8//29/09 September
Doug Noland: "it is the Credit system driving the real economy - not vice-versa. Only massive fiscal and monetary stimulus was capable of stabilizing the system. Total non-financial Credit expanded $470 billion 1991. It is my view that the maladjusted U.S. “Bubble” economy will require non-financial Credit growth of at least $2.0 TN this year. With the banking system and Wall Street finance severely impaired, “federal” (Treasury, agency, GSE MBS) Credit will account for the vast majority of system Credit growth this year....I also believe it matters greatly to both the U.S. economy and markets that our government has become the predominant source of system finance. Granted, it may not matter so much right now as artificial recoveries flourish in the markets and economy. But those believing the stock market is forecasting a happy ending to this, the latest stage of the Bubble, will again be disappointed. I haven’t forgotten how the Wall Street boom papered over a lot of problems and structural issues."
Mike Burk: "Over all years since 1928, the SPX, in September, has been up 44% of the time with an average loss of 1.2%, making it the worst month of the year. During the 1st year of the Presidential Cycle the SPX has been up only 30% of the time with an average loss of 2.3%, also the worst month of year in the 1st year of the Presidential Cycle....The market is overbought any way you want to measure it and new highs are deteriorating. It is likely to take a while for the momentum to bleed off, on the other hand there is unlikely to be much upside either.
I expect the major indices to be lower on Friday September 4 than they were on Friday August 28."
Three more banks were closed by regulators Friday, bringing the 2009 toll to 84.
Guaranty Financial Group Inc has filed for Chapter 11 bankruptcy protection, less than a week after regulators seized its banking unit and sold most of its assets to the Spanish bank, Banco Bilbao Vizcaya Argentaria SA .
Edmunds predicts that the 1.17 million cars will be sold this month, which is up 18% from last month and down “only” 6% from last year. Thank you clunkers.
Zerohedge: "From January to May the total capital outflows from the U.S. amount to ($314) billion in assets, consisting of central bank purchases of $50 billion, however, matched with private investor dispositions of $364 billion....agency bonds peaked in October of 2008 at nearly a trillion dollars but have declined by $178 billion since then. Treasuries, on the other hand, have increased by over $500 billion over that same span of time. A half a trillion dollars!
Shell #1: Foreign central banks sell agency debt out of the custody account.
Shell #2: The Federal Reserve buys those agency bonds with money created out of thin air.
Shell #3: Foreign central banks use that very same money to buy Treasuries at the next government auction."
Chris Martenson: "The Federal Reserve has effectively been monetizing far more US government debt than has openly been revealed, by cleverly enabling foreign central banks to swap their agency debt for Treasury debt. This is not a sign of strength and reveals a pattern of trading temporary relief for future difficulties.
This is very nearly the same path that Zimbabwe took, resulting in the complete abandonment of the Zimbabwe dollar as a unit of currency. The difference is in the complexity of the game being played, not the substance of the actions themselves.The shell game that the Fed is currently playing does not change the basic equation: Money is being printed out of thin air so that it can be used to buy US government debt. When the full scope of this program is more widely recognized, ever more pressure will fall upon the dollar, as more and more private investors shun the dollar and all dollar-denominated instruments as stores of value and wealth. This will further burden the efforts of the various central banks around the world as they endeavor to meet the vast borrowing desires of the US government.One possible result of the abandonment of these efforts is a wholesale flight out of the dollar and into other assets. To US residents, this will be experienced as rapidly rising import costs and increasing costs for all internationally-traded basic commodities, especially food items. For the rest of the world, the results will range from discomforting to disastrous, depending on their degree of dollar linkage. "
“India’s future is threatene by shortages of food, water and energy and these should be addressed on a priority basis, the Prime Minister’s security adviser said. ‘These are part of a broad national security plan, and defense is only one aspect of it,’ Shekhar Dutt, India’s deputy national security adviser, said… ‘We think water is going to be a very severe determinant of prosperity and well-being.’”
Brett Steenbarger: "The current 20-day median TRIN is the lowest value we've seen since 2000 at around .75.
I'm not exactly sure what to make of that. What I can tell you with certainty is that two of the past historical occasions in which we've had 20-day price highs and ultra low median 20-day TRIN readings have been March, 2000 and late May/early June, 2007. Both corresponded more or less to bull market peaks."
The European Union signed a temporary trade pact Saturday with Mauritius, Seychelles, Zimbabwe and Madagascar calling for tariffs on European goods would be removed over the next 15 years.
The four countries in southeast Africa have had full access to the EU consumer market -- the world's biggest -- since the start of 2008 for most goods. Trade barriers for rice and sugar, however, are being removed gradually.
The new deal excludes trade on agricultural products such as milk, meat, vegetables, textiles, footwear and clothing.
The Oil Drum: "Declining industrial electricity demand and an abundance of cheap natural gas will threaten coal's status as the dominant U.S. fuel to generate electric power, even after the economic recession ends.
Power companies are reducing use of coal plants because of declining demand from heavy industry, the economic sector hardest hit by the recession. The loss of industrial "baseload" looks long term, analysts and executives say.
Natural gas-fired plants, easier to stop and start, have remained busy serving commercial and household power demand, which varies hour by hour and has been less affected by the recession."
WSJ: "The U.S. recovery is a tale of two economies. At one extreme are big companies with an enviable access to credit; at the other are small, struggling firms that can't borrow."
Peter Goodman: "Even though consumer spending rose in July, many Americans are still watching their pennies, and some said their newfound frugality would not be temporary."
Internet companies and civil liberties groups were alarmed this spring when a U.S. Senate bill proposed handing the White House the power to disconnect private-sector computers from the Internet.
They're not much happier about a revised version that aides to Sen. Jay Rockefeller, a West Virginia Democrat, have spent months drafting behind closed doors. CNET News has obtained a copy of the 55-page draft of S.773 (excerpt), which still appears to permit the president to seize temporary control of private-sector networks during a so-called cybersecurity emergency.
The new version would
allow the president to "declare a cybersecurity emergency" relating to "non-governmental" computer networks and do what's necessary to respond to the threat. Other sections of the proposal include a federal certification program for "cybersecurity professionals," and a requirement that certain computer systems and networks in the private sector be managed by people who have been awarded that license.
The California Building Industry Association says its members reported a significant drop in traffic to their developments in July because the state stopped taking applications for a $10,000 tax credit for new home buyers.
The $10,000 credit was authorized by the state legislature last February as a way to jump start California construction jobs. The credit, coupled with the $8,000 federal new home buyer credit, had been a big reason why builders in California saw a jump in sales this past spring.
Now with the initial funding exhausted, buyers are less eager. “Activity stopped as quickly as it started, which is bad news for housing and the broader economy,” says Robert Rivinius, the builder association’s president. The trade group is lobbying to get the credit extended.
Saturday, August 29, 2009
Friday, August 28, 2009
Benchmark
8/29/09 Benchmark
A benchmark for the mid- Atlantic region, power fell $3.68, or 10 percent, to $32.31 a megawatt-hour on the Atlanta-based Intercontinental Exchange. That’s the lowest for the region, which stretches from Washington to Chicago, since Dec. 31, 2003.
Mild summer weather and a weak economy have reduced industrial and residential demand for electricity as offices and factories shut and consumers cut back spending.
Meanwhile, consumers reported the worst assessments of their finances since the surveys began in 1946.
Tiffany said sales trends in August are meeting its expectations. It raised its profit forecast for the year to $1.65 to $1.75 a share from a previous projection of as much as $1.60. It forecast a sales decline of about 10%.
German gross domestic product is on track to shrink by 5% or 6% in 2009, Chancellor Angela Merkel said Friday, according to Dow Jones Newswires. Merkel said the economy may have reached bottom but warned that the crisis isn't over.
The UK economy shrank by 0.7 per cent in the second quarter, marginally less than the 0.8 per cent initially estimated, according to official figures published on Friday.
"Personal income increased $3.8 billion, or less than 0.1 percent, and disposable personal income (DPI) decreased $4.6 billion, or less than 0.1 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $25.0 billion, or 0.2 percent. In June, personal income decreased $133.4 billion, or 1.1 percent, DPI decreased $119.9 billion, or 1.1 percent, and PCE increased $60.9 billion, or 0.6 percent, based on revised estimates. Real disposable income decreased 0.1 percent in July, compared with a decrease of 1.6 percent in June. Real PCE increased 0.2 percent, compared with an increase of 0.1 percent." US consumer spending was lifted by the government's "cash-for-clunkers" program that fueled demand for autos.
"Personal saving -- DPI less personal outlays – was $458.5 billion in July, compared with $486.8 billion in June. Personal saving as a percentage of disposable personal income was 4.2 percent in July, compared with 4.5 percent in June. "
Newspapers' financial woes worsened in the second quarter as advertising sales shrank by 29 percent, leaving publishers with $2.8 billion less revenue than they had at the same time last year.
Japan’s consumer prices fell at a record pace in July, adding to signs that deflation will hamper a rebound from the nation’s worst postwar recession.
Consumer prices excluding fresh food declined 2.2 percent from a year earlier after dropping 1.7 percent in the previous month, the statistics bureau said today in Tokyo. It was the sharpest decrease since the survey began in 1971.
The president slips to 50% in the Gallup Poll, reaching that point more quickly than most of his predecessors did.
Copper rose to the highest in almost 11 months in New York on speculation revived economic growth will spur demand. Lead jumped to a one-year high.
Chinese shares fell Friday amid concerns about a possible decline in liquidity, ending the week down 3.4 percent.
Japan's unemployment rate rose to an all-time high in July, deflation intensified and families cut spending — a triple dose of bad news for Prime Minister Taro Aso as his party heads for almost certain defeat in Sunday's parliamentary elections.
The jobless rate hit a seasonally adjusted 5.7 percent, the highest level in Japan's post-World War II era and worsening from 5.4 percent in June, the government said Friday.
The previous record was 5.5 percent, last hit in April 2003.
In some geographic areas, it is currently cheaper to use natural gas than coal. Shocking, right?
U.S. consumer confidence fell to its lowest in four months in August on worries over high unemployment and dismal personal finances, though the mood managed to improve from earlier this month, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for August fell to 65.7 from 66.0 in July.
That was the lowest since 65.1 in April.
Consumers rated the current economic conditions the worst since March, when the stock market hit 12-year lows. This index fell to 66.6 from 70.5 in July.
Fannie Mae, Freddie Mac, AIG, Citi, and Vonage show big gains in August. Insanity is back in force. The U.S. doolar index remains weak while oil is at $73, gold at $958, and natural gas is at the rear at $3.06.
intel issued a forecast calling for revenue of $8.8 billion to $9.2 billion in the current quarter, up from a previously forecast $8.1 billion to $8.9 billion.
Whirlpool Corp. said Friday it will cut 1,100 jobs and close a refrigerator factory in Evansville, Ind., to cut excess production capacity.The jobs will be eliminated in mid-2010.
An Obama administration plan to cut Medicare payments to heart and cancer doctors by $1.4 billion next year is generating a backlash that’s undermining the president’s health-care overhaul.
Xebec Adsorption Inc, a global leader in the drying and purification of natural gas for NGV refueling stations, announced today that the U.S. Department of Energy's (DOE) Clean Cities program has awarded US$300 million in funding to build more than 9,000 alternative fuel and energy efficient vehicles and 542 refueling stations.
"Xebec believes that natural gas as a transportation fuel in the United States has a bright future and the decision by the DOE is an important step in the direction of making the U.S. energy independent while at the same time significantly reducing green house gas admissions," said Kurt Sorschak, President and CEO of Xebec. "Xebec has been in the natural gas vehicle refueling market for over 25 years and enjoys a market share of over 90% in the dehydration of natural gas for refueling stations in the United States."
Raymond James' Buck Horne:"A large part of the completed spec inventory the builders are still holding is simply the wrong product for this environment -- an many of those homes are only getting older. Notice the jump in the median months for sale from 11.8 to 12.4. The newly designed, simplified, downsized product is selling well. All those older homes with lots of bells and whistles are still sitting out there collecting dust."
Apple will sell somewhere between five and seven million iPhones in China in 2010 as a result of its deal with the country's second-largest mobile carrier, a Wall Street analyst said today.
The Chinese market will account for about 15% to 20% of Apple's worldwide iPhone sales next year, said Brian Marshall, an analyst with Broadpoint AmTech. "The upside for Apple is great."
Earlier today, China Unicom, the country's No. 2 carrier, announced a three-year agreement with Apple to sell the latter's iPhone, confirming rumors and reports that the two were nearing a deal. Last March, Web sites and bloggers reported that China Unicom had confirmed it would start selling the iPhone the following month, something that did not happen.
The S&P 500 Index slipped 2.05 points, or 0.2%, to 1,028.93, leaving the broad market gauge up 0.3% for the week. The technology-laden Nasdaq Composite added 1.04 points, or 0.1%, to rest at 2,028.77, leaving it with a weekly gain of 0.4%. The Dow Jones Industrial Average fell 36.43 points, or 0.4%, to 9,544.20, up 0.4% from the week-ago close.
Art Cashin:"The employment situation is hanging tough. Even though I know unemployment is a lagging indicator, with the severe layoffs we've had recently, you find people looking and saying, 'okay, I've still got my job, but the guy down the block lost his, and those two guys over there lost theirs' — and that's beginning to rain down further on housing."
A benchmark for the mid- Atlantic region, power fell $3.68, or 10 percent, to $32.31 a megawatt-hour on the Atlanta-based Intercontinental Exchange. That’s the lowest for the region, which stretches from Washington to Chicago, since Dec. 31, 2003.
Mild summer weather and a weak economy have reduced industrial and residential demand for electricity as offices and factories shut and consumers cut back spending.
Meanwhile, consumers reported the worst assessments of their finances since the surveys began in 1946.
Tiffany said sales trends in August are meeting its expectations. It raised its profit forecast for the year to $1.65 to $1.75 a share from a previous projection of as much as $1.60. It forecast a sales decline of about 10%.
German gross domestic product is on track to shrink by 5% or 6% in 2009, Chancellor Angela Merkel said Friday, according to Dow Jones Newswires. Merkel said the economy may have reached bottom but warned that the crisis isn't over.
The UK economy shrank by 0.7 per cent in the second quarter, marginally less than the 0.8 per cent initially estimated, according to official figures published on Friday.
"Personal income increased $3.8 billion, or less than 0.1 percent, and disposable personal income (DPI) decreased $4.6 billion, or less than 0.1 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $25.0 billion, or 0.2 percent. In June, personal income decreased $133.4 billion, or 1.1 percent, DPI decreased $119.9 billion, or 1.1 percent, and PCE increased $60.9 billion, or 0.6 percent, based on revised estimates. Real disposable income decreased 0.1 percent in July, compared with a decrease of 1.6 percent in June. Real PCE increased 0.2 percent, compared with an increase of 0.1 percent." US consumer spending was lifted by the government's "cash-for-clunkers" program that fueled demand for autos.
"Personal saving -- DPI less personal outlays – was $458.5 billion in July, compared with $486.8 billion in June. Personal saving as a percentage of disposable personal income was 4.2 percent in July, compared with 4.5 percent in June. "
Newspapers' financial woes worsened in the second quarter as advertising sales shrank by 29 percent, leaving publishers with $2.8 billion less revenue than they had at the same time last year.
Japan’s consumer prices fell at a record pace in July, adding to signs that deflation will hamper a rebound from the nation’s worst postwar recession.
Consumer prices excluding fresh food declined 2.2 percent from a year earlier after dropping 1.7 percent in the previous month, the statistics bureau said today in Tokyo. It was the sharpest decrease since the survey began in 1971.
The president slips to 50% in the Gallup Poll, reaching that point more quickly than most of his predecessors did.
Copper rose to the highest in almost 11 months in New York on speculation revived economic growth will spur demand. Lead jumped to a one-year high.
Chinese shares fell Friday amid concerns about a possible decline in liquidity, ending the week down 3.4 percent.
Japan's unemployment rate rose to an all-time high in July, deflation intensified and families cut spending — a triple dose of bad news for Prime Minister Taro Aso as his party heads for almost certain defeat in Sunday's parliamentary elections.
The jobless rate hit a seasonally adjusted 5.7 percent, the highest level in Japan's post-World War II era and worsening from 5.4 percent in June, the government said Friday.
The previous record was 5.5 percent, last hit in April 2003.
In some geographic areas, it is currently cheaper to use natural gas than coal. Shocking, right?
U.S. consumer confidence fell to its lowest in four months in August on worries over high unemployment and dismal personal finances, though the mood managed to improve from earlier this month, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for August fell to 65.7 from 66.0 in July.
That was the lowest since 65.1 in April.
Consumers rated the current economic conditions the worst since March, when the stock market hit 12-year lows. This index fell to 66.6 from 70.5 in July.
Fannie Mae, Freddie Mac, AIG, Citi, and Vonage show big gains in August. Insanity is back in force. The U.S. doolar index remains weak while oil is at $73, gold at $958, and natural gas is at the rear at $3.06.
intel issued a forecast calling for revenue of $8.8 billion to $9.2 billion in the current quarter, up from a previously forecast $8.1 billion to $8.9 billion.
Whirlpool Corp. said Friday it will cut 1,100 jobs and close a refrigerator factory in Evansville, Ind., to cut excess production capacity.The jobs will be eliminated in mid-2010.
An Obama administration plan to cut Medicare payments to heart and cancer doctors by $1.4 billion next year is generating a backlash that’s undermining the president’s health-care overhaul.
Xebec Adsorption Inc, a global leader in the drying and purification of natural gas for NGV refueling stations, announced today that the U.S. Department of Energy's (DOE) Clean Cities program has awarded US$300 million in funding to build more than 9,000 alternative fuel and energy efficient vehicles and 542 refueling stations.
"Xebec believes that natural gas as a transportation fuel in the United States has a bright future and the decision by the DOE is an important step in the direction of making the U.S. energy independent while at the same time significantly reducing green house gas admissions," said Kurt Sorschak, President and CEO of Xebec. "Xebec has been in the natural gas vehicle refueling market for over 25 years and enjoys a market share of over 90% in the dehydration of natural gas for refueling stations in the United States."
Raymond James' Buck Horne:"A large part of the completed spec inventory the builders are still holding is simply the wrong product for this environment -- an many of those homes are only getting older. Notice the jump in the median months for sale from 11.8 to 12.4. The newly designed, simplified, downsized product is selling well. All those older homes with lots of bells and whistles are still sitting out there collecting dust."
Apple will sell somewhere between five and seven million iPhones in China in 2010 as a result of its deal with the country's second-largest mobile carrier, a Wall Street analyst said today.
The Chinese market will account for about 15% to 20% of Apple's worldwide iPhone sales next year, said Brian Marshall, an analyst with Broadpoint AmTech. "The upside for Apple is great."
Earlier today, China Unicom, the country's No. 2 carrier, announced a three-year agreement with Apple to sell the latter's iPhone, confirming rumors and reports that the two were nearing a deal. Last March, Web sites and bloggers reported that China Unicom had confirmed it would start selling the iPhone the following month, something that did not happen.
The S&P 500 Index slipped 2.05 points, or 0.2%, to 1,028.93, leaving the broad market gauge up 0.3% for the week. The technology-laden Nasdaq Composite added 1.04 points, or 0.1%, to rest at 2,028.77, leaving it with a weekly gain of 0.4%. The Dow Jones Industrial Average fell 36.43 points, or 0.4%, to 9,544.20, up 0.4% from the week-ago close.
Art Cashin:"The employment situation is hanging tough. Even though I know unemployment is a lagging indicator, with the severe layoffs we've had recently, you find people looking and saying, 'okay, I've still got my job, but the guy down the block lost his, and those two guys over there lost theirs' — and that's beginning to rain down further on housing."
Thursday, August 27, 2009
Exhausting Benefits
8/27/09 Exhausting Benefits
Despite repeated extensions of the unemployment compensation program — up to a record 79 weeks in many states, compared to the standard 26 weeks in normal times — some 1.5 million people are expected to exhaust their benefits by year’s end.
In the first big wave, some 540,000 are expected to fall out of the program by the end of September, according to the nonprofit National Employment Law Project.
“Every state is going to experience a substantial increase in people exhausting their benefits,” says Chris Owen, executive director of the Washington, D.C.-based worker advocacy group. “That means more people who will not be able to pay their mortgages, and who will not be able to shop and buy things. It will be a blow for the national economy, and for state and local economies.”
The FDIC on Thursday will disclose how much is left in its insurance fund, and update the number of banks on its list of troubled institutions. That number shot up to 305 in the first quarter — the highest since 1994 and up from 252 late last year.
FDIC Chairman Sheila Bair may also use the quarterly briefing to discuss how the agency plans to shore up its accounts.
Small and midsize banks across the country have been hurt by rising loan defaults in the recession. When they fail, the FDIC is responsible for making sure depositors don't lose a cent.
It has two options to replenish its insurance fund in the short run: It can charge banks higher fees or it can take the more radical step of borrowing from the U.S. Treasury.
The U.S. added 111 lenders to its list of “problem banks” in the second quarter, a 36 percent increase that pushed the group to a 15-year high.
A total of 416 banks with combined assets of $299.8 billion failed the Federal Deposit Insurance Corp.’s grading system for asset quality, liquidity and earnings, the most since June 1994, the Washington-based FDIC said in a report today. Regulators didn’t identify companies deemed “problem” banks.
Since February, default and foreclosure rates on option ARMs have passed those of subprime mortgages, according to the research firm First American CoreLogic, in part because so many subprime mortgages have already failed.
“Everyone’s been focused on subprime, but we’re more concerned about this,” said Todd Jadlos, managing director of
LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
First American CoreLogic anticipates 600,000 option ARMS will reset within four years.
Toll Brothers Inc. says it lost $472.3 million in its fiscal third quarter, as the luxury homebuilder took a large tax hit.
But while Toll Brothers' results were worse than analysts expected, the company is seeing signs of improvement in the industry.
The builder said Thursday it lost $2.93 a share in the three months ended July 31. That compares with a loss of $29.3 million, or 18 cents a share, the same period last year.
Toll Brothers sold 792 homes with revenue totaling $461.4 million. Those results were down 36 percent and 42 percent, respectively, from the third fiscal quarter last year.
First-time claims for state unemployment benefits fell for the first time in three weeks, the Labor Department reported Thursday. The number of initial claims in the week ending Aug. 22 fell 10,000 to 570,000. The consensus forecast of Wall Street economists was for claims to fall to 565,000. Claims in the previous week were revised to an increase of 19,000 to 580,000 compared with the initial estimate of a increase of 15,000 to 576,000. Claims had risen 26,000 in the past two weeks. The four-week average of initial claims fell 4,750 to 566,250. Meanwhile, the number of Americans receiving state jobless benefits fell 119,000 to 6.13 million in the week ending Aug. 15. This is the lowest level since early April. The four-week moving average of continuing claims fell 27,000 to 6.24 million.
Retail maven Howard Davidowitz paid another visit to Tech Ticker this week. And despite signs of improvement in consumer confidence and retail stocks rising, Davidowitz is steadfast in his belief the consumer is dead.
Rather than summarize, let me just highlight some of his best one-liners:
On retail:
"The retail business is terrible... It's almost all negative." "We're going to close hundreds of thousands of stores."
On the consumer:
"They’re still over leveraged, they're losing jobs, their credit has been cut back."
On America:
"We are in the tank forever. As a country we are out of control, we're in a death spiral."
Boeing Co said on Thursday that its 787 Dreamliner would make its first flight by the end of this year, with the first delivery expected in the fourth quarter of 2010.
The plane maker said it has concluded that the initial test-flight planes of the long-delayed 787 have no commercial market value because of necessary modifications that have been made.
It added that costs previously recorded for the first three test planes would be reclassified as research and development expense, resulting in an estimated pretax charge of $2.5 billion, or $2.21 a share, against results for the third quarter.
The aircraft, already two years behind its original schedule, was to fly in the second quarter of 2009, but the flight was delayed so Boeing could address a structural problem.
Working gas in storage was 3,258 Bcf as of Friday, August 21, 2009, according to EIA estimates. This represents a net increase of 54 Bcf from the previous week. Stocks were 516 Bcf higher than last year at this time and 500 Bcf above the 5-year average of 2,758 Bcf. In the East Region, stocks were 153 Bcf above the 5-year average following net injections of 43 Bcf. Stocks in the Producing Region were 271 Bcf above the 5-year average of 808 Bcf after a net injection of 5 Bcf. Stocks in the West Region were 76 Bcf above the 5-year average after a net addition of 6 Bcf. At 3,258 Bcf, total working gas is above the 5-year historical range.
Analysts surveyed by Platts expected an addition of between 48 and 52 billion cubic feet, while IHS Global Insight projected a build of 52 billion cubic feet.
Wyoming's unemployment rate climbed to 6.5 percent in July, its highest rate in more than 20 years.
According to the Wyoming Department of Employment, the state has lost about 8,900 jobs from July 2008 through last month. The main losses over the year included 4,400 jobs in the construction sector and 4,200 jobs from natural resources and mining.
The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.
“We’ve already lost 81 this year,” he told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.”
The USDA says American farm profits will decline more than expected, falling 38% this year to $54B vs. an earlier forecast of $71.2B. While input costs for energy and feed are falling, product sales are falling faster, and swine flu and a dairy surplus aren't helping.
Nouriel Roubini: "Consider that by the end of 2010 most of the tax cuts legislated by the Bush administration in 2001 and 2003 are due to expire. This means that there will be a sharp tax hike, including income taxes, capital gains taxes and taxes on dividends and estates. This hike--equivalent to around 1.5% to 2% of GDP--is already factored in to future calculations of government indebtedness. So if by next year the recovery proves as anemic as I expect, and if unemployment is around 10.5%-11%, as I also expect, then the pressure for another stimulus round early in 2010 will be strong."
Oil futures end up $1.06 at $72.49/brl on Nymex.
Toyota Motor Corp.'s board voted to close the automaker's Fremont, Calif.-based plant by March, according to media reports Thursday. The plant housing New United Motor Manufacturing Inc., a joint venture with General Motors Co., employs about 4,600 workers, according to reports.
U.S. dollar index weak at 77.90.
The Dow Jones Industrial Average added 37.11 points, or 0.4%, to 9,580.63. The S&P 500 Index gained 2.86 points, or 0.3%, to stand at 1,030.98, while the Nasdaq Composite added 3.3 points, or 0.2%, to 2,027.73.
Despite repeated extensions of the unemployment compensation program — up to a record 79 weeks in many states, compared to the standard 26 weeks in normal times — some 1.5 million people are expected to exhaust their benefits by year’s end.
In the first big wave, some 540,000 are expected to fall out of the program by the end of September, according to the nonprofit National Employment Law Project.
“Every state is going to experience a substantial increase in people exhausting their benefits,” says Chris Owen, executive director of the Washington, D.C.-based worker advocacy group. “That means more people who will not be able to pay their mortgages, and who will not be able to shop and buy things. It will be a blow for the national economy, and for state and local economies.”
The FDIC on Thursday will disclose how much is left in its insurance fund, and update the number of banks on its list of troubled institutions. That number shot up to 305 in the first quarter — the highest since 1994 and up from 252 late last year.
FDIC Chairman Sheila Bair may also use the quarterly briefing to discuss how the agency plans to shore up its accounts.
Small and midsize banks across the country have been hurt by rising loan defaults in the recession. When they fail, the FDIC is responsible for making sure depositors don't lose a cent.
It has two options to replenish its insurance fund in the short run: It can charge banks higher fees or it can take the more radical step of borrowing from the U.S. Treasury.
The U.S. added 111 lenders to its list of “problem banks” in the second quarter, a 36 percent increase that pushed the group to a 15-year high.
A total of 416 banks with combined assets of $299.8 billion failed the Federal Deposit Insurance Corp.’s grading system for asset quality, liquidity and earnings, the most since June 1994, the Washington-based FDIC said in a report today. Regulators didn’t identify companies deemed “problem” banks.
Since February, default and foreclosure rates on option ARMs have passed those of subprime mortgages, according to the research firm First American CoreLogic, in part because so many subprime mortgages have already failed.
“Everyone’s been focused on subprime, but we’re more concerned about this,” said Todd Jadlos, managing director of
LPS Applied Analytics, which analyzes data for the financial industry. “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.”
First American CoreLogic anticipates 600,000 option ARMS will reset within four years.
Toll Brothers Inc. says it lost $472.3 million in its fiscal third quarter, as the luxury homebuilder took a large tax hit.
But while Toll Brothers' results were worse than analysts expected, the company is seeing signs of improvement in the industry.
The builder said Thursday it lost $2.93 a share in the three months ended July 31. That compares with a loss of $29.3 million, or 18 cents a share, the same period last year.
Toll Brothers sold 792 homes with revenue totaling $461.4 million. Those results were down 36 percent and 42 percent, respectively, from the third fiscal quarter last year.
First-time claims for state unemployment benefits fell for the first time in three weeks, the Labor Department reported Thursday. The number of initial claims in the week ending Aug. 22 fell 10,000 to 570,000. The consensus forecast of Wall Street economists was for claims to fall to 565,000. Claims in the previous week were revised to an increase of 19,000 to 580,000 compared with the initial estimate of a increase of 15,000 to 576,000. Claims had risen 26,000 in the past two weeks. The four-week average of initial claims fell 4,750 to 566,250. Meanwhile, the number of Americans receiving state jobless benefits fell 119,000 to 6.13 million in the week ending Aug. 15. This is the lowest level since early April. The four-week moving average of continuing claims fell 27,000 to 6.24 million.
Retail maven Howard Davidowitz paid another visit to Tech Ticker this week. And despite signs of improvement in consumer confidence and retail stocks rising, Davidowitz is steadfast in his belief the consumer is dead.
Rather than summarize, let me just highlight some of his best one-liners:
On retail:
"The retail business is terrible... It's almost all negative." "We're going to close hundreds of thousands of stores."
On the consumer:
"They’re still over leveraged, they're losing jobs, their credit has been cut back."
On America:
"We are in the tank forever. As a country we are out of control, we're in a death spiral."
Boeing Co said on Thursday that its 787 Dreamliner would make its first flight by the end of this year, with the first delivery expected in the fourth quarter of 2010.
The plane maker said it has concluded that the initial test-flight planes of the long-delayed 787 have no commercial market value because of necessary modifications that have been made.
It added that costs previously recorded for the first three test planes would be reclassified as research and development expense, resulting in an estimated pretax charge of $2.5 billion, or $2.21 a share, against results for the third quarter.
The aircraft, already two years behind its original schedule, was to fly in the second quarter of 2009, but the flight was delayed so Boeing could address a structural problem.
Working gas in storage was 3,258 Bcf as of Friday, August 21, 2009, according to EIA estimates. This represents a net increase of 54 Bcf from the previous week. Stocks were 516 Bcf higher than last year at this time and 500 Bcf above the 5-year average of 2,758 Bcf. In the East Region, stocks were 153 Bcf above the 5-year average following net injections of 43 Bcf. Stocks in the Producing Region were 271 Bcf above the 5-year average of 808 Bcf after a net injection of 5 Bcf. Stocks in the West Region were 76 Bcf above the 5-year average after a net addition of 6 Bcf. At 3,258 Bcf, total working gas is above the 5-year historical range.
Analysts surveyed by Platts expected an addition of between 48 and 52 billion cubic feet, while IHS Global Insight projected a build of 52 billion cubic feet.
Wyoming's unemployment rate climbed to 6.5 percent in July, its highest rate in more than 20 years.
According to the Wyoming Department of Employment, the state has lost about 8,900 jobs from July 2008 through last month. The main losses over the year included 4,400 jobs in the construction sector and 4,200 jobs from natural resources and mining.
The US banking system will lose some 1,000 institutions over the next two years, said John Kanas, whose private equity firm bought BankUnited of Florida in May.
“We’ve already lost 81 this year,” he told CNBC. “The numbers are climbing every day. Many of these institutions nobody’s ever heard of. They're smaller companies.”
The USDA says American farm profits will decline more than expected, falling 38% this year to $54B vs. an earlier forecast of $71.2B. While input costs for energy and feed are falling, product sales are falling faster, and swine flu and a dairy surplus aren't helping.
Nouriel Roubini: "Consider that by the end of 2010 most of the tax cuts legislated by the Bush administration in 2001 and 2003 are due to expire. This means that there will be a sharp tax hike, including income taxes, capital gains taxes and taxes on dividends and estates. This hike--equivalent to around 1.5% to 2% of GDP--is already factored in to future calculations of government indebtedness. So if by next year the recovery proves as anemic as I expect, and if unemployment is around 10.5%-11%, as I also expect, then the pressure for another stimulus round early in 2010 will be strong."
Oil futures end up $1.06 at $72.49/brl on Nymex.
Toyota Motor Corp.'s board voted to close the automaker's Fremont, Calif.-based plant by March, according to media reports Thursday. The plant housing New United Motor Manufacturing Inc., a joint venture with General Motors Co., employs about 4,600 workers, according to reports.
U.S. dollar index weak at 77.90.
The Dow Jones Industrial Average added 37.11 points, or 0.4%, to 9,580.63. The S&P 500 Index gained 2.86 points, or 0.3%, to stand at 1,030.98, while the Nasdaq Composite added 3.3 points, or 0.2%, to 2,027.73.
Wednesday, August 26, 2009
Moving Averages
8/26/09 Moving Averages
Rob Hanna: "Some extreme readings are appearing in a few Worden Bros. indicators that look at stocks relative to their 200 day moving averages. One is T2107, which simply looks at the percentage of stocks trading above their 200ma. The other is T2109, which looks at the percentage of stocks trading at least 1 standard deviation above their 200ma. Both indicators are near all time highs (dating back to 1986). In fact, the only period of time in which these indicators registered higher readings was in the beginning of 2004....the last time these levels were reached in 2004, the market continued to trudge higher for about 2 ½ months before finally beginning a meaningful correction."
Japan's provisional trade surplus for July more than quadrupled on year, rising 364% from the same month in 2008, according to data released Wednesday by the Ministry of Finance. The surplus totaled 380.2 billion yen ($4.05 billion), below expectations reported by Dow Jones Newswires for a 396.9 billion yen surplus. Exports for the month fell 36.5% on year, while imports lost 40.8%. Shipments to China, which just recently became Japan's largest trading partner, were down 26.5% from the year before, while those to the U.S. fell 39.5%, the ministry said.
Colonial BancGroup Inc., the Montgomery-based real estate lender whose banking unit was shut down by the government and sold to BB&T Corp. earlier this month, has filed for Chapter 11 bankruptcy protection.
Shipments for durable goods rose 2% in July after a 0.7% increase in June. Inventories fell 0.8% in July. Orders are down 26% in the first seven months of 2009 compared with the same period last year.
Orders for transportation equipment, which rose 18.4 percent, drove the overall increase. Commercial aircraft orders, a volatile category, more than doubled after falling 30 percent in June. Motor vehicle orders increased 0.9 percent.
Excluding transportation goods, orders rose 0.8 percent. That was the third straight increase, but just below analysts' expectations of a 0.9 percent rise.
The API said late Tuesday that crude supplies rose by 4.3 million barrels last week, according to media reports. The Energy Information Administration is due to release its more closely watched report on Wednesday morning, with analysts surveyed by Platts expecting a drop of 2.7 million barrels in crude inventories in the week ended Aug. 21.
China said it’s studying curbs on overcapacity in industries including steel and cement, adding to concern policy makers may seek to rein in growth fueled by record credit expansion this year.
The government will increase “guidance” of industries including steel, cement, glass and power equipment, the State Council, China’s cabinet, said in a statement on its Web site today. The government will strengthen controls on approval of stock and bond sales by companies in these industries, according to the statement.
China’s benchmark stock index has dropped 15 percent from its Aug. 4 high on concern economic growth will falter as banks rein in lending. China’s economy expanded 7.9 percent in the second quarter, rebounding from the weakest growth in almost a decade, after banks extended a record $1.1 trillion of new loans in the first six months.
Brett Steenbarger: "It also raises the possibility that we saw a momentum high in July, a stiff pullback last week, and now price highs on lower participation. If this is, indeed, a larger timeframe transition pattern in the making, we should fail at these highs and begin a sharp pullback that would take us below the lows of last week.
While I stick with my short-term indicators, such as Cumulative TICK and Demand/Supply, and those are bullish, the larger picture non-confirmations leave me nervous and ready to reverse views. We need to see day-over-day strength here, confirming the bull move. Expanding new 20-day lows would be an important indication that all is not well for the bull. Expanding 20-day highs would be important support for the bulls."
Crude-oil futures reduced their losses Wednesday after government data showed a small increase in crude inventories last week, in contrast with an earlier report released by an industry group that showed a big buildup. U.S. crude inventories rose by 200,000 barrels in the week ended Aug. 21, the Energy Information Administration reported. The American Petroleum Institute had reported late Tuesday that inventories rose by 4.3 million barrels. The API and the EIA use different methodologies to calculate stockpiles. After the EIA report, December crude futures fell 56 cents, or 0.8%, to $71.52 a barrel. They were down more than 1% before the data. The EIA also reported a drop of 1.7 million barrels in gasoline inventories and an increase of 800,000 barrels in distillate fuels, which include heating oil and diesel. Analysts surveyed by Platts had expected a drop of 2.7 million barrels in crude inventories, a decline of 1.5 million barrels for gasoline, and a drop of 700,000 barrels for distillates.
Paper and packaging producer International Paper Co said demand for its products has stagnated, and it sees no immediate signs of the U.S. economy
improving. "I don't think we've seen anything that could be called a
trend other than the flat market," Chief Financial Officer
Timothy Nicholls told the Reuters Paper and Packaging Summit on
Tuesday.
The rise of emerging economies such as China and Russia will prevent the U.S. dollar from remaining the world's only reserve currency, French President Nicolas Sarkozy said Wednesday, according to Dow Jones Newswires. "The political and economic reality of a multipolar world will have to find sooner or later a translation on the monetary level," Sarkozy said at a yearly reception for foreign ambassadors in Paris, the report said. Sarkozy also said he won't let the euro alone bear the weight of adjustments in the foreign exchange market, a phenomenon he said has occurred in the past.
Swiss private bank Wegelin & Co. said Tuesday it was pulling out of the United States in response to stricter U.S. measures against tax dodgers.
“Goodbye to America,” the bank said in a letter to investors, which cited increased regulatory requirements for foreign banks and planned changes to the estate tax as the reasons for its pullout.
The U.S. Internal Revenue Service has cracked down on suspected tax evaders recently.
A high-profile court case in Florida involving Swiss banking giant UBS was settled last week when Switzerland and the U.S. signed an agreement that will see details on almost 4,500 suspected tax dodgers handed over to the IRS.
Dollar Tree, which operated 3,717 stores as of Aug. 1, said quarterly sales rose 12 percent to $1.22 billion, while sales at stores open at least a year, a key retail gauge known as same-store sales, rose 6.8 percent.
The Consumer Comfort Index rose to a summer high of -45 in
the week to Aug. 23 from -46 the previous week, according to
ABC.The gauge first hit an all-time low of -54 in the week to
Dec. 1, 2008, and again in the week to Jan. 25, 2009.
Brown Shoe Co. lowered its full-year sales forecast Wednesday, after reporting a second-quarter revenue decline.
The footwear company now expects sales of $2.18 billion to $2.2 billion for 2009, with Famous Footwear same-store sales down in the low- to mid-single digits during the second half of the year. Its prior forecast was for sales of $2.2 billion to $2.3 billion.
Investors should buy an exchange- traded fund tracking natural gas futures while selling shares of the fuel’s producers, to boost returns after the companies outperformed the commodity, Societe Generale SA said.
A basket of 10 natural-gas producer stocks rose 26 percent this year before today, beating the 14 percent gain for the Standard & Poor’s 500 Index and 54 percent loss for the S&P GSCI Natural Gas index of returns from owning gas futures, equity derivatives strategist Rebecca Cheong wrote.
Investors should bet on a potential convergence between natural-gas producer stocks and gas futures, which moved in opposite directions this year after tracking one another in 2008, New York-based Cheong wrote yesterday.
Cheong advised buying the SPY, an ETF tracking the S&P 500, and the UNG, which tracks natural gas futures, while short- selling shares of Chesapeake Energy Corp., Apache Corp., Devon Energy Corp., and seven other producers. In a short sale, investors sell borrowed securities and agree to buy and return them to the shareholder later, profiting from any drop in the stock.
Dec. gold ends slightly lower at $945.80 an ounce.
The Investors Intelligence Advisors Sentiment Index, which gauges the stock advice of about 150 newsletters and other paid market-advice outlets, said bulls jumped to 51.6% in the recent week, the highest since the end of 2007. Bears fell to 19.8%, the first time since October 2007 that the percentage fell below 20%.
Rob Hanna: "Some extreme readings are appearing in a few Worden Bros. indicators that look at stocks relative to their 200 day moving averages. One is T2107, which simply looks at the percentage of stocks trading above their 200ma. The other is T2109, which looks at the percentage of stocks trading at least 1 standard deviation above their 200ma. Both indicators are near all time highs (dating back to 1986). In fact, the only period of time in which these indicators registered higher readings was in the beginning of 2004....the last time these levels were reached in 2004, the market continued to trudge higher for about 2 ½ months before finally beginning a meaningful correction."
Japan's provisional trade surplus for July more than quadrupled on year, rising 364% from the same month in 2008, according to data released Wednesday by the Ministry of Finance. The surplus totaled 380.2 billion yen ($4.05 billion), below expectations reported by Dow Jones Newswires for a 396.9 billion yen surplus. Exports for the month fell 36.5% on year, while imports lost 40.8%. Shipments to China, which just recently became Japan's largest trading partner, were down 26.5% from the year before, while those to the U.S. fell 39.5%, the ministry said.
Colonial BancGroup Inc., the Montgomery-based real estate lender whose banking unit was shut down by the government and sold to BB&T Corp. earlier this month, has filed for Chapter 11 bankruptcy protection.
Shipments for durable goods rose 2% in July after a 0.7% increase in June. Inventories fell 0.8% in July. Orders are down 26% in the first seven months of 2009 compared with the same period last year.
Orders for transportation equipment, which rose 18.4 percent, drove the overall increase. Commercial aircraft orders, a volatile category, more than doubled after falling 30 percent in June. Motor vehicle orders increased 0.9 percent.
Excluding transportation goods, orders rose 0.8 percent. That was the third straight increase, but just below analysts' expectations of a 0.9 percent rise.
The API said late Tuesday that crude supplies rose by 4.3 million barrels last week, according to media reports. The Energy Information Administration is due to release its more closely watched report on Wednesday morning, with analysts surveyed by Platts expecting a drop of 2.7 million barrels in crude inventories in the week ended Aug. 21.
China said it’s studying curbs on overcapacity in industries including steel and cement, adding to concern policy makers may seek to rein in growth fueled by record credit expansion this year.
The government will increase “guidance” of industries including steel, cement, glass and power equipment, the State Council, China’s cabinet, said in a statement on its Web site today. The government will strengthen controls on approval of stock and bond sales by companies in these industries, according to the statement.
China’s benchmark stock index has dropped 15 percent from its Aug. 4 high on concern economic growth will falter as banks rein in lending. China’s economy expanded 7.9 percent in the second quarter, rebounding from the weakest growth in almost a decade, after banks extended a record $1.1 trillion of new loans in the first six months.
Brett Steenbarger: "It also raises the possibility that we saw a momentum high in July, a stiff pullback last week, and now price highs on lower participation. If this is, indeed, a larger timeframe transition pattern in the making, we should fail at these highs and begin a sharp pullback that would take us below the lows of last week.
While I stick with my short-term indicators, such as Cumulative TICK and Demand/Supply, and those are bullish, the larger picture non-confirmations leave me nervous and ready to reverse views. We need to see day-over-day strength here, confirming the bull move. Expanding new 20-day lows would be an important indication that all is not well for the bull. Expanding 20-day highs would be important support for the bulls."
Crude-oil futures reduced their losses Wednesday after government data showed a small increase in crude inventories last week, in contrast with an earlier report released by an industry group that showed a big buildup. U.S. crude inventories rose by 200,000 barrels in the week ended Aug. 21, the Energy Information Administration reported. The American Petroleum Institute had reported late Tuesday that inventories rose by 4.3 million barrels. The API and the EIA use different methodologies to calculate stockpiles. After the EIA report, December crude futures fell 56 cents, or 0.8%, to $71.52 a barrel. They were down more than 1% before the data. The EIA also reported a drop of 1.7 million barrels in gasoline inventories and an increase of 800,000 barrels in distillate fuels, which include heating oil and diesel. Analysts surveyed by Platts had expected a drop of 2.7 million barrels in crude inventories, a decline of 1.5 million barrels for gasoline, and a drop of 700,000 barrels for distillates.
Paper and packaging producer International Paper Co said demand for its products has stagnated, and it sees no immediate signs of the U.S. economy
improving. "I don't think we've seen anything that could be called a
trend other than the flat market," Chief Financial Officer
Timothy Nicholls told the Reuters Paper and Packaging Summit on
Tuesday.
The rise of emerging economies such as China and Russia will prevent the U.S. dollar from remaining the world's only reserve currency, French President Nicolas Sarkozy said Wednesday, according to Dow Jones Newswires. "The political and economic reality of a multipolar world will have to find sooner or later a translation on the monetary level," Sarkozy said at a yearly reception for foreign ambassadors in Paris, the report said. Sarkozy also said he won't let the euro alone bear the weight of adjustments in the foreign exchange market, a phenomenon he said has occurred in the past.
Swiss private bank Wegelin & Co. said Tuesday it was pulling out of the United States in response to stricter U.S. measures against tax dodgers.
“Goodbye to America,” the bank said in a letter to investors, which cited increased regulatory requirements for foreign banks and planned changes to the estate tax as the reasons for its pullout.
The U.S. Internal Revenue Service has cracked down on suspected tax evaders recently.
A high-profile court case in Florida involving Swiss banking giant UBS was settled last week when Switzerland and the U.S. signed an agreement that will see details on almost 4,500 suspected tax dodgers handed over to the IRS.
Dollar Tree, which operated 3,717 stores as of Aug. 1, said quarterly sales rose 12 percent to $1.22 billion, while sales at stores open at least a year, a key retail gauge known as same-store sales, rose 6.8 percent.
The Consumer Comfort Index rose to a summer high of -45 in
the week to Aug. 23 from -46 the previous week, according to
ABC.The gauge first hit an all-time low of -54 in the week to
Dec. 1, 2008, and again in the week to Jan. 25, 2009.
Brown Shoe Co. lowered its full-year sales forecast Wednesday, after reporting a second-quarter revenue decline.
The footwear company now expects sales of $2.18 billion to $2.2 billion for 2009, with Famous Footwear same-store sales down in the low- to mid-single digits during the second half of the year. Its prior forecast was for sales of $2.2 billion to $2.3 billion.
Investors should buy an exchange- traded fund tracking natural gas futures while selling shares of the fuel’s producers, to boost returns after the companies outperformed the commodity, Societe Generale SA said.
A basket of 10 natural-gas producer stocks rose 26 percent this year before today, beating the 14 percent gain for the Standard & Poor’s 500 Index and 54 percent loss for the S&P GSCI Natural Gas index of returns from owning gas futures, equity derivatives strategist Rebecca Cheong wrote.
Investors should bet on a potential convergence between natural-gas producer stocks and gas futures, which moved in opposite directions this year after tracking one another in 2008, New York-based Cheong wrote yesterday.
Cheong advised buying the SPY, an ETF tracking the S&P 500, and the UNG, which tracks natural gas futures, while short- selling shares of Chesapeake Energy Corp., Apache Corp., Devon Energy Corp., and seven other producers. In a short sale, investors sell borrowed securities and agree to buy and return them to the shareholder later, profiting from any drop in the stock.
Dec. gold ends slightly lower at $945.80 an ounce.
The Investors Intelligence Advisors Sentiment Index, which gauges the stock advice of about 150 newsletters and other paid market-advice outlets, said bulls jumped to 51.6% in the recent week, the highest since the end of 2007. Bears fell to 19.8%, the first time since October 2007 that the percentage fell below 20%.
Tuesday, August 25, 2009
Cure Rate
8/25/09 Cure Rate
China's benchmark Shanghai Composite Index took another sharp dive Tuesday, falling 5.3% to 2,832.76 in late action.
James Hagerty: "Homeowners who fall behind on their mortgage payments have become much less likely to catch up again, a new study shows.
The report from Fitch Ratings Ltd., a credit-rating firm, focuses on a plunge in the "cure rate" for mortgages that were packaged into securities. The study excludes loans guaranteed by government-backed agencies as well as those that weren't bundled into securities. The cure rate is the portion of delinquent loans that return to current payment status each month.
Fitch found that the cure rate for prime loans dropped to 6.6% as of July from an average of 45% for the years 2000 through 2006. For so-called Alt-A loans -- a category between prime and subprime that typically involves borrowers who don't fully document their income or assets -- the cure rate has fallen to 4.3% from 30.2%. In the subprime category, the rate has declined to 5.3% from 19.4%.
"The cure rates have really collapsed," said Roelof Slump, a managing director at Fitch."
Aon Consulting, a subsidiary of Chicago-based Aon Corp., surveyed about 60 health insurers around the country earlier this year. The study found that, on average, insurers expect to pay out 10.5 percent more in claims costs in the next year — slightly less than the 10.6 percent increase forecast last year.
The expected increase doesn't necessarily mean the premiums employees pay will grow at the same clip.
TransUnion expects the percentage of California home loans that are at least 60 days late or are in foreclosure to skyrocket to more than 14% by year-end.
"New orders for manufactured goods in June, up four of the last five months, increased $1.4 billion or 0.4 percent to $349.0 billion, the U.S. Census Bureau reported today. This followed a 1.1 percent May increase. Excluding transportation, new orders increased 2.3 percent. Shipments, up following ten consecutive monthly decreases, increased $4.9 billion or 1.4 percent to $358.3 billion. This followed a 0.8 percent May decrease. Unfilled orders, down nine consecutive months, decreased $6.5 billion or 0.9 percent to $740.2 billion. This was the longest streak of consecutive monthly decreases since November 2001-July 2002. This followed a 0.3 percent May decrease. The unfilled orders-to-shipments ratio was 6.04, down from 6.15 in May. Inventories, down ten consecutive months, decreased $4.2 billion or 0.8 percent to $508.3 billion. This was the longest streak of consecutive monthly decreases since March 2003-January 2004 and followed a 0.8 percent May decrease. The inventories-to-shipments ratio was 1.42, down from 1.45 in May.
New orders for manufactured durable goods in June, down following two consecutive monthly increases, decreased $3.6 billion or 2.2 percent to $159.1 billion, revised from the previously published 2.5 percent decrease. This followed a 1.3 percent May increase.
New orders for manufactured nondurable goods increased $5.0 billion or 2.7 percent to $190.0 billion.
Shipments of manufactured durable goods in June, down eleven consecutive months, decreased $0.1 billion or 0.1 percent to $168.3 billion, revised from the previously published 0.2 percent decrease. This also was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 2.7 percent May decrease.
Unfilled orders for manufactured durable goods in June, down nine consecutive months, decreased $6.5 billion or 0.9 percent to $740.2 billion, unchanged from the previously published decrease. This followed a 0.3 percent May decrease.
The Federal Reserve must make public reports about recipients of emergency loans from U.S. taxpayers under programs created to address the financial crisis, a federal judge ruled.
Home prices in 20 U.S. cities fell in June at a slower pace than forecast, signaling the real- estate crisis that triggered the worst recession since the 1930s is dissipating.
The S&P/Case-Shiller home-price
index declined 15.4 percent from a year earlier, the smallest drop since April 2008, the group said today in New York. The gauge rose from the prior month by the most in four years. All of the 20 cities in the S&P/Case-Shiller index showed a year-over-year price decrease in June, led by a 32 percent plunge in Las Vegas. Dallas showed the smallest decline at 2.2 percent.
Chain store sales fell 0.7% in the first three weeks of August, Redbook says, slightly worse than the -0.6% expected. According to ICSC, weekly sales fell 0.2% Y/Y but rose 0.6% from the previous week.
The head of SunTrust Banks Inc., Georgia’s biggest lender, said U.S. financial institutions probably will report further credit losses as commercial real estate falters through next year.
“The industry is a long way from declaring any sort of victory, especially regarding credit issues,” Chief Executive Officer
James Wells III said today in a speech to the Rotary Club of Atlanta. “This credit cycle has yet to play itself out. We do not expect things to improve for the banking industry in the very near future.”
Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.
Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.
"This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter," Romer said.
The revised estimates project that the economy will contract by 2.8 percent this year, more than twice what the White House predicted earlier this year. Romer projected that the economy would expand in 2010, but by 2 percent instead of the 3.2 percent growth the White House predicted in May. By 2011, Romer estimated, the economy would be humming at 3.6 percent growth.
The Conference Board said its consumer confidence index rose to 54.1 in August from 47.4 in July.
U.S. home prices rose 0.5% in June, the second increase in a row, the Federal Housing Finance Agency reported Tuesday. However, prices fell 0.7% in the second quarter, the agency said. Prices are down 6.1% in the past year, according to the FHFA index, which tracks sales of the same properties over time. Prices fell in six of the nine regions and in 38 states in the second quarter.
Toyota Motor Corp. plans to cut its global capacity production by 10%, or by 1 million vehicles, as early as this fiscal year, Nikkei reported on its online edition Tuesday in a story dated for Wednesday.
Irwin Kellner: "Guess what? The Federal Reserve has not only stopped depositing copious amounts of liquidity into the economy -- it now appears to be in the process of making a sizable withdrawal.
A close look at quantitative measures of monetary policy reveals a sudden change in trend. After growing at unprecedented rates for well over a year, these aggregates stopped rising several months ago and have since declined, according to data provided by the Federal Reserve Bank of St. Louis.
For example, the monetary base -- the raw material for the money supply -- has fallen at a seasonally adjusted annual rate of 8% from early April of this year through mid-August, after soaring at a 187% pace during the previous eight months."
The US Postal Service will offer buyouts to as many as 30000 employees under agreements with two unions that could save the government agency up to $500 million next year.
Obama aide Romer: 10% unemployment by year end.
The Dow industrials gained 30.01 points, or 0.3%, to 9,539.29. The S&P 500 Index added 2.43 points, or 0.2%, to finish at 1,028.01, while the Nasdaq Composite climbed 6.25 points, or 0.3%, to end at 2,024.23.
U.S. crude oil dropped $2.32 to settle at $72.05 a barrel, down from a high of $75, in the biggest percentage loss since August 14. Brent crude dropped $2.44 to $71.82. In a Dow Jones survey, analysts gave an average forecast for a 1.6 million-barrel drop in oil inventories, in data due out from the American Petroleum Institute later Tuesday, and the U.S. Department of Energy on Wednesday.
In October 2008 the Baltic Dry Index was decimated for a 72% loss. It would not be surprising to see a loss of 30% this month. China's commodity imports are slowing down
dramatically from the surge that took place this Spring.
More than half the employers in a new poll say they plan to hire full-time employees in the next 12 months, according to research released on Tuesday that could spell relief for unemployed U.S. workers.
Four in 10 employers plan to hire contract, temporary or project workers, and another four in 10 will be hiring part-time employees, according to the survey conducted for Robert Half International, a staffing company, and CareerBuilder.com, an online career site.
The study found 53 percent of employers said they expect to hire full-time employees over the next 12 months.
China's benchmark Shanghai Composite Index took another sharp dive Tuesday, falling 5.3% to 2,832.76 in late action.
James Hagerty: "Homeowners who fall behind on their mortgage payments have become much less likely to catch up again, a new study shows.
The report from Fitch Ratings Ltd., a credit-rating firm, focuses on a plunge in the "cure rate" for mortgages that were packaged into securities. The study excludes loans guaranteed by government-backed agencies as well as those that weren't bundled into securities. The cure rate is the portion of delinquent loans that return to current payment status each month.
Fitch found that the cure rate for prime loans dropped to 6.6% as of July from an average of 45% for the years 2000 through 2006. For so-called Alt-A loans -- a category between prime and subprime that typically involves borrowers who don't fully document their income or assets -- the cure rate has fallen to 4.3% from 30.2%. In the subprime category, the rate has declined to 5.3% from 19.4%.
"The cure rates have really collapsed," said Roelof Slump, a managing director at Fitch."
Aon Consulting, a subsidiary of Chicago-based Aon Corp., surveyed about 60 health insurers around the country earlier this year. The study found that, on average, insurers expect to pay out 10.5 percent more in claims costs in the next year — slightly less than the 10.6 percent increase forecast last year.
The expected increase doesn't necessarily mean the premiums employees pay will grow at the same clip.
TransUnion expects the percentage of California home loans that are at least 60 days late or are in foreclosure to skyrocket to more than 14% by year-end.
"New orders for manufactured goods in June, up four of the last five months, increased $1.4 billion or 0.4 percent to $349.0 billion, the U.S. Census Bureau reported today. This followed a 1.1 percent May increase. Excluding transportation, new orders increased 2.3 percent. Shipments, up following ten consecutive monthly decreases, increased $4.9 billion or 1.4 percent to $358.3 billion. This followed a 0.8 percent May decrease. Unfilled orders, down nine consecutive months, decreased $6.5 billion or 0.9 percent to $740.2 billion. This was the longest streak of consecutive monthly decreases since November 2001-July 2002. This followed a 0.3 percent May decrease. The unfilled orders-to-shipments ratio was 6.04, down from 6.15 in May. Inventories, down ten consecutive months, decreased $4.2 billion or 0.8 percent to $508.3 billion. This was the longest streak of consecutive monthly decreases since March 2003-January 2004 and followed a 0.8 percent May decrease. The inventories-to-shipments ratio was 1.42, down from 1.45 in May.
New orders for manufactured durable goods in June, down following two consecutive monthly increases, decreased $3.6 billion or 2.2 percent to $159.1 billion, revised from the previously published 2.5 percent decrease. This followed a 1.3 percent May increase.
New orders for manufactured nondurable goods increased $5.0 billion or 2.7 percent to $190.0 billion.
Shipments of manufactured durable goods in June, down eleven consecutive months, decreased $0.1 billion or 0.1 percent to $168.3 billion, revised from the previously published 0.2 percent decrease. This also was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 2.7 percent May decrease.
Unfilled orders for manufactured durable goods in June, down nine consecutive months, decreased $6.5 billion or 0.9 percent to $740.2 billion, unchanged from the previously published decrease. This followed a 0.3 percent May decrease.
The Federal Reserve must make public reports about recipients of emergency loans from U.S. taxpayers under programs created to address the financial crisis, a federal judge ruled.
Home prices in 20 U.S. cities fell in June at a slower pace than forecast, signaling the real- estate crisis that triggered the worst recession since the 1930s is dissipating.
The S&P/Case-Shiller home-price
index declined 15.4 percent from a year earlier, the smallest drop since April 2008, the group said today in New York. The gauge rose from the prior month by the most in four years. All of the 20 cities in the S&P/Case-Shiller index showed a year-over-year price decrease in June, led by a 32 percent plunge in Las Vegas. Dallas showed the smallest decline at 2.2 percent.
Chain store sales fell 0.7% in the first three weeks of August, Redbook says, slightly worse than the -0.6% expected. According to ICSC, weekly sales fell 0.2% Y/Y but rose 0.6% from the previous week.
The head of SunTrust Banks Inc., Georgia’s biggest lender, said U.S. financial institutions probably will report further credit losses as commercial real estate falters through next year.
“The industry is a long way from declaring any sort of victory, especially regarding credit issues,” Chief Executive Officer
James Wells III said today in a speech to the Rotary Club of Atlanta. “This credit cycle has yet to play itself out. We do not expect things to improve for the banking industry in the very near future.”
Figures released by the White House budget office foresee a cumulative $9 trillion deficit from 2010-2019, $2 trillion more than the administration estimated in May. Moreover, the figures show the public debt doubling by 2019 and reaching three-quarters the size of the entire national economy.
Obama economic adviser Christina Romer predicted unemployment could reach 10 percent this year and begin a slow decline next year. Still, she said, the average unemployment will be 9.3 in 2009 and 9.8 percent in 2010.
"This recession was simply worse than the information that we and other forecasters had back in last fall and early this winter," Romer said.
The revised estimates project that the economy will contract by 2.8 percent this year, more than twice what the White House predicted earlier this year. Romer projected that the economy would expand in 2010, but by 2 percent instead of the 3.2 percent growth the White House predicted in May. By 2011, Romer estimated, the economy would be humming at 3.6 percent growth.
The Conference Board said its consumer confidence index rose to 54.1 in August from 47.4 in July.
U.S. home prices rose 0.5% in June, the second increase in a row, the Federal Housing Finance Agency reported Tuesday. However, prices fell 0.7% in the second quarter, the agency said. Prices are down 6.1% in the past year, according to the FHFA index, which tracks sales of the same properties over time. Prices fell in six of the nine regions and in 38 states in the second quarter.
Toyota Motor Corp. plans to cut its global capacity production by 10%, or by 1 million vehicles, as early as this fiscal year, Nikkei reported on its online edition Tuesday in a story dated for Wednesday.
Irwin Kellner: "Guess what? The Federal Reserve has not only stopped depositing copious amounts of liquidity into the economy -- it now appears to be in the process of making a sizable withdrawal.
A close look at quantitative measures of monetary policy reveals a sudden change in trend. After growing at unprecedented rates for well over a year, these aggregates stopped rising several months ago and have since declined, according to data provided by the Federal Reserve Bank of St. Louis.
For example, the monetary base -- the raw material for the money supply -- has fallen at a seasonally adjusted annual rate of 8% from early April of this year through mid-August, after soaring at a 187% pace during the previous eight months."
The US Postal Service will offer buyouts to as many as 30000 employees under agreements with two unions that could save the government agency up to $500 million next year.
Obama aide Romer: 10% unemployment by year end.
The Dow industrials gained 30.01 points, or 0.3%, to 9,539.29. The S&P 500 Index added 2.43 points, or 0.2%, to finish at 1,028.01, while the Nasdaq Composite climbed 6.25 points, or 0.3%, to end at 2,024.23.
U.S. crude oil dropped $2.32 to settle at $72.05 a barrel, down from a high of $75, in the biggest percentage loss since August 14. Brent crude dropped $2.44 to $71.82. In a Dow Jones survey, analysts gave an average forecast for a 1.6 million-barrel drop in oil inventories, in data due out from the American Petroleum Institute later Tuesday, and the U.S. Department of Energy on Wednesday.
In October 2008 the Baltic Dry Index was decimated for a 72% loss. It would not be surprising to see a loss of 30% this month. China's commodity imports are slowing down
dramatically from the surge that took place this Spring.
More than half the employers in a new poll say they plan to hire full-time employees in the next 12 months, according to research released on Tuesday that could spell relief for unemployed U.S. workers.
Four in 10 employers plan to hire contract, temporary or project workers, and another four in 10 will be hiring part-time employees, according to the survey conducted for Robert Half International, a staffing company, and CareerBuilder.com, an online career site.
The study found 53 percent of employers said they expect to hire full-time employees over the next 12 months.
Monday, August 24, 2009
Layaway
8/24/09 Layaway
Premier Wen Jiabao cautioned against being "blindly optimistic" despite improvements in the economy, according to a statement on the Cabinet's Web site.
The economy "still faces many new difficulties and problems," Wen was quoted as saying during a visit to southeastern China that ended Monday. "There are still a lot of unstable and uncertain factors ahead and the economic situation ahead is still very grave, although both the world economy and the national economy are making positive changes now."
The premier cautioned that the effects of some government measures might fade while others would take time to show results, the Cabinet statement said. It gave no other details of potential problems.
John Talton: "The real unemployment rate nationally is nearly 17 percent, instead of the official 9.4 percent, when discouraged workers and part-timers who want full-time employment are factored in. Other workers have seen their hours cut or been forced to take furloughs.
Meanwhile, the number of Americans out of a job for six months or more is at a 70-year high."
Demand from China, the world’s fastest-growing major economy, is helping pull Japan out of its deepest postwar slump, a top Japanese government economist said.
“There’s no mistake that China’s economic recovery is contributing to a rebound in Japan and other economies in the region,”
Tomoko Hayashi, director for overseas economies at the Cabinet Office in Tokyo, said in an interview on Aug. 21.
Liechtenstein’s Crown Prince Alois said his country will push ahead with moves to bolster adherence to global tax rules at the risk of losing bank clients.
The principality of 35,000, on the Organization for Economic Cooperation and Development “gray list” of tax havens that haven’t yet implemented OECD standards, will seek to be removed from the list by signing 12 tax-information exchange agreements in the coming months, the prince said in an interview on Aug. 21.
“If you move forward faster than other financial centers, there could be clients that perhaps don’t see the advantage for themselves in the process and then turn to another financial center,”
Prince Alois said, speaking by phone from the capital, Vaduz. “The majority of our clients will appreciate the direction we are taking in tax matters while still keeping very strong banking secrecy.”
The 12 tax-information exchange agreements, or TIEAs -- which the OECD has identified as one step toward removal from the “gray list” -- may be signed “as early as September or October,” the prince said.
“In any case it is likely to happen during the fall of this year,” he said. “We are in relatively advanced talks with some.”
Pacific Investment Management Co.’s
Paul McCulley said we’re at the bottom of a secular bull market in bonds.
The big gains in our lifetime in bonds have been made, McCulley said in an interview today with Bloomberg Radio.
Pimco has called for a “new normal” in the global economy that will include heightened government regulation, lower consumption, slower growth and a shrinking global role for the U.S. economy. U.S. growth rates will slow around 2 percent over the next several years, according to the firm.
The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows that 27% of the nation's voters Strongly Approve of the way that
Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -14. These figures mark the lowest Approval Index rating yet recorded for this President. The previous low of -12 was reached on July 30.
PFC Energy, a consultancy, estimates advancements made by the independents – which carry out exploration and production of the natural gas but not refining – in developing natural gas from shale could, if taken abroad,
more than quadruple gas resources, increasing supplies of this alternative option to greenhouse-intensive oil, coal and oil sands fuels.
The
US is now believed to have 100 years’ worth of resources, at today’s usage rates, up from about 30 years just three years ago.
Given political concerns over carbon, the industry believes natural gas will have a major role in the energy future of the US and the world. This belief has stoked interest in spite of the drop in the natural gas price to about $3 per million British thermal units, down from last year’s record high of $13.694 per mBtu.
Yet the companies recognise that working shale gas is different from conventional production. The shale rock must be fractured with high-pressure water to produce the gas, which has been absorbed in the rock, trapped in the pore spaces and confined in fractures. And new wells must constantly be drilled to maintain production.
Aubrey McClendon, chief executive of independent
Chesapeake Energy, said there was an “enormous worldwide interest’’ in US shale resources. “There are acquirers from all parts of the globe currently kicking tyres on US shale plays.’’
Rob Hanna: " On Friday the CBOE reported the lowest relative equity put/call ever. It came in at 0.39, which is nearly 45% below its 200-day moving average. This is only the 2nd time it has closed as much as 40% below the 200. The other time was 11/15/04. The SPX dropped 0.7% the next day but that was basically the end of the selloff. A few more days of chop was followed by a further market rally."
John Mauldin: " Two-thirds of home sales are either foreclosures or banks taking a loss on the mortgage. And only a third of the remaining one-third – roughly 10% of overall sales – comes from something we could call a normal selling process.”
China central bank adviser Fan Gang predicts economic growth will stay at 8% next year, as property and corporate investment and rising exports take up the slack from waning government investment. While growth will be steady, the composition of the recovery will be more diverse and healthier than this year's, Gang says.
John Dalt: "According to the Energy Information Agency (EIA), we imported approximately four tcf of natural gas last year. Ninety percent of this imported gas came from Canada. Most of this natural gas comes from the Western Canada Sedimentary Basin, where production peaked in 2001. Production has decreased 8.1% since then. Natural gas well production declines much quicker than crude oil. It takes constant exploration and discoveries to replace the depletion. According to Baker Hughes (BHI), a drilling company, there are 688 rigs drilling for natural gas in the U.S. That is 56% less than a year ago. This is the future we face: natural gas is abundant, but we are not replacing the reserves to meet our future needs."
Struggling Japan Airlines Corp., which is in the midst of major restructuring, is considering slashing 5,000 jobs in three years, a news report said Monday.
Andy Xie: "The US will enter this second dip in the first quarter of next year. Its economic recovery in the second half of this year is being driven by inventory restocking and fiscal stimulus.
However, US households have lost their love for borrow-and-spend for good. American household demand won’t pick up when the temporary growth factors run out of steam. By the middle of the second quarter next year, most of the world will have entered the second dip. But, by then, financial markets will have collapsed...The final crash will come when the Fed raises the interest rate to 5 per cent or more. Most think that when the Fed does this, the global economy will be strong and, hence, exports would do well and bring in money to keep up asset markets. Unfortunately, this is not how our story will end this time. The growth model of the past two decades - Americans borrow and spend; Chinese lend and export - is broken for good. Policymakers have been busy stimulating, rather than reforming, in desperate attempts to bring growth back. The massive increase in money supplies around the world will spur inflation through commodity-market speculation and inflation expectations in wage setting. We are not in the midst of a new boom. We are at the last stage of the Greenspan bubble. It ends with stagflation."
Taylor, Bean & Whitaker Mortgage Corp on Monday filed for Chapter 11 bankruptcy protection, fewer than three weeks after it closed its mortgage lending business and was suspended by a federal agency.
The Ocala, Florida-based company, which was the nation's 12th-largest U.S. mortgage lender from January to June, filed for protection with the U.S. bankruptcy court in Jacksonville.
A record number of shoppers, shut off from credit and short on cash, are relying on Kmart's layaway program to pay for all of their kids' school needs, said Tom Aiello, a spokesman for Kmart's parent Sears Holdings Corp. Layaway allows shoppers to pay over time, interest- free, and pick up their merchandise when it's paid in full.
"It's a sight. In the past, we would see layaway start to pick up around Halloween" as people get a jump start for Christmas, said David Travis, manager of a Kmart store in Conover, N.C.
Burlington Coat Factory Warehouse Corp. said its layaway business is stronger than a year ago. And e-Layaway.com, which offers online layaway services for about 1,000 merchants, has seen its business double from the same time last year. Customers are setting aside even $25 calculators and $30 backpacks. Layaway has its roots in the Great Depression. Kmart's Travis predicts this Christmas will be a "record-setting" layaway season.
According to the WSJ, In Texas, revenue from gas-production taxes has fallen 43% from last year, costing the state more than $1 billion in lost revenue. Plus, when drilling slows, employment slows. Unemployed people don't pay taxes, and they don't spend much money, either, hurting the retail sector.
Equities closed flat on the day.
Premier Wen Jiabao cautioned against being "blindly optimistic" despite improvements in the economy, according to a statement on the Cabinet's Web site.
The economy "still faces many new difficulties and problems," Wen was quoted as saying during a visit to southeastern China that ended Monday. "There are still a lot of unstable and uncertain factors ahead and the economic situation ahead is still very grave, although both the world economy and the national economy are making positive changes now."
The premier cautioned that the effects of some government measures might fade while others would take time to show results, the Cabinet statement said. It gave no other details of potential problems.
John Talton: "The real unemployment rate nationally is nearly 17 percent, instead of the official 9.4 percent, when discouraged workers and part-timers who want full-time employment are factored in. Other workers have seen their hours cut or been forced to take furloughs.
Meanwhile, the number of Americans out of a job for six months or more is at a 70-year high."
Demand from China, the world’s fastest-growing major economy, is helping pull Japan out of its deepest postwar slump, a top Japanese government economist said.
“There’s no mistake that China’s economic recovery is contributing to a rebound in Japan and other economies in the region,”
Tomoko Hayashi, director for overseas economies at the Cabinet Office in Tokyo, said in an interview on Aug. 21.
Liechtenstein’s Crown Prince Alois said his country will push ahead with moves to bolster adherence to global tax rules at the risk of losing bank clients.
The principality of 35,000, on the Organization for Economic Cooperation and Development “gray list” of tax havens that haven’t yet implemented OECD standards, will seek to be removed from the list by signing 12 tax-information exchange agreements in the coming months, the prince said in an interview on Aug. 21.
“If you move forward faster than other financial centers, there could be clients that perhaps don’t see the advantage for themselves in the process and then turn to another financial center,”
Prince Alois said, speaking by phone from the capital, Vaduz. “The majority of our clients will appreciate the direction we are taking in tax matters while still keeping very strong banking secrecy.”
The 12 tax-information exchange agreements, or TIEAs -- which the OECD has identified as one step toward removal from the “gray list” -- may be signed “as early as September or October,” the prince said.
“In any case it is likely to happen during the fall of this year,” he said. “We are in relatively advanced talks with some.”
Pacific Investment Management Co.’s
Paul McCulley said we’re at the bottom of a secular bull market in bonds.
The big gains in our lifetime in bonds have been made, McCulley said in an interview today with Bloomberg Radio.
Pimco has called for a “new normal” in the global economy that will include heightened government regulation, lower consumption, slower growth and a shrinking global role for the U.S. economy. U.S. growth rates will slow around 2 percent over the next several years, according to the firm.
The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows that 27% of the nation's voters Strongly Approve of the way that
Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -14. These figures mark the lowest Approval Index rating yet recorded for this President. The previous low of -12 was reached on July 30.
PFC Energy, a consultancy, estimates advancements made by the independents – which carry out exploration and production of the natural gas but not refining – in developing natural gas from shale could, if taken abroad,
more than quadruple gas resources, increasing supplies of this alternative option to greenhouse-intensive oil, coal and oil sands fuels.
The
US is now believed to have 100 years’ worth of resources, at today’s usage rates, up from about 30 years just three years ago.
Given political concerns over carbon, the industry believes natural gas will have a major role in the energy future of the US and the world. This belief has stoked interest in spite of the drop in the natural gas price to about $3 per million British thermal units, down from last year’s record high of $13.694 per mBtu.
Yet the companies recognise that working shale gas is different from conventional production. The shale rock must be fractured with high-pressure water to produce the gas, which has been absorbed in the rock, trapped in the pore spaces and confined in fractures. And new wells must constantly be drilled to maintain production.
Aubrey McClendon, chief executive of independent
Chesapeake Energy, said there was an “enormous worldwide interest’’ in US shale resources. “There are acquirers from all parts of the globe currently kicking tyres on US shale plays.’’
Rob Hanna: " On Friday the CBOE reported the lowest relative equity put/call ever. It came in at 0.39, which is nearly 45% below its 200-day moving average. This is only the 2nd time it has closed as much as 40% below the 200. The other time was 11/15/04. The SPX dropped 0.7% the next day but that was basically the end of the selloff. A few more days of chop was followed by a further market rally."
John Mauldin: " Two-thirds of home sales are either foreclosures or banks taking a loss on the mortgage. And only a third of the remaining one-third – roughly 10% of overall sales – comes from something we could call a normal selling process.”
China central bank adviser Fan Gang predicts economic growth will stay at 8% next year, as property and corporate investment and rising exports take up the slack from waning government investment. While growth will be steady, the composition of the recovery will be more diverse and healthier than this year's, Gang says.
John Dalt: "According to the Energy Information Agency (EIA), we imported approximately four tcf of natural gas last year. Ninety percent of this imported gas came from Canada. Most of this natural gas comes from the Western Canada Sedimentary Basin, where production peaked in 2001. Production has decreased 8.1% since then. Natural gas well production declines much quicker than crude oil. It takes constant exploration and discoveries to replace the depletion. According to Baker Hughes (BHI), a drilling company, there are 688 rigs drilling for natural gas in the U.S. That is 56% less than a year ago. This is the future we face: natural gas is abundant, but we are not replacing the reserves to meet our future needs."
Struggling Japan Airlines Corp., which is in the midst of major restructuring, is considering slashing 5,000 jobs in three years, a news report said Monday.
Andy Xie: "The US will enter this second dip in the first quarter of next year. Its economic recovery in the second half of this year is being driven by inventory restocking and fiscal stimulus.
However, US households have lost their love for borrow-and-spend for good. American household demand won’t pick up when the temporary growth factors run out of steam. By the middle of the second quarter next year, most of the world will have entered the second dip. But, by then, financial markets will have collapsed...The final crash will come when the Fed raises the interest rate to 5 per cent or more. Most think that when the Fed does this, the global economy will be strong and, hence, exports would do well and bring in money to keep up asset markets. Unfortunately, this is not how our story will end this time. The growth model of the past two decades - Americans borrow and spend; Chinese lend and export - is broken for good. Policymakers have been busy stimulating, rather than reforming, in desperate attempts to bring growth back. The massive increase in money supplies around the world will spur inflation through commodity-market speculation and inflation expectations in wage setting. We are not in the midst of a new boom. We are at the last stage of the Greenspan bubble. It ends with stagflation."
Taylor, Bean & Whitaker Mortgage Corp on Monday filed for Chapter 11 bankruptcy protection, fewer than three weeks after it closed its mortgage lending business and was suspended by a federal agency.
The Ocala, Florida-based company, which was the nation's 12th-largest U.S. mortgage lender from January to June, filed for protection with the U.S. bankruptcy court in Jacksonville.
A record number of shoppers, shut off from credit and short on cash, are relying on Kmart's layaway program to pay for all of their kids' school needs, said Tom Aiello, a spokesman for Kmart's parent Sears Holdings Corp. Layaway allows shoppers to pay over time, interest- free, and pick up their merchandise when it's paid in full.
"It's a sight. In the past, we would see layaway start to pick up around Halloween" as people get a jump start for Christmas, said David Travis, manager of a Kmart store in Conover, N.C.
Burlington Coat Factory Warehouse Corp. said its layaway business is stronger than a year ago. And e-Layaway.com, which offers online layaway services for about 1,000 merchants, has seen its business double from the same time last year. Customers are setting aside even $25 calculators and $30 backpacks. Layaway has its roots in the Great Depression. Kmart's Travis predicts this Christmas will be a "record-setting" layaway season.
According to the WSJ, In Texas, revenue from gas-production taxes has fallen 43% from last year, costing the state more than $1 billion in lost revenue. Plus, when drilling slows, employment slows. Unemployed people don't pay taxes, and they don't spend much money, either, hurting the retail sector.
Equities closed flat on the day.
Existing Home Sales
8/23/09 Existing Home Sales
The Oil Drum: "Refining one gallon of ethanol requires four gallons of water. This turns out to be a drop in the bucket compared with how much water it takes to grow enough corn to refine one gallon of ethanol: as much as 2,500 gallons."
Clif Droke: "The 10-year cycle told us to expect a strong recovery in 2009 and to date it has performed according to the historical script. The analysis of prior 10-year cycle peaks also gives us reason for an overall positive performance in the fourth quarter, notwithstanding the bumpiness which is always felt by the actual peaking of the 10-year cycle near the end of the third quarter."
Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975. By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
"I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal."
Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.
That tells me that the economy will take a further hit in consumer spending. Seniors will cut back. Government numbers show that about 50 million citizens get payments from the fund.
Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent, according to CapGemini and Merrill Lynch Wealth Management. Monthly income from stock dividends, which is concentrated among the affluent, has fallen more than 20 percent since last summer, the biggest such decline since the government began keeping records in 1959.
Existing home sales (ex-Condos) were down 10% from July 2007, flat from July 2008, and off 5% from June 2009. Mark Hanson: “If not for a surprise and suspect 16k increase in Northeast condo sales, Existing Home Sales would have been lower month-over-month and only up 12k units from July 2008, which was the worst year on record for housing.”
John Hussman: "Ben Bernanke (like Tim Geithner and his predecessor Hank Paulson), shows no hesitation in diverting the real resources of the American public to defend and compensate the bondholders of mismanaged financial companies who made reckless loans and who should have (and equally important, could have) been expected to write down principal or swap debt for equity as an alternative to receivership. This is not decisiveness. It is timidity and poor stewardship. Worse, the underlying problems are not healed - only band-aided temporarily by a flood of public money.
Unfortunately, the resources used in the recent bailout were not just free money tossed out of a helicopter. Only a partial-equilibrium economist thinks that way. No, this was an allocation of trillions of dollars of real resources that could be spent improving access of poor families to health care, finding cures for life-changing diseases, providing better education, and reversing the crowding-out of productive private investment. A public servant willing to act this carelessly with the resources entrusted to him, and so strongly in defense of fellow bankers, frankly does not deserve the job. Most likely, we will face the same credit issues a few quarters from now, given that the lull in the adjustable-rate reset schedule is near its end. We continue to expect a fresh acceleration of credit losses as we enter 2010. It would be best if we faced these challenges with more thoughtful leadership."
The Oil Drum: "Refining one gallon of ethanol requires four gallons of water. This turns out to be a drop in the bucket compared with how much water it takes to grow enough corn to refine one gallon of ethanol: as much as 2,500 gallons."
Clif Droke: "The 10-year cycle told us to expect a strong recovery in 2009 and to date it has performed according to the historical script. The analysis of prior 10-year cycle peaks also gives us reason for an overall positive performance in the fourth quarter, notwithstanding the bumpiness which is always felt by the actual peaking of the 10-year cycle near the end of the third quarter."
Millions of older people face shrinking Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975. By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
"I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal."
Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.
That tells me that the economy will take a further hit in consumer spending. Seniors will cut back. Government numbers show that about 50 million citizens get payments from the fund.
Last year, the number of Americans with a net worth of at least $30 million dropped 24 percent, according to CapGemini and Merrill Lynch Wealth Management. Monthly income from stock dividends, which is concentrated among the affluent, has fallen more than 20 percent since last summer, the biggest such decline since the government began keeping records in 1959.
Existing home sales (ex-Condos) were down 10% from July 2007, flat from July 2008, and off 5% from June 2009. Mark Hanson: “If not for a surprise and suspect 16k increase in Northeast condo sales, Existing Home Sales would have been lower month-over-month and only up 12k units from July 2008, which was the worst year on record for housing.”
John Hussman: "Ben Bernanke (like Tim Geithner and his predecessor Hank Paulson), shows no hesitation in diverting the real resources of the American public to defend and compensate the bondholders of mismanaged financial companies who made reckless loans and who should have (and equally important, could have) been expected to write down principal or swap debt for equity as an alternative to receivership. This is not decisiveness. It is timidity and poor stewardship. Worse, the underlying problems are not healed - only band-aided temporarily by a flood of public money.
Unfortunately, the resources used in the recent bailout were not just free money tossed out of a helicopter. Only a partial-equilibrium economist thinks that way. No, this was an allocation of trillions of dollars of real resources that could be spent improving access of poor families to health care, finding cures for life-changing diseases, providing better education, and reversing the crowding-out of productive private investment. A public servant willing to act this carelessly with the resources entrusted to him, and so strongly in defense of fellow bankers, frankly does not deserve the job. Most likely, we will face the same credit issues a few quarters from now, given that the lull in the adjustable-rate reset schedule is near its end. We continue to expect a fresh acceleration of credit losses as we enter 2010. It would be best if we faced these challenges with more thoughtful leadership."
Saturday, August 22, 2009
Clunkers
8/22/09 Clunkers
Failure Friday claims First Coweta, of Newnan, Ga., and CapitalSouth Bank, of Birmingham, Ala., to bring the 2009 toll to 80. The combined cost of the two to the FDIC's Deposit Insurance Fund is an estimated $199M.
Guaranty Bank of Austin, Tex. became the 81st bank failure of 2009 after it was closed by Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corp. as receiver, the federal agency said late Friday. The FDIC said it has entered into a "purchase and assumption agreement" with BBVA Compass of Birmingham, Ala. As of June 30, Guaranty Bank had total assets about $13 billion and total deposits of about $12 billion.
George Ure: "The number of bank branches closed since IndyMac really got things going last year, is up to 3,610. Since this doesn't count the ATM's involved, nor does it count online banking use, a direct comparison the 1930's Depression (1) and the Second Depression (SD) may be elusive."
Floyd Norris: "As the United States rolls up record budget deficits, Asian countries are showing a reduced willingness to finance the debt.
Figures released by the Treasury Department this week indicated that China reduced its holdings of Treasury securities by $25 billion in June, the most China had ever sold in a month....
In May, China increased its holdings by $38 billion, according to the Treasury figures.
Nonetheless, the decline highlighted a fact shown in the accompanying graphics: Asia’s appetite for Treasury securities is not growing as fast as it once did. That means the United States will have to turn to other buyers, including American citizens, who are now saving as they did not do during the boom years, to finance the deficits."
Doug Noland: "My view differs from both the bullish consensus reflation viewpoint and that of the protagonists/ “deflationists.” And, to cut to the chase, I do believe a period of global reflation can evolve in the face of weak U.S. consumption. And while a troubled bond market would likely stop reflation in it tracks, a downtrodden American consumer is an impediment to be hurdled with a powerful boost from ultra-easy global “money.” Indeed, deep underlying U.S. fragility – and resulting market assurance that the Fed is indefinitely wedded to ultra-loose policy – is a critical facet of my global reflation thesis.
Fundamentally, it is my view that the nexus of global reflation emanates from irreparable structural impairment to the international dollar reserve system. The global dollar monetary “regime” some time back stopped functioning as a disciplining or restraining force for Credit systems around the world. Today, even in this nervous post-crisis landscape, the prospect of an unending expansion of dollar reserves works to foment synchronized Credit and speculative excesses. And the deeply maladjusted U.S. “Bubble” economy ensures heavy ongoing non-productive U.S. debt issuance that manifests as enormous trade and speculative dollar financial flows - to further inundate the saturated world. The unfolding breakdown in this dollar “system” is the genesis of global inflationary forces....I’ll posit that artificially low interest rates everywhere are global reflation’s greatest champion. It is the nature of Bubbles that the longer markets misprice risk the greater the pain when the Bubble eventually bursts. Credit and market analysis could not be more challenging or fascinating."
S&P said 201 borrowers with $453.1bn in debt have defaulted this year, exceeding the 126 defaults for all of 2008, which comprised debt worth $433bn.
GM's board rejected management's proposal for a sale of its Opel unit, asking for new details and a reconsideration of a second bidder.
Jim MCTAGUE: "OBAMACARE HAS KICKED THE BUCKET. IT IS pushing up daisies; has shuffled off this mortal coil. The proposal is deader than Monty Python's famed dead parrot.
ObamaCare was put to sleep by a death panel: The American public. It has carefully read the three House bills and one Senate bill on the Internet and consequently is shaken. Numerous polls show a majority of persons desire Congress to scrap the plan and begin anew. A recent Rasmussen Report survey found that 54% of Americans don't want Congress to vote on the measure this year.
It's not merely the loud-mouths at the town brawl meetings who are opposed to the current bills; so are many open-minded people who have read the legislation cover to cover. They find it vague and confusing and consequently, very worrisome. They cannot decide whether they are reading boilerplate with a foundation of sound case law or the hasty concoction of exhausted aides whose ideological bosses want to railroad the plan through both houses by the fall."
Eric Savitz: "A recovery in IT spending may take a while." What does that mean for tech stocks?
Guy Lerner: "The Dollar Index has closed below the low of a positive divergence bar, and I am expecting prices to accelerate lower over the next 4 months. A weekly close above the pivot low point at 79.46 would be a reason to re-evaluate this position...
As far as equities are concerned, well I am starting to sound like a broken record: the market is overbought, oversubscribed (i.e., too many bulls) and has limited upside potential. "Where do we go from here?" is a refrain I often ask myself, and I am starting to think about what happens when investors rush for the exits. From a reward to risk perspective, this isn't my "cup of tea". The market remains range bound albeit we are at the upper limit of that range.
If the Dollar Index continues its downward spiral, then I would expect commodities, gold, and long term Treasury yields to out pace equities. As I have shown in the past, when the trends in these assets are strong, equities face a stiff headwind."
Coming this fall, a clunkers-type program to boost sales of energy-efficient home appliances will authorize rebates of $50 to $200. How about a cash for elected officials do over? Hand in your clunker vote and receive someone who keeps his/her word and promises. If they don't keep promises, promise not to pay taxes.
“Among chief executive officers who expect profits to increase, 56 percent believe cost reductions will drive profits up, while 33 percent cite market/demand growth as the main source of improvement. Only 7 percent cite new technology as a driver of growth and the remaining 4 percent cite price increases.”Brian Pretti observes: "Confidence surveys are for show, business spending, revenue gains and actual hiring are for dough."
Earthfiles: " NOAA's National Climatic Data Center in Asheville, NC, reports Earth’s average ocean surface temperature worldwide in July 2009 has broken all records at 62.6 degrees F. That is 1.06°F above
the 20th century average of 61.5°F. Heat is most noticeable near the Arctic, where water temperatures
are as much as 10 degrees F. above average. Right: Leed's University reports that West Antarctica's
largest glacier, Pine Island, has thinned four times more quickly than expected over a decade.
If the melt rate continues or accelerates, projected sea level rise for this 21st Century
could be higher than the projected 20 cm (8 inches)."
Failure Friday claims First Coweta, of Newnan, Ga., and CapitalSouth Bank, of Birmingham, Ala., to bring the 2009 toll to 80. The combined cost of the two to the FDIC's Deposit Insurance Fund is an estimated $199M.
Guaranty Bank of Austin, Tex. became the 81st bank failure of 2009 after it was closed by Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corp. as receiver, the federal agency said late Friday. The FDIC said it has entered into a "purchase and assumption agreement" with BBVA Compass of Birmingham, Ala. As of June 30, Guaranty Bank had total assets about $13 billion and total deposits of about $12 billion.
George Ure: "The number of bank branches closed since IndyMac really got things going last year, is up to 3,610. Since this doesn't count the ATM's involved, nor does it count online banking use, a direct comparison the 1930's Depression (1) and the Second Depression (SD) may be elusive."
Floyd Norris: "As the United States rolls up record budget deficits, Asian countries are showing a reduced willingness to finance the debt.
Figures released by the Treasury Department this week indicated that China reduced its holdings of Treasury securities by $25 billion in June, the most China had ever sold in a month....
In May, China increased its holdings by $38 billion, according to the Treasury figures.
Nonetheless, the decline highlighted a fact shown in the accompanying graphics: Asia’s appetite for Treasury securities is not growing as fast as it once did. That means the United States will have to turn to other buyers, including American citizens, who are now saving as they did not do during the boom years, to finance the deficits."
Doug Noland: "My view differs from both the bullish consensus reflation viewpoint and that of the protagonists/ “deflationists.” And, to cut to the chase, I do believe a period of global reflation can evolve in the face of weak U.S. consumption. And while a troubled bond market would likely stop reflation in it tracks, a downtrodden American consumer is an impediment to be hurdled with a powerful boost from ultra-easy global “money.” Indeed, deep underlying U.S. fragility – and resulting market assurance that the Fed is indefinitely wedded to ultra-loose policy – is a critical facet of my global reflation thesis.
Fundamentally, it is my view that the nexus of global reflation emanates from irreparable structural impairment to the international dollar reserve system. The global dollar monetary “regime” some time back stopped functioning as a disciplining or restraining force for Credit systems around the world. Today, even in this nervous post-crisis landscape, the prospect of an unending expansion of dollar reserves works to foment synchronized Credit and speculative excesses. And the deeply maladjusted U.S. “Bubble” economy ensures heavy ongoing non-productive U.S. debt issuance that manifests as enormous trade and speculative dollar financial flows - to further inundate the saturated world. The unfolding breakdown in this dollar “system” is the genesis of global inflationary forces....I’ll posit that artificially low interest rates everywhere are global reflation’s greatest champion. It is the nature of Bubbles that the longer markets misprice risk the greater the pain when the Bubble eventually bursts. Credit and market analysis could not be more challenging or fascinating."
S&P said 201 borrowers with $453.1bn in debt have defaulted this year, exceeding the 126 defaults for all of 2008, which comprised debt worth $433bn.
GM's board rejected management's proposal for a sale of its Opel unit, asking for new details and a reconsideration of a second bidder.
Jim MCTAGUE: "OBAMACARE HAS KICKED THE BUCKET. IT IS pushing up daisies; has shuffled off this mortal coil. The proposal is deader than Monty Python's famed dead parrot.
ObamaCare was put to sleep by a death panel: The American public. It has carefully read the three House bills and one Senate bill on the Internet and consequently is shaken. Numerous polls show a majority of persons desire Congress to scrap the plan and begin anew. A recent Rasmussen Report survey found that 54% of Americans don't want Congress to vote on the measure this year.
It's not merely the loud-mouths at the town brawl meetings who are opposed to the current bills; so are many open-minded people who have read the legislation cover to cover. They find it vague and confusing and consequently, very worrisome. They cannot decide whether they are reading boilerplate with a foundation of sound case law or the hasty concoction of exhausted aides whose ideological bosses want to railroad the plan through both houses by the fall."
Eric Savitz: "A recovery in IT spending may take a while." What does that mean for tech stocks?
Guy Lerner: "The Dollar Index has closed below the low of a positive divergence bar, and I am expecting prices to accelerate lower over the next 4 months. A weekly close above the pivot low point at 79.46 would be a reason to re-evaluate this position...
As far as equities are concerned, well I am starting to sound like a broken record: the market is overbought, oversubscribed (i.e., too many bulls) and has limited upside potential. "Where do we go from here?" is a refrain I often ask myself, and I am starting to think about what happens when investors rush for the exits. From a reward to risk perspective, this isn't my "cup of tea". The market remains range bound albeit we are at the upper limit of that range.
If the Dollar Index continues its downward spiral, then I would expect commodities, gold, and long term Treasury yields to out pace equities. As I have shown in the past, when the trends in these assets are strong, equities face a stiff headwind."
Coming this fall, a clunkers-type program to boost sales of energy-efficient home appliances will authorize rebates of $50 to $200. How about a cash for elected officials do over? Hand in your clunker vote and receive someone who keeps his/her word and promises. If they don't keep promises, promise not to pay taxes.
“Among chief executive officers who expect profits to increase, 56 percent believe cost reductions will drive profits up, while 33 percent cite market/demand growth as the main source of improvement. Only 7 percent cite new technology as a driver of growth and the remaining 4 percent cite price increases.”Brian Pretti observes: "Confidence surveys are for show, business spending, revenue gains and actual hiring are for dough."
Earthfiles: " NOAA's National Climatic Data Center in Asheville, NC, reports Earth’s average ocean surface temperature worldwide in July 2009 has broken all records at 62.6 degrees F. That is 1.06°F above
the 20th century average of 61.5°F. Heat is most noticeable near the Arctic, where water temperatures
are as much as 10 degrees F. above average. Right: Leed's University reports that West Antarctica's
largest glacier, Pine Island, has thinned four times more quickly than expected over a decade.
If the melt rate continues or accelerates, projected sea level rise for this 21st Century
could be higher than the projected 20 cm (8 inches)."
Friday, August 21, 2009
Clunkers: A Clusterf---
8/21/09 Clunkers: A Clusterf---
China is now Japan's largest export market, surpassing the U.S. despite a drop in overall trade, according to recent figures from the Japan External Trade Organization. Japan's exports to China fell 25.3% during the first half of the year to $46.5 billion, the agency said, but due to a steeper drop in shipments to the U.S., China became Japan's largest trade destination for the first time. According to a report Thursday in China Daily, China is also Japan's largest source of imports.
Meredith Whitney, the analyst who predicted that Citigroup Inc. would cut its dividend last year, said the number of U.S. bank failures will quadruple as lenders struggle with bad loans.
“There will be over 300 bank closures,” Whitney said in an interview with Bloomberg Television from Jackson Hole, Wyoming. “The small-business owner on Main Street continues to see liquidity come away.”
The Washington Post-ABC News survey found that less that half of Americans — 49 percent — say they believe the president will make the right decisions for the country. That's down from 60 percent at the 100-day mark of the Obama presidency.
The poll published Friday says Obama's overall approval is 57 percent, 12 points lower than it was at its peak in April. Fifty-three percent disapprove of the way he's handling the budget deficit and his approval on health care continues to deteriorate.
The dollar’s role as a good store of value is “questionable” and the currency has a high degree of risk, said Nobel Prize-winning economist
Joseph Stiglitz.
“There is a need for a global reserve system,” Stiglitz, a Columbia University economics professor, said at a conference in Bangkok today. Support from countries like China should ensure orderly discussions on a new reserve system, he added.
24/7WallSt: "Jay Brinkmann, MBA’s Chief Economist said, “While the rate of new foreclosures started was essentially unchanged from last quarter’s record high, there was a major drop in foreclosures on subprime
ARM loans . The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase.”
The well-to-do are having trouble making their house payments which should send a shiver through the spines of executives at banks and
mortgage loan firms. These companies are just beginning to recover from the subprime mortgage fiasco and are suddenly faced with a new wave of trouble.
There are probably several reasons for prime mortgages hitting a troubled patch. Unemployment has not spared the middle and upper classes. It is probably harder for someone who has lost a $100,000 job to find one quickly than it is for someone making $25,000. The universe of jobs gets smaller as people move up the compensation ladder. Added to that is the fact that prime borrowers had fairly valuable homes, at least at one point. That may have allowed them to borrow relatively significant amounts of money though
home equity loans . Many of those loans are underwater, further pressuring owners."
The King Report: "Is Bernanke purposely aiding & abetting the usual market manipulation that occurs during expiration
week? In July, Ben poured $80.2B into the system, mostly by monetizing MBS, during expiration week, igniting a huge rally. The Fed balance sheet contracted for most of June and July before Ben’s gambit.
For the week ended Wednesday, Ben increased the
Fed balance sheet $46.157B. Ben monetized
$66.646B MBS this time."
China's banking regulator is considering new rules that could crimp loan expansion by disqualifying subordinated debt from being counted as bank capital.
China has teamed up with 40 countries or regions on energy cooperation and established national-level bilateral energy dialogues with 36 countries, said an official with the National Energy Administration in Beijing on Thursday.
China has also joined 22 international energy organizations and forums conducting multilateral negotiations and discussions.
Crude oil for October delivery rose 98 cents, or 1.4%, to $73.88 a barrel in electronic trading on Globex. Earlier, the new front-month contract hit an intraday high of $74.05 a barrel. Separately, September natural-gas futures extended their decline after ending at a 7-year low in the previous session. Natural-gas prices were last down 4 cents, or 1.4%. December gold futures were last up $17.20, or 1.8%, at $958.80 an ounce in electronic trading.
Brett Steenbarger: "We only had 698 stocks make 20-day highs yesterday, against 229 lows. That compares to over 3000 20-day highs in the last half of July."
Nearly 70% of all Americans surveyed by Gallup say they expect higher taxes by the end of Obama's term. That could explain the difficulty selling a healthcare overhaul.
U.S. dollar index falls to 77.75. Last September the index dropped to 76.
AMG Data Services reports for the week ended Aug. 21 Equity Fund Outflows -$1.1 Bil; Taxable Bond Fund Inflows $2.8 Bil
xETFs - Equity Fund Outflows -$64 Mil; Taxable Bond Fund Inflows $2.2 Bil.
As of Thursday, the National Highway Traffic Safety Administration said it had processed only 170,000 or so of the more than 457,000 applications from new-car dealers. Only $145 million in reimbursement checks have been sent to dealers -- a fraction of the roughly $1.9 billion they say they are owed. Many dealers have stopped participating because of the delays. You should trust this government with your healthcare?
New-vehicle retail sales in August are forecast to cross the 1 million mark for the first time in the past 12 months because of the program, according to J.D. Power and Associates.
Resales of U.S. single-family homes and condos rose 7.2% in July to a seasonally adjusted annual rate of 5.24 million, the highest level since August 2007, the National Association of Realtors reported Friday. Resales have gained for four consecutive straight months. Inventories of unsold homes remain elevated, with a 9.4-month supply at the July sales rate, matching the prior month's result. Without seasonal adjustment, the median sales price fell 15.1% in the past year to $178,400. Distressed properties accounted for 31% of sales in July.
Barry Ritholtz: "A combination of historically low rates, first-time home buyer $8,000 tax credit, and foreclosure pummeled prices have combined to move some inventory."
“It is tough times in the gas business, certainly,” said Thomas F. Darden, chief executive of Quicksilver Resources, a major natural gas producer, after the government stockpile report was released. “Prices today are below our costs to produce, so in our view this is not a sustainable scenario.” For the week, natural-gas prices tumbled 43.40 cents, or 13.4%, from last Friday's closing level of $3.238. Meanwhile, October crude futures rose to an intraday high of $74.72 a barrel in electronic trading on Globex. That's the highest level for a front-month contract since late 2008, according to FactSet Research data.
“We have never been here before in terms of what to expect when storage gets this high,” said Aubrey K. McClendon, chief executive of Chesapeake Energy, another major gas producer. “It’s like a balloon; there comes a point where you can’t blow any more air into it....It doesn’t set the stage for $10 gas, but it does set the stage for $6 to $8 gas, which is in our view a fair price for consumers and producers,” Mr. McClendon added.”
China is Australia’s second-biggest trading partner, with two-way trade valued at A$68 billion ($56 billion) in 2008. China is also Australia’s largest source of foreign investment.
China is Australia’s second-biggest trading partner, with two-way trade valued at A$68 billion ($56 billion) in 2008. China is also Australia’s largest source of foreign investment.
Gold settles at $954.70, up $13 an ounce.
Natural-gas futures tumbled over 5% on Friday, extending their losses from the previous session when the contract ended at a seven-year low. September natural-gas futures dropped 15.50 cents, or 5.2%, to $2.791 per million British thermal units in electronic trading on Globex. Earlier, the contract fell to an intraday low of $2.776 per million British thermal units.
I
n a court filing submitted close to midnight Thursday in San Francisco, the Justice Department asked a federal judge to dismiss a lawsuit brought by a Muslim charity, the Al-Haramain Islamic Foundation, and two of its lawyers, all of whom contend they were illegally wiretapped as part of Bush's so-called Terrorist Surveillance Program.
The foundation and its attorneys allege that the government inadvertently revealed the surveillance in 2004 by sending them a top secret log of communications that were intercepted. However, the courts have taken that document off the table in the litigation after the Bush administration asserted the state secrets privilege, a claim the Obama administration later joined in even though candidate Obama complained that the privilege had been overused.
In the new filing, the Justice Department said the foundation and its lawyers don't have enough other evidence to prove that they were actually subjected to the allegedly illegal wiretapping program.
"Plaintiffs are now required to set forth specific, uncontroverted facts establishing that they were the targets of, or have been subjected to, warrantless electronic surveillance. Plaintiffs instead continue to rely on the same speculative 'inferences' and conjecture that plainly fail to establish their standing.
Plaintiffs’ evidence is no more than a string of speculation that fails to demonstrate that plaintiffs were in fact subject to any surveillance, that any such surveillance was 'electronic surveillance' as defined by the [Foreign Intelligence Surveillance Act], or that any such surveillance was undertaken without judicial authorization," the government's new brief declares.
During the campaign, Obama and other officials who would later take up senior roles in his administration asserted that the warrantless wiretapping program was illegal. Lawyers for the foundation had hoped the Justice Department would repeat or repudiate that position, but the new brief doesn't take a position one way or the other, and instead urges Judge Vaugn Walker not to rule on the issue.
The brief says whatever allegedly illegal surveillance may have been imposed on the plaintiffs is unlikely to recur because Congress authorized a version of Bush's program in 2007.
Another hearing in the suit is set for Sept. 23.
Oct. crude ends up 98 cents at $73.89/brl on Nymex.
Burt P. Flickinger III, a retail consultant, estimates that in 25 percent of shoppers' trips to the store, they're ditching at least one item. In the recession of the early 1990s, it was 15 to 20 percent. In good times, it's more like 10 percent.
Atlanta-based Ebank became the 78th bank failure of 2009, according to the Federal Deposit Insurance Corp. on Friday. Stearns Bank of St. Cloud, Minn. will assume all of the deposits and purchase Ebank's assets.
The Dow Jones Industrial Average added 155.91 points, or 1.7%, to 9,505.96. The S&P 500 added 18.76 points, or 1.9%, to end at 1,026.13. The Nasdaq Composite Index rose 31.68 points, to 1.6%, to 2,020.9.
Copper for September delivery gained 14 cents, or 5%, to end at $2.8805 a pound on the New York Mercantile Exchange.
The Obama administration will increase its 10-year budget deficit projection to roughly $9 trillion from $7.108 trillion in a report next week, a senior administration official told Reuters on Friday. So much for fiscal rationality.
China is now Japan's largest export market, surpassing the U.S. despite a drop in overall trade, according to recent figures from the Japan External Trade Organization. Japan's exports to China fell 25.3% during the first half of the year to $46.5 billion, the agency said, but due to a steeper drop in shipments to the U.S., China became Japan's largest trade destination for the first time. According to a report Thursday in China Daily, China is also Japan's largest source of imports.
Meredith Whitney, the analyst who predicted that Citigroup Inc. would cut its dividend last year, said the number of U.S. bank failures will quadruple as lenders struggle with bad loans.
“There will be over 300 bank closures,” Whitney said in an interview with Bloomberg Television from Jackson Hole, Wyoming. “The small-business owner on Main Street continues to see liquidity come away.”
The Washington Post-ABC News survey found that less that half of Americans — 49 percent — say they believe the president will make the right decisions for the country. That's down from 60 percent at the 100-day mark of the Obama presidency.
The poll published Friday says Obama's overall approval is 57 percent, 12 points lower than it was at its peak in April. Fifty-three percent disapprove of the way he's handling the budget deficit and his approval on health care continues to deteriorate.
The dollar’s role as a good store of value is “questionable” and the currency has a high degree of risk, said Nobel Prize-winning economist
Joseph Stiglitz.
“There is a need for a global reserve system,” Stiglitz, a Columbia University economics professor, said at a conference in Bangkok today. Support from countries like China should ensure orderly discussions on a new reserve system, he added.
24/7WallSt: "Jay Brinkmann, MBA’s Chief Economist said, “While the rate of new foreclosures started was essentially unchanged from last quarter’s record high, there was a major drop in foreclosures on subprime
ARM loans . The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase.”
The well-to-do are having trouble making their house payments which should send a shiver through the spines of executives at banks and
mortgage loan firms. These companies are just beginning to recover from the subprime mortgage fiasco and are suddenly faced with a new wave of trouble.
There are probably several reasons for prime mortgages hitting a troubled patch. Unemployment has not spared the middle and upper classes. It is probably harder for someone who has lost a $100,000 job to find one quickly than it is for someone making $25,000. The universe of jobs gets smaller as people move up the compensation ladder. Added to that is the fact that prime borrowers had fairly valuable homes, at least at one point. That may have allowed them to borrow relatively significant amounts of money though
home equity loans . Many of those loans are underwater, further pressuring owners."
The King Report: "Is Bernanke purposely aiding & abetting the usual market manipulation that occurs during expiration
week? In July, Ben poured $80.2B into the system, mostly by monetizing MBS, during expiration week, igniting a huge rally. The Fed balance sheet contracted for most of June and July before Ben’s gambit.
For the week ended Wednesday, Ben increased the
Fed balance sheet $46.157B. Ben monetized
$66.646B MBS this time."
China's banking regulator is considering new rules that could crimp loan expansion by disqualifying subordinated debt from being counted as bank capital.
China has teamed up with 40 countries or regions on energy cooperation and established national-level bilateral energy dialogues with 36 countries, said an official with the National Energy Administration in Beijing on Thursday.
China has also joined 22 international energy organizations and forums conducting multilateral negotiations and discussions.
Crude oil for October delivery rose 98 cents, or 1.4%, to $73.88 a barrel in electronic trading on Globex. Earlier, the new front-month contract hit an intraday high of $74.05 a barrel. Separately, September natural-gas futures extended their decline after ending at a 7-year low in the previous session. Natural-gas prices were last down 4 cents, or 1.4%. December gold futures were last up $17.20, or 1.8%, at $958.80 an ounce in electronic trading.
Brett Steenbarger: "We only had 698 stocks make 20-day highs yesterday, against 229 lows. That compares to over 3000 20-day highs in the last half of July."
Nearly 70% of all Americans surveyed by Gallup say they expect higher taxes by the end of Obama's term. That could explain the difficulty selling a healthcare overhaul.
U.S. dollar index falls to 77.75. Last September the index dropped to 76.
AMG Data Services reports for the week ended Aug. 21 Equity Fund Outflows -$1.1 Bil; Taxable Bond Fund Inflows $2.8 Bil
xETFs - Equity Fund Outflows -$64 Mil; Taxable Bond Fund Inflows $2.2 Bil.
As of Thursday, the National Highway Traffic Safety Administration said it had processed only 170,000 or so of the more than 457,000 applications from new-car dealers. Only $145 million in reimbursement checks have been sent to dealers -- a fraction of the roughly $1.9 billion they say they are owed. Many dealers have stopped participating because of the delays. You should trust this government with your healthcare?
New-vehicle retail sales in August are forecast to cross the 1 million mark for the first time in the past 12 months because of the program, according to J.D. Power and Associates.
Resales of U.S. single-family homes and condos rose 7.2% in July to a seasonally adjusted annual rate of 5.24 million, the highest level since August 2007, the National Association of Realtors reported Friday. Resales have gained for four consecutive straight months. Inventories of unsold homes remain elevated, with a 9.4-month supply at the July sales rate, matching the prior month's result. Without seasonal adjustment, the median sales price fell 15.1% in the past year to $178,400. Distressed properties accounted for 31% of sales in July.
Barry Ritholtz: "A combination of historically low rates, first-time home buyer $8,000 tax credit, and foreclosure pummeled prices have combined to move some inventory."
“It is tough times in the gas business, certainly,” said Thomas F. Darden, chief executive of Quicksilver Resources, a major natural gas producer, after the government stockpile report was released. “Prices today are below our costs to produce, so in our view this is not a sustainable scenario.” For the week, natural-gas prices tumbled 43.40 cents, or 13.4%, from last Friday's closing level of $3.238. Meanwhile, October crude futures rose to an intraday high of $74.72 a barrel in electronic trading on Globex. That's the highest level for a front-month contract since late 2008, according to FactSet Research data.
“We have never been here before in terms of what to expect when storage gets this high,” said Aubrey K. McClendon, chief executive of Chesapeake Energy, another major gas producer. “It’s like a balloon; there comes a point where you can’t blow any more air into it....It doesn’t set the stage for $10 gas, but it does set the stage for $6 to $8 gas, which is in our view a fair price for consumers and producers,” Mr. McClendon added.”
China is Australia’s second-biggest trading partner, with two-way trade valued at A$68 billion ($56 billion) in 2008. China is also Australia’s largest source of foreign investment.
China is Australia’s second-biggest trading partner, with two-way trade valued at A$68 billion ($56 billion) in 2008. China is also Australia’s largest source of foreign investment.
Gold settles at $954.70, up $13 an ounce.
Natural-gas futures tumbled over 5% on Friday, extending their losses from the previous session when the contract ended at a seven-year low. September natural-gas futures dropped 15.50 cents, or 5.2%, to $2.791 per million British thermal units in electronic trading on Globex. Earlier, the contract fell to an intraday low of $2.776 per million British thermal units.
I
n a court filing submitted close to midnight Thursday in San Francisco, the Justice Department asked a federal judge to dismiss a lawsuit brought by a Muslim charity, the Al-Haramain Islamic Foundation, and two of its lawyers, all of whom contend they were illegally wiretapped as part of Bush's so-called Terrorist Surveillance Program.
The foundation and its attorneys allege that the government inadvertently revealed the surveillance in 2004 by sending them a top secret log of communications that were intercepted. However, the courts have taken that document off the table in the litigation after the Bush administration asserted the state secrets privilege, a claim the Obama administration later joined in even though candidate Obama complained that the privilege had been overused.
In the new filing, the Justice Department said the foundation and its lawyers don't have enough other evidence to prove that they were actually subjected to the allegedly illegal wiretapping program.
"Plaintiffs are now required to set forth specific, uncontroverted facts establishing that they were the targets of, or have been subjected to, warrantless electronic surveillance. Plaintiffs instead continue to rely on the same speculative 'inferences' and conjecture that plainly fail to establish their standing.
Plaintiffs’ evidence is no more than a string of speculation that fails to demonstrate that plaintiffs were in fact subject to any surveillance, that any such surveillance was 'electronic surveillance' as defined by the [Foreign Intelligence Surveillance Act], or that any such surveillance was undertaken without judicial authorization," the government's new brief declares.
During the campaign, Obama and other officials who would later take up senior roles in his administration asserted that the warrantless wiretapping program was illegal. Lawyers for the foundation had hoped the Justice Department would repeat or repudiate that position, but the new brief doesn't take a position one way or the other, and instead urges Judge Vaugn Walker not to rule on the issue.
The brief says whatever allegedly illegal surveillance may have been imposed on the plaintiffs is unlikely to recur because Congress authorized a version of Bush's program in 2007.
Another hearing in the suit is set for Sept. 23.
Oct. crude ends up 98 cents at $73.89/brl on Nymex.
Burt P. Flickinger III, a retail consultant, estimates that in 25 percent of shoppers' trips to the store, they're ditching at least one item. In the recession of the early 1990s, it was 15 to 20 percent. In good times, it's more like 10 percent.
Atlanta-based Ebank became the 78th bank failure of 2009, according to the Federal Deposit Insurance Corp. on Friday. Stearns Bank of St. Cloud, Minn. will assume all of the deposits and purchase Ebank's assets.
The Dow Jones Industrial Average added 155.91 points, or 1.7%, to 9,505.96. The S&P 500 added 18.76 points, or 1.9%, to end at 1,026.13. The Nasdaq Composite Index rose 31.68 points, to 1.6%, to 2,020.9.
Copper for September delivery gained 14 cents, or 5%, to end at $2.8805 a pound on the New York Mercantile Exchange.
The Obama administration will increase its 10-year budget deficit projection to roughly $9 trillion from $7.108 trillion in a report next week, a senior administration official told Reuters on Friday. So much for fiscal rationality.
Thursday, August 20, 2009
Natural Gas
8/20/09 Natural Gas
Gallup reports that disapproval of the president's economic policies has grown to 49% in July from 30% in February. Even among the president's core supporters, young people in the 18-29 age group, his overall approval has dropped 11 points since January. In a July 2009 Gallup poll, the No. 1 reason for disapproval of the president's economic policies was, literally, "spending too much." In second place was the worry that the president is "leading the nation toward socialism" through government takeovers and bailouts.
A hedge fund has made a large bet that natural gas prices will triple by winter just as the price of the commodity slides to a seven-year low.
Traders took notice last week when the fund, as yet undisclosed, spent millions for the right to buy US natural gas at $10 (£6.03) per million British thermal units in January and February, up from Wednesday’s spot level just above $3 per mBtu.
The White House plans to announce the federal deficit is about $262 billion less than officials predicted earlier this year -- in part because the administration has provided less aid than expected to Wall Street.The federal deficit this year will total $1.58 trillion, a senior White House official said late Wednesday. That's three times more red ink than last year. The official spoke on the condition of anonymity to discuss the report before its release next Tuesday. The nation's debt now stands at $11.7 trillion.
Among all adults, 51 percent now say the Afghan war is not worth fighting, up six percentage points since last month and 10 since March. Less than half, 47 percent, say the war is worth its costs. Those strongly opposed (41 percent) outweigh strong proponents (31 percent).
Citigroup Global Markets Inc. predicts that this will be the first year that back-to-school sales will decline since at least 1995.
Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended August 15 from 561,000 the prior week, the Labor Department said.
Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000. A Labor Department official said there were no special factors influencing the report.
The number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended August 8, the latest week for which the data is available. However, the four-week moving average declined 2,500 to 6.27 million.
The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, was unchanged at 4.7 percent.
Sears Holding Corp reported a quarterly loss on Thursday instead of the profit Wall Street was expecting as the retailer struggled to cut costs to keep up with falling revenues, and its shares fell nearly 13 percent.
China's current-account surplus in the first half of the year was 32% lower than the same period a year earlier, according to data released by the foreign-exchange regulator and reported Thursday by Dow Jones Newswires. The current-account surplus narrowed to $130 billion in the six months through June, compared to the year-ago total of $191.72 billion, according to previous data from the State Administration of Foreign Exchange, which were reportedly released on its Web site Tuesday. The trade surplus in goods totaled $118.33 billion, while a deficit of $18.64 billion was reported in services. Year-ago figures for these results weren't provided by the agency, the report said.
Jet Republic, which bills itself as a "private jet club" by allowing members to fly on a per-hour basis, declared itself insolvent on Thursday.
GameStop cut its full-year profit forecast to as much as $2.64 from a previous projection of as much as $2.93 a share.
''You keep challenging and violating our core national interests, and we have to react,'' People's Liberation Army Chief of the General Staff Chen Bingde said at a meeting in Beijing with his U.S. counterpart, Gen. George Casey.
Chen said the United States has sought China's help in international operations such as the war in Afghanistan or in fighting piracy off Somalia but undermined the mutual trust needed for such cooperation with its arms sales to Taiwan.
''Once the United State needs us to cooperate, they are good to us, they are friendly to us. Otherwise, they can do anything they want, even to offend the Chinese people. But I don't think that kind of cooperation can continue,'' Chen said at the meeting, which was open to the media.
Major U.S. pension funds have recouped less than half of the $53.8 billion in cash they've invested in private-equity funds started since 2000. All told, they haven't seen a paper profit in seven years. That means less money for the plans' retirees.
Xcel officials proposed a natural gas commodity price of 31.77 cents per therm for September. The proposed price is up 2 percent from August’s 31.24 cents per therm price and lower than the September 2008 price of 43.81 cents per therm. If the Colorado Public Utilities Commission approves the price, it would take effect Sept. 1.
Next month, typical Xcel residential customers are expected to increase their natural gas usage by 45 percent, meaning their bills would increase to $21.71, based on the projected use of 21.7 therms, Xcel officials said in a release. The typical residential customer’s energy bill in August was $18.27 on the projected use of 15 therms.
During September 2008, the typical residential customer paid $23.91, if adjusted for next month’s projected usage of 21.7 therms.
Frontline mentioned the volume of crude oil in ships being used as storage had increased from 80 million to 100 million barrels. I would suggest one consider reducing positions in crude. This could be the top for some time.
The Philly Fed index rose to 4.2 in August from negative 7.5 in July. "The region's manufacturing sector is showing some signs of stabilizing," the report said. The new orders index edged six points higher, from negative 2.2 to 4.2, also its highest since November 2007. The shipments index increased 10 points. Employment indexes remained negative.
Mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded by the Mortgage Bankers Association, the industry group reported on Thursday. The delinquency rate for mortgages on one- to four-unit properties rose to a seasonally adjusted 9.24% of all mortgage loans outstanding in the second quarter, up from 9.12% in the first quarter. Mortgages somewhere in the foreclosure process reached 4.3% of all mortgages, up from 3.85% in the first quarter, the MBA said.
An economic recovery may begin soon, and the recession is bottoming out, the Conference Board said Thursday. For its fourth consecutive monthly gain, the index of leading economic indicators rose in 0.6% in July, following an upwardly revised increase of 0.8% in June. Economists polled by MarketWatch were looking for a gain of 0.7% in July. The interest rate spread was the largest positive contributor, while a reading on consumer expectations was the largest negative contributor. Overall, six of the 10 indicators were positive contributors, three were negative, and one was steady. The six-month growth rate for the overall index hit its highest level since mid-2004, according to the Conference Board.
Working gas in storage was 3,204 Bcf as of Friday, August 14, 2009, according to EIA estimates. This represents a net increase of 52 Bcf from the previous week. Stocks were 562 Bcf higher than last year at this time and 513 Bcf above the 5-year average of 2,691 Bcf. In the East Region, stocks were 162 Bcf above the 5-year average following net injections of 46 Bcf. Stocks in the Producing Region were 275 Bcf above the 5-year average of 799 Bcf after a net injection of 1 Bcf. Stocks in the West Region were 75 Bcf above the 5-year average after a net addition of 5 Bcf. At 3,204 Bcf, total working gas is above the 5-year historical range. Natural gas dropped 17 cents to $2.95 per million British thermal units and oil is $73 a barrel or roughly a 24:1 ratio, and that has never taken place before.
Sales of new homes are down 72 percent from their 2005 peak, while existing ones are off 24 percent from their peak a year later.
Randall Forsyth: "As Paul Macrae Montgomery points out in his Universal Economics letter, the S&P and Dow topped out intraday on Aug. 7, -- marking 38.2% retracements of their bear-market losses. Fibonacci fans will immediately recognize the significance of that percentage move. (If you're not, search Fibonacci for an explanation.)
Also, Aug. 7 was the 154th day after the market hit its low on March 6. "This is the same number of days that the historic 1929-1930 bear market rally lasted," he observes. Just as with Russell, Montgomery says, "So we will remain defensive, unless stocks better their early August highs."
Gold for December delivery settled at $941.7 an ounce, down $3.10, or 0.3%.
Mohamed El-Erian, chief executive officer of Newport Beach, California-based Pacific Investment Management Co., said in an interview:
“The question is not whether the dollar will weaken over time, but how it will weaken,” said El-Erian, a former deputy director of the International Monetary Fund whose firm runs the world’s largest bond fund. “The real risk is that you will get a disorderly decline.”
Natural gas for September delivery dropped 17.40 cents, or 5.6%, to end at $2.945 per million British thermal units on the New York Mercantile Exchange. That was the lowest closing level for a front-month contract since Aug. 14, 2002, when futures settled at $2.910 per million British thermal units, according to historical data from the CME Group. As a long term investor, it would be difficult to see a better risk/reward than natural gas at these prices. Drilling will come to a halt at these prices. Wells will be capped.
U.S. govt. to end "Cash for Clunkers" Aug. 24.
Mexico's gross domestic product contracted 10.3% in the second quarter.
The Dow Jones Industrial Average rose 70.89 points, or 0.8%, to 9,350.05. The S&P 500 Index added 10.91 points, or 1.1%, to 1,007.37, bringing it above the 1,000-level for the first day in four. The Nasdaq Composite advanced 19.98 points, or 1%, to 1,989.22.
& lt; br>Karen Weaver of Deutsche Bank predicted that, by 2011, nearly half of American mortgage holders would be underwater (meaning that they'll owe more on their mortgages than their houses were worth).
Half of mortgage holders means about one-third of American households. Put another way, Weaver forecasts 25 million mortgage holders will be under water by 2011, up from an estimated 14 million currently.
The size of the Federal Reserve’s balance sheet rose 2.3 percent as the central bank bought more U.S. Treasuries and mortgage-backed securities.
Fed assets gained $46.2 billion to $2.06 trillion in the week that ended yesterday, the central bank said today in Washington. Holdings of mortgage-backed securities jumped $66.6 billion to $609.5 billion, and the Fed’s portfolio of U.S. Treasury securities increased $7.1 billion to $736.1 billion.
Gallup reports that disapproval of the president's economic policies has grown to 49% in July from 30% in February. Even among the president's core supporters, young people in the 18-29 age group, his overall approval has dropped 11 points since January. In a July 2009 Gallup poll, the No. 1 reason for disapproval of the president's economic policies was, literally, "spending too much." In second place was the worry that the president is "leading the nation toward socialism" through government takeovers and bailouts.
A hedge fund has made a large bet that natural gas prices will triple by winter just as the price of the commodity slides to a seven-year low.
Traders took notice last week when the fund, as yet undisclosed, spent millions for the right to buy US natural gas at $10 (£6.03) per million British thermal units in January and February, up from Wednesday’s spot level just above $3 per mBtu.
The White House plans to announce the federal deficit is about $262 billion less than officials predicted earlier this year -- in part because the administration has provided less aid than expected to Wall Street.The federal deficit this year will total $1.58 trillion, a senior White House official said late Wednesday. That's three times more red ink than last year. The official spoke on the condition of anonymity to discuss the report before its release next Tuesday. The nation's debt now stands at $11.7 trillion.
Among all adults, 51 percent now say the Afghan war is not worth fighting, up six percentage points since last month and 10 since March. Less than half, 47 percent, say the war is worth its costs. Those strongly opposed (41 percent) outweigh strong proponents (31 percent).
Citigroup Global Markets Inc. predicts that this will be the first year that back-to-school sales will decline since at least 1995.
Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended August 15 from 561,000 the prior week, the Labor Department said.
Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000. A Labor Department official said there were no special factors influencing the report.
The number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended August 8, the latest week for which the data is available. However, the four-week moving average declined 2,500 to 6.27 million.
The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, was unchanged at 4.7 percent.
Sears Holding Corp reported a quarterly loss on Thursday instead of the profit Wall Street was expecting as the retailer struggled to cut costs to keep up with falling revenues, and its shares fell nearly 13 percent.
China's current-account surplus in the first half of the year was 32% lower than the same period a year earlier, according to data released by the foreign-exchange regulator and reported Thursday by Dow Jones Newswires. The current-account surplus narrowed to $130 billion in the six months through June, compared to the year-ago total of $191.72 billion, according to previous data from the State Administration of Foreign Exchange, which were reportedly released on its Web site Tuesday. The trade surplus in goods totaled $118.33 billion, while a deficit of $18.64 billion was reported in services. Year-ago figures for these results weren't provided by the agency, the report said.
Jet Republic, which bills itself as a "private jet club" by allowing members to fly on a per-hour basis, declared itself insolvent on Thursday.
GameStop cut its full-year profit forecast to as much as $2.64 from a previous projection of as much as $2.93 a share.
''You keep challenging and violating our core national interests, and we have to react,'' People's Liberation Army Chief of the General Staff Chen Bingde said at a meeting in Beijing with his U.S. counterpart, Gen. George Casey.
Chen said the United States has sought China's help in international operations such as the war in Afghanistan or in fighting piracy off Somalia but undermined the mutual trust needed for such cooperation with its arms sales to Taiwan.
''Once the United State needs us to cooperate, they are good to us, they are friendly to us. Otherwise, they can do anything they want, even to offend the Chinese people. But I don't think that kind of cooperation can continue,'' Chen said at the meeting, which was open to the media.
Major U.S. pension funds have recouped less than half of the $53.8 billion in cash they've invested in private-equity funds started since 2000. All told, they haven't seen a paper profit in seven years. That means less money for the plans' retirees.
Xcel officials proposed a natural gas commodity price of 31.77 cents per therm for September. The proposed price is up 2 percent from August’s 31.24 cents per therm price and lower than the September 2008 price of 43.81 cents per therm. If the Colorado Public Utilities Commission approves the price, it would take effect Sept. 1.
Next month, typical Xcel residential customers are expected to increase their natural gas usage by 45 percent, meaning their bills would increase to $21.71, based on the projected use of 21.7 therms, Xcel officials said in a release. The typical residential customer’s energy bill in August was $18.27 on the projected use of 15 therms.
During September 2008, the typical residential customer paid $23.91, if adjusted for next month’s projected usage of 21.7 therms.
Frontline mentioned the volume of crude oil in ships being used as storage had increased from 80 million to 100 million barrels. I would suggest one consider reducing positions in crude. This could be the top for some time.
The Philly Fed index rose to 4.2 in August from negative 7.5 in July. "The region's manufacturing sector is showing some signs of stabilizing," the report said. The new orders index edged six points higher, from negative 2.2 to 4.2, also its highest since November 2007. The shipments index increased 10 points. Employment indexes remained negative.
Mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded by the Mortgage Bankers Association, the industry group reported on Thursday. The delinquency rate for mortgages on one- to four-unit properties rose to a seasonally adjusted 9.24% of all mortgage loans outstanding in the second quarter, up from 9.12% in the first quarter. Mortgages somewhere in the foreclosure process reached 4.3% of all mortgages, up from 3.85% in the first quarter, the MBA said.
An economic recovery may begin soon, and the recession is bottoming out, the Conference Board said Thursday. For its fourth consecutive monthly gain, the index of leading economic indicators rose in 0.6% in July, following an upwardly revised increase of 0.8% in June. Economists polled by MarketWatch were looking for a gain of 0.7% in July. The interest rate spread was the largest positive contributor, while a reading on consumer expectations was the largest negative contributor. Overall, six of the 10 indicators were positive contributors, three were negative, and one was steady. The six-month growth rate for the overall index hit its highest level since mid-2004, according to the Conference Board.
Working gas in storage was 3,204 Bcf as of Friday, August 14, 2009, according to EIA estimates. This represents a net increase of 52 Bcf from the previous week. Stocks were 562 Bcf higher than last year at this time and 513 Bcf above the 5-year average of 2,691 Bcf. In the East Region, stocks were 162 Bcf above the 5-year average following net injections of 46 Bcf. Stocks in the Producing Region were 275 Bcf above the 5-year average of 799 Bcf after a net injection of 1 Bcf. Stocks in the West Region were 75 Bcf above the 5-year average after a net addition of 5 Bcf. At 3,204 Bcf, total working gas is above the 5-year historical range. Natural gas dropped 17 cents to $2.95 per million British thermal units and oil is $73 a barrel or roughly a 24:1 ratio, and that has never taken place before.
Sales of new homes are down 72 percent from their 2005 peak, while existing ones are off 24 percent from their peak a year later.
Randall Forsyth: "As Paul Macrae Montgomery points out in his Universal Economics letter, the S&P and Dow topped out intraday on Aug. 7, -- marking 38.2% retracements of their bear-market losses. Fibonacci fans will immediately recognize the significance of that percentage move. (If you're not, search Fibonacci for an explanation.)
Also, Aug. 7 was the 154th day after the market hit its low on March 6. "This is the same number of days that the historic 1929-1930 bear market rally lasted," he observes. Just as with Russell, Montgomery says, "So we will remain defensive, unless stocks better their early August highs."
Gold for December delivery settled at $941.7 an ounce, down $3.10, or 0.3%.
Mohamed El-Erian, chief executive officer of Newport Beach, California-based Pacific Investment Management Co., said in an interview:
“The question is not whether the dollar will weaken over time, but how it will weaken,” said El-Erian, a former deputy director of the International Monetary Fund whose firm runs the world’s largest bond fund. “The real risk is that you will get a disorderly decline.”
Natural gas for September delivery dropped 17.40 cents, or 5.6%, to end at $2.945 per million British thermal units on the New York Mercantile Exchange. That was the lowest closing level for a front-month contract since Aug. 14, 2002, when futures settled at $2.910 per million British thermal units, according to historical data from the CME Group. As a long term investor, it would be difficult to see a better risk/reward than natural gas at these prices. Drilling will come to a halt at these prices. Wells will be capped.
U.S. govt. to end "Cash for Clunkers" Aug. 24.
Mexico's gross domestic product contracted 10.3% in the second quarter.
The Dow Jones Industrial Average rose 70.89 points, or 0.8%, to 9,350.05. The S&P 500 Index added 10.91 points, or 1.1%, to 1,007.37, bringing it above the 1,000-level for the first day in four. The Nasdaq Composite advanced 19.98 points, or 1%, to 1,989.22.
& lt; br>Karen Weaver of Deutsche Bank predicted that, by 2011, nearly half of American mortgage holders would be underwater (meaning that they'll owe more on their mortgages than their houses were worth).
Half of mortgage holders means about one-third of American households. Put another way, Weaver forecasts 25 million mortgage holders will be under water by 2011, up from an estimated 14 million currently.
The size of the Federal Reserve’s balance sheet rose 2.3 percent as the central bank bought more U.S. Treasuries and mortgage-backed securities.
Fed assets gained $46.2 billion to $2.06 trillion in the week that ended yesterday, the central bank said today in Washington. Holdings of mortgage-backed securities jumped $66.6 billion to $609.5 billion, and the Fed’s portfolio of U.S. Treasury securities increased $7.1 billion to $736.1 billion.
Wednesday, August 19, 2009
U.S. Dollar
8/19/09 U.S. Dollar
Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar will probably fall as it loses its status as a reserve currency.
The dollar will especially drop against emerging-market counterparts,
Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. Investors should consider cutting their holdings of the U.S. currency, he said.
Deere & Co. said Wednesday its fiscal third-quarter earnings fell to $420 million, or 99 cents a share, from $575 million, or $1.32 a share, in the year-ago period. Sales plunged 24% to $5.9 billion. For 2009, the Moline, Ill., farming-equipment maker forecast a net income of $1.1 billion, in line with analysts' mean expectation. Deere lowered its 2009 sales forecast amid declining demand for lawn and construction machinery.
Mainland China's top stock markets suffered their latest in a string of heavy falls Wednesday, with the Shanghai Composite Index closing down 4.3% and the Shenzhen Composite Index ending 4.9% lower. The Shanghai A-share benchmark index has served as something of a leading indicator for quarterly GDP growth over the past three years.
Warren Buffett: "With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap...Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress."
German producer prices have recorded their largest year-on-year fall since the second world war, highlighting the weakness of inflationary pressures across Europe.
Prices of industrial products were 7.8 per cent lower in July than 12 months earlier, the steepest such fall since records began in 1949, the German federal statistics office reported.
Stora Enso Oyj said Wednesday it will lay off up to 1,100 workers, cut production and close mills in Finland as the Nordic paper maker continues to struggle with dwindling revenue.
The announcement came four weeks after the company reported a second-quarter net loss of euro368 million ($523 million) and a 24-percent drop in net sales to euro2.2 billion.
Stora Enso said it will close a pulp mill by the end of the year and a sawmill in 2010. Also, cutbacks and reorganization at other mills will be made to save costs, it added.
Natural gas prices fell to seven-year lows Tuesday.
Near-term futures prices in New York slid 7 cents, or 2.1%, to $3.10 per million British thermal units -- the ninth straight decline and the lowest price since Aug. 2002.
While crude oil prices have jumped 55% this year, to $69.19 a barrel as of Tuesday, natural gas has plunged 45%.
George Ure: "So if printing is up 17% on the money side, and the annualized current report rate of deflation (finished producer prices annualized) is still down 11%, that means true deflation is still in control, which is enough to scare the hell out of the central banksters.
But that's OK, since the dealing of the Treasury and the Fed are allowing banks to do a little money laundering on their balance sheets...you can rest assured: "Good times are just ahead."
In May, RISD revealed that its endowment had fallen from $374 million in December 2007 to about $250 million. The school also announced layoffs of about 20 staff members, a tuition hike and the closure of the museum for all of August.
Nouriel Roubini: "So, the end of this severe global recession will be closer at the end of this year than it is now, the recovery will be anaemic rather than robust in advanced economies, and there is a rising risk of a double-dip recession. The recent market rallies in stocks, commodities and credit may have gotten ahead of the improvement in the real economy. If so, a correction cannot be too far behind."
Chinese refiners increased their combined crude oil processing volume to a new record high of 33.11 million metric tons, or 7.83 million barrels per day, in July, while overall implied oil demand in China rose 4.2% from a year ago to 34.92 million metric tons, energy information provider Platts said in a statement on Wednesday. July was the fourth consecutive month to register a year-on-year increase in China's apparent oil demand, which includes barrels moving into storage, Platts said.
Ian Mathias: "The “cash for clunkers” program is creating a small jobs boom — for the government. The Obama administration has vowed to triple the number of government employees processing “cash for clunker” vouchers from U.S. dealerships. The program has been such a “success” that the government can’t keep up with the vouchers coming in, and poor dealers are complaining that they have to sit on big losses while they wait for government reimbursement.
By the end of the week, up to 1,100 people will be working full time to process cash for clunker reimbursements...stimulation of consumption by issuing public debt is not the best solution to an extended period of overconsumption… especially one fueled by household debt, which, in turn, was built up on the back of asset bubbles.."
Obama's approval rating on healthcare was at 41 percent, unchanged from last month, while 36 percent believed his reform plans were a good idea and 42 percent a bad idea -- also unchanged from last month's NBC/Wall Street Journal poll.
If iron ore prices into China have topped out, then there could be further weakness in the Baltic Dry Index and this could relate to equities in the U.S. losing demand.
Today, the U.S. has about 150 oil refineries with a total operating capacity of roughly 17.6 million barrels per day. Over 40 percent of that capacity is located in Texas and Louisiana, and about half of that amount is within the Greater Houston area.
In June, petroleum refineries employed 76,100 people, according to the Bureau of Labor Statistics.
In Texas, petroleum and coal products — a manufacturing sector that includes refining — employed 27,000 statewide and 14,300 in the Houston area, Texas Workforce Commission data show.
Refiners began cutting output last year, and are currently running plants at about 85 percent of capacity, well below the 90-plus percent range they have seen in recent years.
Energy Department projections show utilization could drop to 78.5 percent next year, its lowest since 1985, as fuel demand remains weak and new refinery expansion projects come online.
EIA: Crude stocks down 8.4 million barrels. Platts expected a rise of 1.1 million barrels. Gasoline stocks down 2.1 million barrels. Crude prices rally to $71.
Rep. Ron Paul: "I happen to believe that because it [the creation of fiat money] is a moral issue more than an economic issue, it is for this reason that the people have lost trust in their government, trust in the banks, trust in business, trust in themselves, and that we are a nation of distrust." M.A. Nystrom: "The first step in that direction is a full audit of the Fed, and the next step is to end it."
The U.S. dollar index weak at 78.40. Ten yield govt bond yields fall to 3.44%. Fools gold with spiralin out of control U.S. debt levels.
Seeking Alpha: " Credit-card interest rates are moving sharply upward ahead of new regulations taking effect, though banks' own borrowing costs are decreasing. The average lowest rates are around 11-12% and rates overall have moved up some 20% since January."
December gold futures end up 0.6% at $944.80. Oil futures up 4.5% at $72.25/brl on Globex.
Wells Fargo is facing a lawsuit claiming the bank illegally reduced the size of customers' home equity lines of credit.
It's been a tough year for the travel and leisure industry as hotels have slashed room rates and attendance at conventions is down, according to Greg Ortale, president and CEO of the Greater Houston Convention & Visitors Bureau.
That, in turn, has depressed the collection of the hotel occupancy tax, which funds about 90 percent of the bureau's budget, said Ortale, whose report for the bureau's annual meeting on Tuesday was not as upbeat as previous years. This quarter alone, tax revenues are down about 25 percent.
A New York dealership group says hundreds of its members have left the Cash for Clunkers program, citing delays in getting reimbursed by the government.
The president of the Greater New York Automobile Dealers Association says about half its 425 members have stopped offering rebates from the program because they can no longer afford them.
Mark Schienberg says the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made, leaving many short on cash.
If the govt can't handle this program, can you imagine the mess they will make of healthcare? Too much govt breeds trouble not solution.
Energy companies are not showing a lot of interest in offshore leases for natural gas being offered by the government.
With prices down two-thirds, it's no surprise.
Producers put up $115.5 million in winning bids on 162 federal tracts during Wednesday's auction by the Minerals Management Service.
That's down sharply from last year's western Gulf of Mexico sale when $483.9 million in winning bids were put up for 313 tracts.
Commercial real estate values in the U.S. fell 27 percent in the year through June and rents for offices, shops and warehouse space may continue to drop through 2010 as the recession saps jobs and consumer spending.
The Moody’s/REAL Commercial Property Price Indices fell 1 percent in June and are down 36 percent from their October 2007 peak, Moody’s Investors Service said in a report today. A rebound isn’t likely until the second half of next year, the National Association of Realtors forecast in a separate report.
Brokers and real estate agents can no longer order appraisals. Lenders now control the entire process.
PetSmart projected a 2009 earnings outlook of $1.37 to $1.45 a share, compared with $1.53 a share estimated by analysts.
The Dow Jones Industrial Average rose 61.22 points, or 0.7%, to end at 9,279.16. The S&P 500 Index climbed 6.79 points, or 0.7%, to 996.46, while the Nasdaq Composite advanced 13.32 points, or 0.7%, to end at 1,969.24.
Banco Bilbao Vizcaya Argentaria SA, Spain’s second-largest bank by market value, was selected to take over the assets of Guaranty Financial Group Inc. in a government-assisted transaction, according to people familiar with the situation. The Austin, Texas-based lender said last month that it was unable to raise capital as demanded by regulators and will probably fail.
Pacific Investment Management Co., which runs the world’s biggest bond fund, said the dollar will probably fall as it loses its status as a reserve currency.
The dollar will especially drop against emerging-market counterparts,
Curtis A. Mewbourne, a Pimco portfolio manager, wrote in a report on the company’s Web site. Investors should consider cutting their holdings of the U.S. currency, he said.
Deere & Co. said Wednesday its fiscal third-quarter earnings fell to $420 million, or 99 cents a share, from $575 million, or $1.32 a share, in the year-ago period. Sales plunged 24% to $5.9 billion. For 2009, the Moline, Ill., farming-equipment maker forecast a net income of $1.1 billion, in line with analysts' mean expectation. Deere lowered its 2009 sales forecast amid declining demand for lawn and construction machinery.
Mainland China's top stock markets suffered their latest in a string of heavy falls Wednesday, with the Shanghai Composite Index closing down 4.3% and the Shenzhen Composite Index ending 4.9% lower. The Shanghai A-share benchmark index has served as something of a leading indicator for quarterly GDP growth over the past three years.
Warren Buffett: "With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap...Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress."
German producer prices have recorded their largest year-on-year fall since the second world war, highlighting the weakness of inflationary pressures across Europe.
Prices of industrial products were 7.8 per cent lower in July than 12 months earlier, the steepest such fall since records began in 1949, the German federal statistics office reported.
Stora Enso Oyj said Wednesday it will lay off up to 1,100 workers, cut production and close mills in Finland as the Nordic paper maker continues to struggle with dwindling revenue.
The announcement came four weeks after the company reported a second-quarter net loss of euro368 million ($523 million) and a 24-percent drop in net sales to euro2.2 billion.
Stora Enso said it will close a pulp mill by the end of the year and a sawmill in 2010. Also, cutbacks and reorganization at other mills will be made to save costs, it added.
Natural gas prices fell to seven-year lows Tuesday.
Near-term futures prices in New York slid 7 cents, or 2.1%, to $3.10 per million British thermal units -- the ninth straight decline and the lowest price since Aug. 2002.
While crude oil prices have jumped 55% this year, to $69.19 a barrel as of Tuesday, natural gas has plunged 45%.
George Ure: "So if printing is up 17% on the money side, and the annualized current report rate of deflation (finished producer prices annualized) is still down 11%, that means true deflation is still in control, which is enough to scare the hell out of the central banksters.
But that's OK, since the dealing of the Treasury and the Fed are allowing banks to do a little money laundering on their balance sheets...you can rest assured: "Good times are just ahead."
In May, RISD revealed that its endowment had fallen from $374 million in December 2007 to about $250 million. The school also announced layoffs of about 20 staff members, a tuition hike and the closure of the museum for all of August.
Nouriel Roubini: "So, the end of this severe global recession will be closer at the end of this year than it is now, the recovery will be anaemic rather than robust in advanced economies, and there is a rising risk of a double-dip recession. The recent market rallies in stocks, commodities and credit may have gotten ahead of the improvement in the real economy. If so, a correction cannot be too far behind."
Chinese refiners increased their combined crude oil processing volume to a new record high of 33.11 million metric tons, or 7.83 million barrels per day, in July, while overall implied oil demand in China rose 4.2% from a year ago to 34.92 million metric tons, energy information provider Platts said in a statement on Wednesday. July was the fourth consecutive month to register a year-on-year increase in China's apparent oil demand, which includes barrels moving into storage, Platts said.
Ian Mathias: "The “cash for clunkers” program is creating a small jobs boom — for the government. The Obama administration has vowed to triple the number of government employees processing “cash for clunker” vouchers from U.S. dealerships. The program has been such a “success” that the government can’t keep up with the vouchers coming in, and poor dealers are complaining that they have to sit on big losses while they wait for government reimbursement.
By the end of the week, up to 1,100 people will be working full time to process cash for clunker reimbursements...stimulation of consumption by issuing public debt is not the best solution to an extended period of overconsumption… especially one fueled by household debt, which, in turn, was built up on the back of asset bubbles.."
Obama's approval rating on healthcare was at 41 percent, unchanged from last month, while 36 percent believed his reform plans were a good idea and 42 percent a bad idea -- also unchanged from last month's NBC/Wall Street Journal poll.
If iron ore prices into China have topped out, then there could be further weakness in the Baltic Dry Index and this could relate to equities in the U.S. losing demand.
Today, the U.S. has about 150 oil refineries with a total operating capacity of roughly 17.6 million barrels per day. Over 40 percent of that capacity is located in Texas and Louisiana, and about half of that amount is within the Greater Houston area.
In June, petroleum refineries employed 76,100 people, according to the Bureau of Labor Statistics.
In Texas, petroleum and coal products — a manufacturing sector that includes refining — employed 27,000 statewide and 14,300 in the Houston area, Texas Workforce Commission data show.
Refiners began cutting output last year, and are currently running plants at about 85 percent of capacity, well below the 90-plus percent range they have seen in recent years.
Energy Department projections show utilization could drop to 78.5 percent next year, its lowest since 1985, as fuel demand remains weak and new refinery expansion projects come online.
EIA: Crude stocks down 8.4 million barrels. Platts expected a rise of 1.1 million barrels. Gasoline stocks down 2.1 million barrels. Crude prices rally to $71.
Rep. Ron Paul: "I happen to believe that because it [the creation of fiat money] is a moral issue more than an economic issue, it is for this reason that the people have lost trust in their government, trust in the banks, trust in business, trust in themselves, and that we are a nation of distrust." M.A. Nystrom: "The first step in that direction is a full audit of the Fed, and the next step is to end it."
The U.S. dollar index weak at 78.40. Ten yield govt bond yields fall to 3.44%. Fools gold with spiralin out of control U.S. debt levels.
Seeking Alpha: " Credit-card interest rates are moving sharply upward ahead of new regulations taking effect, though banks' own borrowing costs are decreasing. The average lowest rates are around 11-12% and rates overall have moved up some 20% since January."
December gold futures end up 0.6% at $944.80. Oil futures up 4.5% at $72.25/brl on Globex.
Wells Fargo is facing a lawsuit claiming the bank illegally reduced the size of customers' home equity lines of credit.
It's been a tough year for the travel and leisure industry as hotels have slashed room rates and attendance at conventions is down, according to Greg Ortale, president and CEO of the Greater Houston Convention & Visitors Bureau.
That, in turn, has depressed the collection of the hotel occupancy tax, which funds about 90 percent of the bureau's budget, said Ortale, whose report for the bureau's annual meeting on Tuesday was not as upbeat as previous years. This quarter alone, tax revenues are down about 25 percent.
A New York dealership group says hundreds of its members have left the Cash for Clunkers program, citing delays in getting reimbursed by the government.
The president of the Greater New York Automobile Dealers Association says about half its 425 members have stopped offering rebates from the program because they can no longer afford them.
Mark Schienberg says the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made, leaving many short on cash.
If the govt can't handle this program, can you imagine the mess they will make of healthcare? Too much govt breeds trouble not solution.
Energy companies are not showing a lot of interest in offshore leases for natural gas being offered by the government.
With prices down two-thirds, it's no surprise.
Producers put up $115.5 million in winning bids on 162 federal tracts during Wednesday's auction by the Minerals Management Service.
That's down sharply from last year's western Gulf of Mexico sale when $483.9 million in winning bids were put up for 313 tracts.
Commercial real estate values in the U.S. fell 27 percent in the year through June and rents for offices, shops and warehouse space may continue to drop through 2010 as the recession saps jobs and consumer spending.
The Moody’s/REAL Commercial Property Price Indices fell 1 percent in June and are down 36 percent from their October 2007 peak, Moody’s Investors Service said in a report today. A rebound isn’t likely until the second half of next year, the National Association of Realtors forecast in a separate report.
Brokers and real estate agents can no longer order appraisals. Lenders now control the entire process.
PetSmart projected a 2009 earnings outlook of $1.37 to $1.45 a share, compared with $1.53 a share estimated by analysts.
The Dow Jones Industrial Average rose 61.22 points, or 0.7%, to end at 9,279.16. The S&P 500 Index climbed 6.79 points, or 0.7%, to 996.46, while the Nasdaq Composite advanced 13.32 points, or 0.7%, to end at 1,969.24.
Banco Bilbao Vizcaya Argentaria SA, Spain’s second-largest bank by market value, was selected to take over the assets of Guaranty Financial Group Inc. in a government-assisted transaction, according to people familiar with the situation. The Austin, Texas-based lender said last month that it was unable to raise capital as demanded by regulators and will probably fail.
Subscribe to:
Posts (Atom)