9/26/09 Audit The Fed
Floyd Norris: "Total domestic debt — the amounts owed by individuals, governments and businesses — climbed just 3.7 percent from the second quarter of 2008 through the second quarter of this year. That is the smallest increase since the Fed started these calculations in the early 1950s.
Moreover, domestic debt declined in the second quarter, falling 0.3 percent to $50.8 trillion. The figures are not seasonally adjusted, making quarter-to-quarter comparisons risky, but it was the first such decline since the first quarter of 1954, when total debt was less than $500 billion.
Over the 12-month period, nonfinancial businesses increased their debt by just 1.3 percent. Since that number is well below the interest rate most of those companies pay, it indicates that they paid back more in old loans than they took out in new ones....Over the year, total household debt fell by 1.7 percent, and mortgage debt — the largest component of household debt — fell a bit more, at a 1.8 percent pace. This is the 10th recession since the Fed began collecting the numbers, but the first in which the amount of home mortgage debt fell. Some of that decline, of course, came from foreclosures that canceled debt and left lenders with big losses...Twenty years ago, nonfinancial businesses in the United States borrowed $1.70 for every dollar borrowed by the financial sector, government-guaranteed or not. Now the figure is 68 cents."
Doug Noland: "I remain bearish because, from my analytical framework, deleterious Credit system developments suggest worse yet to come - perhaps much worse. The global Credit boom has not fully run its course, so the depths of the downturn remain indeterminable....It is worth noting that the level of nominal GDP from 1929 was not attained again until 1941 – after bottoming seven years earlier in 1934 (five years after the crash!). Statistically, GDP posted relatively strong growth in 1935, 1936, 1937, 1939, 1940 and 1941 – but in aggregate this period of “strength” only returned output back to the late-twenties level. And anyone turning bullish in 1931 – two years after the financial Bubble burst – would have had to endure a nominal GDP drop of another 25% and even worse percentage declines in the stock market. It was many years after the bursting of the financial Bubble before bullishness had much relevance....There is at this point ample confirmation that, with the bursting of the Wall Street/mortgage finance Bubble, this previously steadfast inflationary dynamic has turned impotent. The combination of securitized finance, the proliferation of leveraged speculation, contemporary unconstrained finance, and activist central banking nurtured a financial and economic environment unlike any in recent history. But analysts should no longer extrapolate from this previous boom period. Previous Credit and economic dynamics no longer apply....I’ll look to remove the bear from my lapel when a sounder Credit backdrop emerges at home and globally. It’s just not moving in that direction. I don’t see Trillions of federal government Credit as sustainable or constructive – and wouldn’t extrapolate recent system stabilization out to a sustainable economic recovery. I don’t see any semblance of restraint or monetary discipline – the requirements of a sustainable monetary regime – in key domestic Credit systems internationally. And I wouldn’t assume that the worst of Credit dislocation is behind us. And, I’ll add, the worst-case scenario at this point would include a robust global rejuvenation of Credit and asset Bubbles, rapid synchronized economic recovery, and a rebirth of bullish expectations. I do see all the makings for a grinding, debilitating, secular bear market."
Eric Janszen: "Pension fund shortfalls were problematic for most companies even before the financial and economic crisis. Low stock valuations and interest rates have increased the number of pension funds that are not 100% or better funded from 67.6% in FY 2008
to 92.7% in FY 2009 ending in June. The median funded level has fallen to a mere
46%.
By law, companies have to bring these funds up to 100%. Unless both stock prices
and interest rates rise, they will have to make up shortfalls out of operating
cash flow rather than of investing in growth, such as in hiring and capital expenditure."
More than 12,000 Texans will exhaust their unemployment benefits by Oct. 10, with 43,000 more due to follow by the end of the year, the Texas Workforce Commission said on Friday. As individuals lose their unemployment benefits, the government no longer considers them as part of the unemployment rolls. As such, the unemployment rate declines. And the public and the congress put up with this BLS bullshit.
More than two-thirds of the members of the House of Representatives have signed on as co-sponsors of Paul's "audit the Fed" bill.
The Fed strongly opposes the legislation, saying it would subject its decisions to political influence that could shake market confidence.
According to Bloomberg, MGM has informed creditors it will skip a $12 million coupon payment.
Saturday, September 26, 2009
Friday, September 25, 2009
Appetizer
9/25/09 Appetizer
Simmons Co. said Friday it will file for bankruptcy and reorganization under Chapter 11, and has agreed to sell its core bedding business to Ares Management and Teachers' Private Capital, the investment arm of the Ontario Teachers' Pension Plan.
Goldman Sachs has raised its global oil demand forecasts for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.
Unilever, the maker of Dove soap, agreed to buy Sara Lee Corp.’s personal-care and European detergent unit for 1.28 billion euros ($1.88 billion), gaining Sanex shower gel in its biggest purchase in nine years.
Unilever, based in London and Rotterdam, will pay cash for the business, which makes Duschdas and Radox soap and had sales of more than 750 million euros for the year ending June 2009, according to a statement today. Sara Lee, which has been shedding units to focus on coffee and food, said the proceeds would help it buy back up to $1 billion in stock.
The government of Iran has told the International Atomic Energy Agency that it is building a second uranium enrichment plant for making fuel, the nuclear watchdog agency said Friday.
China's auto sales should soar to 12.6 million units this year, up 35 percent from 2008, boosted by subsidies that the industry is lobbying Beijing to extend, a government researcher said Friday.
China's auto sales have surpassed those of the limping U.S. market for all but two months so far this year, helped by cuts in sales tax and subsidies for more fuel-efficient vehicles.
In September, Chinese sales are likely to total 1.25 million units, said Xu Changming, senior economist for the Cabinet's State Information Center. He was speaking at a seminar organized by industry newsletters China Business Update and China Auto Review.
Boeing employees are about to lose a popular perk: company-paid education subsidies. Macquarie raised its 2010 earnings outlook for Boeing to $4.51 a share from $4.35, and maintained its 2011 forecast at $4.20 a share.Not exactly an exciting growth picture.
The recovery in the manufacturing sector stumbled in August, as a big decline in orders for new airplanes pushed total durable goods orders down 2.4%, the largest decline since January, the Commerce Department reported Friday. The 42% drop in orders for civilian aircraft accounted for most of the decline. Weaker demand wasn't confined to the aircraft sector, however. Excluding the 9.3% drop in transportation orders, orders were flat in August, the weakest showing since April.
Unfilled orders for manufactured durable goods in August, down eleven consecutive months, decreased $2.8 billion or 0.4 percent to $737.1 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 0.1 percent July decrease.
"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Julian Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."
Five U.S. troops were killed in three separate incidents in southern Afghanistan, the military said on Friday.
"Natural gas is an attractive energy source for the future," said Rune Bjornson, StatoilHydro's executive vice president for natural gas during a press seminar in Oslo on Thursday, September 24.
StatoilHydro is currently the second largest supplier of gas to Europe, and the group helps secure a stable supply of energy to Europe through export of gas from the Norwegian continental shelf (NCS) , as well as holding significant international gas positions in Algeria, Azerbaijan and in the USA.
It's predicted that by 2020, China's natural gas demand will approximately reach 240 billion cubic meters.
Cypress Gardens, which reigned as Florida's grandest theme park in the days before Disney, has shut down while its owners try to sell the attraction.
House Financial Services Committee Chairman Barney Frank, D-Mass., said he backs legislation introduced by Rep. Ron Paul, R-Texas, that would require the Government Accountability Office to audit how the Federal Reserve implements monetary policy and examines every aspect of the Fed, including how much it has lent and will lend to specific banks as part of its bank bailout program.
Benchmark borrowing costs for highly rated state and local governments dropped to a 42-year low this week, as the pace of new municipal-bond issues slowed and cash flowing into mutual funds accelerated to a record.
Homebuilder
KB Homes reported a narrower quarterly loss, though its chief executive cautioned that he does not expect to see "meaningful improvement" in the U.S. housing market in the near future.
The value of imports of consumer goods into the U.S. peaked in August 2008 at $42 billion. (The category excludes oil, food, industrial supplies, capital goods and automotive vehicles.) In June the U.S. bought only $34 billion of products from the rest of the world, according to the U.S. Bureau of Economic Analysis. Wary Americans have gone back to saving. "In U.S. dollar terms, exports to China from Japan were only down 22% year-on-year in May, while to the U.S. they were --40%. Exports to China were $8.5 billion that month while only $6.7 billion to the U.S.," notes John Vail, chief global strategist at Nikko Asset Management in Tokyo.
By 2012, according to research company Display Search, China will be the world's biggest LCD TV market. Chinese brands Skyworth, Hisense and TCL in the space of only a year have overtaken foreign makers to dominate LCD TV sales in China.
The Group of 20 on Friday planned to approve a greater voice for Asian and Latin American countries in a historic shift that recognizes the rising influence of both regions.
According to AMG Data, in the week ended Sept.23,
Equity Fund Inflows $1.2 Bil; Taxable Bond Fund Inflows $5.3 Bil
xETFs - Equity Fund Outflows -$306 Mil; Taxable Bond Fund Inflows $4.4 Bil
Consumer sentiment improved in late September, according to media reports on Friday of the Reuters/University of Michigan index. The consumer sentiment index jumped to 73.5 in late September from 70.2 earlier in the month.
Despite a record drop in prices, sales of new homes flattened out in August after four months of strong increases, the Commerce Department estimated Friday. Sales of new homes rose a statistically insignificant 0.7% in August to a seasonally adjusted annual rate of 429,000 from a downwardly revised 426,000 in July. Sales were down 3.4% from a year earlier, and are up 30% from the low in January. Sales were weaker than the 440,000 annual pace expected by economists surveyed by MarketWatch. The median sales price fell a record 9.5% from July to August. Inventories of unsold homes continued to fall in August, dropping 3% to 262,000, the fewest in 17 years.
The crisis the world went through is just an appetizer for a future one because the weaknesses that created it have not been addressed, Marc Faber, author and publisher of the Gloom, Doom and Boom Report, told CNBC Friday. "It's a total and complete disaster and the crisis we had is just the appetizer to the big total breakdown of financial markets and of governments in five or 10 years time when the whole system goes bust," Faber told "Worldwide Exchange." The G20 meeting is not likely to find a solution that would prevent a future meltdown, as the people who are supposed to implement the new measures are the same people who were unable to foresee this crisis, he said.
The issues of excessive leverage and the "uncontrolled, unbound credit growth," as well as the bulging deficits and interest rates at zero are not being addressed, he added.
"I think that people will have to rethink the world and that they should have little money in the US and have 50 percent of their funds in emerging economies," he said.
The European Union has decided to impose five-year anti-dumping tariffs on aluminum foil from three countries including China, and on Chinese seamless steel pipes, state media reported on Friday.
Japan's domestic vehicle sales rose in August from a year earlier for the first time in 13 months.
Toyota's Prius hybrid has been Japan's top-selling car for the past four months.
Wal-Mart and Costco both dropped $1.18 a share in Friday trading.
The Dow Jones Industrial Average fell 42.25 points, or 0.4%, to 9,665.19, giving it a weekly loss of 1.6%. The S&P 500 declined 6.4 points, or 0.6%, to 1,044.38, off 2.2% from the week-ago close. The Nasdaq Composite slumped 16.69 points, or 0.8%, to 2,090.92, a weekly loss of 2%.
Pomeroy Computer announces agreement to be acquired by Platinum Equity for $6.50 per share in cash.
Atlanta's Georgian Bank became the 95th bank failure of the year, according to the Federal Deposit Insurance Corp. on Friday. First Citizens Bank and Trust Company Inc. of Columbia, S.C., will assume all of the deposits of Georgian Bank, estimated at about $2 billion as of July 24.
Simmons Co. said Friday it will file for bankruptcy and reorganization under Chapter 11, and has agreed to sell its core bedding business to Ares Management and Teachers' Private Capital, the investment arm of the Ontario Teachers' Pension Plan.
Goldman Sachs has raised its global oil demand forecasts for the fourth quarter of 2009 and for 2010 by 1.2 million barrels a day and 1.6 million barrels a day, respectively.
Unilever, the maker of Dove soap, agreed to buy Sara Lee Corp.’s personal-care and European detergent unit for 1.28 billion euros ($1.88 billion), gaining Sanex shower gel in its biggest purchase in nine years.
Unilever, based in London and Rotterdam, will pay cash for the business, which makes Duschdas and Radox soap and had sales of more than 750 million euros for the year ending June 2009, according to a statement today. Sara Lee, which has been shedding units to focus on coffee and food, said the proceeds would help it buy back up to $1 billion in stock.
The government of Iran has told the International Atomic Energy Agency that it is building a second uranium enrichment plant for making fuel, the nuclear watchdog agency said Friday.
China's auto sales should soar to 12.6 million units this year, up 35 percent from 2008, boosted by subsidies that the industry is lobbying Beijing to extend, a government researcher said Friday.
China's auto sales have surpassed those of the limping U.S. market for all but two months so far this year, helped by cuts in sales tax and subsidies for more fuel-efficient vehicles.
In September, Chinese sales are likely to total 1.25 million units, said Xu Changming, senior economist for the Cabinet's State Information Center. He was speaking at a seminar organized by industry newsletters China Business Update and China Auto Review.
Boeing employees are about to lose a popular perk: company-paid education subsidies. Macquarie raised its 2010 earnings outlook for Boeing to $4.51 a share from $4.35, and maintained its 2011 forecast at $4.20 a share.Not exactly an exciting growth picture.
The recovery in the manufacturing sector stumbled in August, as a big decline in orders for new airplanes pushed total durable goods orders down 2.4%, the largest decline since January, the Commerce Department reported Friday. The 42% drop in orders for civilian aircraft accounted for most of the decline. Weaker demand wasn't confined to the aircraft sector, however. Excluding the 9.3% drop in transportation orders, orders were flat in August, the weakest showing since April.
Unfilled orders for manufactured durable goods in August, down eleven consecutive months, decreased $2.8 billion or 0.4 percent to $737.1 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 0.1 percent July decrease.
"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Julian Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."
Five U.S. troops were killed in three separate incidents in southern Afghanistan, the military said on Friday.
"Natural gas is an attractive energy source for the future," said Rune Bjornson, StatoilHydro's executive vice president for natural gas during a press seminar in Oslo on Thursday, September 24.
StatoilHydro is currently the second largest supplier of gas to Europe, and the group helps secure a stable supply of energy to Europe through export of gas from the Norwegian continental shelf (NCS) , as well as holding significant international gas positions in Algeria, Azerbaijan and in the USA.
It's predicted that by 2020, China's natural gas demand will approximately reach 240 billion cubic meters.
Cypress Gardens, which reigned as Florida's grandest theme park in the days before Disney, has shut down while its owners try to sell the attraction.
House Financial Services Committee Chairman Barney Frank, D-Mass., said he backs legislation introduced by Rep. Ron Paul, R-Texas, that would require the Government Accountability Office to audit how the Federal Reserve implements monetary policy and examines every aspect of the Fed, including how much it has lent and will lend to specific banks as part of its bank bailout program.
Benchmark borrowing costs for highly rated state and local governments dropped to a 42-year low this week, as the pace of new municipal-bond issues slowed and cash flowing into mutual funds accelerated to a record.
Homebuilder
KB Homes reported a narrower quarterly loss, though its chief executive cautioned that he does not expect to see "meaningful improvement" in the U.S. housing market in the near future.
The value of imports of consumer goods into the U.S. peaked in August 2008 at $42 billion. (The category excludes oil, food, industrial supplies, capital goods and automotive vehicles.) In June the U.S. bought only $34 billion of products from the rest of the world, according to the U.S. Bureau of Economic Analysis. Wary Americans have gone back to saving. "In U.S. dollar terms, exports to China from Japan were only down 22% year-on-year in May, while to the U.S. they were --40%. Exports to China were $8.5 billion that month while only $6.7 billion to the U.S.," notes John Vail, chief global strategist at Nikko Asset Management in Tokyo.
By 2012, according to research company Display Search, China will be the world's biggest LCD TV market. Chinese brands Skyworth, Hisense and TCL in the space of only a year have overtaken foreign makers to dominate LCD TV sales in China.
The Group of 20 on Friday planned to approve a greater voice for Asian and Latin American countries in a historic shift that recognizes the rising influence of both regions.
According to AMG Data, in the week ended Sept.23,
Equity Fund Inflows $1.2 Bil; Taxable Bond Fund Inflows $5.3 Bil
xETFs - Equity Fund Outflows -$306 Mil; Taxable Bond Fund Inflows $4.4 Bil
Consumer sentiment improved in late September, according to media reports on Friday of the Reuters/University of Michigan index. The consumer sentiment index jumped to 73.5 in late September from 70.2 earlier in the month.
Despite a record drop in prices, sales of new homes flattened out in August after four months of strong increases, the Commerce Department estimated Friday. Sales of new homes rose a statistically insignificant 0.7% in August to a seasonally adjusted annual rate of 429,000 from a downwardly revised 426,000 in July. Sales were down 3.4% from a year earlier, and are up 30% from the low in January. Sales were weaker than the 440,000 annual pace expected by economists surveyed by MarketWatch. The median sales price fell a record 9.5% from July to August. Inventories of unsold homes continued to fall in August, dropping 3% to 262,000, the fewest in 17 years.
The crisis the world went through is just an appetizer for a future one because the weaknesses that created it have not been addressed, Marc Faber, author and publisher of the Gloom, Doom and Boom Report, told CNBC Friday. "It's a total and complete disaster and the crisis we had is just the appetizer to the big total breakdown of financial markets and of governments in five or 10 years time when the whole system goes bust," Faber told "Worldwide Exchange." The G20 meeting is not likely to find a solution that would prevent a future meltdown, as the people who are supposed to implement the new measures are the same people who were unable to foresee this crisis, he said.
The issues of excessive leverage and the "uncontrolled, unbound credit growth," as well as the bulging deficits and interest rates at zero are not being addressed, he added.
"I think that people will have to rethink the world and that they should have little money in the US and have 50 percent of their funds in emerging economies," he said.
The European Union has decided to impose five-year anti-dumping tariffs on aluminum foil from three countries including China, and on Chinese seamless steel pipes, state media reported on Friday.
Japan's domestic vehicle sales rose in August from a year earlier for the first time in 13 months.
Toyota's Prius hybrid has been Japan's top-selling car for the past four months.
Wal-Mart and Costco both dropped $1.18 a share in Friday trading.
The Dow Jones Industrial Average fell 42.25 points, or 0.4%, to 9,665.19, giving it a weekly loss of 1.6%. The S&P 500 declined 6.4 points, or 0.6%, to 1,044.38, off 2.2% from the week-ago close. The Nasdaq Composite slumped 16.69 points, or 0.8%, to 2,090.92, a weekly loss of 2%.
Pomeroy Computer announces agreement to be acquired by Platinum Equity for $6.50 per share in cash.
Atlanta's Georgian Bank became the 95th bank failure of the year, according to the Federal Deposit Insurance Corp. on Friday. First Citizens Bank and Trust Company Inc. of Columbia, S.C., will assume all of the deposits of Georgian Bank, estimated at about $2 billion as of July 24.
Thursday, September 24, 2009
Unemployment
9/24/09 Unemployment
Avtovaz, Russia's biggest carmaker, said Thursday it will cut 27,600 jobs in a move to deal with the effects of the global economic crisis. Currently, 102,000 people work at Avtovaz, but staff has to be cut considering that its plant is working one shift and at 65% of capacity, the carmaker said in a statement posted on its Web site. French carmaker Renault owns a 25% stake in Avtovaz, whose main brand is Lada.
Brett Steenbarger: "An international investor who has owned U.S. stocks has seen gains in equities eroded by losses in the U.S. dollar. Similarly, holders of U.S. debt find themselves being repaid in cheaper dollars. It is difficult to imagine U.S. assets finding relative strength on a global basis when those assets are facing weak dollar headwinds."
In the week ending Sept. 19, the advance figure for seasonally adjusted initial claims was 530,000, a decrease of 21,000 from the previous week's revised figure of 551,000. The 4-week moving average was 553,500, a decrease of 11,000 from the previous week's revised average of 564,500.
The advance seasonally adjusted insured unemployment rate was 4.6 percent for the week ending Sept. 12, a decrease of 0.1 percentage point from the prior week's unrevised rate of 4.7 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Sept. 12 was 6,138,000, a decrease of 123,000 from the preceding week's revised level of 6,261,000. The 4-week moving average was 6,187,250, a decrease of 1,250 from the preceding week's revised average of 6,188,500.
The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.651 million.
The advance number of actual initial claims under state programs, unadjusted, totaled 434,358 in the week ending Sept. 19, an increase of 21,966 from the previous week. There were 398,070 initial claims in the comparable week in 2008.
The advance unadjusted insured unemployment rate was 3.9 percent during the week ending Sept. 12, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,204,972, a decrease of 91,789 from the preceding week. A year earlier, the rate was 2.3 percent and the volume was 3,014,874.
Employers took 2,690 mass layoff actions in August that resulted in the separa- tion of 259,307 workers, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the U.S. Bureau of Labor Statistics reported today. Each action involved at least 50 persons from a single employer. The number of mass layoff events in August increased by 533 from the prior month, and the number of associated initial claims increased by 52,516. Over the year, the number of mass layoff events increased by 803, and associated initial claims increased by 70,356. Year-to-date mass layoff events (21,184) and initial claims (2,162,202) both recorded program highs through August. In August, 900 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 93,892 initial claims. Over the month, the number of manufacturing events increased by 279, and associated initial claims increased by 21,626. During the 21 months from December 2007 through August 2009, the total number of mass layoff events (seasonally adjusted) was 44,669, and the number of initial claims filed (seasonally adjusted) in those events was 4,556,636."
Rite Aid: "A more discount-driven customer buying more items on sale continued to have a negative impact on front end results. Because we expect these negative trends and a tough economy to continue throughout the second half of the year, we have lowered our outlook for fiscal 2010."
Gold for December delivery, the most active contract, fell $15.50, or 1.5%, to finish the session at $998.90 an ounce on the New York Mercantile Exchange. Gold earlier rose to an intraday high of $1,021 an ounce and fell as low as $991.30..
United Steelworkers and three paper firms filed antidumping petitions against China and Indonesia, making good on the union's threat to protect other U.S. industries after winning a recent trade decision against China.
Iran is willing to have its nuclear experts meet with scientists from the United States and other world powers as a confidence-building measure aimed at resolving concerns about Tehran's nuclear program, Iranian President Mahmoud Ahmadinejad said Wednesday.
George Ure: "We've heard rumblings, unconfirmed yet, that a lot of small businesses around America are on the verge of filing for bankruptcy in two weeks time about October 15th. That's when the second extension to file 2008 income taxes will expire.
What we're hearing in general terms is that thousands of small business owners bet on a recovery in 2009 in order to catch up on past tax debts and since that hasn't happened yet, they're going to the wall October 15th with BK filings. We may have more on this next week as we've heard that a local (to East Texas) radio show is talking to some folks."
The U.S. credit card charge-off rate rose to a record high in August, as more Americans lost their jobs, Moody's Investors Service said on Wednesday, in another sign consumers remain under stress.
The Moody's credit card charge-off index -- which measures credit card loans that banks do not expect to be repaid -- rose to 11.49 percent in August from 10.52 percent in July.
The index resumed an upward trend after declining in July for the first time in almost a year, vanishing hopes of stabilization in the industry after record high credit losses.
Total holiday sales are expected to be the same as or less than in 2008, despite signs of an easing recession heading into the industry's most critical quarter, according to a survey released yesterday by Philadelphia's Hay Group Inc. and two others earlier in the week from Deloitte and Retail Forward Inc.
If sales remain flat, as the reports predict, the quarter will rank as the second-worst in 52 years, according to Retail Forward, of Columbus, Ohio. And one of the reports suggests a sales drop from last year's pace is even possible.
Deloitte said sales unchanged from last year would mean about $810 billion for the November through January period. Last holiday season, sales fell 2.4 percent from the year before.
"Retailers are planning for a challenging Christmas season," said Craig Rowley, vice president and global practice leader for Hay Group's retail practice in Dallas.
Deloitte based its forecast on high unemployment, tight consumer credit, and continuing home foreclosures, said Tara Weiner, managing partner of its Greater Philadelphia office.
"In any recession, the consumer is the last to feel the recession and the last to recover," said Weiner, adding that consumer attitudes may improve in mid-2010.
Al Haramain, an Oregon group that the government declared to be a terrorist organization in 2004, and which has since gone out of business, sued the Bush administration in 2006. It claimed that federal authorities had illegally listened in on its lawyers' phone calls and is seeking damages. Its officials denied the group was a terrorist outfit.
Chief U.S. District Judge Vaughn Walker, who has rebuffed Bush and Obama administration requests to dismiss the suit, did not reveal his views on the legality of the program. But he told a government lawyer that Al-Haramain had presented strong evidence that it had been wiretapped and had the right to sue.
The hearing was the first in California, and the second in the nation, to address the constitutionality of Bush's post-Sept. 11 order to intercept communications between Americans and suspected foreign terrorists without a warrant.
Since the New York Times revealed the program, and Bush confirmed it, in December 2005, would-be plaintiffs have struggled to prove they were targeted for surveillance and were entitled to challenge it.
A federal judge in Michigan declared the program unconstitutional in 2006, in the only other instance in which the issue has gone to court. But an appeals court threw the case out because none of the plaintiffs could show that their calls had been intercepted.
Al-Haramain's lawsuit is unique because the charity was inadvertently sent a classified document in 2004 that reportedly showed that its lawyers had been wiretapped.
Nevertheless, said a lawyer for Obama's Justice Department, Al-Haramain can't prove it was subject to electronic surveillance, because the document - which the group returned to the government, at officials' request - and virtually everything else about the program are secrets.
People can't sue over a confidential government program "based on speculation," said Justice Department attorney Anthony Coppolino.
A ruling on the legality of the program "is simply inappropriate," he told Walker, and even a decision on whether Al-Haramain has the right to sue would reveal information about "intelligence sources and methods."
Walker, however, has already ruled that public statements by Bush administration officials indicated that the Islamic organization had probably been wiretapped.
The judge told Coppolino that Al-Haramain "has presented a substantial array of evidence" that indicated it had been subject to electronic surveillance.
The dollar fell to 90.62 yen versus the Japanese unit, down from 91.13 yen in North American trade late Wednesday.
"One of the main agendas for the G20 Summit is the discussion of options to address global structural imbalances which would make it difficult to exclude currencies from the discussion," strategists at Brown Brothers Harriman wrote in a note.
Sales of existing U.S. homes unexpectedly fell in August for the first time in four months, signaling the housing recovery will be slow to gain speed.
Purchases dropped 2.7 percent to a 5.1 million annual rate, the second-highest level in the last 23 months, the National Association of Realtors said today in Washington. The median price dropped 12.5 percent from August 2008.
Working gas in storage was 3,525 Bcf as of Friday, September 18, 2009, according to EIA estimates. This represents a net increase of 67 Bcf from the previous week. Stocks were 509 Bcf higher than last year at this time and 485 Bcf above the 5-year average of 3,040 Bcf. In the East Region, stocks were 149 Bcf above the 5-year average following net injections of 41 Bcf. Stocks in the Producing Region were 263 Bcf above the 5-year average of 863 Bcf after a net injection of 16 Bcf. Stocks in the West Region were 73 Bcf above the 5-year average after a net addition of 10 Bcf. At 3,525 Bcf, total working gas is above the 5-year historical range.
Tyler Durden: "According to the BLS, the exhaustion rate, or the number of people who have used up their benefits, and will no longer be receiving unemployment checks, has hit an all time high of 52.40% for August. This is a staggering number, and whats worse it was grown in practically a linear fashion with not even a hope of a second (third or fourth) derivative green shoot in sight. In fact, the deterioration in "employability" is accelerating. And yet assorted "pundits" claim the employment picture is improving. We wish them and their newsletters (and, heaven forbid, LPs) all the best."
MANCHESTER, Conn.--(BUSINESS WIRE)--The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.
The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.
"We are addicted to rare earths as much as we are addicted to oil," said Byron King, editor of Energy & Scarcity Investors, published by Agora Financial LLC. Yet "none of these elements are famous like gold or silver. None gets shipped in giant ore freighters like iron, aluminum or copper."
"Without these elements, much of the modern economy will just plain shut down," he said.
And yet, King said, "the only people who really study these elements are master's- and PhD-level chemists and solid-state physicists ... and national leaders in places like China."
In fact, China has all but cornered the market. The rare-earths space is like a Monopoly game, in which Beijing owns Boardwalk, Park Place, and well, pretty much all the properties, while the West owns St. James Place.
"China is the Saudi Arabia of rare elements," said Mark Williams, a risk management expert and finance professor at Boston University. And "like oil, rare elements will flow to the highest bidder."
Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing.
Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night.
“All segments are showing signs of distress but the luxury segment carries much higher loan balances and is more clearly affected,” Frank Innaurato, managing director of CMBS analytical services at Horsham, Pennsylvania-based Realpoint, said in a telephone interview.
Crude drops $3 to $65.90 while natural gas increases 10 cents to $3.96.
Hewlett-Packard Co expects its 2010 fiscal year earnings-per-share to be between $3.60 a share and $3.70 a share, on revenue of $117 billion to $118 billion.
The Dow Jones Industrial Average fell 41.11 points, or 0.4%, to 9,707.44. The S&P 500 declined 10.09 points, or 1%, to 1,050.78. The Nasdaq Composite slumped 23.81 points, or 1.1%, to 2,107.61.
Research In Motion Ltd. forecast third-quarter sales that missed analysts’ estimates, signaling the BlackBerry maker may sell phones at lower prices to compete with Apple Inc.’s iPhone. The shares sank in late trading.
Revenue in the period ending Nov. 28 will be $3.6 billion to $3.85 billion, Waterloo, Ontario-based RIM said today in a statement. Analysts on average projected sales of $3.91 billion.
Avtovaz, Russia's biggest carmaker, said Thursday it will cut 27,600 jobs in a move to deal with the effects of the global economic crisis. Currently, 102,000 people work at Avtovaz, but staff has to be cut considering that its plant is working one shift and at 65% of capacity, the carmaker said in a statement posted on its Web site. French carmaker Renault owns a 25% stake in Avtovaz, whose main brand is Lada.
Brett Steenbarger: "An international investor who has owned U.S. stocks has seen gains in equities eroded by losses in the U.S. dollar. Similarly, holders of U.S. debt find themselves being repaid in cheaper dollars. It is difficult to imagine U.S. assets finding relative strength on a global basis when those assets are facing weak dollar headwinds."
In the week ending Sept. 19, the advance figure for seasonally adjusted initial claims was 530,000, a decrease of 21,000 from the previous week's revised figure of 551,000. The 4-week moving average was 553,500, a decrease of 11,000 from the previous week's revised average of 564,500.
The advance seasonally adjusted insured unemployment rate was 4.6 percent for the week ending Sept. 12, a decrease of 0.1 percentage point from the prior week's unrevised rate of 4.7 percent.
The advance number for seasonally adjusted insured unemployment during the week ending Sept. 12 was 6,138,000, a decrease of 123,000 from the preceding week's revised level of 6,261,000. The 4-week moving average was 6,187,250, a decrease of 1,250 from the preceding week's revised average of 6,188,500.
The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.651 million.
The advance number of actual initial claims under state programs, unadjusted, totaled 434,358 in the week ending Sept. 19, an increase of 21,966 from the previous week. There were 398,070 initial claims in the comparable week in 2008.
The advance unadjusted insured unemployment rate was 3.9 percent during the week ending Sept. 12, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,204,972, a decrease of 91,789 from the preceding week. A year earlier, the rate was 2.3 percent and the volume was 3,014,874.
Employers took 2,690 mass layoff actions in August that resulted in the separa- tion of 259,307 workers, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the U.S. Bureau of Labor Statistics reported today. Each action involved at least 50 persons from a single employer. The number of mass layoff events in August increased by 533 from the prior month, and the number of associated initial claims increased by 52,516. Over the year, the number of mass layoff events increased by 803, and associated initial claims increased by 70,356. Year-to-date mass layoff events (21,184) and initial claims (2,162,202) both recorded program highs through August. In August, 900 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 93,892 initial claims. Over the month, the number of manufacturing events increased by 279, and associated initial claims increased by 21,626. During the 21 months from December 2007 through August 2009, the total number of mass layoff events (seasonally adjusted) was 44,669, and the number of initial claims filed (seasonally adjusted) in those events was 4,556,636."
Rite Aid: "A more discount-driven customer buying more items on sale continued to have a negative impact on front end results. Because we expect these negative trends and a tough economy to continue throughout the second half of the year, we have lowered our outlook for fiscal 2010."
Gold for December delivery, the most active contract, fell $15.50, or 1.5%, to finish the session at $998.90 an ounce on the New York Mercantile Exchange. Gold earlier rose to an intraday high of $1,021 an ounce and fell as low as $991.30..
United Steelworkers and three paper firms filed antidumping petitions against China and Indonesia, making good on the union's threat to protect other U.S. industries after winning a recent trade decision against China.
Iran is willing to have its nuclear experts meet with scientists from the United States and other world powers as a confidence-building measure aimed at resolving concerns about Tehran's nuclear program, Iranian President Mahmoud Ahmadinejad said Wednesday.
George Ure: "We've heard rumblings, unconfirmed yet, that a lot of small businesses around America are on the verge of filing for bankruptcy in two weeks time about October 15th. That's when the second extension to file 2008 income taxes will expire.
What we're hearing in general terms is that thousands of small business owners bet on a recovery in 2009 in order to catch up on past tax debts and since that hasn't happened yet, they're going to the wall October 15th with BK filings. We may have more on this next week as we've heard that a local (to East Texas) radio show is talking to some folks."
The U.S. credit card charge-off rate rose to a record high in August, as more Americans lost their jobs, Moody's Investors Service said on Wednesday, in another sign consumers remain under stress.
The Moody's credit card charge-off index -- which measures credit card loans that banks do not expect to be repaid -- rose to 11.49 percent in August from 10.52 percent in July.
The index resumed an upward trend after declining in July for the first time in almost a year, vanishing hopes of stabilization in the industry after record high credit losses.
Total holiday sales are expected to be the same as or less than in 2008, despite signs of an easing recession heading into the industry's most critical quarter, according to a survey released yesterday by Philadelphia's Hay Group Inc. and two others earlier in the week from Deloitte and Retail Forward Inc.
If sales remain flat, as the reports predict, the quarter will rank as the second-worst in 52 years, according to Retail Forward, of Columbus, Ohio. And one of the reports suggests a sales drop from last year's pace is even possible.
Deloitte said sales unchanged from last year would mean about $810 billion for the November through January period. Last holiday season, sales fell 2.4 percent from the year before.
"Retailers are planning for a challenging Christmas season," said Craig Rowley, vice president and global practice leader for Hay Group's retail practice in Dallas.
Deloitte based its forecast on high unemployment, tight consumer credit, and continuing home foreclosures, said Tara Weiner, managing partner of its Greater Philadelphia office.
"In any recession, the consumer is the last to feel the recession and the last to recover," said Weiner, adding that consumer attitudes may improve in mid-2010.
Al Haramain, an Oregon group that the government declared to be a terrorist organization in 2004, and which has since gone out of business, sued the Bush administration in 2006. It claimed that federal authorities had illegally listened in on its lawyers' phone calls and is seeking damages. Its officials denied the group was a terrorist outfit.
Chief U.S. District Judge Vaughn Walker, who has rebuffed Bush and Obama administration requests to dismiss the suit, did not reveal his views on the legality of the program. But he told a government lawyer that Al-Haramain had presented strong evidence that it had been wiretapped and had the right to sue.
The hearing was the first in California, and the second in the nation, to address the constitutionality of Bush's post-Sept. 11 order to intercept communications between Americans and suspected foreign terrorists without a warrant.
Since the New York Times revealed the program, and Bush confirmed it, in December 2005, would-be plaintiffs have struggled to prove they were targeted for surveillance and were entitled to challenge it.
A federal judge in Michigan declared the program unconstitutional in 2006, in the only other instance in which the issue has gone to court. But an appeals court threw the case out because none of the plaintiffs could show that their calls had been intercepted.
Al-Haramain's lawsuit is unique because the charity was inadvertently sent a classified document in 2004 that reportedly showed that its lawyers had been wiretapped.
Nevertheless, said a lawyer for Obama's Justice Department, Al-Haramain can't prove it was subject to electronic surveillance, because the document - which the group returned to the government, at officials' request - and virtually everything else about the program are secrets.
People can't sue over a confidential government program "based on speculation," said Justice Department attorney Anthony Coppolino.
A ruling on the legality of the program "is simply inappropriate," he told Walker, and even a decision on whether Al-Haramain has the right to sue would reveal information about "intelligence sources and methods."
Walker, however, has already ruled that public statements by Bush administration officials indicated that the Islamic organization had probably been wiretapped.
The judge told Coppolino that Al-Haramain "has presented a substantial array of evidence" that indicated it had been subject to electronic surveillance.
The dollar fell to 90.62 yen versus the Japanese unit, down from 91.13 yen in North American trade late Wednesday.
"One of the main agendas for the G20 Summit is the discussion of options to address global structural imbalances which would make it difficult to exclude currencies from the discussion," strategists at Brown Brothers Harriman wrote in a note.
Sales of existing U.S. homes unexpectedly fell in August for the first time in four months, signaling the housing recovery will be slow to gain speed.
Purchases dropped 2.7 percent to a 5.1 million annual rate, the second-highest level in the last 23 months, the National Association of Realtors said today in Washington. The median price dropped 12.5 percent from August 2008.
Working gas in storage was 3,525 Bcf as of Friday, September 18, 2009, according to EIA estimates. This represents a net increase of 67 Bcf from the previous week. Stocks were 509 Bcf higher than last year at this time and 485 Bcf above the 5-year average of 3,040 Bcf. In the East Region, stocks were 149 Bcf above the 5-year average following net injections of 41 Bcf. Stocks in the Producing Region were 263 Bcf above the 5-year average of 863 Bcf after a net injection of 16 Bcf. Stocks in the West Region were 73 Bcf above the 5-year average after a net addition of 10 Bcf. At 3,525 Bcf, total working gas is above the 5-year historical range.
Tyler Durden: "According to the BLS, the exhaustion rate, or the number of people who have used up their benefits, and will no longer be receiving unemployment checks, has hit an all time high of 52.40% for August. This is a staggering number, and whats worse it was grown in practically a linear fashion with not even a hope of a second (third or fourth) derivative green shoot in sight. In fact, the deterioration in "employability" is accelerating. And yet assorted "pundits" claim the employment picture is improving. We wish them and their newsletters (and, heaven forbid, LPs) all the best."
MANCHESTER, Conn.--(BUSINESS WIRE)--The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.
The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.
"We are addicted to rare earths as much as we are addicted to oil," said Byron King, editor of Energy & Scarcity Investors, published by Agora Financial LLC. Yet "none of these elements are famous like gold or silver. None gets shipped in giant ore freighters like iron, aluminum or copper."
"Without these elements, much of the modern economy will just plain shut down," he said.
And yet, King said, "the only people who really study these elements are master's- and PhD-level chemists and solid-state physicists ... and national leaders in places like China."
In fact, China has all but cornered the market. The rare-earths space is like a Monopoly game, in which Beijing owns Boardwalk, Park Place, and well, pretty much all the properties, while the West owns St. James Place.
"China is the Saudi Arabia of rare elements," said Mark Williams, a risk management expert and finance professor at Boston University. And "like oil, rare elements will flow to the highest bidder."
Luxury hotel owners risk defaulting on their debt as the recession cuts occupancies and the credit crunch constrains refinancing.
Loans secured by more than 1,500 hotels with a total outstanding balance of $24.5 billion may be in danger of default, according to Realpoint LLC, a credit rating company that tracks commercial mortgage-backed securities. Some of the biggest loans, put on the company’s watch list because of late payments, decreasing occupancies or cash flow, were made to luxury properties where rooms can cost more than $850 a night.
“All segments are showing signs of distress but the luxury segment carries much higher loan balances and is more clearly affected,” Frank Innaurato, managing director of CMBS analytical services at Horsham, Pennsylvania-based Realpoint, said in a telephone interview.
Crude drops $3 to $65.90 while natural gas increases 10 cents to $3.96.
Hewlett-Packard Co expects its 2010 fiscal year earnings-per-share to be between $3.60 a share and $3.70 a share, on revenue of $117 billion to $118 billion.
The Dow Jones Industrial Average fell 41.11 points, or 0.4%, to 9,707.44. The S&P 500 declined 10.09 points, or 1%, to 1,050.78. The Nasdaq Composite slumped 23.81 points, or 1.1%, to 2,107.61.
Research In Motion Ltd. forecast third-quarter sales that missed analysts’ estimates, signaling the BlackBerry maker may sell phones at lower prices to compete with Apple Inc.’s iPhone. The shares sank in late trading.
Revenue in the period ending Nov. 28 will be $3.6 billion to $3.85 billion, Waterloo, Ontario-based RIM said today in a statement. Analysts on average projected sales of $3.91 billion.
Wednesday, September 23, 2009
Overbought
9/23/09 Overbought
John Hussman: "My discomfort about strenuously overbought and moderately overvalued conditions overlaps with skepticism about the U.S. economic “recovery,” which appears to be nothing but an artifact of government spending, while intrinsic economic activity remains weak."
U.S. budget deficits will continue to pile up in the next decade, eventually reaching an unsustainable level that may result in an economic collapse, according to
Richard Duncan, author of “The Dollar Crisis.”
The U.S. has little chance of resolving its deteriorating financial position because the manufacturing industry continues to shrink, leaving the nation with few goods to export, said Duncan, now at Singapore-based Blackhorse Asset Management.
General Mills raised its 2010 earnings forecast to $4.40 to $4.45 per share from its earlier estimate of $4.20 to $4.25 a share.
Rob Hanna: " The average Fed day has ourperformed the average day by about 7.5 times."
The House has agreed to give the jobless in a majority of states another 13 weeks of unemployment insurance benefits.
The bill, which passed the House 331-83 , approves the extra three months of benefits for those jobless living in 27 states, plus the District of Columbia and Puerto Rico, with unemployment rates topping 8.5 percent. Similar legislation is pending in the Senate. The longtime unemployed in states with lower levels of joblessness would not get the extension.
The government of President Hugo Chavez said Tuesday that it is considering a lawsuit against U.S. oil giant ConocoPhillips for seeking Venezuela's stake in a Texas oil refinery.
Oil Minister Rafael Ramirez said a legal team representing the state oil company, Petroleos de Venezuela SA, or PDVSA, could file a lawsuit against ConocoPhillips for exercising an option to purchase PDVSA's 50 percent stake in the Sweeny refinery.
“Our lawyers are proposing a lawsuit against Conoco,” Ramirez said.
ConocoPhillips argues that PDVSA has failed deliver heavy crude as required under contract to the refinery since the beginning of the year, prompting the Houston-based company to notify PDVSA on Aug. 28 that it would exercise the option under a joint venture agreement.
U.S. mortgage applications jumped last week to their highest since late May as interest rates tumbled below 5 percent, data from an industry group showed on Wednesday.
Crude inventories rose 2.8 million barrels in the week ended Sept 18, gasoline inventories gained 5.4 million barrels, and distillate stockpiles, which include diesel and heating oil, rose 3 million barrels. Gasoline supplied, an implied gauge of consumption, fell to 8.79 million barrels a day, the lowest level since late January, the EIA data showed. On the New York Mercantile Exchange, November crude lost $2.72, or 3.8%, to $69.04 a barrel. It was down less than 2% ahead of the data.
About 40% of the 25 biggest American retail chains say they will hire between 5% and 25% fewer temp workers than even last year's poor season; last year the same survey found 29% of retailers saying they'd cut workers.
The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.
The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.
Up 80 points after the Fed decision to keep rates unchanged, the Dow Jones Industrial Average fell 81.32 points to 9,748.55. The S&P 500 Index declined 10.79 points to 1,060.87, while the Nasdaq Composite fell 14.88 points to 2,131.42.
The dollar index stood at 75.907.
John Hussman: "My discomfort about strenuously overbought and moderately overvalued conditions overlaps with skepticism about the U.S. economic “recovery,” which appears to be nothing but an artifact of government spending, while intrinsic economic activity remains weak."
U.S. budget deficits will continue to pile up in the next decade, eventually reaching an unsustainable level that may result in an economic collapse, according to
Richard Duncan, author of “The Dollar Crisis.”
The U.S. has little chance of resolving its deteriorating financial position because the manufacturing industry continues to shrink, leaving the nation with few goods to export, said Duncan, now at Singapore-based Blackhorse Asset Management.
General Mills raised its 2010 earnings forecast to $4.40 to $4.45 per share from its earlier estimate of $4.20 to $4.25 a share.
Rob Hanna: " The average Fed day has ourperformed the average day by about 7.5 times."
The House has agreed to give the jobless in a majority of states another 13 weeks of unemployment insurance benefits.
The bill, which passed the House 331-83 , approves the extra three months of benefits for those jobless living in 27 states, plus the District of Columbia and Puerto Rico, with unemployment rates topping 8.5 percent. Similar legislation is pending in the Senate. The longtime unemployed in states with lower levels of joblessness would not get the extension.
The government of President Hugo Chavez said Tuesday that it is considering a lawsuit against U.S. oil giant ConocoPhillips for seeking Venezuela's stake in a Texas oil refinery.
Oil Minister Rafael Ramirez said a legal team representing the state oil company, Petroleos de Venezuela SA, or PDVSA, could file a lawsuit against ConocoPhillips for exercising an option to purchase PDVSA's 50 percent stake in the Sweeny refinery.
“Our lawyers are proposing a lawsuit against Conoco,” Ramirez said.
ConocoPhillips argues that PDVSA has failed deliver heavy crude as required under contract to the refinery since the beginning of the year, prompting the Houston-based company to notify PDVSA on Aug. 28 that it would exercise the option under a joint venture agreement.
U.S. mortgage applications jumped last week to their highest since late May as interest rates tumbled below 5 percent, data from an industry group showed on Wednesday.
Crude inventories rose 2.8 million barrels in the week ended Sept 18, gasoline inventories gained 5.4 million barrels, and distillate stockpiles, which include diesel and heating oil, rose 3 million barrels. Gasoline supplied, an implied gauge of consumption, fell to 8.79 million barrels a day, the lowest level since late January, the EIA data showed. On the New York Mercantile Exchange, November crude lost $2.72, or 3.8%, to $69.04 a barrel. It was down less than 2% ahead of the data.
About 40% of the 25 biggest American retail chains say they will hire between 5% and 25% fewer temp workers than even last year's poor season; last year the same survey found 29% of retailers saying they'd cut workers.
The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.
The “huge shadow inventory,” reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.
Up 80 points after the Fed decision to keep rates unchanged, the Dow Jones Industrial Average fell 81.32 points to 9,748.55. The S&P 500 Index declined 10.79 points to 1,060.87, while the Nasdaq Composite fell 14.88 points to 2,131.42.
The dollar index stood at 75.907.
Tuesday, September 22, 2009
Autumn
9/22/09 Autumn
Dow Jones to close Far Eastern Economic Review in December. The Far Eastern Economic Review was launched in 1946.
SeekingAlpha: " AAR's latest weekly data (.pdf) shows rail traffic down another 3% Y/Y to -19.8%. The numbers are not seasonally adjusted, which means freight is back at 1993 levels. And recent data was still inflated by Cash for Clunkers."
Aaron Task: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults and the impoverishment of large segments of Western society," Marc Faber writes in the September issue of The Gloom, Boom & Doom Report.
A statement like that pretty much speaks for itself, but it's a bit more complicated than appears on first blush.
Faber has been bullish -- especially on commodities and emerging market stocks -- for some time now and believes the current global recovery trade will last another two-to-three years, as discussed in more detail in a forthcoming clip. But he has major long-term concerns about the dollar's long-term viability given rising U.S. deficits, massive unfunded mandates and the fact "we have a money-printer at the Fed."
This combination will eventually lead to runaway inflation, wholesale debasement of the dollar, and a major lowering of living standards for most Americans and many Europeans as well, says Faber, who is "highly confident" in this grim prediction."
Lowe's Cos., on Tuesday kept its profit forecast for this year and gave an outlook for next year that may fall short of Wall Street expectations. Lowe's Companies Inc.said Tuesday it expects 2010 earnings of $1.13 to $1.21 a share. Wall Street analysts expect earnings of $1.21 share from the Charlotte, N.C. home improvement products retailer, according to a survey of analysts by FactSet Research. Lowe's expects 2011 earnings of $1.24 a share to $1.34 a share, compared to the analyst target of $1.34 a share. The company expects to open 62 to 66 stores in 2009, with total square footage growth of approximately 4%. Total 2009 sales are expected to decline approximately 3%. The company expects comparable store sales to decline 7% to 9% in 2009.
Tenneco Inc will close its original equipment ride-control plant in Cozad, Neb. Tenneco currently employs 460 hourly and 40 salaried workers at the plant.
The Oil Drum: "Saudi Aramco, the state-run oil monopoly, sees little chance of pumping crude from idle fields next year because a recovery in world demand has yet to begin, its chief executive officer said.
Saudi Arabia has idled about 4 million barrels a day, or about one third of its crude-oil production capacity, according to the oil ministry. The Dhahran-based company, the biggest exporter of unrefined crude oil, is spending $90 billion to develop new reserves and refineries over five years to 2012.
The world’s most influential oil producer is leading OPEC members cutting a record 14 percent of daily output, contributing to the 56 percent rally in crude prices since December. Global demand for oil is expected to rise by 1.27 million barrels a day, or 1.5 percent, next year, according to the International Energy Agency, not enough for Saudi Arabia to resume all of its idled fields."
Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters.
August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed.
The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months.
According to Reuters, 128,000 people in Arizona alone will face reset IO mortgages next year.
Michael Pento: "Households are reducing their debt at a 1.7% annual rate and business at a 1.8% annual rate. However, while the private sector gets their finances in order the Federal government is increasing its debt at a 28.2% annual rate!
The net effect is that the annual rate of increase in our nation's debt is currently 4.9%, which is even faster than the rate of increase of 4.1% experienced in Q1 2009. Yep, we are increasing our debt at a faster pace."
The value of U.S. homes rose by 0.3% in July compared with June, the Federal Housing Finance Agency reported Tuesday. Prices fell 4.2% in the past year and were down 10.5% from the peak in April 2007. Prices in July were at the same level as March 2005. June's increase was revised lower to a 0.1% gain from 0.5% previously reported. Prices rose in five of nine regions, led by a 1.6% gain in the Pacific states, where prices have fallen 9% in the past year. The biggest monthly drop was 0.9% in the East South Central states (Kentucky, Tennessee, Mississippi and Alabama). The index is based on repeat sales financed through Fannie Mae or Freddie Mac. Is there any reason why the August number won't be revised down as it was in July?
Stephen Labaton: "Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune."
The FDIC has the authority to borrow as much as $500 billion through 2010.
"The recession has affected everybody in one way or another as families use lots of different strategies to cope with a new economic reality," said Mark Mather, associate vice president of the nonprofit Population Reference Bureau.
"Job loss — or the potential for job loss — also leads to feelings of economic insecurity and can create social tension."
"It's just the tip of the iceberg," he said, noting that unemployment is still rising.
The percentage of people who drove alone to work dropped last year to 75.5 percent, the lowest in a decade, as commuters grew weary of paying close to $4 a gallon for gasoline and opted to carpool or take public transportation.
Twenty-two states had declines in solo drivers compared with the year before, with the rest statistically unchanged. The decreases were particularly evident in states with higher traffic congestion, such as Maryland, Texas and Washington.
Google shares above $500; first time since Aug. 08. The growth of Google Inc.'s advertising revenue is set to come back faster than expected toward the end of the year, a Canaccord Adams analyst said Tuesday.
"Our recent checks suggest that ad budgets are coming back, particularly in e-commerce," Canaccord analyst Jeff Rath said in a note to investors. He boosted his price target for Google shares to $560 from $480, which implies upside of 12.7 percent over its closing price Monday.
Last year’s holiday season arrived just months after an economic meltdown. Consumers panicked and holiday sales fell 2.4%, the first decline since 1967.
Deloitte issued a forecast today saying it expects holiday sales be flat in 2009. The firm forecasts total U.S. holiday sales of $810 billion. (That’s November to January sales, excluding motor vehicles and gasoline.)
"For those of you who like conspiracy theories: The Fed is no longer publishing MEW (Mortgage Equity Withdrawal). This was one of the engines of the financial crisis - so much for an early warning on the next housing crisis. ISI will estimate the three main components of the Fed's report and like our estimate for some the old "M" statistics it will be there down the road when needed again." - Carrie Butler
Crude ends up 2.6% at $71.55 a barrel.
The Dow Jones Industrial Average gained 51.01 points, or 0.5%, to stand at 9,829.87. The S&P 500 Index added 7 points, or 0.7%, to 1,071.66. The Nasdaq Composite rose 8.26 points, or 0.4%, to 2,146.30.
Dow Jones to close Far Eastern Economic Review in December. The Far Eastern Economic Review was launched in 1946.
SeekingAlpha: " AAR's latest weekly data (.pdf) shows rail traffic down another 3% Y/Y to -19.8%. The numbers are not seasonally adjusted, which means freight is back at 1993 levels. And recent data was still inflated by Cash for Clunkers."
Aaron Task: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults and the impoverishment of large segments of Western society," Marc Faber writes in the September issue of The Gloom, Boom & Doom Report.
A statement like that pretty much speaks for itself, but it's a bit more complicated than appears on first blush.
Faber has been bullish -- especially on commodities and emerging market stocks -- for some time now and believes the current global recovery trade will last another two-to-three years, as discussed in more detail in a forthcoming clip. But he has major long-term concerns about the dollar's long-term viability given rising U.S. deficits, massive unfunded mandates and the fact "we have a money-printer at the Fed."
This combination will eventually lead to runaway inflation, wholesale debasement of the dollar, and a major lowering of living standards for most Americans and many Europeans as well, says Faber, who is "highly confident" in this grim prediction."
Lowe's Cos., on Tuesday kept its profit forecast for this year and gave an outlook for next year that may fall short of Wall Street expectations. Lowe's Companies Inc.said Tuesday it expects 2010 earnings of $1.13 to $1.21 a share. Wall Street analysts expect earnings of $1.21 share from the Charlotte, N.C. home improvement products retailer, according to a survey of analysts by FactSet Research. Lowe's expects 2011 earnings of $1.24 a share to $1.34 a share, compared to the analyst target of $1.34 a share. The company expects to open 62 to 66 stores in 2009, with total square footage growth of approximately 4%. Total 2009 sales are expected to decline approximately 3%. The company expects comparable store sales to decline 7% to 9% in 2009.
Tenneco Inc will close its original equipment ride-control plant in Cozad, Neb. Tenneco currently employs 460 hourly and 40 salaried workers at the plant.
The Oil Drum: "Saudi Aramco, the state-run oil monopoly, sees little chance of pumping crude from idle fields next year because a recovery in world demand has yet to begin, its chief executive officer said.
Saudi Arabia has idled about 4 million barrels a day, or about one third of its crude-oil production capacity, according to the oil ministry. The Dhahran-based company, the biggest exporter of unrefined crude oil, is spending $90 billion to develop new reserves and refineries over five years to 2012.
The world’s most influential oil producer is leading OPEC members cutting a record 14 percent of daily output, contributing to the 56 percent rally in crude prices since December. Global demand for oil is expected to rise by 1.27 million barrels a day, or 1.5 percent, next year, according to the International Energy Agency, not enough for Saudi Arabia to resume all of its idled fields."
Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters.
August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed.
The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months.
According to Reuters, 128,000 people in Arizona alone will face reset IO mortgages next year.
Michael Pento: "Households are reducing their debt at a 1.7% annual rate and business at a 1.8% annual rate. However, while the private sector gets their finances in order the Federal government is increasing its debt at a 28.2% annual rate!
The net effect is that the annual rate of increase in our nation's debt is currently 4.9%, which is even faster than the rate of increase of 4.1% experienced in Q1 2009. Yep, we are increasing our debt at a faster pace."
The value of U.S. homes rose by 0.3% in July compared with June, the Federal Housing Finance Agency reported Tuesday. Prices fell 4.2% in the past year and were down 10.5% from the peak in April 2007. Prices in July were at the same level as March 2005. June's increase was revised lower to a 0.1% gain from 0.5% previously reported. Prices rose in five of nine regions, led by a 1.6% gain in the Pacific states, where prices have fallen 9% in the past year. The biggest monthly drop was 0.9% in the East South Central states (Kentucky, Tennessee, Mississippi and Alabama). The index is based on repeat sales financed through Fannie Mae or Freddie Mac. Is there any reason why the August number won't be revised down as it was in July?
Stephen Labaton: "Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune."
The FDIC has the authority to borrow as much as $500 billion through 2010.
"The recession has affected everybody in one way or another as families use lots of different strategies to cope with a new economic reality," said Mark Mather, associate vice president of the nonprofit Population Reference Bureau.
"Job loss — or the potential for job loss — also leads to feelings of economic insecurity and can create social tension."
"It's just the tip of the iceberg," he said, noting that unemployment is still rising.
The percentage of people who drove alone to work dropped last year to 75.5 percent, the lowest in a decade, as commuters grew weary of paying close to $4 a gallon for gasoline and opted to carpool or take public transportation.
Twenty-two states had declines in solo drivers compared with the year before, with the rest statistically unchanged. The decreases were particularly evident in states with higher traffic congestion, such as Maryland, Texas and Washington.
Google shares above $500; first time since Aug. 08. The growth of Google Inc.'s advertising revenue is set to come back faster than expected toward the end of the year, a Canaccord Adams analyst said Tuesday.
"Our recent checks suggest that ad budgets are coming back, particularly in e-commerce," Canaccord analyst Jeff Rath said in a note to investors. He boosted his price target for Google shares to $560 from $480, which implies upside of 12.7 percent over its closing price Monday.
Last year’s holiday season arrived just months after an economic meltdown. Consumers panicked and holiday sales fell 2.4%, the first decline since 1967.
Deloitte issued a forecast today saying it expects holiday sales be flat in 2009. The firm forecasts total U.S. holiday sales of $810 billion. (That’s November to January sales, excluding motor vehicles and gasoline.)
"For those of you who like conspiracy theories: The Fed is no longer publishing MEW (Mortgage Equity Withdrawal). This was one of the engines of the financial crisis - so much for an early warning on the next housing crisis. ISI will estimate the three main components of the Fed's report and like our estimate for some the old "M" statistics it will be there down the road when needed again." - Carrie Butler
Crude ends up 2.6% at $71.55 a barrel.
The Dow Jones Industrial Average gained 51.01 points, or 0.5%, to stand at 9,829.87. The S&P 500 Index added 7 points, or 0.7%, to 1,071.66. The Nasdaq Composite rose 8.26 points, or 0.4%, to 2,146.30.
Monday, September 21, 2009
Russia
9/21/09 Russia
Russia can't sustain the rise in oil exports that saw it surpass Saudi Arabia as the world's top exporter for the first time in the post-Soviet period, according to OAO Rosneft, the country's biggest oil producer.
The trend of increasing oil exports isn't sustainable as the domestic market becomes more attractive for Russian oil producers and tax breaks for exports are lifted, Peter O'Brien, Rosneft's vice president for finance and investment, told reporters Sunday near Moscow.
Exports of crude and refined products from Russia rose to about 7.4 million barrels a day in the second quarter, according to Energy Ministry data.
Saudi shipments decreased to about 7 million barrels a day, International Energy Agency estimates of output and domestic demand showed.
Russian President
Dmitry Medvedev said Israeli leaders assured him they’re not planning a military strike against Iran.
Israeli President
Shimon Peres told Medvedev that his country does not plan any strikes against Iran, the Russian president said in a Sept. 15 interview with CNN that was released today.
“I hope this decision will not be taken,” Medvedev said in the interview. “We have to push Iran toward cooperation.”
Medvedev confirmed that Israeli Prime Minister
Benjamin Netanyahu made a secret visit to Moscow earlier this month and that the two leaders discussed “various issues.”
A bill offered by Rep. Jim McDermott, D-Wash., and expected to pass easily would provide 13 weeks of extended unemployment benefits for more than 300,000 jobless people who live in states with unemployment rates of at least 8.5 percent and who are scheduled to run out of benefits by the end of September.
The 13-week extension would supplement the 26 weeks of benefits most states offer and the federally funded extensions of up to 53 weeks that Congress approved in legislation last year and in the stimulus bill enacted last February.
U.S. distillate fuel inventories, which include heating oil and jet fuel, are the highest since 1983 at 167.8 million barrels, according to the Energy Department. U.S. gasoline supplies are 2.2 percent
greater than they were in late May, the start of the peak-demand summer driving season, at 207.7 million barrels.
Gasoil
stockpiles, the European equivalent of heating oil, near Europe’s refining hub of Rotterdam reached a record 3.03 million tons (23 million barrels) on Sept. 10, according to PJK International BV of Oosterhout, the Netherlands.
More than 60 million barrels of fuel is stored on tankers offshore, according to the IEA.
“There’s all this heating oil with no place to go,”
Philip Verleger, a professor at the University of Calgary and head of consultant PKVerleger LLC, said in a phone interview. “I’m fairly certain we’ll see prices in the $30s this year.”
The Conference Board's index of leading indicators rose 0.6% last month, compared with the 0.7% average forecast of economists surveyed by MarketWatch. The coincident index - designed to measure current activity - was flat in August after an upwardly revised 0.1% gain in July, the private research organization said. "These numbers are consistent with the view that, after a very severe downturn, a recovery is very near," said Ken Goldstein, economist for the organization.
Dec. gold ends down 0.5% at $1,004.90 an ounce.
Light crude futures fell more than 3 percent, settling below $70 a barrel, hurt by concerns about demand despite hopes for economic recovery. The Reuters-Jefferies CRB index of commodities tumbled 2.2 percent, its largest percentage drop in five weeks.
The Dow Jones industrial average dropped 41.34 points, or 0.42 percent, to end at 9,778.86. The Standard & Poor's 500 Index fell 3.64 points, or 0.34 percent, to 1,064.66. But the Nasdaq Composite Index gained 5.18 points, or 0.24 percent, to close at 2,138.04.
Russia can't sustain the rise in oil exports that saw it surpass Saudi Arabia as the world's top exporter for the first time in the post-Soviet period, according to OAO Rosneft, the country's biggest oil producer.
The trend of increasing oil exports isn't sustainable as the domestic market becomes more attractive for Russian oil producers and tax breaks for exports are lifted, Peter O'Brien, Rosneft's vice president for finance and investment, told reporters Sunday near Moscow.
Exports of crude and refined products from Russia rose to about 7.4 million barrels a day in the second quarter, according to Energy Ministry data.
Saudi shipments decreased to about 7 million barrels a day, International Energy Agency estimates of output and domestic demand showed.
Russian President
Dmitry Medvedev said Israeli leaders assured him they’re not planning a military strike against Iran.
Israeli President
Shimon Peres told Medvedev that his country does not plan any strikes against Iran, the Russian president said in a Sept. 15 interview with CNN that was released today.
“I hope this decision will not be taken,” Medvedev said in the interview. “We have to push Iran toward cooperation.”
Medvedev confirmed that Israeli Prime Minister
Benjamin Netanyahu made a secret visit to Moscow earlier this month and that the two leaders discussed “various issues.”
A bill offered by Rep. Jim McDermott, D-Wash., and expected to pass easily would provide 13 weeks of extended unemployment benefits for more than 300,000 jobless people who live in states with unemployment rates of at least 8.5 percent and who are scheduled to run out of benefits by the end of September.
The 13-week extension would supplement the 26 weeks of benefits most states offer and the federally funded extensions of up to 53 weeks that Congress approved in legislation last year and in the stimulus bill enacted last February.
U.S. distillate fuel inventories, which include heating oil and jet fuel, are the highest since 1983 at 167.8 million barrels, according to the Energy Department. U.S. gasoline supplies are 2.2 percent
greater than they were in late May, the start of the peak-demand summer driving season, at 207.7 million barrels.
Gasoil
stockpiles, the European equivalent of heating oil, near Europe’s refining hub of Rotterdam reached a record 3.03 million tons (23 million barrels) on Sept. 10, according to PJK International BV of Oosterhout, the Netherlands.
More than 60 million barrels of fuel is stored on tankers offshore, according to the IEA.
“There’s all this heating oil with no place to go,”
Philip Verleger, a professor at the University of Calgary and head of consultant PKVerleger LLC, said in a phone interview. “I’m fairly certain we’ll see prices in the $30s this year.”
The Conference Board's index of leading indicators rose 0.6% last month, compared with the 0.7% average forecast of economists surveyed by MarketWatch. The coincident index - designed to measure current activity - was flat in August after an upwardly revised 0.1% gain in July, the private research organization said. "These numbers are consistent with the view that, after a very severe downturn, a recovery is very near," said Ken Goldstein, economist for the organization.
Dec. gold ends down 0.5% at $1,004.90 an ounce.
Light crude futures fell more than 3 percent, settling below $70 a barrel, hurt by concerns about demand despite hopes for economic recovery. The Reuters-Jefferies CRB index of commodities tumbled 2.2 percent, its largest percentage drop in five weeks.
The Dow Jones industrial average dropped 41.34 points, or 0.42 percent, to end at 9,778.86. The Standard & Poor's 500 Index fell 3.64 points, or 0.34 percent, to 1,064.66. But the Nasdaq Composite Index gained 5.18 points, or 0.24 percent, to close at 2,138.04.
Fleeced
9/20/09 Fleeced
China's President Hu Jintao said Sunday the country faces difficult challenges in maintaining stable economic growth and social stability, and called for efforts to strengthen unity among the people.
"The task of dealing with the blow of the international financial crisis and maintaining stable and relatively fast economic development is arduous," Hu said.
China now faces more "unstable and uncertain factors," Hu said, describing the economic crisis as having had a "profound impact."
Risk Analytics thinks that more than 1,000 banks will fail in the current cycle. With 25 down in 2008 and 94 so far this year, that just leaves another 900 or so.
Mike Burk: "The market is overbought going into what has seasonally been a very weak week. There may be some short term weakness in the coming week or so, however, there is no sign of a developing top.
I expect the major indices to be lower on Friday September 25 than they were on Friday September 18."
Dell to acquire Perot Systems for $3.9 billion, creating comprehensive, customer-focused it-solutions company
* Says transaction is not subject to a financing condition.
* Says terms of the agreement were approved yesterday by the boards of directors of both companies
* Dell says will commence tender offer to acquire all of the outstanding class a common stock of Perot Systems for $30 per share in cash
* Says acquisition expected to be accretive to GAAP earnings in fiscal 2012
* Says Perot Systems will become dell's services unit
* Says companies together represent $8 billion in services revenue.
House builder Lennar Corp. said Monday that its fiscal third-quarter net loss widened to $171.6 million, or 97 cents a share, from $89 million, or 56 cents a share, a year earlier. Revenue for the quarter ended Aug. 31 dropped 35% to $720.7 million. Lennar said its loss included 42 cents-a-share of charges related to valuation adjustments and other write-offs and 34 cents a share related to a non-cash deferred tax asset valuation allowance. Analysts polled by FactSet had been expecting a loss of 52 cents a share on revenue of $734.4 million. The group said the drop in revenue reflected a 28% drop in the number of sales and a 12% fall in the average selling price. It added that adjusted gross margin fell 2.4 percentage points compared to a year earlier, but was up 1.6 percentage points from the second quarter. The group said that, assuming the economy continues to stabilize, it expects to return to profit in fiscal 2010.
Ty Andros: "Many ECONOMISTS AND MARKET ANALYSTS ARE PREDICTING AN END OF THE RECESSION AND GROWTH GOING FORWARD. MY RESPONSE IS THE NUMBERS HAVEN'T ADDED UP FOR YEARS, AND REGARDLESS OF WHAT THEY CLAIM, WE ARE ABOUT TO COMMENCE THE NEXT LEG DOWN INTO WHAT WILL become known as the GREATEST DEPRESSION in history. The numbers they point to are POLITICALLY-CORRECT measurements, but practically incorrect; any insights you may glean from them are HEADLINE illusions for the sheep that are being FLEECED and who have misplaced their faith in the government to PROVIDE for them."
China's President Hu Jintao said Sunday the country faces difficult challenges in maintaining stable economic growth and social stability, and called for efforts to strengthen unity among the people.
"The task of dealing with the blow of the international financial crisis and maintaining stable and relatively fast economic development is arduous," Hu said.
China now faces more "unstable and uncertain factors," Hu said, describing the economic crisis as having had a "profound impact."
Risk Analytics thinks that more than 1,000 banks will fail in the current cycle. With 25 down in 2008 and 94 so far this year, that just leaves another 900 or so.
Mike Burk: "The market is overbought going into what has seasonally been a very weak week. There may be some short term weakness in the coming week or so, however, there is no sign of a developing top.
I expect the major indices to be lower on Friday September 25 than they were on Friday September 18."
Dell to acquire Perot Systems for $3.9 billion, creating comprehensive, customer-focused it-solutions company
* Says transaction is not subject to a financing condition.
* Says terms of the agreement were approved yesterday by the boards of directors of both companies
* Dell says will commence tender offer to acquire all of the outstanding class a common stock of Perot Systems for $30 per share in cash
* Says acquisition expected to be accretive to GAAP earnings in fiscal 2012
* Says Perot Systems will become dell's services unit
* Says companies together represent $8 billion in services revenue.
House builder Lennar Corp. said Monday that its fiscal third-quarter net loss widened to $171.6 million, or 97 cents a share, from $89 million, or 56 cents a share, a year earlier. Revenue for the quarter ended Aug. 31 dropped 35% to $720.7 million. Lennar said its loss included 42 cents-a-share of charges related to valuation adjustments and other write-offs and 34 cents a share related to a non-cash deferred tax asset valuation allowance. Analysts polled by FactSet had been expecting a loss of 52 cents a share on revenue of $734.4 million. The group said the drop in revenue reflected a 28% drop in the number of sales and a 12% fall in the average selling price. It added that adjusted gross margin fell 2.4 percentage points compared to a year earlier, but was up 1.6 percentage points from the second quarter. The group said that, assuming the economy continues to stabilize, it expects to return to profit in fiscal 2010.
Ty Andros: "Many ECONOMISTS AND MARKET ANALYSTS ARE PREDICTING AN END OF THE RECESSION AND GROWTH GOING FORWARD. MY RESPONSE IS THE NUMBERS HAVEN'T ADDED UP FOR YEARS, AND REGARDLESS OF WHAT THEY CLAIM, WE ARE ABOUT TO COMMENCE THE NEXT LEG DOWN INTO WHAT WILL become known as the GREATEST DEPRESSION in history. The numbers they point to are POLITICALLY-CORRECT measurements, but practically incorrect; any insights you may glean from them are HEADLINE illusions for the sheep that are being FLEECED and who have misplaced their faith in the government to PROVIDE for them."
Saturday, September 19, 2009
Lost Jobs
9/19/09 Lost Jobs
Forty-two states lost jobs last month, up from 29 in July, with the biggest net payroll cuts coming in Texas, Michigan, Georgia and Ohio.
The House will vote Tuesday whether to give unemployed workers in Michigan and other hard-hit states an extra 13 weeks of jobless benefits.
The measure would help states with unemployment rates of at least 8.5 percent. Michigan's unemployment rate is 15.2 percent, and Metro Detroit's rate is 17.3 percent.
Moody’s forecasts that some home prices may not return to their pre-recession levels until 2030. This means that hundreds of thousands of Americans may find it impossible to sell their houses without making payments to their banks to cover underwater home loans.
The Oil Drum: "When times were flush for the natural gas industry (can this be just over a year ago) and in order to ensure supplies for its customers in the West, Russia agreed to a much more beneficial pricing for the Turkmen gas, and was buying some 50 bcm a year. This was all arranged after the Russian Presidency changed hands, and was one of the first items on the new President’s agenda.
Since then things have not really gone well for the relationship as a whole. Turkmenistan has agreed to send natural gas to China, providing it with a second customer, while the price of natural gas has fallen with the recession in demand, around the world. That pipeline is now expected to be in place
by the end of next year, and I saw pipelines being laid in China on my recent visit, as they extend the network. The pipeline is expected to carry some 40 bcm (more than Russia will buy this year).
Turkmenistan has also agreed
to supply Iran with 14 bcm of natural gas with a new pipeline to carry gas down into Iran being planned for the near future.
Gazprom profits, meanwhile
have dropped 62%, as the demand from Europe has dropped dramatically – with Gazprom market share falling to 16%. There was an “accident” to a pipeline between Russia and Turkmenistan, and since then no gas has flowed through the pipelines."
Doug Noland: "Over the past four quarters, Non-Financial Credit expanded $1.959 TN, or 6.1%, to $34.320 TN. This was no small amount of debt growth. Treasury borrowings increased $1.893 TN over the past year to $7.143 TN. And during this period Federal Reserve assets ballooned $1.111 TN, or 117%, to $2.063 TN. It is incredible to watch the emerging Government Finance Bubble take such command of U.S. Credit...It is my view that, at this point, only massive federal deficits and government intrusions will stabilize system incomes at today’s highly inflated levels.....My bet is that this massive government intrusion into mortgage finance eventually backfires. It puts Washington on course for bankrupting the country, while doing little to direct financial and real resources in a manner to spur needed economic restructuring."
LA Times: "Few areas feel the sting of a global recession quicker than Wilmington, a community of 61,000 on the north border of the Port of Los Angeles. The biggest share of its local jobs -- more than 33% -- involves transportation, warehousing and retail and wholesale trade, according to city statistics."It's difficult when so much employment is based on the number of cargo containers. It makes us vulnerable," said Los Angeles City Councilwoman Janice Hahn, who represents the area. She said it was a primary reason for her efforts to broaden the kinds of jobs available in Wilmington.
In October, well before the bottom fell out of the economy and trade levels plummeted, Wilmington already had an unemployment rate of 13.4%. Now, with both ports reporting double-digit cargo declines, it has gotten much worse.
"The unemployment rate there could be pushing 20% by now," said Jack Kyser, an economist at the nonprofit Los Angeles County Economic Development Corp. "People don't understand what it means when you have such a big drop in cargo container volumes. It affects everything, longshoremen, truckers, freight forwarders, warehouses."
In a clear sign that the local economy has a long way to go whether the U.S. recession has ended or not, Wilmington businesses are struggling, work is hard to find and financial institutions are tallying up the pain."
With light Labor Day traffic in the mix, the Association of American Railroads said that volume for the week ending September 12 was down compared to the same week last year—although the same week last year did not include Labor Day.
Carload freight for the week ending September 12, which does not include intermodal data, totaled 263,349 cars, which is down 19.8 percent year-over-year, and is down from the preceding week—for the week ending September 5—which came in at 284,715 cars.
Carloadings in the 18.4 percent and 21.8 percent in the west and east, respectively, according to the AAR.
Weekly intermodal volume was 175,813 trailers or containers, representing a 25.8 percent year-over-year decline, with container volume down 20.9 percent and trailer volume down 43.9 percent. This is down from recent weeks, which have been in the 189,000-200,000 range.
The IMF has disclosed it is selling 403 metric tons of gold, or about one eighth of its total gold holdings.
The House is prepared to vote on a bill that would eliminate the role of private student lenders altogether, bringing all funding under government control, where it can be expanded with ease and targeted politically.
Target plans to hire less seasonal employees than it did last year, and the stores will instead increase their current worker’s hours, cross-training them in multiple departments, spokesperson Brandy Doyle said.
More retailers are also hiring floaters — part-time employees who have already been trained and periodically fill spots for extended periods of time, said Dan Butler, vice president of retail operations for the National Retail Federation.
Forty-two states lost jobs last month, up from 29 in July, with the biggest net payroll cuts coming in Texas, Michigan, Georgia and Ohio.
The House will vote Tuesday whether to give unemployed workers in Michigan and other hard-hit states an extra 13 weeks of jobless benefits.
The measure would help states with unemployment rates of at least 8.5 percent. Michigan's unemployment rate is 15.2 percent, and Metro Detroit's rate is 17.3 percent.
Moody’s forecasts that some home prices may not return to their pre-recession levels until 2030. This means that hundreds of thousands of Americans may find it impossible to sell their houses without making payments to their banks to cover underwater home loans.
The Oil Drum: "When times were flush for the natural gas industry (can this be just over a year ago) and in order to ensure supplies for its customers in the West, Russia agreed to a much more beneficial pricing for the Turkmen gas, and was buying some 50 bcm a year. This was all arranged after the Russian Presidency changed hands, and was one of the first items on the new President’s agenda.
Since then things have not really gone well for the relationship as a whole. Turkmenistan has agreed to send natural gas to China, providing it with a second customer, while the price of natural gas has fallen with the recession in demand, around the world. That pipeline is now expected to be in place
by the end of next year, and I saw pipelines being laid in China on my recent visit, as they extend the network. The pipeline is expected to carry some 40 bcm (more than Russia will buy this year).
Turkmenistan has also agreed
to supply Iran with 14 bcm of natural gas with a new pipeline to carry gas down into Iran being planned for the near future.
Gazprom profits, meanwhile
have dropped 62%, as the demand from Europe has dropped dramatically – with Gazprom market share falling to 16%. There was an “accident” to a pipeline between Russia and Turkmenistan, and since then no gas has flowed through the pipelines."
Doug Noland: "Over the past four quarters, Non-Financial Credit expanded $1.959 TN, or 6.1%, to $34.320 TN. This was no small amount of debt growth. Treasury borrowings increased $1.893 TN over the past year to $7.143 TN. And during this period Federal Reserve assets ballooned $1.111 TN, or 117%, to $2.063 TN. It is incredible to watch the emerging Government Finance Bubble take such command of U.S. Credit...It is my view that, at this point, only massive federal deficits and government intrusions will stabilize system incomes at today’s highly inflated levels.....My bet is that this massive government intrusion into mortgage finance eventually backfires. It puts Washington on course for bankrupting the country, while doing little to direct financial and real resources in a manner to spur needed economic restructuring."
LA Times: "Few areas feel the sting of a global recession quicker than Wilmington, a community of 61,000 on the north border of the Port of Los Angeles. The biggest share of its local jobs -- more than 33% -- involves transportation, warehousing and retail and wholesale trade, according to city statistics."It's difficult when so much employment is based on the number of cargo containers. It makes us vulnerable," said Los Angeles City Councilwoman Janice Hahn, who represents the area. She said it was a primary reason for her efforts to broaden the kinds of jobs available in Wilmington.
In October, well before the bottom fell out of the economy and trade levels plummeted, Wilmington already had an unemployment rate of 13.4%. Now, with both ports reporting double-digit cargo declines, it has gotten much worse.
"The unemployment rate there could be pushing 20% by now," said Jack Kyser, an economist at the nonprofit Los Angeles County Economic Development Corp. "People don't understand what it means when you have such a big drop in cargo container volumes. It affects everything, longshoremen, truckers, freight forwarders, warehouses."
In a clear sign that the local economy has a long way to go whether the U.S. recession has ended or not, Wilmington businesses are struggling, work is hard to find and financial institutions are tallying up the pain."
With light Labor Day traffic in the mix, the Association of American Railroads said that volume for the week ending September 12 was down compared to the same week last year—although the same week last year did not include Labor Day.
Carload freight for the week ending September 12, which does not include intermodal data, totaled 263,349 cars, which is down 19.8 percent year-over-year, and is down from the preceding week—for the week ending September 5—which came in at 284,715 cars.
Carloadings in the 18.4 percent and 21.8 percent in the west and east, respectively, according to the AAR.
Weekly intermodal volume was 175,813 trailers or containers, representing a 25.8 percent year-over-year decline, with container volume down 20.9 percent and trailer volume down 43.9 percent. This is down from recent weeks, which have been in the 189,000-200,000 range.
The IMF has disclosed it is selling 403 metric tons of gold, or about one eighth of its total gold holdings.
The House is prepared to vote on a bill that would eliminate the role of private student lenders altogether, bringing all funding under government control, where it can be expanded with ease and targeted politically.
Target plans to hire less seasonal employees than it did last year, and the stores will instead increase their current worker’s hours, cross-training them in multiple departments, spokesperson Brandy Doyle said.
More retailers are also hiring floaters — part-time employees who have already been trained and periodically fill spots for extended periods of time, said Dan Butler, vice president of retail operations for the National Retail Federation.
Friday, September 18, 2009
Container Traffic
9/18/09 Container Traffic
Investors stepped up withdrawals from money-market funds this week ahead of today's expiry of a federal guarantee to safeguard their money. Investors withdrew $55B on Tuesday and Wednesday, far more than usual, according to fund-watcher Crane Data.
Right now, housing remains on government life support. Treasury-backed entities are guaranteeing about 85% of new mortgages, while the Fed buys 80% of the securities into which these taxpayer-backed mortgages are packaged.
Real average hourly earnings fell 0.2 percent from July to August 2009.
George Ure: "The latest batch of TEU data from the Port of Long Beach just out shows their container traffic is down a whopping 21.7% from last year. What's worse? While imports are down 21.9%, the outbound loaded figure is down a full 26% which means the balance of trade picture is suffering continued asymmetry.
True, the Port of Seattle August container traffic showed a rise of 5.4% in August this year, but the odds of Seattle hitting its all time high of 14-million + metric tons of cargo (set in 2005) this year are somewhere between slim and none. Nor is Seattle's blip a coast-wide phenomena: The Port of Portland's container volume was down 14.5% from 2008 (the previous month it was down 18.5%) but compared with 2007, Portland is down almost 22%.
The Port of Los Angeles showed a 19.32% drop in loaded inbound, while loaded outbound was down only 14.22%. But just so you don't get the wrong idea for your balance of trade musings, keep in mind that even with the lesser decline in exports, Los Angeles still runs only 31.7% export trade; the rest is inbound.
Russia's Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.
Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for "an uncontrolled issue of dollars" and said the American currency's dominance had been "one of the triggers" of the global crisis.
Net borrowing by the British public sector rose to 16.1 billion pounds ($26.6 billion) in August, up from 9.9 billion pounds in the same month last year, the Office for National Statistics reported Friday. Economists had forecast a rise to 12.5 billion pounds. Total current government receipts fell 9.1% from a year ago to 34.1 billion pounds, while total current spending rose to 45.6 billion from 44.3 billion pounds. The figures left the government with a current budget deficit of 12.8 billion pounds, while net debt totaled 804.8 billion pounds, equal to 57.5% of gross domestic product. A year ago, the deficit stood at 7.7 billion pounds and net debt totaled 632.8 billion pounds, or 44% of GDP.
“I think the big run in US Treasurys has ended,” Cramer said. “It’s time for you to sell 10-year and 30-year” bonds.
The trust that controls Hershey Co. has hired a notable banker and a small banking firm to advise on a possible bid for rival candy maker Cadbury to compete with an offer from Kraft Foods Co., according to a published report.
The Wall Street Journal, citing people familiar with the matter, reported Thursday that the trust has hired Byron Trott, a former Goldman Sachs & Co. banker who has worked with Warren Buffett, and boutique banking firm Watch Hill Partners.
Construction starts for projects with five or more units were up 35.3%. Starts for single-family houses, though, were down 3%.
The uptick in housing starts might signal a bottom in the home-building industry, but a return to peak construction levels probably is a long way off.
"We still have about 800,000 too many homes out there," said economist Patrick Newport of the consulting firm IHS Global Insight, referring to the vast supply of unsold new buildings. "We need to get rid of that excess" before home construction returns to historical norms, he said.
“The dollar is the cheapest funding currency bar none and only challenged by the U.K. in terms of the risks from money printing and escalating deficits,” says
Simon Grose-Hodge, a strategist at LGT Group in Singapore.
"Despite the improvement in homeowners' equity share in real estate in the aggregate in the second quarter, we still know many homeowners are severely 'underwater' with large negative equity positions," SMR observes. "As of June, First American CoreLogic estimated that nearly a third of all mortgaged properties were in a negative equity position."
Nomura has secured a six-year rent holiday after signing a 20 year lease in a new office development owned by Oxford Properties Group, a subsidiary of the Ontario Municipal Employees Retirement System (Omers).
Nomura said that the deal is believed to be the largest ever non pre-let leasing transaction in the UK office market.
Prime Minister
Vladimir Putin called for trade concessions, including an end to restrictions on high-tech transfers to Russia, following U.S. President Barack Obama’s decision to abandon a missile shield in Europe.
“I’m counting on other decisions to follow this correct and brave decision, including the complete elimination of restrictions on cooperation with Russia and on transfers of high technology to Russia as well as an intensification of World Trade Organization expansion to include Russia, Belarus and Kazakhstan,” Putin said at a business forum in Sochi today.
The Federal Housing Administration is losing so much money on delinquent mortgage loans that its reserves will drop below the required 2% of loans, FHA Commissioner David Stevens told the Washington Post in a story published Friday. Stevens said the agency would announce steps on Friday to boost the reserves, without asking Congress to bail out the agency. The FHA will ask that banks take responsibility for losses due to fraud, he said. The FHA is now guaranteeing about 23% of new mortgages, up from around 3% in 2006.
Federal Deposit Insurance Corp. Chairman Sheila Bair said the agency may consider tapping its Treasury Department line of credit as it examines “all options” for replenishing a deposit insurance fund being tapped by bank failures.
Potash now expects earnings of $3.25 to $3.75 a share. It previously expected $4 to $5 a share.
Irwin Union Bank and Trust Co. of Columbus, Ind., and Irwin Union Bank, F.S.B., in Louisville, Ky., subsidiaries of Irwin Financial Corp., were closed by regulators Friday, bringing the number of U.S. bank failures this year to 94.
The Dow Jones Industrial Average ended at 9,820.2, up 0.4% for the day and 2.2% higher for the week. The S&P 500 Index climbed 2.81 points, or 0.3%, to 1,068.3, a weekly advance of 2.5%, while the Nasdaq Composite rose 6.11 points, or 0.3%, to 2,132.86, a weekly gain of 2.5%.
Crude oil for October delivery finished down 43 cents, or 0.6%, at $72.04 a barrel. Natural gas, meanwhile, continued its recent surge, with the October contract up 33 cents, or 6%, to $3.78 British thermal units. October natural gas has surged more than 27% this week.
Gold for December delivery finished down $3.20, or 0.3%, at $1,010.30 an ounce on the New York Mercantile Exchange. The September contract finished at $1,009.20 an ounce, down $3.10, or 0.4%. Gold, however, finished the week higher, with the December contracting gaining 0.4% from last Friday.
Investors stepped up withdrawals from money-market funds this week ahead of today's expiry of a federal guarantee to safeguard their money. Investors withdrew $55B on Tuesday and Wednesday, far more than usual, according to fund-watcher Crane Data.
Right now, housing remains on government life support. Treasury-backed entities are guaranteeing about 85% of new mortgages, while the Fed buys 80% of the securities into which these taxpayer-backed mortgages are packaged.
Real average hourly earnings fell 0.2 percent from July to August 2009.
George Ure: "The latest batch of TEU data from the Port of Long Beach just out shows their container traffic is down a whopping 21.7% from last year. What's worse? While imports are down 21.9%, the outbound loaded figure is down a full 26% which means the balance of trade picture is suffering continued asymmetry.
True, the Port of Seattle August container traffic showed a rise of 5.4% in August this year, but the odds of Seattle hitting its all time high of 14-million + metric tons of cargo (set in 2005) this year are somewhere between slim and none. Nor is Seattle's blip a coast-wide phenomena: The Port of Portland's container volume was down 14.5% from 2008 (the previous month it was down 18.5%) but compared with 2007, Portland is down almost 22%.
The Port of Los Angeles showed a 19.32% drop in loaded inbound, while loaded outbound was down only 14.22%. But just so you don't get the wrong idea for your balance of trade musings, keep in mind that even with the lesser decline in exports, Los Angeles still runs only 31.7% export trade; the rest is inbound.
Russia's Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.
Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for "an uncontrolled issue of dollars" and said the American currency's dominance had been "one of the triggers" of the global crisis.
Net borrowing by the British public sector rose to 16.1 billion pounds ($26.6 billion) in August, up from 9.9 billion pounds in the same month last year, the Office for National Statistics reported Friday. Economists had forecast a rise to 12.5 billion pounds. Total current government receipts fell 9.1% from a year ago to 34.1 billion pounds, while total current spending rose to 45.6 billion from 44.3 billion pounds. The figures left the government with a current budget deficit of 12.8 billion pounds, while net debt totaled 804.8 billion pounds, equal to 57.5% of gross domestic product. A year ago, the deficit stood at 7.7 billion pounds and net debt totaled 632.8 billion pounds, or 44% of GDP.
“I think the big run in US Treasurys has ended,” Cramer said. “It’s time for you to sell 10-year and 30-year” bonds.
The trust that controls Hershey Co. has hired a notable banker and a small banking firm to advise on a possible bid for rival candy maker Cadbury to compete with an offer from Kraft Foods Co., according to a published report.
The Wall Street Journal, citing people familiar with the matter, reported Thursday that the trust has hired Byron Trott, a former Goldman Sachs & Co. banker who has worked with Warren Buffett, and boutique banking firm Watch Hill Partners.
Construction starts for projects with five or more units were up 35.3%. Starts for single-family houses, though, were down 3%.
The uptick in housing starts might signal a bottom in the home-building industry, but a return to peak construction levels probably is a long way off.
"We still have about 800,000 too many homes out there," said economist Patrick Newport of the consulting firm IHS Global Insight, referring to the vast supply of unsold new buildings. "We need to get rid of that excess" before home construction returns to historical norms, he said.
“The dollar is the cheapest funding currency bar none and only challenged by the U.K. in terms of the risks from money printing and escalating deficits,” says
Simon Grose-Hodge, a strategist at LGT Group in Singapore.
"Despite the improvement in homeowners' equity share in real estate in the aggregate in the second quarter, we still know many homeowners are severely 'underwater' with large negative equity positions," SMR observes. "As of June, First American CoreLogic estimated that nearly a third of all mortgaged properties were in a negative equity position."
Nomura has secured a six-year rent holiday after signing a 20 year lease in a new office development owned by Oxford Properties Group, a subsidiary of the Ontario Municipal Employees Retirement System (Omers).
Nomura said that the deal is believed to be the largest ever non pre-let leasing transaction in the UK office market.
Prime Minister
Vladimir Putin called for trade concessions, including an end to restrictions on high-tech transfers to Russia, following U.S. President Barack Obama’s decision to abandon a missile shield in Europe.
“I’m counting on other decisions to follow this correct and brave decision, including the complete elimination of restrictions on cooperation with Russia and on transfers of high technology to Russia as well as an intensification of World Trade Organization expansion to include Russia, Belarus and Kazakhstan,” Putin said at a business forum in Sochi today.
The Federal Housing Administration is losing so much money on delinquent mortgage loans that its reserves will drop below the required 2% of loans, FHA Commissioner David Stevens told the Washington Post in a story published Friday. Stevens said the agency would announce steps on Friday to boost the reserves, without asking Congress to bail out the agency. The FHA will ask that banks take responsibility for losses due to fraud, he said. The FHA is now guaranteeing about 23% of new mortgages, up from around 3% in 2006.
Federal Deposit Insurance Corp. Chairman Sheila Bair said the agency may consider tapping its Treasury Department line of credit as it examines “all options” for replenishing a deposit insurance fund being tapped by bank failures.
Potash now expects earnings of $3.25 to $3.75 a share. It previously expected $4 to $5 a share.
Irwin Union Bank and Trust Co. of Columbus, Ind., and Irwin Union Bank, F.S.B., in Louisville, Ky., subsidiaries of Irwin Financial Corp., were closed by regulators Friday, bringing the number of U.S. bank failures this year to 94.
The Dow Jones Industrial Average ended at 9,820.2, up 0.4% for the day and 2.2% higher for the week. The S&P 500 Index climbed 2.81 points, or 0.3%, to 1,068.3, a weekly advance of 2.5%, while the Nasdaq Composite rose 6.11 points, or 0.3%, to 2,132.86, a weekly gain of 2.5%.
Crude oil for October delivery finished down 43 cents, or 0.6%, at $72.04 a barrel. Natural gas, meanwhile, continued its recent surge, with the October contract up 33 cents, or 6%, to $3.78 British thermal units. October natural gas has surged more than 27% this week.
Gold for December delivery finished down $3.20, or 0.3%, at $1,010.30 an ounce on the New York Mercantile Exchange. The September contract finished at $1,009.20 an ounce, down $3.10, or 0.4%. Gold, however, finished the week higher, with the December contracting gaining 0.4% from last Friday.
A Super Stretched Stock Rally
9/17/09 A Super Stretched Stock Rally
Only 8 percent of U.S. adults plan to increase household spending, almost one-third will spend less, and 58 percent expect to “stay the course,” a Bloomberg News poll showed. More than 3 in 4 said they reduced spending in the past year. Respondents were divided over whether the economy will get better or stay the same in the next six months; only 1 in 6 said things will get worse. More than 40 percent of those surveyed said they feel less
financially secure than they did when President Barack Obama took office in January, outnumbering 35 percent who said they feel more secure.
President Barack Obama has decided to scrap plans for a U.S. missile defense shield in the Czech Republic and Poland that had deeply angered Russia, the Czech prime minister confirmed Thursday.
NATO's new chief hailed the move as "a positive step" and a Russian analyst said Obama's decision will increase the chances that Russia will cooperate more closely with the United States in the dispute over Iran's nuclear program.
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 579,000. This is 2.7 percent (±1.2%) above the revised July rate of 564,000, but is 32.4 percent (±1.3%) below the August 2008 estimate of 857,000. Single-family authorizations in August were at a rate of 462,000; this is 0.2 percent (±1.1%)* below the revised July figure of 463,000. Authorizations of units in buildings with five units or more were at a rate of 98,000 in August.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 598,000. This is 1.5 percent (±7.9%)* above the revised July estimate of 589,000, but is 29.6 percent (±6.0%) below the August 2008 rate of 849,000. Single-family housing starts in August were at a rate of 479,000; this is 3.0 percent (±5.7%)* below the revised July figure of 494,000. The August rate for units in buildings with five units or more was 115,000.
Privately-owned housing completions in August were at a seasonally adjusted annual rate of 760,000. This is 5.5 percent (±14.0%)* below the revised July estimate of 804,000 and is 25.3 percent (±9.6%) below the August 2008 rate of 1,018,000. Single-family housing completions in August were at a rate of 489,000; this is 1.6 percent (±12.7%)* below the revised July figure of 497,000. The August rate for units in buildings with five units or more was 256,000.
The number of people filing for state unemployment benefits for the first time fell 12,000 to a seasonally adjusted 545,000 last week, the lowest since mid-July, the U.S. Labor Department reported Thursday. Meanwhile, the number of people collecting regular state benefits rose by 129,000 in the week ending Sept. 5 to a seasonally adjusted 6.23 million. The number of people claiming benefits of any kind was 9.53 million, not seasonally adjusted.
French Prime Minister Francois Fillon on Thursday said the country's economy will shrink by 2.25% in 2010, rather than the forecast for a 3% contraction in gross domestic product, AFP reported. Fillon said the economy should return to growth in 2010.
Bank of Japan Gov. Masaaki Shirakawa said Thursday that a stronger yen could boost Japan's economy in the long term, and that stable foreign-exchange movements were desirable. The dollar fell to 90.71 yen, from above 91 yen shortly before Shirakawa spoke after the central bank's regular monthly policy meeting. Policy members held rates steady at 0.1% and upgraded their view of Japan's economy. While Japan's Ministry of Finance, not the central bank, is in charge of making currency policy, Shirakawa's remarks echo recent comments by new Finance Minister Hirohisa Fujii.
Venezuela's President Hugo Chavez has announced that China will invest $16 billion in an oil exploration project in the Orinoco river basin, according to media reports. The news comes only a few days after Venezuela signed a $20 billion joint venture agreement with Russia to drill for oil in the Orinoco, reports said. Chavez, who has a reputation as a firebrand and is a vocal critic of the United States, said the two deals will increase Venezuela's oil production by about 900,000 barrels a day, according to reports. A member of the OPEC oil cartel, Venezuela is one of the world's largest exporters of crude oil.
Rob Hanna: " 57.19% of stocks are now stretched far above their 40-ma’s."
Richard Benson: "In today's world, homeowners motivated by cold hard economics and common sense are not stupid. When you don't have any real equity in your house or are underwater and out of work, it's time to mail the house keys back to the government or the bank! Foreclosures are picking up not only because mortgage holders are walking away, but when many people stop paying their mortgage, they also stop paying their property taxes. Local governments everywhere are strapped for cash and are willing to quickly sell tax liens on properties with delinquent taxes due. The buyer of a tax lien has rights to the property that come before that of the mortgage holder so if the mortgage holder doesn't pay the tax lien, they could be wiped out when the holder of the tax lien files to get clear title of the property.
So how big is the next wave in the housing mortgage disaster? Currently, one out of eight mortgages is in foreclosure or paying late, and with unemployment averaging over 9 percent for 2009 and 2010 and peaking in 2011, it's likely one in five mortgages could ultimately default. Moreover, we have seen that less than 7 percent of those mortgages that are late will get cured and stay out of foreclosure. Over the last six months, notices of home foreclosures have been running about 350,000 a month, which is over 4 million a year. A lot of homes are headed to the auction block with their mortgages headed for the shredder."
China rejected the import of 37.8 tons of frozen orange juice concentrate by
PepsiCo Inc. after the shipment failed quality inspections.
The frozen juice, shipped from Brazil in July, was rejected because its yeast content exceeded approved limits, the General Administration of Quality Supervision, Inspection and Quarantine of China said in a Sept. 15 statement posted on its Web site.
Other products that failed inspections in July included a snack produced by General Mills Inc. because of mold, frozen pigs’ feet supplied by Tyson Foods Inc. after tests found they contained a drug banned in China and baby milk formula produced by Mead Johnson Nutrition Co. for failing to meet China’s protein requirements, the regulator said.
Peter Garnham: "For years, the yen was the currency of choice to fund international carry trades. But is the dollar starting to take its place?
Analysts say negligible US interest rates, its
quantitative easing measures and little sign that the country is set to withdraw from its ultra-loose monetary policy anytime soon leaves it in a similar position to Japan at the start of the decade."
The Philly Fed index rose to 14.1 this month from 4.2 in August. Despite the increase, the employment index remained firmly in negative territory in September, dropping to negative 14.3 from negative 12.9 in August.
The U.S. dollar index slipped to 76.01, its lowest level in a year, in early trading.
Natural gas supplies up 66 bcf in latest week. Platts expected an increase of between 72 and 76 billion cubic feet to natural gas storage inventories for the week that ended Sept. 11. Natural gas also gave back some of the prior session's gains. The October contract fell 8% to finish at $3.46 per British thermal units. It briefly jumped 2% after the Energy Department reported a smaller-than-expected increase of U.S. gas in storage in the week ended Sept.11.
Crude for October delivery finished down 4 cents, or 0.1%, at $72.47 a barrel on the New York Mercantile Exchange. Crude oil earlier rose to a high of $73.16 a barrel and fell to a low of $70.40 a barrel. Gold for December delivery, the most active contract, fell $6.70, or 0.6% to finish at $1,013.50 an ounce.
In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter.
The Dow Jones Industrial Average fell 7.79 points, or less than 0.1%, to end at 9,783.92. The S&P 500 Index declined 3.27 points, or 0.3%, to 1,065.49, while the Nasdaq
Only 8 percent of U.S. adults plan to increase household spending, almost one-third will spend less, and 58 percent expect to “stay the course,” a Bloomberg News poll showed. More than 3 in 4 said they reduced spending in the past year. Respondents were divided over whether the economy will get better or stay the same in the next six months; only 1 in 6 said things will get worse. More than 40 percent of those surveyed said they feel less
financially secure than they did when President Barack Obama took office in January, outnumbering 35 percent who said they feel more secure.
President Barack Obama has decided to scrap plans for a U.S. missile defense shield in the Czech Republic and Poland that had deeply angered Russia, the Czech prime minister confirmed Thursday.
NATO's new chief hailed the move as "a positive step" and a Russian analyst said Obama's decision will increase the chances that Russia will cooperate more closely with the United States in the dispute over Iran's nuclear program.
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 579,000. This is 2.7 percent (±1.2%) above the revised July rate of 564,000, but is 32.4 percent (±1.3%) below the August 2008 estimate of 857,000. Single-family authorizations in August were at a rate of 462,000; this is 0.2 percent (±1.1%)* below the revised July figure of 463,000. Authorizations of units in buildings with five units or more were at a rate of 98,000 in August.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 598,000. This is 1.5 percent (±7.9%)* above the revised July estimate of 589,000, but is 29.6 percent (±6.0%) below the August 2008 rate of 849,000. Single-family housing starts in August were at a rate of 479,000; this is 3.0 percent (±5.7%)* below the revised July figure of 494,000. The August rate for units in buildings with five units or more was 115,000.
Privately-owned housing completions in August were at a seasonally adjusted annual rate of 760,000. This is 5.5 percent (±14.0%)* below the revised July estimate of 804,000 and is 25.3 percent (±9.6%) below the August 2008 rate of 1,018,000. Single-family housing completions in August were at a rate of 489,000; this is 1.6 percent (±12.7%)* below the revised July figure of 497,000. The August rate for units in buildings with five units or more was 256,000.
The number of people filing for state unemployment benefits for the first time fell 12,000 to a seasonally adjusted 545,000 last week, the lowest since mid-July, the U.S. Labor Department reported Thursday. Meanwhile, the number of people collecting regular state benefits rose by 129,000 in the week ending Sept. 5 to a seasonally adjusted 6.23 million. The number of people claiming benefits of any kind was 9.53 million, not seasonally adjusted.
French Prime Minister Francois Fillon on Thursday said the country's economy will shrink by 2.25% in 2010, rather than the forecast for a 3% contraction in gross domestic product, AFP reported. Fillon said the economy should return to growth in 2010.
Bank of Japan Gov. Masaaki Shirakawa said Thursday that a stronger yen could boost Japan's economy in the long term, and that stable foreign-exchange movements were desirable. The dollar fell to 90.71 yen, from above 91 yen shortly before Shirakawa spoke after the central bank's regular monthly policy meeting. Policy members held rates steady at 0.1% and upgraded their view of Japan's economy. While Japan's Ministry of Finance, not the central bank, is in charge of making currency policy, Shirakawa's remarks echo recent comments by new Finance Minister Hirohisa Fujii.
Venezuela's President Hugo Chavez has announced that China will invest $16 billion in an oil exploration project in the Orinoco river basin, according to media reports. The news comes only a few days after Venezuela signed a $20 billion joint venture agreement with Russia to drill for oil in the Orinoco, reports said. Chavez, who has a reputation as a firebrand and is a vocal critic of the United States, said the two deals will increase Venezuela's oil production by about 900,000 barrels a day, according to reports. A member of the OPEC oil cartel, Venezuela is one of the world's largest exporters of crude oil.
Rob Hanna: " 57.19% of stocks are now stretched far above their 40-ma’s."
Richard Benson: "In today's world, homeowners motivated by cold hard economics and common sense are not stupid. When you don't have any real equity in your house or are underwater and out of work, it's time to mail the house keys back to the government or the bank! Foreclosures are picking up not only because mortgage holders are walking away, but when many people stop paying their mortgage, they also stop paying their property taxes. Local governments everywhere are strapped for cash and are willing to quickly sell tax liens on properties with delinquent taxes due. The buyer of a tax lien has rights to the property that come before that of the mortgage holder so if the mortgage holder doesn't pay the tax lien, they could be wiped out when the holder of the tax lien files to get clear title of the property.
So how big is the next wave in the housing mortgage disaster? Currently, one out of eight mortgages is in foreclosure or paying late, and with unemployment averaging over 9 percent for 2009 and 2010 and peaking in 2011, it's likely one in five mortgages could ultimately default. Moreover, we have seen that less than 7 percent of those mortgages that are late will get cured and stay out of foreclosure. Over the last six months, notices of home foreclosures have been running about 350,000 a month, which is over 4 million a year. A lot of homes are headed to the auction block with their mortgages headed for the shredder."
China rejected the import of 37.8 tons of frozen orange juice concentrate by
PepsiCo Inc. after the shipment failed quality inspections.
The frozen juice, shipped from Brazil in July, was rejected because its yeast content exceeded approved limits, the General Administration of Quality Supervision, Inspection and Quarantine of China said in a Sept. 15 statement posted on its Web site.
Other products that failed inspections in July included a snack produced by General Mills Inc. because of mold, frozen pigs’ feet supplied by Tyson Foods Inc. after tests found they contained a drug banned in China and baby milk formula produced by Mead Johnson Nutrition Co. for failing to meet China’s protein requirements, the regulator said.
Peter Garnham: "For years, the yen was the currency of choice to fund international carry trades. But is the dollar starting to take its place?
Analysts say negligible US interest rates, its
quantitative easing measures and little sign that the country is set to withdraw from its ultra-loose monetary policy anytime soon leaves it in a similar position to Japan at the start of the decade."
The Philly Fed index rose to 14.1 this month from 4.2 in August. Despite the increase, the employment index remained firmly in negative territory in September, dropping to negative 14.3 from negative 12.9 in August.
The U.S. dollar index slipped to 76.01, its lowest level in a year, in early trading.
Natural gas supplies up 66 bcf in latest week. Platts expected an increase of between 72 and 76 billion cubic feet to natural gas storage inventories for the week that ended Sept. 11. Natural gas also gave back some of the prior session's gains. The October contract fell 8% to finish at $3.46 per British thermal units. It briefly jumped 2% after the Energy Department reported a smaller-than-expected increase of U.S. gas in storage in the week ended Sept.11.
Crude for October delivery finished down 4 cents, or 0.1%, at $72.47 a barrel on the New York Mercantile Exchange. Crude oil earlier rose to a high of $73.16 a barrel and fell to a low of $70.40 a barrel. Gold for December delivery, the most active contract, fell $6.70, or 0.6% to finish at $1,013.50 an ounce.
In the second quarter, household debt fell at a 1.7% annual rate to $13.7 trillion, matching the record percentage decline in the fourth quarter.
The Dow Jones Industrial Average fell 7.79 points, or less than 0.1%, to end at 9,783.92. The S&P 500 Index declined 3.27 points, or 0.3%, to 1,065.49, while the Nasdaq
Wednesday, September 16, 2009
The Dollar
9/16/09 News
U.S. dollar index declines to 76.18. Investors turned the most bearish on the
dollar in 18 months as signs of a recovery in the global economy reduced demand for the currency as a refuge, a survey of Bloomberg users showed.
The world’s main reserve currency will fall and Treasury yields will rise over the next six months, according to 1,851 respondents in the Bloomberg Professional Global Confidence Index. Their outlook on the economy improved for a second month, after saying it worsened every month since the index began in November 2007.
The U.S. Dollar Index fell yesterday to the lowest level in a year as a decline in foreign-exchange price swings encouraged investors to borrow the currency at record low interest rates to finance the purchase of assets in countries offering yields as much as 8.1 percentage points higher than deposit rates in America.
“You’ve had a lot of people being in the dollar that are going to exit when it isn’t a necessity as a safe haven,” said
Fabian Eliasson, a survey participant and head of U.S. currency sales at Mizuho Corporate Bank Ltd. in New York. Eliasson said he expects the dollar to weaken.
Sentiment toward the greenback fell to 30.8 in September, from 38.8 in August, according to the survey. The reading is the lowest since it dropped to 30.3 in March 2008, and has tumbled from a high of 68.86 a year ago. The measure is a diffusion index, meaning a reading below 50 indicates Bloomberg users expect the dollar to weaken.
The OECD reports that unemployment among developed nations has reached a post-WWII high. In its latest employment outlook the agency said that the unemployment rate has already reached a post-war record high at 8.5% in the OECD area, corresponding to an increase in more than 15 million in the ranks of the unemployed since the end of 2007. If the recovery fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10%,with 57 million people out of work.
Wells Fargo & Co., the nation’s biggest home lender, expects unpaid loans to increase, adding to signs that the U.S. real-estate crunch will squeeze bank profits the rest of this year.
The U.S. current account deficit narrowed to $98.8 billion in the second quarter, or 2.8% of gross domestic product, the Commerce Department reported Wednesday. In percentage terms, this is the smallest deficit since the first quarter of 1991. In dollar terms, the deficit is the lowest since the fourth quarter of 2001. The deficit was $104.5 billion in the first quarter. The narrowing in the deficit was accounted by a reduction in the deficit on goods. Net financial inflows increased to $58.3 billion in the second quarter from $35.4 billion.in the first quarter. Foreign-owned assets in the second quarter increased $16.4 billion in the second quarter after a drop of $67.8 billion in the first quarter.
U.S. consumer prices increased a seasonally adjusted 0.4% in August, pushed higher by a 9.1% increase in gasoline prices, the Labor Department reported Wednesday. In the past 12 months, the consumer price index has fallen 1.5%, largely because energy prices have dropped 23% over that period. Core consumer prices - which exclude food and energy prices to get a better look at underlying inflation - rose 0.1% in August. The core CPI is up 1.4% in the past year, the smallest year-over-year gain since February 2004.
The number of British workers claiming jobless benefits rose by 24,400 in August to a total of 1.61 million, the Office for National Statistics reported Wednesday. The increase exceeded forecasts for a rise of 20,450. The unemployment rate, when calculated according to International Labor Organization standards, rose to 7.9% in the three months to July, up from 7.2% in the previous three months. The unemployment level rose by 210,000 to 2.47 million during the period, the ONS said. Average earning excluding bonuses rose at an annual pace of 2.2% in the three months to July, the lowest rise since comparable records began in 2001. Including bonuses, earnings rose 1.7%.
The December contract for gold futures climbed as high as $1,017.80 an ounce Wednesday in electronic trading on Globex. By late afternoon in Tokyo, it had eased slightly to trade up $9.10, or 0.9%, at $1,015.40.
Blockbuster to close up to 960 stores by end of 2010.
The Bloomberg Professional Global Confidence Index rose to 58.54 this month from 58.12 in August.
Reuters: "Mexican Finance Minister Agustin Carstens urged lawmakers on Tuesday to approve new taxes to offset lower oil revenues, saying the country's struggling energy industry would not recover quickly.
The government of President Felipe Calderon has proposed hiking income and consumption taxes in 2010 to offset lower revenues from crude exports as output from Mexico's state-run oil industry is expected to remain weak.
"This fall (in oil production) is going to last for years ... The future has caught up to us ... we've been living as oil addicts," Carstens said at a congressional hearing on the budget proposals."
The American Petroleum Institute, in a weekly inventory
report, said that crude stocks rose 631,000 barrels in the week
to Sept. 11, against the forecast in a Reuters poll of analysts
for a 2.4-million-barrel drawdown. The industry group said gasoline stocks rose 1.3 million
barrels, more than twice the forecast for a 600,000 barrel
build in the poll. Most stunning for analysts, distillate stocks, which
include heating oil and diesel fuel, jumped 5.2 million
barrels, against the forecast for a 1.3 million barrel rise. "What strikes me the most in the API report is the
incredible build in distillates, even with our current surplus
in supplies already above the five-year average," said Phil
Flynn, analyst at PFGBest Research in Chicago."This is very bearish and tells you that we still have demand issues that probably reflect some of the problems we still have in the economy. Of course, we'll have to wait for
tomorrow's EIA data to see if these industry numbers will
stick," he added.
The Chicago Board Options Exchange Volatility Index on Wednesday traded at its lowest levels in more than a year as U.S. stocks climbed amid thinking the economy is on the mend. Trading lower for a third consecutive session, the VIX, a gauge of investors' willingness to take on risk, recently stood at 23.40, after trading as low as 22.78 earlier on.
The Treasury Department said foreigners sold $97.5 billion in U.S. assets in July, after a $56.8 billion outflow in June that analysts said was higher than previously reported. Also, U.S. industrial production rose 0.8% in August, more than expected. Capacity utilization - a gauge of slack in the economy -- rose to 69.6% in August from a revised 69.0% in July. There were gains across the board in August. Manufacturing expanded 0.6% in August. Excluding autos and auto parts, manufacturing rose 0.4%.
Chicken producer Pilgrim's Pride Corp. confirmed Tuesday that Brazilian beef producer JBS SA will buy a majority stake in the company in a deal that values the company at $2.8 billion. Pilgrim's Pride has agreed to sell 64 percent of stock in the reorganized company to JBS for $800 million in cash. Existing shareholders will receive shares totaling 36 percent of the company.
The S&P hit a new high for the year shortly after the open, and is now up 56 percent from the March 9 low.
Randall W. Forsyth: "The biggest fleet of ships in maritime history sits empty and eerily silent off Singapore, instead of hauling goods and fuel to and from Asia, according to a terrific report from the UK Daily Mail. (Hat tip to Joan McCullough of East Shore Partners for bringing the article to my attention.)
According to the article, this fleet may number close to 500 idle vessels -- bigger than the U.S. and British navies combined. That's equal to about 12% of the world's shipping capacity, which ought to be fully utilized hauling goods to American malls for the Christmas shopping rush."
The NAHB/Wells Fargo Housing Market index climbed to 19 from 18 in August, in line with the forecast in a Reuters survey.
Ferndale, WA start-up Sea 2 Sky Corp. is poised to take its renewable bio-energy business into the big time using a high-heat processs to convert wood and wood fiber into a nonpolluting, high-energy alternative to coal.
The process, known as torrefaction, is a thermo-chemical treatment that incinerates biomass in the 200 to 340 Celsius range (392 to 644 degrees Fahrenheit).
During torrefaction the biomass partly decomposes, but the resulting transformed solid biomass -- in the Sea 2 Sky case called torrefied wood pellets -- has about 30 percent more energy content per unit of mass than its original state, weighs less, is more easily transportable and is virtually pollution-free.
Sea 2 Sky plans to apply this technology to increase the energy output in biomass products and to provide a "coal-like product with significant environmental advantages," it says.
It's "is a scientifically proven method for improving the properties of biomass as a fuel," say Sea 2 Sky officials. The solid product produced retains about 70 percent of its initial weight and 90 percent of the original energy content, but without the harmful emissions of coal.
Natural gas for October delivery also continued its recent surge, gaining 44 cents, or 13%, to finish at $3.76 per million British thermal units.
U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the
week ending September 11, 56 thousand barrels per day below the previous week's
average. Refineries operated at 86.9 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 9.0 million barrels
per day. Distillate fuel production increased last week, averaging 4.2 million
barrels per day.
U.S. crude oil imports averaged 8.9 million barrels per day last week, down 192
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.2 million barrels per day, 454 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 701 thousand barrels per day. Distillate fuel imports
averaged 147 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At
332.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
increased by 0.5 million barrels last week, and are near the upper limit of the
average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories increased by 2.2
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories remained unchanged last week
and are above the upper limit of the average range. Total commercial petroleum
inventories decreased by 3.2 million barrels last week, and are above the
upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 19.5
million barrels per day, up by 3.7 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged about 9.2
million barrels per day, up by 3.5 percent from the same period last year.
Distillate fuel demand has averaged 3.4 million barrels per day over the last
four weeks, down by 6.8 percent from the same period last year. Jet fuel demand
is 6.1 percent lower over the last four weeks compared to the same four-week
period last year.
At 10:37 today, global debt totaled $35,014,935,027,853.
In early trading Apple rose $5+ to a new 52-week high of $180+.
Dow industrials gain 107.77 points to 9,791.18. S&P 500 Index rises 16.07 points to 1,068.7
The Nasdaq rises 30 points to 2,133.
U.S. dollar index declines to 76.18. Investors turned the most bearish on the
dollar in 18 months as signs of a recovery in the global economy reduced demand for the currency as a refuge, a survey of Bloomberg users showed.
The world’s main reserve currency will fall and Treasury yields will rise over the next six months, according to 1,851 respondents in the Bloomberg Professional Global Confidence Index. Their outlook on the economy improved for a second month, after saying it worsened every month since the index began in November 2007.
The U.S. Dollar Index fell yesterday to the lowest level in a year as a decline in foreign-exchange price swings encouraged investors to borrow the currency at record low interest rates to finance the purchase of assets in countries offering yields as much as 8.1 percentage points higher than deposit rates in America.
“You’ve had a lot of people being in the dollar that are going to exit when it isn’t a necessity as a safe haven,” said
Fabian Eliasson, a survey participant and head of U.S. currency sales at Mizuho Corporate Bank Ltd. in New York. Eliasson said he expects the dollar to weaken.
Sentiment toward the greenback fell to 30.8 in September, from 38.8 in August, according to the survey. The reading is the lowest since it dropped to 30.3 in March 2008, and has tumbled from a high of 68.86 a year ago. The measure is a diffusion index, meaning a reading below 50 indicates Bloomberg users expect the dollar to weaken.
The OECD reports that unemployment among developed nations has reached a post-WWII high. In its latest employment outlook the agency said that the unemployment rate has already reached a post-war record high at 8.5% in the OECD area, corresponding to an increase in more than 15 million in the ranks of the unemployed since the end of 2007. If the recovery fails to gain momentum, the OECD unemployment rate could even approach a new post-war high of 10%,with 57 million people out of work.
Wells Fargo & Co., the nation’s biggest home lender, expects unpaid loans to increase, adding to signs that the U.S. real-estate crunch will squeeze bank profits the rest of this year.
The U.S. current account deficit narrowed to $98.8 billion in the second quarter, or 2.8% of gross domestic product, the Commerce Department reported Wednesday. In percentage terms, this is the smallest deficit since the first quarter of 1991. In dollar terms, the deficit is the lowest since the fourth quarter of 2001. The deficit was $104.5 billion in the first quarter. The narrowing in the deficit was accounted by a reduction in the deficit on goods. Net financial inflows increased to $58.3 billion in the second quarter from $35.4 billion.in the first quarter. Foreign-owned assets in the second quarter increased $16.4 billion in the second quarter after a drop of $67.8 billion in the first quarter.
U.S. consumer prices increased a seasonally adjusted 0.4% in August, pushed higher by a 9.1% increase in gasoline prices, the Labor Department reported Wednesday. In the past 12 months, the consumer price index has fallen 1.5%, largely because energy prices have dropped 23% over that period. Core consumer prices - which exclude food and energy prices to get a better look at underlying inflation - rose 0.1% in August. The core CPI is up 1.4% in the past year, the smallest year-over-year gain since February 2004.
The number of British workers claiming jobless benefits rose by 24,400 in August to a total of 1.61 million, the Office for National Statistics reported Wednesday. The increase exceeded forecasts for a rise of 20,450. The unemployment rate, when calculated according to International Labor Organization standards, rose to 7.9% in the three months to July, up from 7.2% in the previous three months. The unemployment level rose by 210,000 to 2.47 million during the period, the ONS said. Average earning excluding bonuses rose at an annual pace of 2.2% in the three months to July, the lowest rise since comparable records began in 2001. Including bonuses, earnings rose 1.7%.
The December contract for gold futures climbed as high as $1,017.80 an ounce Wednesday in electronic trading on Globex. By late afternoon in Tokyo, it had eased slightly to trade up $9.10, or 0.9%, at $1,015.40.
Blockbuster to close up to 960 stores by end of 2010.
The Bloomberg Professional Global Confidence Index rose to 58.54 this month from 58.12 in August.
Reuters: "Mexican Finance Minister Agustin Carstens urged lawmakers on Tuesday to approve new taxes to offset lower oil revenues, saying the country's struggling energy industry would not recover quickly.
The government of President Felipe Calderon has proposed hiking income and consumption taxes in 2010 to offset lower revenues from crude exports as output from Mexico's state-run oil industry is expected to remain weak.
"This fall (in oil production) is going to last for years ... The future has caught up to us ... we've been living as oil addicts," Carstens said at a congressional hearing on the budget proposals."
The American Petroleum Institute, in a weekly inventory
report, said that crude stocks rose 631,000 barrels in the week
to Sept. 11, against the forecast in a Reuters poll of analysts
for a 2.4-million-barrel drawdown. The industry group said gasoline stocks rose 1.3 million
barrels, more than twice the forecast for a 600,000 barrel
build in the poll. Most stunning for analysts, distillate stocks, which
include heating oil and diesel fuel, jumped 5.2 million
barrels, against the forecast for a 1.3 million barrel rise. "What strikes me the most in the API report is the
incredible build in distillates, even with our current surplus
in supplies already above the five-year average," said Phil
Flynn, analyst at PFGBest Research in Chicago."This is very bearish and tells you that we still have demand issues that probably reflect some of the problems we still have in the economy. Of course, we'll have to wait for
tomorrow's EIA data to see if these industry numbers will
stick," he added.
The Chicago Board Options Exchange Volatility Index on Wednesday traded at its lowest levels in more than a year as U.S. stocks climbed amid thinking the economy is on the mend. Trading lower for a third consecutive session, the VIX, a gauge of investors' willingness to take on risk, recently stood at 23.40, after trading as low as 22.78 earlier on.
The Treasury Department said foreigners sold $97.5 billion in U.S. assets in July, after a $56.8 billion outflow in June that analysts said was higher than previously reported. Also, U.S. industrial production rose 0.8% in August, more than expected. Capacity utilization - a gauge of slack in the economy -- rose to 69.6% in August from a revised 69.0% in July. There were gains across the board in August. Manufacturing expanded 0.6% in August. Excluding autos and auto parts, manufacturing rose 0.4%.
Chicken producer Pilgrim's Pride Corp. confirmed Tuesday that Brazilian beef producer JBS SA will buy a majority stake in the company in a deal that values the company at $2.8 billion. Pilgrim's Pride has agreed to sell 64 percent of stock in the reorganized company to JBS for $800 million in cash. Existing shareholders will receive shares totaling 36 percent of the company.
The S&P hit a new high for the year shortly after the open, and is now up 56 percent from the March 9 low.
Randall W. Forsyth: "The biggest fleet of ships in maritime history sits empty and eerily silent off Singapore, instead of hauling goods and fuel to and from Asia, according to a terrific report from the UK Daily Mail. (Hat tip to Joan McCullough of East Shore Partners for bringing the article to my attention.)
According to the article, this fleet may number close to 500 idle vessels -- bigger than the U.S. and British navies combined. That's equal to about 12% of the world's shipping capacity, which ought to be fully utilized hauling goods to American malls for the Christmas shopping rush."
The NAHB/Wells Fargo Housing Market index climbed to 19 from 18 in August, in line with the forecast in a Reuters survey.
Ferndale, WA start-up Sea 2 Sky Corp. is poised to take its renewable bio-energy business into the big time using a high-heat processs to convert wood and wood fiber into a nonpolluting, high-energy alternative to coal.
The process, known as torrefaction, is a thermo-chemical treatment that incinerates biomass in the 200 to 340 Celsius range (392 to 644 degrees Fahrenheit).
During torrefaction the biomass partly decomposes, but the resulting transformed solid biomass -- in the Sea 2 Sky case called torrefied wood pellets -- has about 30 percent more energy content per unit of mass than its original state, weighs less, is more easily transportable and is virtually pollution-free.
Sea 2 Sky plans to apply this technology to increase the energy output in biomass products and to provide a "coal-like product with significant environmental advantages," it says.
It's "is a scientifically proven method for improving the properties of biomass as a fuel," say Sea 2 Sky officials. The solid product produced retains about 70 percent of its initial weight and 90 percent of the original energy content, but without the harmful emissions of coal.
Natural gas for October delivery also continued its recent surge, gaining 44 cents, or 13%, to finish at $3.76 per million British thermal units.
U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the
week ending September 11, 56 thousand barrels per day below the previous week's
average. Refineries operated at 86.9 percent of their operable capacity last
week. Gasoline production decreased last week, averaging 9.0 million barrels
per day. Distillate fuel production increased last week, averaging 4.2 million
barrels per day.
U.S. crude oil imports averaged 8.9 million barrels per day last week, down 192
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.2 million barrels per day, 454 thousand
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 701 thousand barrels per day. Distillate fuel imports
averaged 147 thousand barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 4.7 million barrels from the previous week. At
332.8 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
increased by 0.5 million barrels last week, and are near the upper limit of the
average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories increased by 2.2
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories remained unchanged last week
and are above the upper limit of the average range. Total commercial petroleum
inventories decreased by 3.2 million barrels last week, and are above the
upper limit of the average range for this time of year.
Total products supplied over the last four-week period has averaged 19.5
million barrels per day, up by 3.7 percent compared to the similar period last
year. Over the last four weeks, motor gasoline demand has averaged about 9.2
million barrels per day, up by 3.5 percent from the same period last year.
Distillate fuel demand has averaged 3.4 million barrels per day over the last
four weeks, down by 6.8 percent from the same period last year. Jet fuel demand
is 6.1 percent lower over the last four weeks compared to the same four-week
period last year.
At 10:37 today, global debt totaled $35,014,935,027,853.
In early trading Apple rose $5+ to a new 52-week high of $180+.
Dow industrials gain 107.77 points to 9,791.18. S&P 500 Index rises 16.07 points to 1,068.7
The Nasdaq rises 30 points to 2,133.
Tuesday, September 15, 2009
Real Household Income
9/15/09 Real Household Income
Randall W. Forsyth: "The real median income of American households is no higher than in 1973, after inflation, according to Shadow Government Statistics.
"Recent reporting has shown not only that real growth in household income has failed to keep up with inflation, but that consumer debt and net worth are contracting paces previously not seen in the post-World War II era," writes SGS's John Williams.
Indeed, he adds, "the official numbers show households struggling to make ends meet for at least the last decade. Without adequate income growth, consumers met the consumption needs and/or desires through expanded debt...."Such activity was encouraged openly by Federal Reserve Chairman Alan Greenspan, and the bulk of economic growth in recent years, as a result, was due largely to debt expansion, not to healthy growth in consumer income," Williams concludes."
MasterCard Inc.'s chief financial officer on Tuesday said the global economic slowdown continues to prove "challenging" for consumers, MasterCard's bank customers, merchants and the company itself. "We are mindful that while the unemployment figures are a lagging indicator, consumer confidence remains low," said Martina Hund-Mejean at the Barclays Capital Global Financial Services Conference. "There is a correlation, a tight correlation, between the unemployment rate and the write-offs of our bank customers which will continue to impact growth."
U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years, boosted by government subsidies for cars, higher gas prices, and busy crowds at the malls, the Commerce Department estimated Tuesday. Sales were stronger than the 2.3% expected by economists surveyed by MarketWatch, largely because of widespread sales gains outside of gas stations and auto lots. Sales were down 5.3% compared with a year earlier. Auto sales surged 10.6% on the back of the government's cash-for-clunkers program. Excluding autos, sales rose 1.1%, the most since February. Gas station sales rose 5.1% on higher prices. Excluding autos and gas, sales rose 0.6%.
Manufacturing activity in the New York improved in September to the highest level since prior to beginning of the recession in late 2007, the New York Federal Reserve Bank said Tuesday. The bank's Empire State Manufacturing index rose to 18.9 in September from 12.1 in August. The new orders index climbed in September, while shipments dipped. The employment index remained in negative territory.
U.S. producer prices rose by 1.7% in August, the Labor Department reported Tuesday, powered by the biggest gain in energy prices since November 2007. Minus volatile energy and food prices, however, the producer price index rose just 0.2%. Economists surveyed by MarketWatch were expecting producer prices to climb by 1.5% in August. They estimated core prices would rise by 0.1%.
"At some point, if you refuse to contain health care costs, you'll go bankrupt," says Andy Xie, a prominent Shanghai-based economist, formerly of Morgan Stanley. "It's widely known among [Chinese] policymakers."
The Kroger Co. says second-quarter profit fell nearly 8 percent, as households cut spending more deeply and food prices fell.
Cincinnati-based Kroger, the nation's largest traditional grocery chain, said sales also fell in the quarter, and it cut its earning guidance for the full year.
Democrats could invoke the reconciliation process on Oct. 15, and that would enable a simple majority to pass the health care bill.
Prime Minister Gordon Brown said Britain’s Labour government will have to cut spending in order to reduce its debts, bowing to pressure from the Bank of England, Standard & Poor’s and opposition politicians.
“I must tell you the tough truth about the hard choices,” Brown said in a speech to union leaders in Liverpool today. “Labour will cut costs, cut inefficiencies, cut unnecessary programs and cut lower priority budgets.”
Stock buybacks among S&P 500 companies have declined to their lowest level since early 1998, Standard & Poor's said on Tuesday. Preliminary results compiled by the index provider found S&P 500 companies spent $24.2 billion on stock repurchases in the second quarter of 2009, a 72% decline from the $87.9 billion spent during the same period last year. "Until sales and profits improve, and for more than one quarter, buybacks will be for the few brave companies that are willing to be separated from their cash security blanket," Howard Silverblatt, senior index analyst at Standard & Poor's, said in an email.
Ca pital One Financial Corp. said Tuesday that delinquencies on its U.S. credit cards rose in August, although defaults slowed, sending its shares tumbling nearly 5 percent.
Trade policies pursued by President Barack Obama and the Democratic-controlled Congress since the start of the year could lead to the loss of 585,800 U.S. jobs, a study said on Tuesday.
The study done for the U.S. Chamber of Commerce attributed almost two-thirds of the potential job losses, or 383,400, to Congress' failure to approve free trade agreements with Colombia and South Korea.
Passing the two agreements and a third pact with Panama should be part of a national plan to double U.S. exports over the next five years, U.S. Chamber of Commerce President Tom Donohue told reporters in a conference call.
"A major surge in exports is our best path out of a recession, out of double-digit unemployment and the exploding deficits we're now experiencing," Donohue said.
The S&P 500 gained 3.3 points, or 0.3%, to 1,052.63 by the close of trading, the highest close since Oct. 6. The Dow Jones Industrial Average rallied 56.6 points, or 0.6%, to 9,683.4 points, also the highest close since Oct. 6. The Nasdaq Composite gained 10.9 points, or 0.5%, to 2,102.6.
Crude oil for October delivery finished up $2.07, or 3%, at $70.93 a barrel.
Randall W. Forsyth: "The real median income of American households is no higher than in 1973, after inflation, according to Shadow Government Statistics.
"Recent reporting has shown not only that real growth in household income has failed to keep up with inflation, but that consumer debt and net worth are contracting paces previously not seen in the post-World War II era," writes SGS's John Williams.
Indeed, he adds, "the official numbers show households struggling to make ends meet for at least the last decade. Without adequate income growth, consumers met the consumption needs and/or desires through expanded debt...."Such activity was encouraged openly by Federal Reserve Chairman Alan Greenspan, and the bulk of economic growth in recent years, as a result, was due largely to debt expansion, not to healthy growth in consumer income," Williams concludes."
MasterCard Inc.'s chief financial officer on Tuesday said the global economic slowdown continues to prove "challenging" for consumers, MasterCard's bank customers, merchants and the company itself. "We are mindful that while the unemployment figures are a lagging indicator, consumer confidence remains low," said Martina Hund-Mejean at the Barclays Capital Global Financial Services Conference. "There is a correlation, a tight correlation, between the unemployment rate and the write-offs of our bank customers which will continue to impact growth."
U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years, boosted by government subsidies for cars, higher gas prices, and busy crowds at the malls, the Commerce Department estimated Tuesday. Sales were stronger than the 2.3% expected by economists surveyed by MarketWatch, largely because of widespread sales gains outside of gas stations and auto lots. Sales were down 5.3% compared with a year earlier. Auto sales surged 10.6% on the back of the government's cash-for-clunkers program. Excluding autos, sales rose 1.1%, the most since February. Gas station sales rose 5.1% on higher prices. Excluding autos and gas, sales rose 0.6%.
Manufacturing activity in the New York improved in September to the highest level since prior to beginning of the recession in late 2007, the New York Federal Reserve Bank said Tuesday. The bank's Empire State Manufacturing index rose to 18.9 in September from 12.1 in August. The new orders index climbed in September, while shipments dipped. The employment index remained in negative territory.
U.S. producer prices rose by 1.7% in August, the Labor Department reported Tuesday, powered by the biggest gain in energy prices since November 2007. Minus volatile energy and food prices, however, the producer price index rose just 0.2%. Economists surveyed by MarketWatch were expecting producer prices to climb by 1.5% in August. They estimated core prices would rise by 0.1%.
"At some point, if you refuse to contain health care costs, you'll go bankrupt," says Andy Xie, a prominent Shanghai-based economist, formerly of Morgan Stanley. "It's widely known among [Chinese] policymakers."
The Kroger Co. says second-quarter profit fell nearly 8 percent, as households cut spending more deeply and food prices fell.
Cincinnati-based Kroger, the nation's largest traditional grocery chain, said sales also fell in the quarter, and it cut its earning guidance for the full year.
Democrats could invoke the reconciliation process on Oct. 15, and that would enable a simple majority to pass the health care bill.
Prime Minister Gordon Brown said Britain’s Labour government will have to cut spending in order to reduce its debts, bowing to pressure from the Bank of England, Standard & Poor’s and opposition politicians.
“I must tell you the tough truth about the hard choices,” Brown said in a speech to union leaders in Liverpool today. “Labour will cut costs, cut inefficiencies, cut unnecessary programs and cut lower priority budgets.”
Stock buybacks among S&P 500 companies have declined to their lowest level since early 1998, Standard & Poor's said on Tuesday. Preliminary results compiled by the index provider found S&P 500 companies spent $24.2 billion on stock repurchases in the second quarter of 2009, a 72% decline from the $87.9 billion spent during the same period last year. "Until sales and profits improve, and for more than one quarter, buybacks will be for the few brave companies that are willing to be separated from their cash security blanket," Howard Silverblatt, senior index analyst at Standard & Poor's, said in an email.
Ca pital One Financial Corp. said Tuesday that delinquencies on its U.S. credit cards rose in August, although defaults slowed, sending its shares tumbling nearly 5 percent.
Trade policies pursued by President Barack Obama and the Democratic-controlled Congress since the start of the year could lead to the loss of 585,800 U.S. jobs, a study said on Tuesday.
The study done for the U.S. Chamber of Commerce attributed almost two-thirds of the potential job losses, or 383,400, to Congress' failure to approve free trade agreements with Colombia and South Korea.
Passing the two agreements and a third pact with Panama should be part of a national plan to double U.S. exports over the next five years, U.S. Chamber of Commerce President Tom Donohue told reporters in a conference call.
"A major surge in exports is our best path out of a recession, out of double-digit unemployment and the exploding deficits we're now experiencing," Donohue said.
The S&P 500 gained 3.3 points, or 0.3%, to 1,052.63 by the close of trading, the highest close since Oct. 6. The Dow Jones Industrial Average rallied 56.6 points, or 0.6%, to 9,683.4 points, also the highest close since Oct. 6. The Nasdaq Composite gained 10.9 points, or 0.5%, to 2,102.6.
Crude oil for October delivery finished up $2.07, or 3%, at $70.93 a barrel.
Monday, September 14, 2009
Swimming Naked
9/14/09 Swimming Naked
Adam Brochert: "There will always be fraud in financial markets and government. But it has reached a feverish pitch at this time precisely because the secular credit contraction has begun and is now revealing who has been swimming naked. Unfortunately, the government is rushing to put a towel around the biggest and worst offenders, including itself. These are secular sign posts that indicate a long-term change is now well-entrenched: a lack of trust in "the powers that be."...But our government has gotten so large and all-encompassing that it demands to control everything. If prices go up, ban investment and chastise the speculators. If prices go down, ban and chastise the short sellers. If spending doesn't fix things, spend more then act shocked when the deficit comes in at levels higher than expected and raise taxes. If foreclosures get excessive, ban foreclosures. If industries fail, take them over and pretend you are going to make them stronger. If some firms are succeeding despite all the obstacles presented by our regulatory and taxation system, over-regulate them and increase their taxes to help out the firms that are struggling. And if none of this works, label the groups that annoy you or get in your way as "suspicious" or "unpatriotic" - maybe even throw around the "terror" word a little."
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.”
Stiglitz’s views echo those of former Federal Reserve Chairman
Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”
The number of people in work in the 16 countries that use the euro fell by 702,000 in the second quarter.
One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.
Even more - 80 percent - rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.
Jo hn Tamny: "It's time to end the buck's role as the world's currency."
"I don't know if the bears have had their final say in the natural gas market, but it takes a lot more courage to be a bear after seeing that we're in September and we had that big pop up back above $3," Phil Flynn concluded.
“By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio, executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.”
Venezuela and a group of Russian companies will invest $20 billion to develop the Junin 6 block of heavy crude reserves in the Orinoco Belt, Energy and Oil Minister Rafael Ramirez said. The Russian companies will pay $1 billion for their participation in the oil block that is expected to produce 400,000 to 450,000 barrels per day.
Venezuela President Hugo Chavez said the South American country plans to develop nuclear energy with Russia . Venezuela doesn’t want to develop nuclear weapons, he said.
Russia has agreed to lend Venezuela over $2 billion to purchase tanks and advanced anti-aircraft missiles in deals that show Moscow's commitment to working closely with Washington-foe President Hugo Chavez.
The average price of regular gasoline at U.S. filling stations slipped to $2.5911 a gallon as supplies rose and demand fell with the end of the U.S. summer driving season.
Gasoline lost 5.06 cents in the three weeks ended Sept. 11, according to a survey of 5,000 filling stations nationwide by Trilby Lundberg, an independent gasoline analyst in Camarillo, California.
“Demand is poor,” Lundberg said in an interview today. “The number of those who do not have jobs continues to rise.”
Nouriel Roubini: "The US economy faces a difficult time ahead as consumers stop spending and the fallout escalates from the collapse of the commercial real estate market, economist Nouriel Roubini told CNBC. Additionally, non-government bonds will face pressure, the securitization market is all but dead, the credit markets are still frozen and consumers will continue to save more rather than spend and boost growth.
"It's going to be death by a thousand cuts," said Roubini, chairman of RGE Monitor and economics professor at New York University's Stern School of Business. "The financial system is severely damaged, and it's not just the banks."
Roubini predicted more than 1,000 financial institutions could fail before all is said and done."
The worst of the economic crisis is not over and a currency crisis can happen this year or the next year, because the problem of too much debt in the system has not been solved, legendary investor Jim Rogers told CNBC Monday.
Earthfiles: “During the July 22 total solar eclipse observation, China had discovered
near the sun an unidentified object, it's physical nature remains to be further studied.”
- Ji Haisheng, Dir., Jijinshan Astronomical Observatory, Nanjing, China,
as quoted on September 7, 2009, by U. K. Daily Mail
ZeroHedge: "Currently, the 14 week rate of change of Treasury yields is negative, and as stated previously, this is the first time since the March bottom."
Eli Lilly & Co. said that it plans to reduce its global headcount to 35,000 by the end of 2011.
Goldman Sachs Group Inc. cut its 12-month forecast for U.S. wheat and corn prices, citing higher estimates for inventories of the grains.
Wheat futures traded in Chicago will rise to $5.50 a bushel in the coming year, 12 percent below last week’s forecast of $6.25, Goldman Sachs analysts wrote in a research note dated yesterday. Corn futures will climb to $4.50 a bushel, 14 percent less than a previous prediction of $5.25, they said.
The U.K. housing market slump will resume next year as the squeeze on mortgage lending persists, Ernst & Young LLC’s Item Club said.
Repsol YPF SA, the Spanish oil company that announced one of the world’s largest natural-gas discoveries last week, said the field will take as many as five years to be developed.
David Rosenberg: “The rally in the U.S. equity market has been so pronounced that it is no longer just pricing in the end of the recession. It is pricing in two years of recovery.”
"What (investors) should do is worry about all the debt developing in the US. They should short bonds because that's the next bubble that's building in the US," Jim Rogers said.
"I own basically commodities where the fundamentals are getting better… I own particularly the yen and the Swiss franc. I don't own many stocks, only in China."
"For one of the few times in my life, I don't have any shorts," he said.
Tony Fratto: "Unless President Obama reverses course, he will be remembered as the president who "lost" trade for America, and the only anti-trade president of modern times."
Crude oil for October delivery dropped 43 cents, or 0.7%, to finish at $68.86 a barrel on the New York Mercantile Exchange. Meanwhile, natural gas futures surged 11.5% as traders bet the commodity's year-long slide has ended as fall approaches, and an exchange-traded fund backed by the commodity announced it would issue more shares.
By 2010, eMarketer expects that 15.5% of all U.S. adult Internet users will use Twitter
Gold for September delivery finished down 0.5% at $999.90 an ounce on the Comex division of the New York Mercantile Exchange. The more active December contract ended down 0.5% at $1,001.10 an ounce.
S&P 500 Index rises 6.57 points to 1,049.30. Nasdaq Composite gains 10.88 points to 2,091.78. Dow gains 21.39 to end at 9,626.80.
Adam Brochert: "There will always be fraud in financial markets and government. But it has reached a feverish pitch at this time precisely because the secular credit contraction has begun and is now revealing who has been swimming naked. Unfortunately, the government is rushing to put a towel around the biggest and worst offenders, including itself. These are secular sign posts that indicate a long-term change is now well-entrenched: a lack of trust in "the powers that be."...But our government has gotten so large and all-encompassing that it demands to control everything. If prices go up, ban investment and chastise the speculators. If prices go down, ban and chastise the short sellers. If spending doesn't fix things, spend more then act shocked when the deficit comes in at levels higher than expected and raise taxes. If foreclosures get excessive, ban foreclosures. If industries fail, take them over and pretend you are going to make them stronger. If some firms are succeeding despite all the obstacles presented by our regulatory and taxation system, over-regulate them and increase their taxes to help out the firms that are struggling. And if none of this works, label the groups that annoy you or get in your way as "suspicious" or "unpatriotic" - maybe even throw around the "terror" word a little."
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.”
Stiglitz’s views echo those of former Federal Reserve Chairman
Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”
The number of people in work in the 16 countries that use the euro fell by 702,000 in the second quarter.
One year after Wall Street teetered on the brink of collapse, seven out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to a new Associated Press-GfK poll.
Even more - 80 percent - rate the condition of the economy as poor and a majority worry about their own ability to make ends meet. The pessimistic outlook sets the stage for President Barack Obama as he attempts to portray the financial sector as increasingly confident and stable and presses Congress to act on new banking regulations.
Jo hn Tamny: "It's time to end the buck's role as the world's currency."
"I don't know if the bears have had their final say in the natural gas market, but it takes a lot more courage to be a bear after seeing that we're in September and we had that big pop up back above $3," Phil Flynn concluded.
“By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” Vic DeIorio, executive vice president of GITI Tire in the U.S., said in a statement. “This decision will cost many more American jobs than it will create.”
Venezuela and a group of Russian companies will invest $20 billion to develop the Junin 6 block of heavy crude reserves in the Orinoco Belt, Energy and Oil Minister Rafael Ramirez said. The Russian companies will pay $1 billion for their participation in the oil block that is expected to produce 400,000 to 450,000 barrels per day.
Venezuela President Hugo Chavez said the South American country plans to develop nuclear energy with Russia . Venezuela doesn’t want to develop nuclear weapons, he said.
Russia has agreed to lend Venezuela over $2 billion to purchase tanks and advanced anti-aircraft missiles in deals that show Moscow's commitment to working closely with Washington-foe President Hugo Chavez.
The average price of regular gasoline at U.S. filling stations slipped to $2.5911 a gallon as supplies rose and demand fell with the end of the U.S. summer driving season.
Gasoline lost 5.06 cents in the three weeks ended Sept. 11, according to a survey of 5,000 filling stations nationwide by Trilby Lundberg, an independent gasoline analyst in Camarillo, California.
“Demand is poor,” Lundberg said in an interview today. “The number of those who do not have jobs continues to rise.”
Nouriel Roubini: "The US economy faces a difficult time ahead as consumers stop spending and the fallout escalates from the collapse of the commercial real estate market, economist Nouriel Roubini told CNBC. Additionally, non-government bonds will face pressure, the securitization market is all but dead, the credit markets are still frozen and consumers will continue to save more rather than spend and boost growth.
"It's going to be death by a thousand cuts," said Roubini, chairman of RGE Monitor and economics professor at New York University's Stern School of Business. "The financial system is severely damaged, and it's not just the banks."
Roubini predicted more than 1,000 financial institutions could fail before all is said and done."
The worst of the economic crisis is not over and a currency crisis can happen this year or the next year, because the problem of too much debt in the system has not been solved, legendary investor Jim Rogers told CNBC Monday.
Earthfiles: “During the July 22 total solar eclipse observation, China had discovered
near the sun an unidentified object, it's physical nature remains to be further studied.”
- Ji Haisheng, Dir., Jijinshan Astronomical Observatory, Nanjing, China,
as quoted on September 7, 2009, by U. K. Daily Mail
ZeroHedge: "Currently, the 14 week rate of change of Treasury yields is negative, and as stated previously, this is the first time since the March bottom."
Eli Lilly & Co. said that it plans to reduce its global headcount to 35,000 by the end of 2011.
Goldman Sachs Group Inc. cut its 12-month forecast for U.S. wheat and corn prices, citing higher estimates for inventories of the grains.
Wheat futures traded in Chicago will rise to $5.50 a bushel in the coming year, 12 percent below last week’s forecast of $6.25, Goldman Sachs analysts wrote in a research note dated yesterday. Corn futures will climb to $4.50 a bushel, 14 percent less than a previous prediction of $5.25, they said.
The U.K. housing market slump will resume next year as the squeeze on mortgage lending persists, Ernst & Young LLC’s Item Club said.
Repsol YPF SA, the Spanish oil company that announced one of the world’s largest natural-gas discoveries last week, said the field will take as many as five years to be developed.
David Rosenberg: “The rally in the U.S. equity market has been so pronounced that it is no longer just pricing in the end of the recession. It is pricing in two years of recovery.”
"What (investors) should do is worry about all the debt developing in the US. They should short bonds because that's the next bubble that's building in the US," Jim Rogers said.
"I own basically commodities where the fundamentals are getting better… I own particularly the yen and the Swiss franc. I don't own many stocks, only in China."
"For one of the few times in my life, I don't have any shorts," he said.
Tony Fratto: "Unless President Obama reverses course, he will be remembered as the president who "lost" trade for America, and the only anti-trade president of modern times."
Crude oil for October delivery dropped 43 cents, or 0.7%, to finish at $68.86 a barrel on the New York Mercantile Exchange. Meanwhile, natural gas futures surged 11.5% as traders bet the commodity's year-long slide has ended as fall approaches, and an exchange-traded fund backed by the commodity announced it would issue more shares.
By 2010, eMarketer expects that 15.5% of all U.S. adult Internet users will use Twitter
Gold for September delivery finished down 0.5% at $999.90 an ounce on the Comex division of the New York Mercantile Exchange. The more active December contract ended down 0.5% at $1,001.10 an ounce.
S&P 500 Index rises 6.57 points to 1,049.30. Nasdaq Composite gains 10.88 points to 2,091.78. Dow gains 21.39 to end at 9,626.80.
Sunday, September 13, 2009
Furious Insider Selling
9/13/09 Furious Insider Selling
George Ure: " Not counting ATM's and online banking operations, since the fall of IndyMac last year, we have not seen 3,684 branches closed or reorganized into other operations (mostly the latter) including the 30 branches of the following which are going through reorg this weekend:
Venture Bank
Brickwell Community Bank
Corus Bank, N.A.
In fairness, we're in what passes for 'normal' in this French Revolution of banking: So far this year we have only seen 1,077 branched reorg'ed, but if we don't count the 800-pound gorilla that failed last year (Washington Mutual/2,239 branches) the numbers for last year wouldn't seem so bad, either."
"It's not a very complicated story," said Charles Biderman, who runs market research firm Trim Tabs. "Insiders know better than you and me. If prices are too high, they sell."
Biderman, who says there were $31 worth of insider stock sales in August for every $1 of insider buys, isn't the only one who has taken note. Ben Silverman, director of research at the InsiderScore.com web site that tracks trading action, said insiders are selling at their most aggressive clip since the summer of 2007. According to Trim Tabs, execs at U.S. public companies have been net sellers of $105 billion worth of stock over the last four months.
The Social Security Trust Fund reported an August net deficit of $5.865 Billion. This is the largest monthly deficit in nineteen years.
The Dow closed Friday at 9,605.41. On September 11, 2001, the Dow closed at guess what? 9,605.51.
Obama placed a tariff on Chinese tires. In the Sept. 12 decision, Obama imposed a 3-year tariff on Chinese-made tire imports. In the first year, it will be set at 35%, far below the 55% levy recommended by the U.S. International Trade Commission. The second year it will be 30%, and the final year 25%. The tariffs begin in 15 days. But David Spooner, a lawyer with Squire, Sanders & Dempsey who represents trade associations of China’s tire producers, said in a statement, "These tariffs are unwarranted. It's troubling that the Administration would invoke an import surge safeguard over the objections U.S. industry and in response to falling imports. Not a single U.S. tire company supports’ the tariffs."
After halting new shares (and then trading at up to a 16% premium to net asset value), U.S. Natural Gas Fund (UNG) will reopen to investment Sept. 28. Natural gas is at a 7.5-year low, and Citigroup (C) estimates that UNG has controlled one-quarter to one-third of futures contracts on ICE and NYMEX.
Doug Noland: "Federal government finance (Treasuries, agency debt and GSE MBS) has expanded about $2.0 TN over the past year. I expect it to inflate another $2.0 TN over the coming twelve months. The private sector Credit apparatus is simply not up to the task of generating the necessary $2.5 TN (or so) of total system Credit expansion necessary to sustain the current economic structure. In this post-Wall Street Bubble environment, only government and government-related Credit retains sufficient “moneyness” in the marketplace. Systemic reflation today depends on a massive inflation of this government helicopter “money....Fixated on the notion of sustainable recovery, policymakers will not be Dialing Back from massive borrowing, spending, or market backstopping endeavors. And this gets to the core of the unquantifiable costs of failing to rein in Credit and asset Bubbles during the boom....And at the end of the day inflationism tends toward socialism. And there is only one way to reverse this course; it is anything but painless. The economy must be weaned off of Credit and financial excesses and government intrusions – and allowed to proceed through the arduous task of adjustment and rebalancing. Choosing instead a course of sustaining current financial and economic structures implies a huge and ever-expanding role for the government. Efforts to stoke a quick recovery imply massive government intrusion and inherent fragility. There will be no Dialing Back....Conceptually, somewhere along the line there reaches a tipping point where government intrusions no longer act as a stabilizing force. They become invariably destabilizing, as the quantity of government monetary inflation becomes massive and uncontrollable. This is the nature of inflationism, although this dynamic is nowhere to be found in Keynesian doctrine. It is my view that this tipping point was reached some time back. It is with this analysis in mind that I fear the emerging Government Finance Bubble risks destroying the creditworthiness of our entire economy."
The government monetary inflation process has been destroying the value of the dollar, undermining the purchasing power of all Americans, and jeopardizing the economic well-being of our present and future. This will have an horrific ending.
Peter Schiff: "When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold."
Daniel Aaronson and Lee Markowitz: "Many people believe that the taxes collected by Social Security are held in some form of a trust fund. As a result, people have been led to think that the issues discussed in the media regarding Social Security's underfunding is the result of the aging American population. In actuality, the problem is that there is no money held by Social Security because the Government spends the surpluses as the Social Security Fund receives it....In other words, all of the surplus money collected since Social Security's inception, which should have been saved for future payments, instead has been lent to the Government in exchange for privately issued Government debt. In fact, the US Treasury does not hold assets against the privately issued Government debt, making social security taxes no different from other federal taxes in that the Treasury uses the money for "general Government purposes".
Even more worrisome is that the cash provided to the Treasury from the Social Security Fund allows the Government to understate its borrowing needs each year, "[b]ecause the OASI and DI Trust Funds and the U.S. Treasury are both part of the Government, these assets and liabilities offset each other for consolidation purposes in the Government-wide financial statements." As Social Security continues to collect more in taxes than it spends for benefits each year, the Government essentially receives a subsidy that shrinks its annual cash requirements.
Another problem is that the special-issue Treasury securities that Social Security owns are no different than IOUs that an individual might issue to himself. Self-issued bonds are not assets because they are an obligation of the same entity. Instead, Social Security should have invested the cash received each year into assets other than Treasury bonds - foreign bonds, corporate bonds, equities or gold. Perhaps, the Government directed Social Security to invest its funds in Treasury IOUs because government leaders believed that the Treasury would run sizable budget surpluses in the future and thus enable it to pay-back the IOUs owed to Social Security (Americans). Clearly, this will never happen....The Government ran out of money long ago. As a result of its insolvency, the Government is tapping any source of cash it can access, such as Social Security's surplus funds. This is not a healthy or sustainable situation. People recognize that Government spending has the US on a crash course, but markets still behave as though the day of reckoning lies so far ahead that there is no need to address it now. However, the Government's attempt at solving the current financial crisis through the assumption of trillions of dollars in additional debt has only moved the day of reckoning closer."
President Obama warned on Saturday that nearly half of all Americans under age 65 could lose their health coverage at some point in the next decade. Scare tactics 101.
Kyle Wingfield: "Can we trust current and future members of Congress to make good on Obama’s pledge not to let new health spending add “one dime to our deficits — either now or in the future”? Can we trust them not to avoid health-related deficits with the same kind of accounting shell games that have put Medicare and Social Security in danger of insolvency?"
Social Security will face a cash shortfall for the first time in decades next
year, according to a little noticed report released late last month by the
Congressional Budget Office (CBO).
As a result, seniors could face benefit cuts in as little as three years.
Congress could instead raise taxes or authorize new borrowing to close the
shortfall, but has never before addressed a Social Security deficit through
long-term borrowing.
"It`s no surprise to seniors that the economy has taken an already crippled
Social Security system and brought it even closer to bankruptcy," said Daniel
O`Connell, chairman of The Senior Citizens League (TSCL). "Seniors are our most
vulnerable citizens and desperately need their benefits to keep up with
inflation."
Almost 70 percent of beneficiaries depend on Social Security for 50 percent
or
more
of
their income. Social Security is the sole source of income for 15
percent of beneficiaries.
The 37 million Americans aged 65 and over who receive a Social Security check
each month are forecast to receive no Cost of Living Adjustment in their Social
Security checks until 2012. Seniors have never failed to receive an annual
increase of less than 1.3 percent since the automatic COLA went into effect in
1975. The Senior Citizens League is calling on Congress and the Administration to
enact major Social Security reforms this year.
With 1.2 million supporters, The Senior Citizens League (www.SeniorsLeague.org)
is one of the nation`s largest nonpartisan seniors groups.
Sept. 18, 2008 Obama:“We, as a nation, can not afford to maintain our present entitlement
contribution and distribution structures. Therefore, in the future,
stay-at-home spouses will have two options as to how they
will
receive
future Social Security benefits. They can either opt to receive 100
percent of their working spouse’s benefit upon the death of said spouse
without contributing any additional funds to FICA, or the working
spouse will have had to contribute an additional 25 percent to FICA in
order for the non-working spouse to receive 50 percent of the retired
spouse’s benefit during the retired spouse’s lifetime.
“However, if the latter option is selected, it will terminate upon the death of the working spouse, and the remaining spouse will then receive the full amount that was being paid to the deceased recipient. This is a much fairer system. We, as a nation, recognize the importance of the stay-at-home spouse, while acknowledging that the majority of families have dual-income earnings. This change will affect only those who are currently 40 years of age or younger.
“The current retirement age will be changed. Those 50 and older will see no change. Those born after 1965 will see their retirement postponed one month for each year, resulting in those born after 2015 reaching retirement age at 70.”
China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site today. The ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.
Mike Burk: "This has been a remarkable rally, no leadership, no new highs and no volume all it does is go up.
I expect the major indices to be higher on Friday September 18 than they were on Friday September 11."
Courtesy of John Mauldin. The Privateer (www.the-privateer.com).
"In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita."
George Ure: " Not counting ATM's and online banking operations, since the fall of IndyMac last year, we have not seen 3,684 branches closed or reorganized into other operations (mostly the latter) including the 30 branches of the following which are going through reorg this weekend:
Venture Bank
Brickwell Community Bank
Corus Bank, N.A.
In fairness, we're in what passes for 'normal' in this French Revolution of banking: So far this year we have only seen 1,077 branched reorg'ed, but if we don't count the 800-pound gorilla that failed last year (Washington Mutual/2,239 branches) the numbers for last year wouldn't seem so bad, either."
"It's not a very complicated story," said Charles Biderman, who runs market research firm Trim Tabs. "Insiders know better than you and me. If prices are too high, they sell."
Biderman, who says there were $31 worth of insider stock sales in August for every $1 of insider buys, isn't the only one who has taken note. Ben Silverman, director of research at the InsiderScore.com web site that tracks trading action, said insiders are selling at their most aggressive clip since the summer of 2007. According to Trim Tabs, execs at U.S. public companies have been net sellers of $105 billion worth of stock over the last four months.
The Social Security Trust Fund reported an August net deficit of $5.865 Billion. This is the largest monthly deficit in nineteen years.
The Dow closed Friday at 9,605.41. On September 11, 2001, the Dow closed at guess what? 9,605.51.
Obama placed a tariff on Chinese tires. In the Sept. 12 decision, Obama imposed a 3-year tariff on Chinese-made tire imports. In the first year, it will be set at 35%, far below the 55% levy recommended by the U.S. International Trade Commission. The second year it will be 30%, and the final year 25%. The tariffs begin in 15 days. But David Spooner, a lawyer with Squire, Sanders & Dempsey who represents trade associations of China’s tire producers, said in a statement, "These tariffs are unwarranted. It's troubling that the Administration would invoke an import surge safeguard over the objections U.S. industry and in response to falling imports. Not a single U.S. tire company supports’ the tariffs."
After halting new shares (and then trading at up to a 16% premium to net asset value), U.S. Natural Gas Fund (UNG) will reopen to investment Sept. 28. Natural gas is at a 7.5-year low, and Citigroup (C) estimates that UNG has controlled one-quarter to one-third of futures contracts on ICE and NYMEX.
Doug Noland: "Federal government finance (Treasuries, agency debt and GSE MBS) has expanded about $2.0 TN over the past year. I expect it to inflate another $2.0 TN over the coming twelve months. The private sector Credit apparatus is simply not up to the task of generating the necessary $2.5 TN (or so) of total system Credit expansion necessary to sustain the current economic structure. In this post-Wall Street Bubble environment, only government and government-related Credit retains sufficient “moneyness” in the marketplace. Systemic reflation today depends on a massive inflation of this government helicopter “money....Fixated on the notion of sustainable recovery, policymakers will not be Dialing Back from massive borrowing, spending, or market backstopping endeavors. And this gets to the core of the unquantifiable costs of failing to rein in Credit and asset Bubbles during the boom....And at the end of the day inflationism tends toward socialism. And there is only one way to reverse this course; it is anything but painless. The economy must be weaned off of Credit and financial excesses and government intrusions – and allowed to proceed through the arduous task of adjustment and rebalancing. Choosing instead a course of sustaining current financial and economic structures implies a huge and ever-expanding role for the government. Efforts to stoke a quick recovery imply massive government intrusion and inherent fragility. There will be no Dialing Back....Conceptually, somewhere along the line there reaches a tipping point where government intrusions no longer act as a stabilizing force. They become invariably destabilizing, as the quantity of government monetary inflation becomes massive and uncontrollable. This is the nature of inflationism, although this dynamic is nowhere to be found in Keynesian doctrine. It is my view that this tipping point was reached some time back. It is with this analysis in mind that I fear the emerging Government Finance Bubble risks destroying the creditworthiness of our entire economy."
The government monetary inflation process has been destroying the value of the dollar, undermining the purchasing power of all Americans, and jeopardizing the economic well-being of our present and future. This will have an horrific ending.
Peter Schiff: "When individuals choose to accumulate savings in the form of gold rather than interest-bearing paper deposits in government-insured accounts, there is only one reason for doing so: they fear that the interest will not be enough to compensate for their expected loss of purchasing power through inflation. This fear reflects both current inflation and the expectation for future inflation. While there are those who buy gold to speculate on its appreciation, the underlying factor that drives that appreciation in the first place will always be inflation. If governments were not creating inflation, there would be little investment advantage to owning gold."
Daniel Aaronson and Lee Markowitz: "Many people believe that the taxes collected by Social Security are held in some form of a trust fund. As a result, people have been led to think that the issues discussed in the media regarding Social Security's underfunding is the result of the aging American population. In actuality, the problem is that there is no money held by Social Security because the Government spends the surpluses as the Social Security Fund receives it....In other words, all of the surplus money collected since Social Security's inception, which should have been saved for future payments, instead has been lent to the Government in exchange for privately issued Government debt. In fact, the US Treasury does not hold assets against the privately issued Government debt, making social security taxes no different from other federal taxes in that the Treasury uses the money for "general Government purposes".
Even more worrisome is that the cash provided to the Treasury from the Social Security Fund allows the Government to understate its borrowing needs each year, "[b]ecause the OASI and DI Trust Funds and the U.S. Treasury are both part of the Government, these assets and liabilities offset each other for consolidation purposes in the Government-wide financial statements." As Social Security continues to collect more in taxes than it spends for benefits each year, the Government essentially receives a subsidy that shrinks its annual cash requirements.
Another problem is that the special-issue Treasury securities that Social Security owns are no different than IOUs that an individual might issue to himself. Self-issued bonds are not assets because they are an obligation of the same entity. Instead, Social Security should have invested the cash received each year into assets other than Treasury bonds - foreign bonds, corporate bonds, equities or gold. Perhaps, the Government directed Social Security to invest its funds in Treasury IOUs because government leaders believed that the Treasury would run sizable budget surpluses in the future and thus enable it to pay-back the IOUs owed to Social Security (Americans). Clearly, this will never happen....The Government ran out of money long ago. As a result of its insolvency, the Government is tapping any source of cash it can access, such as Social Security's surplus funds. This is not a healthy or sustainable situation. People recognize that Government spending has the US on a crash course, but markets still behave as though the day of reckoning lies so far ahead that there is no need to address it now. However, the Government's attempt at solving the current financial crisis through the assumption of trillions of dollars in additional debt has only moved the day of reckoning closer."
President Obama warned on Saturday that nearly half of all Americans under age 65 could lose their health coverage at some point in the next decade. Scare tactics 101.
Kyle Wingfield: "Can we trust current and future members of Congress to make good on Obama’s pledge not to let new health spending add “one dime to our deficits — either now or in the future”? Can we trust them not to avoid health-related deficits with the same kind of accounting shell games that have put Medicare and Social Security in danger of insolvency?"
Social Security will face a cash shortfall for the first time in decades next
year, according to a little noticed report released late last month by the
Congressional Budget Office (CBO).
As a result, seniors could face benefit cuts in as little as three years.
Congress could instead raise taxes or authorize new borrowing to close the
shortfall, but has never before addressed a Social Security deficit through
long-term borrowing.
"It`s no surprise to seniors that the economy has taken an already crippled
Social Security system and brought it even closer to bankruptcy," said Daniel
O`Connell, chairman of The Senior Citizens League (TSCL). "Seniors are our most
vulnerable citizens and desperately need their benefits to keep up with
inflation."
Almost 70 percent of beneficiaries depend on Social Security for 50 percent
or
more
of
their income. Social Security is the sole source of income for 15
percent of beneficiaries.
The 37 million Americans aged 65 and over who receive a Social Security check
each month are forecast to receive no Cost of Living Adjustment in their Social
Security checks until 2012. Seniors have never failed to receive an annual
increase of less than 1.3 percent since the automatic COLA went into effect in
1975. The Senior Citizens League is calling on Congress and the Administration to
enact major Social Security reforms this year.
With 1.2 million supporters, The Senior Citizens League (www.SeniorsLeague.org)
is one of the nation`s largest nonpartisan seniors groups.
Sept. 18, 2008 Obama:“We, as a nation, can not afford to maintain our present entitlement
contribution and distribution structures. Therefore, in the future,
stay-at-home spouses will have two options as to how they
will
receive
future Social Security benefits. They can either opt to receive 100
percent of their working spouse’s benefit upon the death of said spouse
without contributing any additional funds to FICA, or the working
spouse will have had to contribute an additional 25 percent to FICA in
order for the non-working spouse to receive 50 percent of the retired
spouse’s benefit during the retired spouse’s lifetime.
“However, if the latter option is selected, it will terminate upon the death of the working spouse, and the remaining spouse will then receive the full amount that was being paid to the deceased recipient. This is a much fairer system. We, as a nation, recognize the importance of the stay-at-home spouse, while acknowledging that the majority of families have dual-income earnings. This change will affect only those who are currently 40 years of age or younger.
“The current retirement age will be changed. Those 50 and older will see no change. Those born after 1965 will see their retirement postponed one month for each year, resulting in those born after 2015 reaching retirement age at 70.”
China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
Chinese industries have complained that they’re being hurt by “unfair trade practices,” the nation’s Ministry of Commerce said on its Web site today. The ministry is also looking into subsidies for the products, it said. It didn’t specify the imports’ value.
Mike Burk: "This has been a remarkable rally, no leadership, no new highs and no volume all it does is go up.
I expect the major indices to be higher on Friday September 18 than they were on Friday September 11."
Courtesy of John Mauldin. The Privateer (www.the-privateer.com).
"In 1909, the US federal government had an annual budget of $US 0.8 Billion. With this it governed a population of just over 90 million people. The cost of government was about $9 per capita. In 2009, the US federal government has an annual budget of $US 3,550 Billion. With this it governs a population of just over 300 million people. That's a cost of about $11,675 per capita."
Subscribe to:
Posts (Atom)