was changed in 2005. Sometime in 2005, the RNC took action solely to prevent Rove from deleting his e-mails on that server. One reason for specifying Rove, Henry Waxman said, appears to have been pending legal action against him. As Santa might say, "ho ho ho boys and girls."
Rove uses several e-mail accounts, including one with the RNC; one with the White House; and a third, private domain account that is registered to the political consulting company he once owned.
Waxman also said he now has "serious concerns about the White House's compliance with the Presidential Records Act," which requires administrations to keep records of deliberations, decisions and policies. The congressman asked for an inventory of all communications by White House officials on non-government e-mail accounts.
John Conyers: "The White House position seems to be that executive privilege not only applies in the Oval Office, but to the RNC as well."
A guest post by Jeffrey J. Brown on the Oil Drum: "I have been advising for anyone who would listen to voluntarily cut back on their consumption, based on the premise that we were probably headed, in a post-Peak Oil environment, for a prolonged period of deflation in the auto/housing/finance sectors and inflation in food and energy prices...In my opinion, the unfortunate new reality is that we are going to see a growing labor surplus--against the backdrop of deflation in the auto/housing/finance sectors and inflation in food and energy prices. By reducing your expenses now, while you can do it voluntarily, you will at least be better prepared for whatever the future may bring...I recommend that you try to reduce the distance between work and home to as close to zero as possible, and furthermore, that you live in smaller, much more energy efficient housing, preferably close to mass transit lines...We need to once again become a nation of producers. I recommend that you try to become, or work for, a provider of essential goods and services...The biggest risk to family finances is trying to maintain the SUV, suburban mortgage way of life in a period of contracting energy supplies. Beyond that, one of the next biggest risks in my opinion, is excessive and unwise spending--especially debt financed spending--on college education costs."
Crude oil for May delivery fell 22 cents at $63.63 a barrel on the New York Mercantile Exchange. May heating oil fell 0.54 cent at $1.9007 a gallon. May natural-gas futures fell 12.3 cents at $7.801 per million British thermal units.
Peter Schiff: "The dollar is no longer responding to traditional stimulants. This week, despite the apparently "hawkish" tone in the recently released Fed minutes, and trade deficit figures that were slightly less horrific than expected, the dollar nevertheless declined against just about every currency on the planet. As a result, it now teeters dangerously close to the edge of a very large precipice. Looming large is the 80 level of the U.S. Dollar Index which has stood as long term support for almost thirty years. This week, the Index broke below 82, and is sinking fast. When this critical level is breached, look out below. Without any support beneath it, the dollar could literally fall off a cliff."
Thursday, April 12, 2007
Reports
4/13/07 Reports
The 10 members of the Organization of the Petroleum Exporting Countries bound by the group's output agreements produced an average of 26.54 million barrels per day in March, down 80,000 b/d from February, Platts said late Thursday. Including Iraq and Angola, total OPEC production was 30.11 million b/d, down 70,000 b/d from the prior month, Platts reported.
The International Energy Agency said that world oil output fell by 265 thousand barrels a day in March, to 85.3 million barrels a day, after OPEC supply cuts and OECD production outages.
The IEA said global oil product demand has been revised down to 84.3 million barrels a day in 2006 and 85.8 million barrels a day 2007. For 2006 this is mainly related to improved data in non-OECD countries. Demand in the OECD remained largely unchanged, as a cold snap in North America was offset by milder temperatures in Europe and the Pacific.
Manor Care Inc, the biggest U.S. operator of homes for the elderly, said on Wednesday it was evaluating strategic options, sending its shares up more than 9 percent.Manor Care said on Wednesday that it had hired investment bank JPMorgan Chase & Co.
Medimmune has hired Goldman Sachs to explore a sale of the company.
U.S. import prices jumped a larger-than-expected 1.7% in March as petroleum prices rose sharply, Labor Department data showed. The cost of non-petroleum imports showed a 0.3% gain after a 0.1% rise the previous month and the biggest increase in three months. Export prices rose 0.7% in March as prices for agricultural and nonagricultural goods increased, compared with a forecast for a 0.4% gain.
The number of U.S. workers filing new claims for jobless benefits unexpectedly jumped 19,000 last week, government data on Thursday showed in a report skewed by seasonal layoffs for school holidays.
China's forex reserves approximate $1.2 trillion.
The FT reports cross-border flows from institutional investors into US equities relative to other assets are almost at their lowest point in more than a decade, according to State Street.
A bomb rocked Iraq's parliament building in the heavily fortified Green Zone thursday, killing at least two lawmakers in a stunning security breach in the third month of a U.S.-Iraqi crackdown on violence in the capital, officials said.
Wal-Mart Stores Inc said Thursday that strong sales of groceries helped boost same-store sales 4 percent in March. For the five-week period ended April 6, Wal-Mart same-store sales rose 3.4 percent, while Sam's Club same-store sales were up 7.4 percent. However, the company said that the first quarter will still be a "challenge."
China surpassed the United States as the world's second-largest exporter in the middle of last year, according to figures released Thursday by the World Trade Organization, and the Asian country is pulling further and further ahead. Export growth from China boomed 27 percent last year, out-pacing all other major trading nations, the WTO said
Now some state courts are requiring financial institutions to verify that an account does not contain 100% exempt funds before freezing it, and legal-aid attorneys are bringing lawsuits to force banks to ensure that the money they restrain can legally be garnisheed. "When someone has an account which is exclusively made up of Social Security funds, it's likely these are their only funds," says Margot Saunders, the counsel for the National Consumer Law Center. "When their accounts are frozen, they have no money to pay rent, buy food, transportation or go to the doctor." Although no hard data exist on the amount of exempt funds frozen by creditors, community advocates say it's a serious issue. "This is an exploding problem," says Saunders, noting that legal task forces in several states are working on the problem.
Barry Ritholtz: "It is increasingly apparent from the many economic signals we have seen that business spending is fading, and is unlikely to replace consumer spending anytime soon."
The Chinese government will issue a policy in less than two months' time to regulate the use of natural gas and alleviate a shortage in supply, Thursday's China Securities Journal reports.
Some White House staff wrote e-mail messages about official business on Republican Party accounts, and some may have been wrongly deleted, the administration said on Wednesday. I suggest the Congress begin to delete senior White House staff members, and move up from there. "They say they have not been preserved. I don't believe that!" Patrick Leahy shouted from the Senate floor. "You can't erase e-mails, not today. They've gone through too many servers," said Leahy, D-Vt. "Those e-mails are there, they just don't want to produce them. We'll subpoena them if necessary."
Fiscal fourth-quarter results for defense contractor SAIC Inc. came in better than expected, and analysts say the company is weathering an industry slowdown better than peers.
MSN Money reports as medical costs soar in the U.S., the number of uninsured has swelled, exceeding 46 million, or nearly 16% of Americans, last year, according to Census Bureau statistics. As a result, more and more folks are choosing what's known as medical tourism and heading overseas for surgeries and dental treatments they couldn't otherwise afford. In 2006 alone, an estimated 150,000 Americans traveled abroad for medical care, a number expected to double by next year, according to Josef Woodman, the author of "Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism." Nearly half of those -- around 70,000 -- had medically necessary surgeries such as hip replacements or spinal work, heart surgeries including bypass or valve replacements, and even cancer treatments.
Natural gas in storage rose 23 billion cubic feet in the week ending April 6, the Energy Department said Thursday, and the closing price at the end of the trading day was $7.96.
The dollar fell 0.4% against the euro after dropping as low as $1.3505, the lowest since January 2005.
The International Council of Shopping Centers-UBS same-store sales tally of 53 stores posted a 5.9 percent gain, exceeding estimates for 4 percent to 5 percent. Michael P. Niemira, chief economist at ICSC, said the improving weather and earlier Easter boosted March results by 3 percentage points.
But those temporary factors that helped March results are expected to hurt April's figures by that same amount, according to Niemira. The weather has turned cooler in recent days, stifling sales of spring clothing. Bill Kirk, CEO of Weather Trends International, a weather consultancy for retailers, forecast that it will be the coldest April in 24 years.
In my view, this cold April will also reduce natural gas supplies and help to provide a support for prices, which now are approaching $8 per million cubic feet.
U.S. Senator Russ Feingold introduced legislation on April 10 to effectively end U.S. military involvement in Iraq. The bill, supported by Senate Majority Leader Harry Reid, requires the President to begin safely redeploying U.S. troops from Iraq 120 days from enactment, as required by the emergency supplemental spending bill passed by the Senate. The bill ends funding for the war, with three narrow exceptions, effective March 31, 2008. In addition to Reid, the bill is cosponsored by Senators Barbara Boxer (D-CA), Chris Dodd (D-CT), Ted Kennedy (D-MA), John Kerry (D-MA), Pat Leahy (D-VT), and Sheldon Whitehouse (D-RI). If the President vetoes the emergency supplemental spending bill, Reid has said he will work to ensure Feingold’s bill gets a vote in the Senate before Memorial Day.
Last Fall, under the Freedom of Information Act, the National Security Archive Group, in attempt to make certain that there is not an invasion of privacy for innocent Americans, sued the Justice Department for records that detail how the FBI protects privacy while collecting hundreds of millions of records in its investigative Data Warehouse, which contains 659 million documents! The FBI has requested the court to stop the legal proceedings and give the FBI until February 2013 to comply with the request. I suggest we lock up those who are collecting the data and keep them in the data warehouse until 2013. We wouldn't want them to lose themselves or any any documents in the interim period.
Bo Bronson: "Since July 1958, the monthly RA (Risk Aversion) has ranged 11.7 percentage points from a low of -4.7% at the Sept 1987 stock market high[12] to a high of +7.0% at the previous Supercycle Bear Market low in October 1974. At 1.1% currently, it has only risen to its historical midpoint over the past 49 years. We believe that during the coming, second and final downleg in the current Supercycle Bear Market, the RA will continue rising to at least 7%[13], again causing a ~ 50% decline, this time from the February 20 stock market high. This is typical for the decline from an “irrational complacency,” echo-mania high during Supercycle Bear Markets."
Kenneth Heebner, manager of the top-performing real-estate fund over the past decade, said U.S. home prices may plunge as much as 20 percent because of rising defaults on riskier mortgages. He said "it will be the biggest housing-price decline since the Great Depression."
Here's where some of your tax dollars go. Defense spending totaled $67.8 billion in March and $268.3 billion so far for the year, up 7%. Spending on interest on the public debt totaled $21.3 billion in March and $202.1 billion for the year, up about 4%. Meanwhile, for the fiscal year so far, individual income-tax receipts are up about 11%, while corporate-tax receipts are 18% higher. Payroll taxes are up about 5%. Withheld income taxes are 9% higher; nonwithheld income taxes are up 17%. Do you think you are getting value for your tax dollars? There is too much government in the lives of all Americans.
Michael Kahn: "With most major indexes well below their February peaks, which are respective resistance levels, and volume drying up at a steady pace, the conclusion has to be that the stock market is now running on empty."
Gold for June delivery closed down $2 at $679.70 an ounce on the New York Mercantile Exchange. May silver fell 3.5 cents at $13.855 an ounce, July platinum closed down $1.80 at $1,275.50 an ounce and May copper fell 8.05 cents at $3.5020 a pound. However, June palladium bucked the trend, rising $4.75 at $374.30 an ounce.
An afternoon auction of $6 billion in 10-year Treasury Inflation Protected Securities attracted weak demand, including a very low 18.7% indirect bid.
Bill Gross: "It will not be loan losses that threaten future economic growth, however, but the tightening of credit conditions that are in part a result of those losses. To a certain extent this reluctance to extend credit is a typical response to end-of-cycle exuberance run amok. And if one had to measure this cycle's exuberance on a scale of 1-10, double-digits would be the overwhelming vote. Anyone could get a loan because shabby credits were ultimately being camouflaged within CDOs that in turn were being sold to unsophisticated foreign lenders in need of yield as opposed to ¼% bank deposits (read Japan/Yen carry trade). But there is something else in play now that resembles in part the Carter Administration's Depository Institutions and Monetary Control Act of 1980. Lender fears of potential new regulations can do nothing but begin to restrict additional lending at the margin, as will headlines heralding alleged predatory lending practices in recent years. After doubling over 18 months between 2005 and the first half of 2006, non-traditional loan growth has recently turned negative, and lenders' attitudes are turning decidedly conservative..."
Merck's new pain reliever drug Arcoxia, which was proposed as a successor to Vioxx, was rejected by a federal health advisory panel.
A Dow Chemical executive who was fired after being accused of engaging in unauthorized discussions with third parties about selling the company told CNBC's David Faber that "it never happened."
Ipsco Inc., the Regina-based steel maker, which is operated out of Lisle, Ill., is in talks that could lead to it being sold, a potential transaction one analyst valued at $8.7-billion. A Russian business daily reported that Moscow-based Evraz Group SA, Russia's largest steel maker, is in talks to acquire Ipsco.
The Democrat-led Senate's passage Wednesday of legislation seeking to allow federal funding for cutting-edge embryonic stem cell research sets up another fight with President Bush, who has vowed to veto the bill just as he did in July.
Clark Kerr: “The status quo is the only solution that cannot be vetoed.”
The 10 members of the Organization of the Petroleum Exporting Countries bound by the group's output agreements produced an average of 26.54 million barrels per day in March, down 80,000 b/d from February, Platts said late Thursday. Including Iraq and Angola, total OPEC production was 30.11 million b/d, down 70,000 b/d from the prior month, Platts reported.
The International Energy Agency said that world oil output fell by 265 thousand barrels a day in March, to 85.3 million barrels a day, after OPEC supply cuts and OECD production outages.
The IEA said global oil product demand has been revised down to 84.3 million barrels a day in 2006 and 85.8 million barrels a day 2007. For 2006 this is mainly related to improved data in non-OECD countries. Demand in the OECD remained largely unchanged, as a cold snap in North America was offset by milder temperatures in Europe and the Pacific.
Manor Care Inc, the biggest U.S. operator of homes for the elderly, said on Wednesday it was evaluating strategic options, sending its shares up more than 9 percent.Manor Care said on Wednesday that it had hired investment bank JPMorgan Chase & Co.
Medimmune has hired Goldman Sachs to explore a sale of the company.
U.S. import prices jumped a larger-than-expected 1.7% in March as petroleum prices rose sharply, Labor Department data showed. The cost of non-petroleum imports showed a 0.3% gain after a 0.1% rise the previous month and the biggest increase in three months. Export prices rose 0.7% in March as prices for agricultural and nonagricultural goods increased, compared with a forecast for a 0.4% gain.
The number of U.S. workers filing new claims for jobless benefits unexpectedly jumped 19,000 last week, government data on Thursday showed in a report skewed by seasonal layoffs for school holidays.
China's forex reserves approximate $1.2 trillion.
The FT reports cross-border flows from institutional investors into US equities relative to other assets are almost at their lowest point in more than a decade, according to State Street.
A bomb rocked Iraq's parliament building in the heavily fortified Green Zone thursday, killing at least two lawmakers in a stunning security breach in the third month of a U.S.-Iraqi crackdown on violence in the capital, officials said.
Wal-Mart Stores Inc said Thursday that strong sales of groceries helped boost same-store sales 4 percent in March. For the five-week period ended April 6, Wal-Mart same-store sales rose 3.4 percent, while Sam's Club same-store sales were up 7.4 percent. However, the company said that the first quarter will still be a "challenge."
China surpassed the United States as the world's second-largest exporter in the middle of last year, according to figures released Thursday by the World Trade Organization, and the Asian country is pulling further and further ahead. Export growth from China boomed 27 percent last year, out-pacing all other major trading nations, the WTO said
Now some state courts are requiring financial institutions to verify that an account does not contain 100% exempt funds before freezing it, and legal-aid attorneys are bringing lawsuits to force banks to ensure that the money they restrain can legally be garnisheed. "When someone has an account which is exclusively made up of Social Security funds, it's likely these are their only funds," says Margot Saunders, the counsel for the National Consumer Law Center. "When their accounts are frozen, they have no money to pay rent, buy food, transportation or go to the doctor." Although no hard data exist on the amount of exempt funds frozen by creditors, community advocates say it's a serious issue. "This is an exploding problem," says Saunders, noting that legal task forces in several states are working on the problem.
Barry Ritholtz: "It is increasingly apparent from the many economic signals we have seen that business spending is fading, and is unlikely to replace consumer spending anytime soon."
The Chinese government will issue a policy in less than two months' time to regulate the use of natural gas and alleviate a shortage in supply, Thursday's China Securities Journal reports.
Some White House staff wrote e-mail messages about official business on Republican Party accounts, and some may have been wrongly deleted, the administration said on Wednesday. I suggest the Congress begin to delete senior White House staff members, and move up from there. "They say they have not been preserved. I don't believe that!" Patrick Leahy shouted from the Senate floor. "You can't erase e-mails, not today. They've gone through too many servers," said Leahy, D-Vt. "Those e-mails are there, they just don't want to produce them. We'll subpoena them if necessary."
Fiscal fourth-quarter results for defense contractor SAIC Inc. came in better than expected, and analysts say the company is weathering an industry slowdown better than peers.
MSN Money reports as medical costs soar in the U.S., the number of uninsured has swelled, exceeding 46 million, or nearly 16% of Americans, last year, according to Census Bureau statistics. As a result, more and more folks are choosing what's known as medical tourism and heading overseas for surgeries and dental treatments they couldn't otherwise afford. In 2006 alone, an estimated 150,000 Americans traveled abroad for medical care, a number expected to double by next year, according to Josef Woodman, the author of "Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism." Nearly half of those -- around 70,000 -- had medically necessary surgeries such as hip replacements or spinal work, heart surgeries including bypass or valve replacements, and even cancer treatments.
Natural gas in storage rose 23 billion cubic feet in the week ending April 6, the Energy Department said Thursday, and the closing price at the end of the trading day was $7.96.
The dollar fell 0.4% against the euro after dropping as low as $1.3505, the lowest since January 2005.
The International Council of Shopping Centers-UBS same-store sales tally of 53 stores posted a 5.9 percent gain, exceeding estimates for 4 percent to 5 percent. Michael P. Niemira, chief economist at ICSC, said the improving weather and earlier Easter boosted March results by 3 percentage points.
But those temporary factors that helped March results are expected to hurt April's figures by that same amount, according to Niemira. The weather has turned cooler in recent days, stifling sales of spring clothing. Bill Kirk, CEO of Weather Trends International, a weather consultancy for retailers, forecast that it will be the coldest April in 24 years.
In my view, this cold April will also reduce natural gas supplies and help to provide a support for prices, which now are approaching $8 per million cubic feet.
U.S. Senator Russ Feingold introduced legislation on April 10 to effectively end U.S. military involvement in Iraq. The bill, supported by Senate Majority Leader Harry Reid, requires the President to begin safely redeploying U.S. troops from Iraq 120 days from enactment, as required by the emergency supplemental spending bill passed by the Senate. The bill ends funding for the war, with three narrow exceptions, effective March 31, 2008. In addition to Reid, the bill is cosponsored by Senators Barbara Boxer (D-CA), Chris Dodd (D-CT), Ted Kennedy (D-MA), John Kerry (D-MA), Pat Leahy (D-VT), and Sheldon Whitehouse (D-RI). If the President vetoes the emergency supplemental spending bill, Reid has said he will work to ensure Feingold’s bill gets a vote in the Senate before Memorial Day.
Last Fall, under the Freedom of Information Act, the National Security Archive Group, in attempt to make certain that there is not an invasion of privacy for innocent Americans, sued the Justice Department for records that detail how the FBI protects privacy while collecting hundreds of millions of records in its investigative Data Warehouse, which contains 659 million documents! The FBI has requested the court to stop the legal proceedings and give the FBI until February 2013 to comply with the request. I suggest we lock up those who are collecting the data and keep them in the data warehouse until 2013. We wouldn't want them to lose themselves or any any documents in the interim period.
Bo Bronson: "Since July 1958, the monthly RA (Risk Aversion) has ranged 11.7 percentage points from a low of -4.7% at the Sept 1987 stock market high[12] to a high of +7.0% at the previous Supercycle Bear Market low in October 1974. At 1.1% currently, it has only risen to its historical midpoint over the past 49 years. We believe that during the coming, second and final downleg in the current Supercycle Bear Market, the RA will continue rising to at least 7%[13], again causing a ~ 50% decline, this time from the February 20 stock market high. This is typical for the decline from an “irrational complacency,” echo-mania high during Supercycle Bear Markets."
Kenneth Heebner, manager of the top-performing real-estate fund over the past decade, said U.S. home prices may plunge as much as 20 percent because of rising defaults on riskier mortgages. He said "it will be the biggest housing-price decline since the Great Depression."
Here's where some of your tax dollars go. Defense spending totaled $67.8 billion in March and $268.3 billion so far for the year, up 7%. Spending on interest on the public debt totaled $21.3 billion in March and $202.1 billion for the year, up about 4%. Meanwhile, for the fiscal year so far, individual income-tax receipts are up about 11%, while corporate-tax receipts are 18% higher. Payroll taxes are up about 5%. Withheld income taxes are 9% higher; nonwithheld income taxes are up 17%. Do you think you are getting value for your tax dollars? There is too much government in the lives of all Americans.
Michael Kahn: "With most major indexes well below their February peaks, which are respective resistance levels, and volume drying up at a steady pace, the conclusion has to be that the stock market is now running on empty."
Gold for June delivery closed down $2 at $679.70 an ounce on the New York Mercantile Exchange. May silver fell 3.5 cents at $13.855 an ounce, July platinum closed down $1.80 at $1,275.50 an ounce and May copper fell 8.05 cents at $3.5020 a pound. However, June palladium bucked the trend, rising $4.75 at $374.30 an ounce.
An afternoon auction of $6 billion in 10-year Treasury Inflation Protected Securities attracted weak demand, including a very low 18.7% indirect bid.
Bill Gross: "It will not be loan losses that threaten future economic growth, however, but the tightening of credit conditions that are in part a result of those losses. To a certain extent this reluctance to extend credit is a typical response to end-of-cycle exuberance run amok. And if one had to measure this cycle's exuberance on a scale of 1-10, double-digits would be the overwhelming vote. Anyone could get a loan because shabby credits were ultimately being camouflaged within CDOs that in turn were being sold to unsophisticated foreign lenders in need of yield as opposed to ¼% bank deposits (read Japan/Yen carry trade). But there is something else in play now that resembles in part the Carter Administration's Depository Institutions and Monetary Control Act of 1980. Lender fears of potential new regulations can do nothing but begin to restrict additional lending at the margin, as will headlines heralding alleged predatory lending practices in recent years. After doubling over 18 months between 2005 and the first half of 2006, non-traditional loan growth has recently turned negative, and lenders' attitudes are turning decidedly conservative..."
Merck's new pain reliever drug Arcoxia, which was proposed as a successor to Vioxx, was rejected by a federal health advisory panel.
A Dow Chemical executive who was fired after being accused of engaging in unauthorized discussions with third parties about selling the company told CNBC's David Faber that "it never happened."
Ipsco Inc., the Regina-based steel maker, which is operated out of Lisle, Ill., is in talks that could lead to it being sold, a potential transaction one analyst valued at $8.7-billion. A Russian business daily reported that Moscow-based Evraz Group SA, Russia's largest steel maker, is in talks to acquire Ipsco.
The Democrat-led Senate's passage Wednesday of legislation seeking to allow federal funding for cutting-edge embryonic stem cell research sets up another fight with President Bush, who has vowed to veto the bill just as he did in July.
Clark Kerr: “The status quo is the only solution that cannot be vetoed.”
Wednesday, April 11, 2007
Facts
4/12/07 Facts
For the first time in more than three years, Houston-area home sales fell last month, a possible sign that the housing market's heady days may be coming to an end.
Single-family home sales dropped 8.8 percent in March from the same month in 2006, according to the Houston Association of Realtors.
Teen-wear apparel retailer American Eagle Outfitters said hot sales on spring things powered a 20% jump in same-store sales in March. That was well ahead of the 11.1% projection reached by analysts reporting to Thomson Financial.
Genentech Inc. said its first-quarter net earnings came in at $706 million, or 66 cents a share, compared with $421 million, or 39 cents a share, in the same quarter last year. Revenue in the quarter ended March 31 rose 43%, to $2.84 billion from $1.99 billion. Earnings from continuing operations were 74 a share in the latest three-month period. Analysts, on average, had been looking for a per-share profit of 67 cents on revenue of $2.74 billion according to Thomson Financial. Genentech also backed its forecast for pro forma per-share earnings growth of 25% to 30%.
Minutes from the Federal Reserve's last meeting on interest rates confirmed the central bank's focus on inflation. "The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the minutes said.
Comcast Corp. has agreed to acquire Fandango.
The U.S. federal spent more money in March than in any other month ever, the Treasury reported Wednesday. The federal budget deficit widened to $96.3 billion in March, compared with $85.3 billion last March, the government said.
Gold for June delivery settled up 20 cents at $681.70 an ounce on the New York Mercantile Exchange. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.
The American Petroleum Institute reported a rise of 1.97 million barrels in crude supplies for the week ended April 6. The Energy Department reported an increase of 0.7 million barrels. Motor gasoline supplies fell 3.2 million barrels, API said. The government reported a drop of 5.5 million barrels. Distillate supplies fell 443,000 barrels, API said, while the government reported a rise of 100,000 barrels.
On Wednesday, it snowed in Chicago, Milwaukee, and parts of Minnesota.
U.S. home prices will probably fall this year for the first time in at least 38 years, the National Association of Realtors said Wednesday. In its monthly housing outlook, the real estate industry group said tighter lending standards will cut into home sales even further than it had been projecting, driving prices lower. Median sales prices of existing homes are now projected to fall 0.7% in 2007 before a modest 1.6% gain in 2008, the realtors said. Since the realtors began tracking prices of single-family existing homes in 1968, the smallest price gain was 2.0% in 2006. The average gain has been 6.5%. Sales of existing homes are expected to fall 2.2% in 2007, while sales of new homes will drop 14.1%, the realtors project.
For the first time since late in December, BJ Services traded above $30. The April 30 calls traded over 8,000 contracts compared with an open interest of about 22,000 contracts.
RIM revealed that an informal inquiry by the Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation.
The International Monetary Fund cut its forecast for U.S. economic growth in 2007 to 2.2 percent, the slowest expansion in five years, on a weakening housing market.
US Army soldiers in Iraq will now be required to serve 15-month tours so the Pentagon can maintain the levels needed to fight the insurgency and try to secure the country, US Defence Secretary Robert Gates said Wednesday.
An accord on energy-sector cooperation was outlined in a statement issued at the ministerial level as part of the Japan/China summit process. Japan indicated that the accord could result in a transfer of technology to Beijing from Tokyo. The development of the nuclear energy sector in China was also placed within the ambit of this accord.
Trade volume between China and Japan hit a record US$211.3 billion in 2006, accounting for 17.2 percent of Japan's overall foreign trade, and China is expected to surpass the United States to become Japan's largest trade partner in 2007, said a senior official from the Beijing office of the Japan External Trade Organization (JETRO).
China's imports from Japan increased 15.6 percent in 2006, compared with 8.8 percent in 2005. Japan expanded the exports of electronic components, vehicles and automotive parts in 2006 for China to provide more products for the world market to meet rising demand. Non-ferrous metals and plastics from Japan were also popular in China.
Nestle SA is expected to acquire Novartis AG's baby-food unit Gerber for about $5 billion, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with the matter.
For the first time in more than three years, Houston-area home sales fell last month, a possible sign that the housing market's heady days may be coming to an end.
Single-family home sales dropped 8.8 percent in March from the same month in 2006, according to the Houston Association of Realtors.
Teen-wear apparel retailer American Eagle Outfitters said hot sales on spring things powered a 20% jump in same-store sales in March. That was well ahead of the 11.1% projection reached by analysts reporting to Thomson Financial.
Genentech Inc. said its first-quarter net earnings came in at $706 million, or 66 cents a share, compared with $421 million, or 39 cents a share, in the same quarter last year. Revenue in the quarter ended March 31 rose 43%, to $2.84 billion from $1.99 billion. Earnings from continuing operations were 74 a share in the latest three-month period. Analysts, on average, had been looking for a per-share profit of 67 cents on revenue of $2.74 billion according to Thomson Financial. Genentech also backed its forecast for pro forma per-share earnings growth of 25% to 30%.
Minutes from the Federal Reserve's last meeting on interest rates confirmed the central bank's focus on inflation. "The FOMC agreed that further policy firming might prove necessary to foster lower inflation, but in light of increased uncertainty about the outlook for both growth and inflation, the FOMC also agreed that the statement should no longer cite only the possibility of further firming," the minutes said.
Comcast Corp. has agreed to acquire Fandango.
The U.S. federal spent more money in March than in any other month ever, the Treasury reported Wednesday. The federal budget deficit widened to $96.3 billion in March, compared with $85.3 billion last March, the government said.
Gold for June delivery settled up 20 cents at $681.70 an ounce on the New York Mercantile Exchange. May silver fell 4 cents to $13.89 an ounce. July platinum closed up $7.70 at $1,281.30 an ounce, June palladium rose $6.10 at $369.55 an ounce and May copper ended up 5.65 cents at $3.5825 a pound.
The American Petroleum Institute reported a rise of 1.97 million barrels in crude supplies for the week ended April 6. The Energy Department reported an increase of 0.7 million barrels. Motor gasoline supplies fell 3.2 million barrels, API said. The government reported a drop of 5.5 million barrels. Distillate supplies fell 443,000 barrels, API said, while the government reported a rise of 100,000 barrels.
On Wednesday, it snowed in Chicago, Milwaukee, and parts of Minnesota.
U.S. home prices will probably fall this year for the first time in at least 38 years, the National Association of Realtors said Wednesday. In its monthly housing outlook, the real estate industry group said tighter lending standards will cut into home sales even further than it had been projecting, driving prices lower. Median sales prices of existing homes are now projected to fall 0.7% in 2007 before a modest 1.6% gain in 2008, the realtors said. Since the realtors began tracking prices of single-family existing homes in 1968, the smallest price gain was 2.0% in 2006. The average gain has been 6.5%. Sales of existing homes are expected to fall 2.2% in 2007, while sales of new homes will drop 14.1%, the realtors project.
For the first time since late in December, BJ Services traded above $30. The April 30 calls traded over 8,000 contracts compared with an open interest of about 22,000 contracts.
RIM revealed that an informal inquiry by the Securities and Exchange Commission into past stock-option grants has been upgraded to a formal investigation.
The International Monetary Fund cut its forecast for U.S. economic growth in 2007 to 2.2 percent, the slowest expansion in five years, on a weakening housing market.
US Army soldiers in Iraq will now be required to serve 15-month tours so the Pentagon can maintain the levels needed to fight the insurgency and try to secure the country, US Defence Secretary Robert Gates said Wednesday.
An accord on energy-sector cooperation was outlined in a statement issued at the ministerial level as part of the Japan/China summit process. Japan indicated that the accord could result in a transfer of technology to Beijing from Tokyo. The development of the nuclear energy sector in China was also placed within the ambit of this accord.
Trade volume between China and Japan hit a record US$211.3 billion in 2006, accounting for 17.2 percent of Japan's overall foreign trade, and China is expected to surpass the United States to become Japan's largest trade partner in 2007, said a senior official from the Beijing office of the Japan External Trade Organization (JETRO).
China's imports from Japan increased 15.6 percent in 2006, compared with 8.8 percent in 2005. Japan expanded the exports of electronic components, vehicles and automotive parts in 2006 for China to provide more products for the world market to meet rising demand. Non-ferrous metals and plastics from Japan were also popular in China.
Nestle SA is expected to acquire Novartis AG's baby-food unit Gerber for about $5 billion, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with the matter.
Tuesday, April 10, 2007
Commodities
4/11/07 Commodities
Jim Rogers: "We are in a bull market for commodities because supply and demand got terribly out of whack years ago, and they are still out of whack. I also wouldn't call it a theory. Nobody has discovered a gigantic oil field for thirty years. That's not a theory; that's a basic fact. In the meantime, demand for oil has been going up for many years. That's not a theory, either; that's a simple fact. Likewise, there has been one lead mine open in the world for the past twenty years, and the last lead smelter was built in the U.S. in 1979. I could continue: the number of acres devoted to wheat farming has been declining for 20 years. Those are simple facts that lead me--and, I think, any rational person--to conclude that we're in a bull market for commodities that has a ways to go."
United Rentals said it will explore strategic alternatives to enhance shareholder value, including a possible sale of the company.
D.R. Horton Inc. said second-quarter net sales orders fell 37% to 9,983 homes from 15,771 homes a year earlier. The value of net sales orders declined 41% to $2.6 billion from last year's $4.4 billion. The cancellation rate was "essentially unchanged" at 32%
Dow Chemical Co. said in a statement late Monday it "has had no discussion about a leveraged buyout."
The Blue Chip Economic Indicators panel of forecasters said they expect U.S. gross domestic product to expand at a rate of 2.3 percent in 2007, the slowest growth since 2002. The group in March had predicted growth at a rate of 2.5 percent.
"There's no question the credit problems we've seen in sub-prime are blending into Alt-A," said analyst Matthew Howlett of Fox-Pitt Kelton Inc. "It's reflective of the poor underwriting that has gone on in this sector."
Bloomberg reported China's trade surplus almost doubled in the first quarter, adding to friction as the U.S. takes complaints against its second-largest trading partner to the World Trade Organization. The surplus widened to $46.4 billion from $23.3 billion a year earlier, the customs bureau said on its Web site today. However, the March gap was $6.87 billion, smaller than economists expected.
WTRG Economics explained the large decline in the price of crude on Monday. An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate effect on prices, Citigroup Global Markets energy analyst Tim Evans said. Because the hub serves as a delivery point for oil, the facility is the Achilles' heel for the petroleum market, he said. As it nears capacity, dealers have no place to store more oil should they want to take advantage of low prices on the May futures contract, which expires April 20, Evans said.
It would be wise to stay focused on the spread between crude in the U.S. and Brent oil now trading above $67 a barrel. That spread will narrow.
The New York Times reports that a Canadian pension fund and other financial firms are working on a $45 billion takeover bid for BCE, parent of BellCanada.
Brad Setser: "The US “exported” $87b of long-term Treasuries, $83b of long-term Agencies, $23 of long-term corporate debt to China between the end of June 2005 and the end of June 2006. During that period, the US exported $48b of goods to China. No wonder many on Wall Street like an unbalanced world …"
Rep. Ron Paul: "The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars. The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement."
Here is a link to an article in the NY Times on Palatin:
http://www.nytimes.com/2007/04/10/scienc...
My readers are probably bored by all the mentions I have made of Palatin over the past two years and frustrated by the fact that the stock has traded at $1.75 to $4 during this time. At the outset, I said this was a 3 to 5 year hold. It takes quite some time for a drug to go through adequate trials and document research data. Consider the case of Dendreon. Many a shareholder lost faith after 5 years.
There is no question in my mind that Palatin's future has more than excellent potential. Patience will be rewarded.
George Ure provided the following: "A top Constitutional scholar from Princeton who gave a televised speech that slammed President George W. Bush's executive overreach was recently told that he had been added to the Transportation Security Administration's terrorist watch list. He shared his experience this weekend at the law blog Balkinization. Walter F. Murphy, the McCormick Professor of Jurisprudence, Emeritus, at Princeton University, attempted to check his luggage at the curbside in Albuquerque before boarding a plane to Newark, New Jersey. Murphy was told he could not use the service. "I was denied a boarding pass because I was on the Terrorist Watch list," he said. When inquiring with a clerk why he was on the list, Murphy was asked if he had participated in any peace marches."
From The Economist: "Shiites in Iraqi demonstrated en masse against the United States on the fourth anniversary of Saddam Hussein's fall. German commentators are pessimistic about the future of the country, predicting further unrest and even civil war.
Monday marked the fourth anniversary of the fall of Saddam Hussein. But instead of celebrations, the tone in Iraq was set by angry anti-American protests."
A German study suggests there is evidence that cocoa but not tea is linked to blood pressure reduction. The study is published in the American Medical Association journal Archives of Internal Medicine.
Robert Parry: "What makes George W. Bush and Dick Cheney such extraordinary threats to the future of American democracy is their readiness to tell half-truths and outright lies consistently without any apparent fear of accountability. While other politicians might spin some facts in a policy debate or tell a fib about a personal indiscretion, President Bush and Vice President Cheney act as if they have the power and the right to manufacture reality itself, often on matters of grave significance that bear on war and peace or the future of the nation. Even in the face of growing public skepticism, Bush and Cheney continue to invent new lies and retell old ones, seemingly with the goal of at least keeping their gullible right-wing "base" behind the faux reality depicted on Fox News, the Rush Limbaugh radio show and other right-wing media outlets."
On April 5th, Beltway pundit Joe Klein wrote that the Bush Administration is in “epic collapse.” According to Klein, the three latest developments from the White House – the showdown on Iraq, the scandal at Walter Reed Hospital and the firing of the eight U.S. Attorneys – “precisely illuminate the three qualities that make this Administration one of the worst in American history: arrogance (Iraq), incompetence (Walter Reed) and cynicism (the U.S. Attorneys).”
Crude oil for May delivery closed up 38 cents at $61.89 a barrel on the New York Mercantile Exchange. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices. In fact, the U.S. Department of Energy said it expected to see natural-gas prices rising 18% over last summer. May natural-gas futures rose 32.3 cents at $7.869 per million British thermal units, and reached a 5-week high of $7.938 per million BTUs in intraday trading. May heating oil ended up 4.04 cents at $1.8561 a gallon.
The dollar fell across the board Tuesday, touching a two-year low against the euro amid concerns over the U.S. housing market and rising trade tensions with China.
CNBC mentioned that the job cuts at Citigroup could total 45,000.
Bloomberg reported copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal. China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.
Jim Rogers: "We are in a bull market for commodities because supply and demand got terribly out of whack years ago, and they are still out of whack. I also wouldn't call it a theory. Nobody has discovered a gigantic oil field for thirty years. That's not a theory; that's a basic fact. In the meantime, demand for oil has been going up for many years. That's not a theory, either; that's a simple fact. Likewise, there has been one lead mine open in the world for the past twenty years, and the last lead smelter was built in the U.S. in 1979. I could continue: the number of acres devoted to wheat farming has been declining for 20 years. Those are simple facts that lead me--and, I think, any rational person--to conclude that we're in a bull market for commodities that has a ways to go."
United Rentals said it will explore strategic alternatives to enhance shareholder value, including a possible sale of the company.
D.R. Horton Inc. said second-quarter net sales orders fell 37% to 9,983 homes from 15,771 homes a year earlier. The value of net sales orders declined 41% to $2.6 billion from last year's $4.4 billion. The cancellation rate was "essentially unchanged" at 32%
Dow Chemical Co. said in a statement late Monday it "has had no discussion about a leveraged buyout."
The Blue Chip Economic Indicators panel of forecasters said they expect U.S. gross domestic product to expand at a rate of 2.3 percent in 2007, the slowest growth since 2002. The group in March had predicted growth at a rate of 2.5 percent.
"There's no question the credit problems we've seen in sub-prime are blending into Alt-A," said analyst Matthew Howlett of Fox-Pitt Kelton Inc. "It's reflective of the poor underwriting that has gone on in this sector."
Bloomberg reported China's trade surplus almost doubled in the first quarter, adding to friction as the U.S. takes complaints against its second-largest trading partner to the World Trade Organization. The surplus widened to $46.4 billion from $23.3 billion a year earlier, the customs bureau said on its Web site today. However, the March gap was $6.87 billion, smaller than economists expected.
WTRG Economics explained the large decline in the price of crude on Monday. An oversupply at the storage hub in Cushing, Okla., while localized, had a disproportionate effect on prices, Citigroup Global Markets energy analyst Tim Evans said. Because the hub serves as a delivery point for oil, the facility is the Achilles' heel for the petroleum market, he said. As it nears capacity, dealers have no place to store more oil should they want to take advantage of low prices on the May futures contract, which expires April 20, Evans said.
It would be wise to stay focused on the spread between crude in the U.S. and Brent oil now trading above $67 a barrel. That spread will narrow.
The New York Times reports that a Canadian pension fund and other financial firms are working on a $45 billion takeover bid for BCE, parent of BellCanada.
Brad Setser: "The US “exported” $87b of long-term Treasuries, $83b of long-term Agencies, $23 of long-term corporate debt to China between the end of June 2005 and the end of June 2006. During that period, the US exported $48b of goods to China. No wonder many on Wall Street like an unbalanced world …"
Rep. Ron Paul: "The greatest threat facing America today is not terrorism, or foreign economic competition, or illegal immigration. The greatest threat facing America today is the disastrous fiscal policies of our own government, marked by shameless deficit spending and Federal Reserve currency devaluation. It is this one-two punch-- Congress spending more than it can tax or borrow, and the Fed printing money to make up the difference-- that threatens to impoverish us by further destroying the value of our dollars. The Fed's inflationary policies hurt older people the most. Older people generally rely on fixed incomes from pensions and Social Security, along with their savings. Inflation destroys the buying power of their fixed incomes, while low interest rates reduce any income from savings. So while Fed policies encourage younger people to overborrow because interest rates are so low, they also punish thrifty older people who saved for retirement."
Here is a link to an article in the NY Times on Palatin:
http://www.nytimes.com/2007/04/10/scienc...
My readers are probably bored by all the mentions I have made of Palatin over the past two years and frustrated by the fact that the stock has traded at $1.75 to $4 during this time. At the outset, I said this was a 3 to 5 year hold. It takes quite some time for a drug to go through adequate trials and document research data. Consider the case of Dendreon. Many a shareholder lost faith after 5 years.
There is no question in my mind that Palatin's future has more than excellent potential. Patience will be rewarded.
George Ure provided the following: "A top Constitutional scholar from Princeton who gave a televised speech that slammed President George W. Bush's executive overreach was recently told that he had been added to the Transportation Security Administration's terrorist watch list. He shared his experience this weekend at the law blog Balkinization. Walter F. Murphy, the McCormick Professor of Jurisprudence, Emeritus, at Princeton University, attempted to check his luggage at the curbside in Albuquerque before boarding a plane to Newark, New Jersey. Murphy was told he could not use the service. "I was denied a boarding pass because I was on the Terrorist Watch list," he said. When inquiring with a clerk why he was on the list, Murphy was asked if he had participated in any peace marches."
From The Economist: "Shiites in Iraqi demonstrated en masse against the United States on the fourth anniversary of Saddam Hussein's fall. German commentators are pessimistic about the future of the country, predicting further unrest and even civil war.
Monday marked the fourth anniversary of the fall of Saddam Hussein. But instead of celebrations, the tone in Iraq was set by angry anti-American protests."
A German study suggests there is evidence that cocoa but not tea is linked to blood pressure reduction. The study is published in the American Medical Association journal Archives of Internal Medicine.
Robert Parry: "What makes George W. Bush and Dick Cheney such extraordinary threats to the future of American democracy is their readiness to tell half-truths and outright lies consistently without any apparent fear of accountability. While other politicians might spin some facts in a policy debate or tell a fib about a personal indiscretion, President Bush and Vice President Cheney act as if they have the power and the right to manufacture reality itself, often on matters of grave significance that bear on war and peace or the future of the nation. Even in the face of growing public skepticism, Bush and Cheney continue to invent new lies and retell old ones, seemingly with the goal of at least keeping their gullible right-wing "base" behind the faux reality depicted on Fox News, the Rush Limbaugh radio show and other right-wing media outlets."
On April 5th, Beltway pundit Joe Klein wrote that the Bush Administration is in “epic collapse.” According to Klein, the three latest developments from the White House – the showdown on Iraq, the scandal at Walter Reed Hospital and the firing of the eight U.S. Attorneys – “precisely illuminate the three qualities that make this Administration one of the worst in American history: arrogance (Iraq), incompetence (Walter Reed) and cynicism (the U.S. Attorneys).”
Crude oil for May delivery closed up 38 cents at $61.89 a barrel on the New York Mercantile Exchange. A surge in natural-gas futures, which followed comments from the U.S. Department of Energy that demand would remain strong through the summer, also boosted energy prices. In fact, the U.S. Department of Energy said it expected to see natural-gas prices rising 18% over last summer. May natural-gas futures rose 32.3 cents at $7.869 per million British thermal units, and reached a 5-week high of $7.938 per million BTUs in intraday trading. May heating oil ended up 4.04 cents at $1.8561 a gallon.
The dollar fell across the board Tuesday, touching a two-year low against the euro amid concerns over the U.S. housing market and rising trade tensions with China.
CNBC mentioned that the job cuts at Citigroup could total 45,000.
Bloomberg reported copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal. China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.
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