1/30/10 Bank Failures
Three bank failures in Florida, Georgia and Minnesota have brought the number of bank failures in 2010 to 12, according to the Federal Deposit Insurance Corp. late Friday. In Florida, Immokalee's Florida Community Bank will have its $795.5 million in deposits taken over by Miami's Premier American Bank. First National Bank of Georgia in Carrollton will have its $757.9 million in deposits taken over by Carrollton's Community & Southern Bank. Marshall Bank of Hallock, Minn., will have its $54.7 million in deposits taken over by United Valley Bank of Cavalier, N.D. Cornelia, Ga.-based Community Bank & Trust was closed by regulators Friday, bringing the number of U.S. bank failures this year to 13.
Roubini Calls U.S. Growth `Dismal and Poor', Predicts Second-Half Slowdown
Los Angeles, Calif.-based First Regional Bank was closed by regulators Friday, marking the 14th U.S. bank failure of 2010.
Chinese state media says the defense ministry is suspending military exchanges with the United States over its planned $6.4 billion arms sale to neighboring Taiwan.
Rob Hanna: "Amazingly, Thursday’s close marked a 50-day low in the S&P. It was just last week that the S&P closed at a 50-day high. Moving from a 50-day closing high to a 50-day closing low so quickly is quite rare. I only found 6 other instances. Unfortunately, while it appears rare, it doesn’t appear predictive."
Tim W. Wood: "I can tell you now that the Bear has a few more luring tricks up his sleeve. My cycles work tells me that there will be a rebound rally on both a short and an intermediate degree ahead. The short-term rebound will serve to convince a few more that the decline is over and again they will reenter, and just when all the sheep are pulled back in, the Bear will make another sneak attack. This will in turn give us a bit more of a wash out, and then once the market begins to move back up with the intermediate degree bounce, Kudlow, Cramer and the gang will be screaming that we have now seen a healthy and needed correction and that we are once again back on the road to prosperity. But, the cycles work suggests otherwise and again, that intermediate-term rebound will serve to suck every last drop of cash it can back into the market. Then, depending on how the next rally of intermediate degree sets up that will likely set the stage for the Bear to return with full vengeance....From a Dow theory perspective we now have a short-term non-confirmation in place. Reason being, the closing high for the Transports occurred on January 11th, while the closing high for the Industrials occurred on January 19th."
Food Stamps and other entitlement programs have replaced the food lines of the Great Depression.
Argentinian President Cristina Fernandez has told a gathering at her Presidential Palace that pork is even better than Viagra for spicing things up in the bedroom - and credited a satisfying weekend with her husband to the meat.
"I've just been told something I didn't know, that eating pork improves your sex life," she said in a televised speech to the leaders of the Argentinian meat industry, "I'd say it's a lot nicer to eat a bit of grilled pork than take Viagra."
Argentina’s central bank President Martin Redrado resigned last night after a standoff with the government over its plan to use $6.6 billion in reserves to pay debt due this year. “I have followed the Constitution, the law and the central bank rules,” Redrado said during a press conference in Buenos Aires. “My cycle has ended at the bank.”
ZeroHedge: "The average loss severity on CMBS liquidation has just hit a record of 52.7%. That means that on average less than half the loan is recovered in liquidation."
Japan’s housing starts fell to the lowest level since the nation celebrated its postwar recovery by hosting the Olympics in 1964, as builders were hobbled by dwindling household incomes and sustained deflation.
Construction companies broke ground on 788,410 homes last year, 27.9 percent fewer than in 2008, the Land Ministry said today in Tokyo. That was the lowest since 751,429 recorded in 1964. The pace of decrease eased in the past four months.
The US administration is speeding up deployment of defenses against potential Iranian missile attacks in the Gulf to heed off any possible retaliation, The New York Times reported Saturday.
The move involves placing specialized ships off the Iranian coast and anti-missile systems in at least four Arab countries -- Qatar, the United Arab Emirates, Bahrain and Kuwait -- the Times said, citing administration and military officials.
Oman has also been approached, although no Patriot missiles have been deployed there yet, US officials told the newspaper, adding that the willingness of other Arab states to accept the US defenses reflects growing unease in the region over Iran's ambitions and capabilities.
Saturday, January 30, 2010
Friday, January 29, 2010
January
1/29/10 January
Benefit costs rose 0.5% in the quarter, while wages and salaries rose 0.5%. For all of 2009, the employment cost index increased a record low 1.5%. Economists said the weak trend is not surprising given high unemployment rate.
February may be one of the coldest ones in the last 50 years. There's a warning from accuweather.com that much of the nation, including Oakland County, should prepare for another round of severe cold and snowy conditions, starting next week. AccuWeather.com senior meteorologist and long range forecaster Joe Bastardi sees a "top-10 cold February" in store for much of the United States, compared to the last 50 years.
"I believe the physical drivers are all there for a major cold month, much like this December was," Bastardi said.
Tony Blair opened himself up to a charge of misleading Parliament today when he told the Iraq Inquiry that by any objective analysis the threat posed by Saddam Hussein's chemical and biological weapons programme had not increased after 9/11.
Chevron Corp said fourth-quarter net income fell to $3.07 billion, or $1.53 a share, from $4.9 billion, or $2.44 a share in the year-ago period. Wall Street analysts expected earnings of $1.66 a share for Chevron, according to a survey by FactSet Research. Net oil-equivalent production for the quarter was more than 9% higher than the year-ago period, driven by new capital projects. The oil major said revenue rose to $48 billion from $43 billion, on higher oil prices and production increases. Chevron's upstream earnings rose to $4 billion from $3.2 billion, while its refining and marketing business swung to a loss of $613 million from net income of $2.1 billion.
Real gross domestic product increased at a 5.7% seasonally adjusted annual rate in the final three months of the year. About two-thirds of the growth came via the swing in inventories. The 5.7% increase was in line with the 5.4% gain expected by economists surveyed by MarketWatch. Even with healthy growth in the second half of the year, the economy shrank 2.4% in 2009, the worst drop since the 10.9% decline in 1946. Inventories added 3.39%.
"The GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker — a few grains won’t do." David Rosenberg
A senior Federal Reserve official warned on Friday that the uncertain path of interest rates in coming months poses risks for banks inattentive to the match of durations among their assets and liabilities.
Federal Reserve Vice Chairman Donald Kohn told a conference sponsored by the Federal Deposit Insurance Corp that the usual uncertainty about interest rates is compounded in the current situation by the fact that rates are near zero and the Fed has massively expanded the amount of reserves in the banking system.
"Borrowing short and lending long is an inherently risky business strategy," Kohn said. "Intermediaries need to be sure that as the economy recovers, they aren't also hit by the interest rate risk that often accompanies this sort of mismatch in asset and liability maturities."
China is expected to raise the deposit reserve requirement ratio after the Lunar New Year holidays to curb surging liquidity.
The Reuters/University of Michigan consumer sentiment index rose to 74.4 in January from 72.5 in December, according to media reports. It's the highest since January 2008.
The Chicago purchasing managers index rose to 61.5% from 58.7% in December.
-Natural gas futures climbed Friday, supported by wintry weather in the U.S. Midwest and Northeast.
Natural gas for March delivery on the New York Mercantile Exchange was trading 12.7 cents higher, or 2.47%, at $5.265 per million British thermal units after opening floor trade 8.4 cents higher at $5.222/MMBtu.
Frigid temperatures in the major gas-consuming regions over the next two weeks were expected to bolster the demand for natural gas for heating. Utilities and financial traders were buying up gas in response to the weather forecasts, which had been revised from more moderate outlooks earlier in the week.
"Some of the utilities got caught short going into the weekend," said Ed Kennedy, a broker with Hencorp Becstone Futures in Miami. "It's going to be a lot colder."
Commodity Weather Group, a Bethesda, Md. private forecaster, was predicting below-normal temperatures in the eastern half of the U.S. from January 29 to Feb. 2, and in the Northeast from Feb. 3 to Feb. 7.
"The short-term numbers are colder-than-expected in parts of the Midwest and East Coast," CWG meteorologists wrote in a note to clients Friday.
So far, administration officials have not laid out how they plan to double American exports to $2 trillion in 2015, from $1 trillion today. Mr. Obama said he was starting a National Export Initiative that will "help farmers and small businesses increase their exports," but did not elaborate. White House officials, when pressed, said only that the commerce secretary, Gary F. Locke, would give a speech on the matter next week.
Separately, on Thursday, Mr. Locke announced that, as part of a plan to reduce export burdens on American companies, the United States might remove restrictions on exports of goods with potential military applications when such technologies were available worldwide.
"We have too many controls on items readily available around the world," Mr. Locke told the United States-China Business Council.
Export control rules are meant to keep dual-use technologies like computer encryption software and airplane parts out of the hands of American foes that could use them for military purposes.
India raises bank reserve rate by 75 bps, more than expected; Keeps key interest rates.
Japan Consumer Prices fall 1.3% in December - the 10th monthly decline.
Nasdaq down 5.3% in January, S&P down 3.7%, and Dow down 3.5%.
Benefit costs rose 0.5% in the quarter, while wages and salaries rose 0.5%. For all of 2009, the employment cost index increased a record low 1.5%. Economists said the weak trend is not surprising given high unemployment rate.
February may be one of the coldest ones in the last 50 years. There's a warning from accuweather.com that much of the nation, including Oakland County, should prepare for another round of severe cold and snowy conditions, starting next week. AccuWeather.com senior meteorologist and long range forecaster Joe Bastardi sees a "top-10 cold February" in store for much of the United States, compared to the last 50 years.
"I believe the physical drivers are all there for a major cold month, much like this December was," Bastardi said.
Tony Blair opened himself up to a charge of misleading Parliament today when he told the Iraq Inquiry that by any objective analysis the threat posed by Saddam Hussein's chemical and biological weapons programme had not increased after 9/11.
Chevron Corp said fourth-quarter net income fell to $3.07 billion, or $1.53 a share, from $4.9 billion, or $2.44 a share in the year-ago period. Wall Street analysts expected earnings of $1.66 a share for Chevron, according to a survey by FactSet Research. Net oil-equivalent production for the quarter was more than 9% higher than the year-ago period, driven by new capital projects. The oil major said revenue rose to $48 billion from $43 billion, on higher oil prices and production increases. Chevron's upstream earnings rose to $4 billion from $3.2 billion, while its refining and marketing business swung to a loss of $613 million from net income of $2.1 billion.
Real gross domestic product increased at a 5.7% seasonally adjusted annual rate in the final three months of the year. About two-thirds of the growth came via the swing in inventories. The 5.7% increase was in line with the 5.4% gain expected by economists surveyed by MarketWatch. Even with healthy growth in the second half of the year, the economy shrank 2.4% in 2009, the worst drop since the 10.9% decline in 1946. Inventories added 3.39%.
"The GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker — a few grains won’t do." David Rosenberg
A senior Federal Reserve official warned on Friday that the uncertain path of interest rates in coming months poses risks for banks inattentive to the match of durations among their assets and liabilities.
Federal Reserve Vice Chairman Donald Kohn told a conference sponsored by the Federal Deposit Insurance Corp that the usual uncertainty about interest rates is compounded in the current situation by the fact that rates are near zero and the Fed has massively expanded the amount of reserves in the banking system.
"Borrowing short and lending long is an inherently risky business strategy," Kohn said. "Intermediaries need to be sure that as the economy recovers, they aren't also hit by the interest rate risk that often accompanies this sort of mismatch in asset and liability maturities."
China is expected to raise the deposit reserve requirement ratio after the Lunar New Year holidays to curb surging liquidity.
The Reuters/University of Michigan consumer sentiment index rose to 74.4 in January from 72.5 in December, according to media reports. It's the highest since January 2008.
The Chicago purchasing managers index rose to 61.5% from 58.7% in December.
-Natural gas futures climbed Friday, supported by wintry weather in the U.S. Midwest and Northeast.
Natural gas for March delivery on the New York Mercantile Exchange was trading 12.7 cents higher, or 2.47%, at $5.265 per million British thermal units after opening floor trade 8.4 cents higher at $5.222/MMBtu.
Frigid temperatures in the major gas-consuming regions over the next two weeks were expected to bolster the demand for natural gas for heating. Utilities and financial traders were buying up gas in response to the weather forecasts, which had been revised from more moderate outlooks earlier in the week.
"Some of the utilities got caught short going into the weekend," said Ed Kennedy, a broker with Hencorp Becstone Futures in Miami. "It's going to be a lot colder."
Commodity Weather Group, a Bethesda, Md. private forecaster, was predicting below-normal temperatures in the eastern half of the U.S. from January 29 to Feb. 2, and in the Northeast from Feb. 3 to Feb. 7.
"The short-term numbers are colder-than-expected in parts of the Midwest and East Coast," CWG meteorologists wrote in a note to clients Friday.
So far, administration officials have not laid out how they plan to double American exports to $2 trillion in 2015, from $1 trillion today. Mr. Obama said he was starting a National Export Initiative that will "help farmers and small businesses increase their exports," but did not elaborate. White House officials, when pressed, said only that the commerce secretary, Gary F. Locke, would give a speech on the matter next week.
Separately, on Thursday, Mr. Locke announced that, as part of a plan to reduce export burdens on American companies, the United States might remove restrictions on exports of goods with potential military applications when such technologies were available worldwide.
"We have too many controls on items readily available around the world," Mr. Locke told the United States-China Business Council.
Export control rules are meant to keep dual-use technologies like computer encryption software and airplane parts out of the hands of American foes that could use them for military purposes.
India raises bank reserve rate by 75 bps, more than expected; Keeps key interest rates.
Japan Consumer Prices fall 1.3% in December - the 10th monthly decline.
Nasdaq down 5.3% in January, S&P down 3.7%, and Dow down 3.5%.
Thursday, January 28, 2010
Debt Ceiling
1/28/10 Debt Ceiling
Bookings for durable goods excluding transportation equipment climbed 0.9 percent last month, more than anticipated, figures from the Commerce Department showed today in Washington. Total orders increased 0.3 percent, less than forecast, depressed by a drop in demand for commercial aircraft. December 2009 new machine orders was down a full 25.1% compared with 2008 figures.
Initial jobless applications declined to 470,000 in the week ended Jan. 23, higher than anticipated, from 478,000 the prior week, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to the lowest level in a year and those receiving extended benefits also fell.
The four-week average of initial claims rose 9,500 to 456,250. A Labor Department official said there were no reports of backlogs at state offices. Meanwhile, the number of Americans receiving state jobless benefits held steady fell 57,000 to 4.60 million in the week ending Jan 16. The four-week moving average of continuing claims fell 94,250 to 4.7 million. Overall, 11.5 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 9, the latest period for which the data is available. This is down from 12.0 million in the prior week.
The Baltic Dry Index fell 5% today and has broken below 3000 for the first time since Oct 28th and follows the recent correction in Chinese/Hong Kong equities. The market pullback has been of course due to policy steps to slow lending growth and tame the growing property/construction bubble that is heavily reliant on steel and thus iron ore and iron ore is the key commodity in dry bulk.
John Carney: "
Here's a list of what the iPad replaces:
That's right: nothing.
The iPad replaces nothing I have. It isn't a usefully functional personal computer and it doesn't work well as a phone. Instead, it would add to the stuff I carry around with me.
I don't want more stuff to carry around.
When I asked some of my Twitter friends about this, they told me that the iPad would replace newspapers and magazines. I think they're wrong. A newspaper or a magazine is easily acquired, cheap, light weight, resilient, foldable for easy storage, and disposable. If I accidentally leave it somewhere, I haven't lost much. When I'm done with the paper, I just throw it away.
The iPad is the opposite of these things. It is expensive, heavy, fragile, stiff, and permanent. When I'm done reading something, I would have to make sure I remember not to leave my iPad behind. I would be stuck with it even when there's nothing I want to do with it. I'll probably have to carry an entirely new bag just to tote the thing around."
Another 153,127 workers being laid off in mass firings in December.
The expansion of the Panama Canal slashes the cost of shipping them by sea.
The deeper, wider canal will allow A.P. Moeller-Maersk A/S, China Ocean Shipping Group Co. and other lines to ship more cargo directly to New York and Boston instead of unloading it on the West Coast for trains and trucks to finish the journey east. That could save exporters 30 percent, the canal operator said.
The $5.25 billion Panama Canal project, scheduled for completion during its centennial in 2014, may take business from ports including Los Angeles and Seattle, and railroads including Berkshire Hathaway Inc.’s Burlington Northern Santa Fe Corp. It costs as much as $1,000 more per cargo container to use trains than ships, said Lee Sokje, a shipbuilding analyst at Mirae Asset Securities Co. in Seoul.
Twenty-nine percent (29%) of U.S. voters now say the country is heading in the right direction, according to the latest Rasmussen Reports national telephone survey.
This is the lowest level of voter confidence in the nation’s current course so far this year - and ties the findings for two weeks in December. Those readings marked the lowest finding since February. At the start of 2010, 32% felt the country was heading in the right direction.
The majority of voters (65%) continue to believe the nation is heading down the wrong track, a figure that's held roughly steady since mid-November.
WSJ report as further validation of its Natural Gas acquisition strategy. The article reports that recent cold spells in the eastern US have "erased a glut of gas... the shrinking supplies are bolstering prices." And weather forecasts for February and March point to continued natural gas demand for both consumers and industry as inventories dwindle.
Natural gas inventories down 86 billion cubic feet.
Natural gas in U.S. storage for the week ended Jan. 22 stood at 2.521 trillion cubic feet--five higher than last year and 3.6% above the five year average, the EIA said on Thursday.
The reported draw re-establishes the storage surplus relative to both last year and the five year average, after bouts of cold weather had brought stockpiles roughly in line with those historic measures.
"There is still some potential here for prices to hold and turn higher in our view, as the market looks ahead to higher withdrawals in the weeks ahead," Tim Evans, an analyst with Citi Futures Perspective in New York, wrote in a note to clients on Thursday.
A mere three hours before the Bernanke cloture vote, America just got permission to hit 100% Debt/GDP. Thank Senate Democrats who just approved an amendment increasing the US debt ceiling by $1.9 trillion.
ZeroHedge: "StandardStandard & Poor's Ratings Services no longer classifies the United Kingdom (AAA/Negative/A-1+) among the most stable and low-risk banking systems globally due to our view of the country's weak economic environment, the reputational damage we believe has been experienced by the banking industry, and what we see as the high dependence on state-support programs of a significant proportion of the industry."
The median amount of time it takes builders to sell a completed unit is now 13.9 months: an all time record, and 50% higher than a year ago.
Chinese gold production topped 300 tons in 2009, a new record, making China the largest producer of the precious metal in the world for the third year in a row, according to media reports Thursday citing the China Gold Association. The association said that gold production reached 313.98 tons last year. Last month, consultancy group GFMS said China would surpass India this year as the world's largest consumer of gold, with total demand forecast at 432 tons. March gold futures finished down 90 cents at $1,084.80 an ounce on Thursday.
Microsoft Corp. said Thursday its fiscal second-quarter net income rose to $6.66 billion, or 74 cents a share, from $4.17 billion, or 47 cents a share in the same period a year earlier. Revenue for the period ended in December rose 14% to $19.02 billion, Microsoft said. Analysts had expected the Redmond, Wash.-based software giant to post earnings of 59 cents a share, and $17.9 billion in revenue, according to Thomson Reuters data. Microsoft's results included $1.7 billion in revenue deferred from prior quarters, related to pre-sales and a marketing program for its recently-released Windows 7 operating system.
Amazon.com Inc. said Thursday that fourth-quarter earnings surged 70% thanks to strong holiday sales of media products and other items. For the period ended Dec. 31, Amazon reported net income of $384 million, or 85 cents a share, compared to net income of $225 million, or 52 cents a share, for the same period the previous year. Sales rose 42% to $9.52 billion. Analysts were expecting earnings of 72 cents a share on revenue of $9.04 billion, according to consensus forecasts from Thomson Reuters.
The Dow Jones Industrial Average fell 115.7 points to 10,120.46. The S&P 500 Index declined 12.97 points to 1,084.53. The Nasdaq Composite ended at 2,179.00, off 42.41 points.
Bookings for durable goods excluding transportation equipment climbed 0.9 percent last month, more than anticipated, figures from the Commerce Department showed today in Washington. Total orders increased 0.3 percent, less than forecast, depressed by a drop in demand for commercial aircraft. December 2009 new machine orders was down a full 25.1% compared with 2008 figures.
Initial jobless applications declined to 470,000 in the week ended Jan. 23, higher than anticipated, from 478,000 the prior week, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance dropped to the lowest level in a year and those receiving extended benefits also fell.
The four-week average of initial claims rose 9,500 to 456,250. A Labor Department official said there were no reports of backlogs at state offices. Meanwhile, the number of Americans receiving state jobless benefits held steady fell 57,000 to 4.60 million in the week ending Jan 16. The four-week moving average of continuing claims fell 94,250 to 4.7 million. Overall, 11.5 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 9, the latest period for which the data is available. This is down from 12.0 million in the prior week.
The Baltic Dry Index fell 5% today and has broken below 3000 for the first time since Oct 28th and follows the recent correction in Chinese/Hong Kong equities. The market pullback has been of course due to policy steps to slow lending growth and tame the growing property/construction bubble that is heavily reliant on steel and thus iron ore and iron ore is the key commodity in dry bulk.
John Carney: "
Here's a list of what the iPad replaces:
That's right: nothing.
The iPad replaces nothing I have. It isn't a usefully functional personal computer and it doesn't work well as a phone. Instead, it would add to the stuff I carry around with me.
I don't want more stuff to carry around.
When I asked some of my Twitter friends about this, they told me that the iPad would replace newspapers and magazines. I think they're wrong. A newspaper or a magazine is easily acquired, cheap, light weight, resilient, foldable for easy storage, and disposable. If I accidentally leave it somewhere, I haven't lost much. When I'm done with the paper, I just throw it away.
The iPad is the opposite of these things. It is expensive, heavy, fragile, stiff, and permanent. When I'm done reading something, I would have to make sure I remember not to leave my iPad behind. I would be stuck with it even when there's nothing I want to do with it. I'll probably have to carry an entirely new bag just to tote the thing around."
Another 153,127 workers being laid off in mass firings in December.
The expansion of the Panama Canal slashes the cost of shipping them by sea.
The deeper, wider canal will allow A.P. Moeller-Maersk A/S, China Ocean Shipping Group Co. and other lines to ship more cargo directly to New York and Boston instead of unloading it on the West Coast for trains and trucks to finish the journey east. That could save exporters 30 percent, the canal operator said.
The $5.25 billion Panama Canal project, scheduled for completion during its centennial in 2014, may take business from ports including Los Angeles and Seattle, and railroads including Berkshire Hathaway Inc.’s Burlington Northern Santa Fe Corp. It costs as much as $1,000 more per cargo container to use trains than ships, said Lee Sokje, a shipbuilding analyst at Mirae Asset Securities Co. in Seoul.
Twenty-nine percent (29%) of U.S. voters now say the country is heading in the right direction, according to the latest Rasmussen Reports national telephone survey.
This is the lowest level of voter confidence in the nation’s current course so far this year - and ties the findings for two weeks in December. Those readings marked the lowest finding since February. At the start of 2010, 32% felt the country was heading in the right direction.
The majority of voters (65%) continue to believe the nation is heading down the wrong track, a figure that's held roughly steady since mid-November.
WSJ report as further validation of its Natural Gas acquisition strategy. The article reports that recent cold spells in the eastern US have "erased a glut of gas... the shrinking supplies are bolstering prices." And weather forecasts for February and March point to continued natural gas demand for both consumers and industry as inventories dwindle.
Natural gas inventories down 86 billion cubic feet.
Natural gas in U.S. storage for the week ended Jan. 22 stood at 2.521 trillion cubic feet--five higher than last year and 3.6% above the five year average, the EIA said on Thursday.
The reported draw re-establishes the storage surplus relative to both last year and the five year average, after bouts of cold weather had brought stockpiles roughly in line with those historic measures.
"There is still some potential here for prices to hold and turn higher in our view, as the market looks ahead to higher withdrawals in the weeks ahead," Tim Evans, an analyst with Citi Futures Perspective in New York, wrote in a note to clients on Thursday.
A mere three hours before the Bernanke cloture vote, America just got permission to hit 100% Debt/GDP. Thank Senate Democrats who just approved an amendment increasing the US debt ceiling by $1.9 trillion.
ZeroHedge: "StandardStandard & Poor's Ratings Services no longer classifies the United Kingdom (AAA/Negative/A-1+) among the most stable and low-risk banking systems globally due to our view of the country's weak economic environment, the reputational damage we believe has been experienced by the banking industry, and what we see as the high dependence on state-support programs of a significant proportion of the industry."
The median amount of time it takes builders to sell a completed unit is now 13.9 months: an all time record, and 50% higher than a year ago.
Chinese gold production topped 300 tons in 2009, a new record, making China the largest producer of the precious metal in the world for the third year in a row, according to media reports Thursday citing the China Gold Association. The association said that gold production reached 313.98 tons last year. Last month, consultancy group GFMS said China would surpass India this year as the world's largest consumer of gold, with total demand forecast at 432 tons. March gold futures finished down 90 cents at $1,084.80 an ounce on Thursday.
Microsoft Corp. said Thursday its fiscal second-quarter net income rose to $6.66 billion, or 74 cents a share, from $4.17 billion, or 47 cents a share in the same period a year earlier. Revenue for the period ended in December rose 14% to $19.02 billion, Microsoft said. Analysts had expected the Redmond, Wash.-based software giant to post earnings of 59 cents a share, and $17.9 billion in revenue, according to Thomson Reuters data. Microsoft's results included $1.7 billion in revenue deferred from prior quarters, related to pre-sales and a marketing program for its recently-released Windows 7 operating system.
Amazon.com Inc. said Thursday that fourth-quarter earnings surged 70% thanks to strong holiday sales of media products and other items. For the period ended Dec. 31, Amazon reported net income of $384 million, or 85 cents a share, compared to net income of $225 million, or 52 cents a share, for the same period the previous year. Sales rose 42% to $9.52 billion. Analysts were expecting earnings of 72 cents a share on revenue of $9.04 billion, according to consensus forecasts from Thomson Reuters.
The Dow Jones Industrial Average fell 115.7 points to 10,120.46. The S&P 500 Index declined 12.97 points to 1,084.53. The Nasdaq Composite ended at 2,179.00, off 42.41 points.
Wednesday, January 27, 2010
The Fed
1/27/10 The Fed
Caterpillar updated its outlook for 2010, saying it now expects a profit of $2.50 a share on sales of $35.6 billion to $40.5 billion. Analysts' average earnings forecast was $2.71 a share, according to Thomson Reuters I/B/E/S.
Nouriel Roubini: Weak economic recovery under way due to weak labour markets. First half of 2010 will be better than second half due to stimulus factors. Expects an eventual stock market correction (last October he was calling for a 10% to 20% drop that never transpired), and bearish on commodities... we're seeing the start of a global asset bubble, says Greece is already bankrupt and thinks the eurozone is at risk of breaking up sometime down the line.
Japan just received a downgrade warning from S&P over their credit rating and the U.S. is not far behind. Standard & Poor's lowered its outlook for Japan's sovereign debt rating to "negative." While Japan's long-term debt rating remains double-A, the outlook for that high rating no longer is "stable."
Doug Elmendorf, the director of the Congressional Budget Office, called the outlook for the federal budget "bleak." The CBO projects the current year's deficit of $1.35 trillion to equal 9.2% of GDP. CBO forecast total publicly held debt to rise to 60% of GDP this year and 67% by 202o. In 2001, publicly held debt equaled just 33% of GDP.
Several Chinese banks have ordered some branches to suspend lending for this month.
Darrell Issa: "Public Disclosure As A Last Resort: How the Federal Reserve Fought to Cover Up the Details of the AIG Counterparties Bailout From the American People: "The fact that a quasi-government agency, unaccountable to the American people, likely wasted billions of taxpayer dollars and went to great lengths to prevent Congress and the American people from learning about these actions demonstrates the threat that the Federal Reserve poses to basic principles of American democracy."
Boeing gave a cautious outlook for 2010 after dealing with program delays and declining orders in 2009.
Greek bond yields rose on Wednesday to the highest levels since the country joined the euro in April 2001 as the finance ministry said no deal had been reached to sell bonds to China.
Over 80 percent of all the gains from March 2009 through last week’s high have occurred on Mondays.
Rep. Ed Towns, D-N.Y., chairman of the House Oversight and Government Reform committee, on Wednesday said the circumstances surrounding the New York Federal Reserve $182 billion bailout of American International Group Inc. "create an air of suspicion and distrust among the American people." Treasury Secretary Geithner and his predecessor, Henry Paulson, defended their decision to complete the bailout, arguing that it was necessary to ensure the financial market did not collapse. "The taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse," Towns said.
Sales of new U.S. homes fell 7.6% to a seasonally adjusted annual rate of 342,000 in December from 370,000 in November after a popular tax credit for buyers was set to expire, the Commerce Department estimated Wednesday. It was the lowest seasonally adjusted sales pace since March. For all of 2009, sales of new homes fell 8.6% to a record-low level of 374,000, down about 23% from 2008's level. The records date back to 1963. Economists surveyed by MarketWatch were looking for a small gain in December to about 365,000. The number of unsold homes dropped 1.7% to 231,000, the lowest in 38 years.
Crude oil futures slumped on Wednesday after the Energy Department reported a drop of 3.9 million barrels in U.S. crude inventories. Analysts polled by Platts expected a 2-million-barrel increase in commercial crude-oil supplies for the week ended Jan. 22. Crude oil for March delivery recently fell 14 cents, or 0.2%, to $74.58 a barrel, after briefly slumping as low as $73.86 in electronic trade. The EIA also reported distillate supplies rose by 400,000 barrels and gasoline inventories were up by 2 million barrels in the latest week.
“We urge the president to remember that natural gas is not only an environmental solution, it is an economic solution for our country,” Natural Gas Supply Association Pres. R. Skip Horvath said in a statement.
The industry employs several million people already and is posed to add more as power plants, homes, businesses, and factories increase demand, Horvath noted, adding, “Those jobs create revenue in addition to the billions of dollars the natural gas industry already generates for state and federal government through royalties and taxes.”
The Apple iPad has a 9.7-inch touch-screen and looks similar to an enlarged version of Apple's mega-popular iPhone. Jobs said the iPad is designed to fill a gap between the iPod touch and iPhone and its MacBook line of laptop computers.
"We asked if there was room for a third category in the middle, something between a laptop and a smartphone. In order to create a new category, it needed to be far better at doing some key tasks such as browsing the Web, doing e-mail, sharing photos, watching video, gaming and reading e-books," he said.
He also took a dig at netbooks, the ultra-small laptops that other companies have launched in an attempt to fill this market.
The Federal Reserve on Wednesday left interest rates near zero and vowed to keep them there for a while to nurture an economic recovery held back by stubbornly high unemployment.
Oil for March delivery closed the New York floor session at $73.67 a barrel, off $1.04, or 1.4%. Gold for April delivery also sank $13.80 to end the New York floor session at $1,085.70 an ounce. Copper, silver, platinum and palladium also ended lower.
The Dow Jones Industrial Average added 41.87 points to 10,236.16. The S&P 500 Index climbed 5.33 points to 1,097.5. The Nasdaq Composite Index gained 17.68 points to 2,221.41.
Caterpillar updated its outlook for 2010, saying it now expects a profit of $2.50 a share on sales of $35.6 billion to $40.5 billion. Analysts' average earnings forecast was $2.71 a share, according to Thomson Reuters I/B/E/S.
Nouriel Roubini: Weak economic recovery under way due to weak labour markets. First half of 2010 will be better than second half due to stimulus factors. Expects an eventual stock market correction (last October he was calling for a 10% to 20% drop that never transpired), and bearish on commodities... we're seeing the start of a global asset bubble, says Greece is already bankrupt and thinks the eurozone is at risk of breaking up sometime down the line.
Japan just received a downgrade warning from S&P over their credit rating and the U.S. is not far behind. Standard & Poor's lowered its outlook for Japan's sovereign debt rating to "negative." While Japan's long-term debt rating remains double-A, the outlook for that high rating no longer is "stable."
Doug Elmendorf, the director of the Congressional Budget Office, called the outlook for the federal budget "bleak." The CBO projects the current year's deficit of $1.35 trillion to equal 9.2% of GDP. CBO forecast total publicly held debt to rise to 60% of GDP this year and 67% by 202o. In 2001, publicly held debt equaled just 33% of GDP.
Several Chinese banks have ordered some branches to suspend lending for this month.
Darrell Issa: "Public Disclosure As A Last Resort: How the Federal Reserve Fought to Cover Up the Details of the AIG Counterparties Bailout From the American People: "The fact that a quasi-government agency, unaccountable to the American people, likely wasted billions of taxpayer dollars and went to great lengths to prevent Congress and the American people from learning about these actions demonstrates the threat that the Federal Reserve poses to basic principles of American democracy."
Boeing gave a cautious outlook for 2010 after dealing with program delays and declining orders in 2009.
Greek bond yields rose on Wednesday to the highest levels since the country joined the euro in April 2001 as the finance ministry said no deal had been reached to sell bonds to China.
Over 80 percent of all the gains from March 2009 through last week’s high have occurred on Mondays.
Rep. Ed Towns, D-N.Y., chairman of the House Oversight and Government Reform committee, on Wednesday said the circumstances surrounding the New York Federal Reserve $182 billion bailout of American International Group Inc. "create an air of suspicion and distrust among the American people." Treasury Secretary Geithner and his predecessor, Henry Paulson, defended their decision to complete the bailout, arguing that it was necessary to ensure the financial market did not collapse. "The taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse," Towns said.
Sales of new U.S. homes fell 7.6% to a seasonally adjusted annual rate of 342,000 in December from 370,000 in November after a popular tax credit for buyers was set to expire, the Commerce Department estimated Wednesday. It was the lowest seasonally adjusted sales pace since March. For all of 2009, sales of new homes fell 8.6% to a record-low level of 374,000, down about 23% from 2008's level. The records date back to 1963. Economists surveyed by MarketWatch were looking for a small gain in December to about 365,000. The number of unsold homes dropped 1.7% to 231,000, the lowest in 38 years.
Crude oil futures slumped on Wednesday after the Energy Department reported a drop of 3.9 million barrels in U.S. crude inventories. Analysts polled by Platts expected a 2-million-barrel increase in commercial crude-oil supplies for the week ended Jan. 22. Crude oil for March delivery recently fell 14 cents, or 0.2%, to $74.58 a barrel, after briefly slumping as low as $73.86 in electronic trade. The EIA also reported distillate supplies rose by 400,000 barrels and gasoline inventories were up by 2 million barrels in the latest week.
“We urge the president to remember that natural gas is not only an environmental solution, it is an economic solution for our country,” Natural Gas Supply Association Pres. R. Skip Horvath said in a statement.
The industry employs several million people already and is posed to add more as power plants, homes, businesses, and factories increase demand, Horvath noted, adding, “Those jobs create revenue in addition to the billions of dollars the natural gas industry already generates for state and federal government through royalties and taxes.”
The Apple iPad has a 9.7-inch touch-screen and looks similar to an enlarged version of Apple's mega-popular iPhone. Jobs said the iPad is designed to fill a gap between the iPod touch and iPhone and its MacBook line of laptop computers.
"We asked if there was room for a third category in the middle, something between a laptop and a smartphone. In order to create a new category, it needed to be far better at doing some key tasks such as browsing the Web, doing e-mail, sharing photos, watching video, gaming and reading e-books," he said.
He also took a dig at netbooks, the ultra-small laptops that other companies have launched in an attempt to fill this market.
The Federal Reserve on Wednesday left interest rates near zero and vowed to keep them there for a while to nurture an economic recovery held back by stubbornly high unemployment.
Oil for March delivery closed the New York floor session at $73.67 a barrel, off $1.04, or 1.4%. Gold for April delivery also sank $13.80 to end the New York floor session at $1,085.70 an ounce. Copper, silver, platinum and palladium also ended lower.
The Dow Jones Industrial Average added 41.87 points to 10,236.16. The S&P 500 Index climbed 5.33 points to 1,097.5. The Nasdaq Composite Index gained 17.68 points to 2,221.41.
Tuesday, January 26, 2010
Rally Fails
1/26/10 Rally Fails
Brent Steenbarger: "Note the recent spike in the CBOE put/call ratio. Spikes in the ratio have been a nice tell recently for market lows, as excess pessimism has indicated that weak longs have been shaken from their positions.
What makes this spike different from recent ones is that it is not occurring at a higher price low. In a bull market, you want to see stocks hitting oversold levels and bearish sentiment levels at successively higher prices. The retracement of the late 2009/early 2010 strength suggests that a longer-term topping process may be occurring, fueled by monetary tightening in China and the relative weakness of many non-U.S. equity markets."
Chinese banks have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month.
Bank of China Ltd. has stopped extending new corporate loans in the Shanghai area, except for clients who have repaid earlier borrowings, said a person familiar with the matter who declined to be identified. China Construction Bank Corp.’s branch in the city has been told to screen applications for personal loans and mortgages more carefully and to stop new lending once a monthly quota is met, another person said.
China’s benchmark stock index fell to a three-month low today on concern a government clampdown on lending will slow the world’s third-largest economy. Credit Suisse Group AG said in a note today that a countrywide lending halt that started Jan. 19 may trigger a “meaningful” decline in manufacturing.
Federal Reserve policy makers are considering adopting a new benchmark interest rate to replace the one they’ve used for the last two decades.
The central bank has been unable to control the federal funds rate since the September 2008 bankruptcy of Lehman Brothers Holdings Inc., when it began flooding financial markets with $1 trillion to prevent the economy from collapsing. Officials, who start a two-day meeting today, have said they may replace or supplement the fed funds rate with interest paid on excess bank reserves.
“One option you might want to consider is that our policy rate is the interest rate on excess reserves and we let the fed funds rate trade with some spread to that,” Richmond Fed President Jeffrey Lacker told reporters on Jan. 8 in Linthicum, Maryland.
Stephen Schork: "Natural Gas: Open interest in the Henry Hub contract rose for the fourth consecutive week according to the CFTC, rising 3.0 percent to 782,549 contracts as of last Tuesday. That raises the year-on-year surplus from 6.91 percent last week to 8.84 percent this week, and is most likely contributing to the increased volatility seen in the contract.
Total length held by swap dealers and money managers continued in the vein of last week’s 20.0 percent increase by rising 14.6 percent to 47,409 contracts. This is a bullish signal and could imply continued upward strength — prices have risen 4.7 percent since Tuesday."
Baker Hughes Inc., the oilfield services provider that agreed in August to buy BJ Services Co., expects the acquisition to be completed by April as scheduled.
Japan’s sovereign credit rating outlook was on Tuesday cut to “negative” by Standard & Poor’s over the dimming prospects for reducing the country’s swelling debt load.
The decision came as the Bank of Japan kept rates on hold at 0.1 per cent for the 13th consecutive month and forecast that deflation in 2010 and 2011 would be less severe than it previously thought.
Ron Paul: "First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money. The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power."
John Tamny
"Newspaper headlines last week and over the weekend pointed to a vote on Fed Chairman Bernanke's re-nomination that is increasingly dicey. Rather than achieve the lame-duck status that will come with a near-miss vote, Bernanke should step down.
The irony in all of this is that absent the happy bonus situation on Wall Street which revealed a healthier banking system, Bernanke likely would have sailed through to re-nomination. The bank bonuses, while arguably correct, reminded voters of the bailouts of those same banks which were incorrect, but that Bernanke helped engineer.
Bonuses aside, Bernanke should step aside for the simple reason that the Fed which he oversees has failed miserably. Indeed, while in a rational world the Fed's sole mandate would involve it overseeing a dollar-price rule in terms of gold (thus making it largely irrelevant) to the exclusion of all other policies, it is presently charged with maintaining full employment, low inflation and a sound banking system. It has done none of those things."
November Case-Shiller data showed that after having recorded several sequential increases in prices, November's -0.2% decline is substantiating the October -0.1% decline. The decline on a YoY basis was -5.3%. On a seasonally adjusted basis, the Composite 20 also indicated a moderation, as the sequential rate of increase declined from 0.3% to 0.2% in November, and indicated the same YoY decline as the unadjusted data of -5.3%. 15 of the 20 markets they track fell sequentially on a nominal basis.
S. Korean economic growth eases to 0.2%, slowest pace in three quarters.
The Conference Board's Consumer Confidence Index increased to 55.9 -- the highest in more than a year. That compares with 53.6 in December. Still, consumer confidence remains very weak, far below the average level of 95. The improvement in January was due mainly to better feelings about the present situation. Consumer expectations also improved. Assessments of the labor market improved marginally.
The U.S. budget deficit will hit $1.3 trillion in 2010, congressional budget analysts estimated Tuesday, in a fresh piece of grim news for President Barack Obama. The Congressional Budget Office's estimate assumes current laws and policies remain unchanged. Economic growth will also probably be "muted" for the next few years, the CBO said in its budget outlook for 2010.
58 percent of Apple's revenue now comes from overseas.
About 6 million e-readers will be sold this year, up from 3 million last year, Forrester estimates. Amazon.com’s Kindle has about 60 percent of the market, while Sony’s products have 35 percent, Forrester says.
Rob Kirby: "According to the most recent data from the U.S. Office of the Comptroller of the Currency, the notional value of derivatives held by U.S. commercial banks increased $804 billion in the third quarter of 2009, or 0.4%, to $204.3 trillion. Seven banks hold 99.8% of all derivatives."
The American Petroleum Institute said inventories fell by 2.225 million to 326.08 million barrels in the week ended January 22. Analysts polled by Platts expected a 2-million-barrel increase in crude oil stocks. Crude oil for March delivery was down 4 cents at $74.67 a barrel, after earlier rising 7 cents in electronic trade. It had finished on a loss of 55 cents, or 0.7% at the New York Mercantile Exchange. The API also reported a rise of 916,000 barrels in gasoline stocks. Distillate stocks fell 1.978 million barrels, it said. Platts analysts projected an increase of 1.7 million barrels in gasoline inventories and a decrease of 1.8 million barrels in distillate supplies.
The Dow Jones Industrial Average fell 2.57 points to 10,194.29. The S&P 500 Index declined 4.61 points to 1,092.17. The Nasdaq Composite Index fell 7.07 points to 2,203.73.
No. 1 home-improvement retailer Home Depot Inc. is cutting 1,000 jobs and shutting three underperforming pilot stores as the company consolidates human resources, finance, real estate and construction functions, spokesman Ron Defeo said in an interview.
Brent Steenbarger: "Note the recent spike in the CBOE put/call ratio. Spikes in the ratio have been a nice tell recently for market lows, as excess pessimism has indicated that weak longs have been shaken from their positions.
What makes this spike different from recent ones is that it is not occurring at a higher price low. In a bull market, you want to see stocks hitting oversold levels and bearish sentiment levels at successively higher prices. The retracement of the late 2009/early 2010 strength suggests that a longer-term topping process may be occurring, fueled by monetary tightening in China and the relative weakness of many non-U.S. equity markets."
Chinese banks have begun restricting new loans, responding to a push by regulators to contain credit after a surge in lending in the first half of this month.
Bank of China Ltd. has stopped extending new corporate loans in the Shanghai area, except for clients who have repaid earlier borrowings, said a person familiar with the matter who declined to be identified. China Construction Bank Corp.’s branch in the city has been told to screen applications for personal loans and mortgages more carefully and to stop new lending once a monthly quota is met, another person said.
China’s benchmark stock index fell to a three-month low today on concern a government clampdown on lending will slow the world’s third-largest economy. Credit Suisse Group AG said in a note today that a countrywide lending halt that started Jan. 19 may trigger a “meaningful” decline in manufacturing.
Federal Reserve policy makers are considering adopting a new benchmark interest rate to replace the one they’ve used for the last two decades.
The central bank has been unable to control the federal funds rate since the September 2008 bankruptcy of Lehman Brothers Holdings Inc., when it began flooding financial markets with $1 trillion to prevent the economy from collapsing. Officials, who start a two-day meeting today, have said they may replace or supplement the fed funds rate with interest paid on excess bank reserves.
“One option you might want to consider is that our policy rate is the interest rate on excess reserves and we let the fed funds rate trade with some spread to that,” Richmond Fed President Jeffrey Lacker told reporters on Jan. 8 in Linthicum, Maryland.
Stephen Schork: "Natural Gas: Open interest in the Henry Hub contract rose for the fourth consecutive week according to the CFTC, rising 3.0 percent to 782,549 contracts as of last Tuesday. That raises the year-on-year surplus from 6.91 percent last week to 8.84 percent this week, and is most likely contributing to the increased volatility seen in the contract.
Total length held by swap dealers and money managers continued in the vein of last week’s 20.0 percent increase by rising 14.6 percent to 47,409 contracts. This is a bullish signal and could imply continued upward strength — prices have risen 4.7 percent since Tuesday."
Baker Hughes Inc., the oilfield services provider that agreed in August to buy BJ Services Co., expects the acquisition to be completed by April as scheduled.
Japan’s sovereign credit rating outlook was on Tuesday cut to “negative” by Standard & Poor’s over the dimming prospects for reducing the country’s swelling debt load.
The decision came as the Bank of Japan kept rates on hold at 0.1 per cent for the 13th consecutive month and forecast that deflation in 2010 and 2011 would be less severe than it previously thought.
Ron Paul: "First of all, no one should be compelled by law to operate in Federal Reserve notes if they prefer an alternative. We should repeal legal tender laws and allow Americans to conduct transactions in constitutional money. Only gold and silver can constitutionally be legal tender, not paper money. Instead, it is illegal to conduct business using gold and silver instead of Federal Reserve notes. Simply legalizing the Constitution should be a no-brainer to anyone who took an oath of office. Consequently, private mints should be allowed to mint gold and silver coins. They would be subject to fraud and counterfeit laws, of course, and people would be free to use their coins or stay with Federal Reserve notes, as they see fit. Finally, we should abolish taxes on gold and silver, which puts precious metals at a competitive disadvantage to paper money. The Federal Reserve is a government-sanctioned banking cartel that has held far too much power for far too long and is in the end stages of running the dollar into the ground, and our economy along with it. The very least Congress can do, if they are not willing to abolish the Fed, and perhaps not even conduct a serious audit of it, is to allow citizens the freedom to defend themselves from being completely wiped out by their monopoly power."
John Tamny
"Newspaper headlines last week and over the weekend pointed to a vote on Fed Chairman Bernanke's re-nomination that is increasingly dicey. Rather than achieve the lame-duck status that will come with a near-miss vote, Bernanke should step down.
The irony in all of this is that absent the happy bonus situation on Wall Street which revealed a healthier banking system, Bernanke likely would have sailed through to re-nomination. The bank bonuses, while arguably correct, reminded voters of the bailouts of those same banks which were incorrect, but that Bernanke helped engineer.
Bonuses aside, Bernanke should step aside for the simple reason that the Fed which he oversees has failed miserably. Indeed, while in a rational world the Fed's sole mandate would involve it overseeing a dollar-price rule in terms of gold (thus making it largely irrelevant) to the exclusion of all other policies, it is presently charged with maintaining full employment, low inflation and a sound banking system. It has done none of those things."
November Case-Shiller data showed that after having recorded several sequential increases in prices, November's -0.2% decline is substantiating the October -0.1% decline. The decline on a YoY basis was -5.3%. On a seasonally adjusted basis, the Composite 20 also indicated a moderation, as the sequential rate of increase declined from 0.3% to 0.2% in November, and indicated the same YoY decline as the unadjusted data of -5.3%. 15 of the 20 markets they track fell sequentially on a nominal basis.
S. Korean economic growth eases to 0.2%, slowest pace in three quarters.
The Conference Board's Consumer Confidence Index increased to 55.9 -- the highest in more than a year. That compares with 53.6 in December. Still, consumer confidence remains very weak, far below the average level of 95. The improvement in January was due mainly to better feelings about the present situation. Consumer expectations also improved. Assessments of the labor market improved marginally.
The U.S. budget deficit will hit $1.3 trillion in 2010, congressional budget analysts estimated Tuesday, in a fresh piece of grim news for President Barack Obama. The Congressional Budget Office's estimate assumes current laws and policies remain unchanged. Economic growth will also probably be "muted" for the next few years, the CBO said in its budget outlook for 2010.
58 percent of Apple's revenue now comes from overseas.
About 6 million e-readers will be sold this year, up from 3 million last year, Forrester estimates. Amazon.com’s Kindle has about 60 percent of the market, while Sony’s products have 35 percent, Forrester says.
Rob Kirby: "According to the most recent data from the U.S. Office of the Comptroller of the Currency, the notional value of derivatives held by U.S. commercial banks increased $804 billion in the third quarter of 2009, or 0.4%, to $204.3 trillion. Seven banks hold 99.8% of all derivatives."
The American Petroleum Institute said inventories fell by 2.225 million to 326.08 million barrels in the week ended January 22. Analysts polled by Platts expected a 2-million-barrel increase in crude oil stocks. Crude oil for March delivery was down 4 cents at $74.67 a barrel, after earlier rising 7 cents in electronic trade. It had finished on a loss of 55 cents, or 0.7% at the New York Mercantile Exchange. The API also reported a rise of 916,000 barrels in gasoline stocks. Distillate stocks fell 1.978 million barrels, it said. Platts analysts projected an increase of 1.7 million barrels in gasoline inventories and a decrease of 1.8 million barrels in distillate supplies.
The Dow Jones Industrial Average fell 2.57 points to 10,194.29. The S&P 500 Index declined 4.61 points to 1,092.17. The Nasdaq Composite Index fell 7.07 points to 2,203.73.
No. 1 home-improvement retailer Home Depot Inc. is cutting 1,000 jobs and shutting three underperforming pilot stores as the company consolidates human resources, finance, real estate and construction functions, spokesman Ron Defeo said in an interview.
Monday, January 25, 2010
Home Sales
1/25/10 Home Sales
Sam's Club, the warehouse club division of Wal-Mart Stores Inc is cutting roughly 11,200 jobs, or about 10 percent of its workforce, as it outsources in-store product demonstrations and eliminates positions used to recruit new business members.
John McCain came out this morning against Bernanke.
A new message attributed to al-Qaida leader Osama bin Laden claims responsibility for sending the failed airplane bomber to the United States last month. The message says attacks will continue as long as the U.S. supports Israel.
An analysis by CNBC shows Fed Chairman Ben Bernanke is likely to win confirmation, though he will likely draw more opposition than any chairman in recent history.
Last weeks sell off relieved the markets overbought condition with little damage to the breadth indicators. There may be a little more downside, but, it is likely, most of the decline is behind us.
I expect the major averages to be higher on Friday January 29 than they were on Friday January 22.
Overall office vacancy in the fourth quarter in Los Angeles, Orange, San Bernardino and Riverside counties was 18.5%, a substantial jump from 14.4% a year earlier, according to commercial real estate brokerage Cushman & Wakefield.
"Vacancies are up, and I believe they will continue to go up this year as we have continued job losses," said Joe Vargas, leader of the company's Southern California offices.
ZeroHedge: "Economics 101: when supply is greater than demand, prices fall; when supply is $700 billion greater than demand, prices plunge. An in-depth look at the supply-demand mismatch of the 2010 US Treasury market demonstrates that the truth is much worse than you may think, and why Bernanke's first act upon reconfirmation will likely be the announcement of the second part of Quantitative Easing."
John Hussman: ":Despite last week's decline, the Market Climate remains characterized by overvalued, (intermediate-term) overbought, overbullish and rising-yield conditions. As I noted last week, this is " a situation that has historically been associated with a moderate continuation of upward stock market progress and a tendency to make successive but very marginal new highs, typically followed by abrupt and often severe market losses within a time window of about 10-12 weeks. As usual, that's not a forecast - just a regularity. But it's a harsh enough regularity to turn our knuckles white here."
Ericsson announced on Monday an extra 1,500 job cuts under restructuring which bit deeply into fourth-quarter net profit at the firm, the world leader in phone network equipment.
Total announced job cuts are now about 6,500, generating huge restructuring charges with the intention of bringing equally huge cost savings.
Hungary's central bank decided Monday to lower its base rate by 25 basis points to 6.0%. The decision was in line with market expectations. In recent trading, the U.S. dollar gained 0.4% against the Hungarian forint, while the euro edged up 0.1% against the forint.
Ben Chapman: "Accept that we are now in a depression, Stock Markets still grossly overvalued, poverty rates increase across midwest, a lots opportunity to regulate the banks,Goldman Sachs reports record profits and still bonusing employees richly, mainstream America goes on a financial diet, suburbs now home to American poor....How can there be a recovery with 22.5% unemployment, and with the additional threat of further unemployment? Who will buy the new housing and the tremendous inventory overhand? What will happen to the commercial inventory building up? Who has money in America to buy cars and trucks? Credits to buy housing for subprime and ALT-A buyers will end up with a 50% failure rate. Cash for clunkers was a colossal failure. Such exercises in futility only buy time, just as stimulus packages, and monetization do the same thing. The elitists behind the scenes know this just as we know this. That means the colossal deficit increase of $1.4 trillion a year will add 10% yearly to the federal debt to GDP ratio that will be over 100% by 2011. The tax liability to service this debt will be overwhelming. Government debt is rising exponentially and if further stimulus is not added the credit crisis will be renewed. This is why the Fed cannot remove further liquidity from the financial system, especially after having taken M3 from 17 to 18% to 6%. Incidentally, England and the ECB have done the same thing, and they still see rising inflation. If further stimulation is not forthcoming, or war, or default comes, we will see inflation reverse and deflation take over and that could last for ten years or more. This deflation, if allowed to take its course, will cause losses of $12 to $15 trillion from the economy and cause unemployment to rise to 40% to 50%. That would also entail cutting extended benefits. That would give us the scenes we saw in the 1930s. The debt we are facing knows no precedent in modern times, and there is no possible way it can be paid."
U.S. Dec. existing home sales fall 16.7% to 5.45m. The 16.7% percentage decline from November to December was the largest on record, the National Association of Realtors reported. The decline was larger than the 11% drop to 5.80 million that was expected by economists surveyed by MarketWatch. Sales in December were up 15% compared with December 2008. The median sales price rose to $178,300 in December, up 1.5% compared with a year earlier. It's the first year-over-year increase in prices since August 2007.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -16.
"I do see all of the signs of a credit induced real estate bubble ( in China)that i think is going to be a doozy," Jim Chanos stated.
Gold for February delivery finished up $6, or 0.6%, at $1,095.70 an ounce on the New York Mercantile Exchange. Crude oil for March delivery finished on a gain of 72 cents at $75.26 a barrel on the New York Mercantile Exchange, after losing more than 4% over the prior three trading sessions.
Apple on Monday reported a fiscal first-quarter profit of $3.38 billion, or $3.67 a share, compared with earnings of $2.25 billion, or $2.50 a share in the same period a year ago. Revenue rose 32% to $15.68 billion as Apple reported sales of 8.74 million iPhones in the quarter ended in December. The results topped the estimates of analysts surveyed by Thomson Reuters, who forecast Apple to earn $2.07 a share on $12.06 billion in revenue.
The Dow Jones Industrial Average rose 23.88 points, or 0.2%, to 10,196.86. The S&P 500 Index climbed 5.02 points, or 0.5%, to 1,096.78. The Nasdaq Composite Index added 5.51 points, or 0.3%, to 2,210.8.
Sam's Club, the warehouse club division of Wal-Mart Stores Inc is cutting roughly 11,200 jobs, or about 10 percent of its workforce, as it outsources in-store product demonstrations and eliminates positions used to recruit new business members.
John McCain came out this morning against Bernanke.
A new message attributed to al-Qaida leader Osama bin Laden claims responsibility for sending the failed airplane bomber to the United States last month. The message says attacks will continue as long as the U.S. supports Israel.
An analysis by CNBC shows Fed Chairman Ben Bernanke is likely to win confirmation, though he will likely draw more opposition than any chairman in recent history.
Last weeks sell off relieved the markets overbought condition with little damage to the breadth indicators. There may be a little more downside, but, it is likely, most of the decline is behind us.
I expect the major averages to be higher on Friday January 29 than they were on Friday January 22.
Overall office vacancy in the fourth quarter in Los Angeles, Orange, San Bernardino and Riverside counties was 18.5%, a substantial jump from 14.4% a year earlier, according to commercial real estate brokerage Cushman & Wakefield.
"Vacancies are up, and I believe they will continue to go up this year as we have continued job losses," said Joe Vargas, leader of the company's Southern California offices.
ZeroHedge: "Economics 101: when supply is greater than demand, prices fall; when supply is $700 billion greater than demand, prices plunge. An in-depth look at the supply-demand mismatch of the 2010 US Treasury market demonstrates that the truth is much worse than you may think, and why Bernanke's first act upon reconfirmation will likely be the announcement of the second part of Quantitative Easing."
John Hussman: ":Despite last week's decline, the Market Climate remains characterized by overvalued, (intermediate-term) overbought, overbullish and rising-yield conditions. As I noted last week, this is " a situation that has historically been associated with a moderate continuation of upward stock market progress and a tendency to make successive but very marginal new highs, typically followed by abrupt and often severe market losses within a time window of about 10-12 weeks. As usual, that's not a forecast - just a regularity. But it's a harsh enough regularity to turn our knuckles white here."
Ericsson announced on Monday an extra 1,500 job cuts under restructuring which bit deeply into fourth-quarter net profit at the firm, the world leader in phone network equipment.
Total announced job cuts are now about 6,500, generating huge restructuring charges with the intention of bringing equally huge cost savings.
Hungary's central bank decided Monday to lower its base rate by 25 basis points to 6.0%. The decision was in line with market expectations. In recent trading, the U.S. dollar gained 0.4% against the Hungarian forint, while the euro edged up 0.1% against the forint.
Ben Chapman: "Accept that we are now in a depression, Stock Markets still grossly overvalued, poverty rates increase across midwest, a lots opportunity to regulate the banks,Goldman Sachs reports record profits and still bonusing employees richly, mainstream America goes on a financial diet, suburbs now home to American poor....How can there be a recovery with 22.5% unemployment, and with the additional threat of further unemployment? Who will buy the new housing and the tremendous inventory overhand? What will happen to the commercial inventory building up? Who has money in America to buy cars and trucks? Credits to buy housing for subprime and ALT-A buyers will end up with a 50% failure rate. Cash for clunkers was a colossal failure. Such exercises in futility only buy time, just as stimulus packages, and monetization do the same thing. The elitists behind the scenes know this just as we know this. That means the colossal deficit increase of $1.4 trillion a year will add 10% yearly to the federal debt to GDP ratio that will be over 100% by 2011. The tax liability to service this debt will be overwhelming. Government debt is rising exponentially and if further stimulus is not added the credit crisis will be renewed. This is why the Fed cannot remove further liquidity from the financial system, especially after having taken M3 from 17 to 18% to 6%. Incidentally, England and the ECB have done the same thing, and they still see rising inflation. If further stimulation is not forthcoming, or war, or default comes, we will see inflation reverse and deflation take over and that could last for ten years or more. This deflation, if allowed to take its course, will cause losses of $12 to $15 trillion from the economy and cause unemployment to rise to 40% to 50%. That would also entail cutting extended benefits. That would give us the scenes we saw in the 1930s. The debt we are facing knows no precedent in modern times, and there is no possible way it can be paid."
U.S. Dec. existing home sales fall 16.7% to 5.45m. The 16.7% percentage decline from November to December was the largest on record, the National Association of Realtors reported. The decline was larger than the 11% drop to 5.80 million that was expected by economists surveyed by MarketWatch. Sales in December were up 15% compared with December 2008. The median sales price rose to $178,300 in December, up 1.5% compared with a year earlier. It's the first year-over-year increase in prices since August 2007.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -16.
"I do see all of the signs of a credit induced real estate bubble ( in China)that i think is going to be a doozy," Jim Chanos stated.
Gold for February delivery finished up $6, or 0.6%, at $1,095.70 an ounce on the New York Mercantile Exchange. Crude oil for March delivery finished on a gain of 72 cents at $75.26 a barrel on the New York Mercantile Exchange, after losing more than 4% over the prior three trading sessions.
Apple on Monday reported a fiscal first-quarter profit of $3.38 billion, or $3.67 a share, compared with earnings of $2.25 billion, or $2.50 a share in the same period a year ago. Revenue rose 32% to $15.68 billion as Apple reported sales of 8.74 million iPhones in the quarter ended in December. The results topped the estimates of analysts surveyed by Thomson Reuters, who forecast Apple to earn $2.07 a share on $12.06 billion in revenue.
The Dow Jones Industrial Average rose 23.88 points, or 0.2%, to 10,196.86. The S&P 500 Index climbed 5.02 points, or 0.5%, to 1,096.78. The Nasdaq Composite Index added 5.51 points, or 0.3%, to 2,210.8.
Saturday, January 23, 2010
More Bank Failures
1/23/10 More Bank Failures
Regulators shut down banks Friday in Florida, Missouri, New Mexico, Oregon and Washington, bringing to nine the number of bank failures so far in 2010, following 140 closures last year in the toughest economic environment since the Great Depression.
The Federal Deposit Insurance Corp. took over the five banks: Charter Bank, based in Santa Fe, N.M., with $1.2 billion in assets and $851.5 million in deposits; Miami-based Premier American Bank, with $350.9 million in assets and $326.3 million in deposits; Bank of Leeton in Leeton, Mo., with $20.1 million in assets and $20.4 million in deposits; Columbia River Bank, based in The Dalles, Ore., with $1.1 billion in assets and $1 billion in deposits; and Seattle-based Evergreen Bank, with $488.5 million in assets and $439.4 million in deposits.
Beal Financial Corp., based in Plano, Texas, agreed to assume the deposits and assets of Charter Bank. In addition, the FDIC and Beal Financial agreed to share losses on $805.5 million of the failed bank's loans and other assets.
Columbia State Bank, based in Tacoma, Wash., agreed to buy the deposits and assets of Columbia River Bank. The FDIC and Columbia State Bank agreed to share losses on $697.4 million of its loans and other assets.
Umpqua Bank, based in Roseburg, Ore., is assuming the deposits and assets of Evergreen Bank. The FDIC and Umpqua Bank agreed to share losses on $379.5 million of its loans and other assets.
Larry Page and Sergey Brin, co-founders of Google Inc, will each sell about 5 million shares under pre-arranged stock trading plans, the Internet giant said late Friday in a filing. The sale of the shares is likely to be spread over an extended period of time to minimize market impact. Page and Brin together hold about 57.7 million of Class B common shares, which represent around 18% of Google's capital stock. Page currently serves as Google's president, products, while Brin's title is president, technology.
California will need to raise $2.7 billion to avoid a cash shortage in the current fiscal year, according to State Controller John Chiang on Friday.
Bloomberg (Daniel Taub): “Apartment rents and occupancies declined throughout the U.S. West and South in the fourth quarter… The average asking rent fell to $933 from $965 in the third quarter and $994 a year earlier, according to… RealFacts, which surveyed owners of more than 12,600 apartment complexes. The average occupancy rate dropped to 91.3% from 91.7% in the third quarter and 92.2% in the prior-year period.”
Doug Noland: "The markets have been much too complacent when it comes to the vulnerability of this Credit recovery. I wish we could simply go back to simpler financial times – back to when the bank loan was king; back to when the economy wasn’t so dependent on massive ongoing Credit creation; back to when financial speculation wasn’t such a commanding force for global markets and economies. In the past two decades the entire financial apparatus was transformed.
One of the big problems today is that there are tens of Trillions of marketable securities out there – and their value depends greatly on the ongoing creation of Trillions more. Our system needs major financial reform – no doubt about it. From today’s Wall Street Journal: “The White House’s relationship with Wall Street is close to the breaking point.” A war on Wall Street would put Credit growth, asset markets and economic recovery all at risk."
John Mauldin: "This year is a waiting game. There are so many choices we must make, and the paths we will take from those choices vary wildly. But make no mistake, we are coming close to the end game. Some countries and economies are closer to that point than others, but the entire developed world is lurching, in almost drunken fashion, towards our economic denouement.
Over the next several months, we are going to start to explore various aspects of the end game. Whither Japan? Are they actually, as I think, a bug in search of a windshield? What does that mean for the world? How safe is the euro? Everyone over here seems to think Germany will bail out Greece. A breakup seems unthinkable to the people I've been talking to (so far). But what about Spain? Italy? Can you spell moral hazard?
The Fed has said it will exit quantitative easing (QE) at the end of March. But what if mortgage rates rise? Where do we find $1 trillion (plus!!!) in US savings to fund the deficit, assuming foreigners buy about $400 billion? By definition, savings and foreign investment and the federal deficit must add up to zero. (We will go into that later - just take it as gospel for now.) How can we run 10% of GDP deficits if the Fed does not print money (as they did by buying Fannie and Freddie paper, which became treasuries, as I outlined last week)? That would require almost a 10% savings rate - with it all ending up in treasuries. How can that happen? Really?"
The DJ is reporting that the UK raised its terror threat level to ‘Severe’ from ‘Substantial.’ They define ‘Substantial’ as an ‘attack is a strong possibility’ whereas ‘Severe’ is defined as ‘an attack is highly likely.’
Early Friday, Indian officials faced a scare about a possible airline hijacking. This should jog memories to directly after the “underwear” bomber when British officials warned the United States that there were 25 trained al-Qaeda operatives ready to blow themselves up on U.S. airliners.
It will not end.
The threat in India may even be more nefarious than a simple hijacking. Officials are pointing to the Pakistan-based terror group Lashkar-e-Taiba—the group responsible for the Mumbai hotel attacks. Both countries have nuclear weapons, and the Hindus and Muslims historically do not play well in the sandbox.
Six people on the No-Fly list attempted to board planes worldwide Friday, two at Heathrow Airport in London. Brian Ross of ABC NEWS reports there is now an "elevated" terrorism threat issued for the United States and "all eyes are on Yemen." Ross reports that Al Qaida may have trained "American-looking" women in Yemen for attacks in this country. The women may have U.S. passports. Adding to the anxiety, 6 people on the "no-fly" list reportedly tried to board flights to the United States last weekend.
Taco Del Mar Franchising, a Seattle-based chain of Mexican fast-food restaurants, filed for Chapter 11 bankruptcy protection on Friday.
The owner of The Denver Post, San Jose Mercury News and 52 other daily newspapers filed for bankruptcy protection Friday, joining the procession of publishers choking on too much debt.
The filing by Affiliated Media Inc., the holding company of MediaNews Group, was expected. The privately held company had said Jan. 15 that it would seek to reorganize its finances in bankruptcy court.
Regulators shut down banks Friday in Florida, Missouri, New Mexico, Oregon and Washington, bringing to nine the number of bank failures so far in 2010, following 140 closures last year in the toughest economic environment since the Great Depression.
The Federal Deposit Insurance Corp. took over the five banks: Charter Bank, based in Santa Fe, N.M., with $1.2 billion in assets and $851.5 million in deposits; Miami-based Premier American Bank, with $350.9 million in assets and $326.3 million in deposits; Bank of Leeton in Leeton, Mo., with $20.1 million in assets and $20.4 million in deposits; Columbia River Bank, based in The Dalles, Ore., with $1.1 billion in assets and $1 billion in deposits; and Seattle-based Evergreen Bank, with $488.5 million in assets and $439.4 million in deposits.
Beal Financial Corp., based in Plano, Texas, agreed to assume the deposits and assets of Charter Bank. In addition, the FDIC and Beal Financial agreed to share losses on $805.5 million of the failed bank's loans and other assets.
Columbia State Bank, based in Tacoma, Wash., agreed to buy the deposits and assets of Columbia River Bank. The FDIC and Columbia State Bank agreed to share losses on $697.4 million of its loans and other assets.
Umpqua Bank, based in Roseburg, Ore., is assuming the deposits and assets of Evergreen Bank. The FDIC and Umpqua Bank agreed to share losses on $379.5 million of its loans and other assets.
Larry Page and Sergey Brin, co-founders of Google Inc, will each sell about 5 million shares under pre-arranged stock trading plans, the Internet giant said late Friday in a filing. The sale of the shares is likely to be spread over an extended period of time to minimize market impact. Page and Brin together hold about 57.7 million of Class B common shares, which represent around 18% of Google's capital stock. Page currently serves as Google's president, products, while Brin's title is president, technology.
California will need to raise $2.7 billion to avoid a cash shortage in the current fiscal year, according to State Controller John Chiang on Friday.
Bloomberg (Daniel Taub): “Apartment rents and occupancies declined throughout the U.S. West and South in the fourth quarter… The average asking rent fell to $933 from $965 in the third quarter and $994 a year earlier, according to… RealFacts, which surveyed owners of more than 12,600 apartment complexes. The average occupancy rate dropped to 91.3% from 91.7% in the third quarter and 92.2% in the prior-year period.”
Doug Noland: "The markets have been much too complacent when it comes to the vulnerability of this Credit recovery. I wish we could simply go back to simpler financial times – back to when the bank loan was king; back to when the economy wasn’t so dependent on massive ongoing Credit creation; back to when financial speculation wasn’t such a commanding force for global markets and economies. In the past two decades the entire financial apparatus was transformed.
One of the big problems today is that there are tens of Trillions of marketable securities out there – and their value depends greatly on the ongoing creation of Trillions more. Our system needs major financial reform – no doubt about it. From today’s Wall Street Journal: “The White House’s relationship with Wall Street is close to the breaking point.” A war on Wall Street would put Credit growth, asset markets and economic recovery all at risk."
John Mauldin: "This year is a waiting game. There are so many choices we must make, and the paths we will take from those choices vary wildly. But make no mistake, we are coming close to the end game. Some countries and economies are closer to that point than others, but the entire developed world is lurching, in almost drunken fashion, towards our economic denouement.
Over the next several months, we are going to start to explore various aspects of the end game. Whither Japan? Are they actually, as I think, a bug in search of a windshield? What does that mean for the world? How safe is the euro? Everyone over here seems to think Germany will bail out Greece. A breakup seems unthinkable to the people I've been talking to (so far). But what about Spain? Italy? Can you spell moral hazard?
The Fed has said it will exit quantitative easing (QE) at the end of March. But what if mortgage rates rise? Where do we find $1 trillion (plus!!!) in US savings to fund the deficit, assuming foreigners buy about $400 billion? By definition, savings and foreign investment and the federal deficit must add up to zero. (We will go into that later - just take it as gospel for now.) How can we run 10% of GDP deficits if the Fed does not print money (as they did by buying Fannie and Freddie paper, which became treasuries, as I outlined last week)? That would require almost a 10% savings rate - with it all ending up in treasuries. How can that happen? Really?"
The DJ is reporting that the UK raised its terror threat level to ‘Severe’ from ‘Substantial.’ They define ‘Substantial’ as an ‘attack is a strong possibility’ whereas ‘Severe’ is defined as ‘an attack is highly likely.’
Early Friday, Indian officials faced a scare about a possible airline hijacking. This should jog memories to directly after the “underwear” bomber when British officials warned the United States that there were 25 trained al-Qaeda operatives ready to blow themselves up on U.S. airliners.
It will not end.
The threat in India may even be more nefarious than a simple hijacking. Officials are pointing to the Pakistan-based terror group Lashkar-e-Taiba—the group responsible for the Mumbai hotel attacks. Both countries have nuclear weapons, and the Hindus and Muslims historically do not play well in the sandbox.
Six people on the No-Fly list attempted to board planes worldwide Friday, two at Heathrow Airport in London. Brian Ross of ABC NEWS reports there is now an "elevated" terrorism threat issued for the United States and "all eyes are on Yemen." Ross reports that Al Qaida may have trained "American-looking" women in Yemen for attacks in this country. The women may have U.S. passports. Adding to the anxiety, 6 people on the "no-fly" list reportedly tried to board flights to the United States last weekend.
Taco Del Mar Franchising, a Seattle-based chain of Mexican fast-food restaurants, filed for Chapter 11 bankruptcy protection on Friday.
The owner of The Denver Post, San Jose Mercury News and 52 other daily newspapers filed for bankruptcy protection Friday, joining the procession of publishers choking on too much debt.
The filing by Affiliated Media Inc., the holding company of MediaNews Group, was expected. The privately held company had said Jan. 15 that it would seek to reorganize its finances in bankruptcy court.
Friday, January 22, 2010
Another Big Down Day
1/22/10 Another Big Down Day
McDonald's Corp said Friday that its fourth-quarter net income rose to $1.22 billion, or $1.11 a share, from $985.3 million, or 87 cents a share, in the year-earlier period. The fourth-quarter results included a 7-cent benefit from foreign currency translations and an 8-cent benefit tied to resolution of certain liabilities, the company said. Revenue rose to $5.97 billion from $5.57 billion. Analysts, on average, estimated the fast-food giant to earn $1.01 a share with revenue of $5.92 billion, according to FactSet. Comparable sales rose 2.3% with all segments reporting positive results, McDonald's said.
Trader Mark:"While everyone focuses on flagrantly inaccurate government reports or how companies such as IBM are doing (with 70% of revenues overseas) as some sort of tell on the US economy, I like looking at the railroads. With Burlington Northern (BNI), CSX (CSX), and Union Pacific (UNP) all reporting their fourth quarters we can now pass judgement on the morphine filled US economy. Despite (literally) trillions of injections - it's limp as a dish rag. Don't even bother to ask what it would look like without the morphine - you'd be depressed. Don't think how the economy would work with a 3-5% interest rate, or the lack of now annual stimulus.
For those few who wish to leave the Matrix, let us look at what we are seeing from the railroad sector (keep in mind, these are partially "international" tells as well, as American exports also are loaded on these rail cars)
* The nation's railroad operators expect a tepid recovery for the U.S. economy in 2010, as both businesses and consumers continue to wrestle with the effects of the recession. The severe economic slump cut shipping demand for the railroads because American consumers and industries have been buying fewer of the cars, chemicals, crops, lumber and containers of imported goods the railroads carry.
* Union Pacific Corp., Burlington Northern Santa Fe Corp. and CSX Corp. -- the nation's top three railroad companies -- all say demand for coal, once a lucrative segment, is slumping as U.S. factories and homeowners use less electricity. (as much as I am a coal bull in the long run, the performance of the coal stocks smack of people going to the investing playbook and saying "these stocks should move up ahead of a recovery, therefore I will buy them anticipating such" rather than actually observing what is happening in the US economy) And as people continue to spend sparingly, shipments of consumer goods will show a slight increase at best.
* The companies reported lower fourth-quarter profits this week and said results won't improve until they see a firm turnaround in the economy. (I've been told we've had genetically alterered green shoots everywhere? I believe they cost about $18 million a shoot. Is that not a firm turnaround?)
* "Until employment shows some signs of improvement, you're going to have consumers stay on the sideline, and I think it's going to be pretty tough to see any kind of a strong recovery," Union Pacific Chairman and CEO Jim Young said in an interview with The Associated Press on Thursday.
Rob Hanna: "The VIX provided some notable action Thursday. It closed up over 19% and is now stretched over 20% above its 10ma. Below is a test of other times we saw the VIX stretched this much while the SPX was trading above its 200ma.
The VIX is one of several indicators I am seeing that is suggesting a bounce is near."
The average sector yield of utilities is 4.2%, topped only be telecommunication that yields about 5.2%.
Air America, a politically liberal talk-radio network, said on Thursday it would cease operations and file for Chapter 7 bankruptcy protection to begin an orderly wind down of its business.
The radio network was launched in 2004 by comedian Al Franken, now a U.S. Senator and has helped launch other careers such as that of liberal television personality Rachel Maddow.
The network, which had about 100 radio outlets nationwide, has suffered a decline in advertising amid the U.S. recession and a search for new investors failed, Air America Media chairman Charlie Kireker said in a memo to staff on Thursday.
Air America, which has struggled under a succession of management changes since its inception, had previously been forced into bankruptcy in 2006 when efforts to resolve an outstanding debt with a creditor from the network's earliest days broke down.
Tim Iacono: "To this day, it striking to me that perhaps the greatest lessons of the Great Depression have still not yet been learned."
According to AMG Data, for the week ended 1/20, Equity Fund Outflows -$4.2 Bil; Taxable Bond Fund Inflows $4 Bil
xETFs - Equity Fund Inflows $1.4 Bil; Taxable Bond Fund Inflows $3.5 Bil
T. Boone Pickens, founder and chairman of Dallas-based BP Capital, said a U.S. bill with new incentives for natural-gas vehicles will pass by late May.
"We've got a bill that's set to go," Pickens told Bloomberg Television. "It will pass by Memorial Day."
Joblessness in four states—South Carolina (12.6 percent), Delaware (9.0 percent), Florida (11.8 percent) and North Carolina (11.2 percent)—and the District of Columbia (12.1 percent) reached record highs.
In all, 43 states and the District of Columbia saw their rates increase last month, while four states reported a decrease and three states had no change in their unemployment, according to the Labor Department.
The December data is a reversal from the previous month, when 36 states reported lower unemployment.
March crude ends down 2% at $74.54 a barrel.
U.S. Rig Count is up 34 from last week at 1282; down 233 year over year.
Dr. Marc Faber
Axel Griesch | ASFM | Getty Images
Dr. Marc Faber
President Barack Obama on Thursday proposed new limits on the size and trading practices of big banks, to prevent excessive risk-taking.
"I don't have a very high opinion of Mr. Obama," Marc Faber told "Squawk Box Europe." "I was negative of Mr. Bush but I think Mr. Obama makes him look like a genius."
"Basically I think everybody will agree that in an economic system the market solves problems best."
U.K. raises terrorism threat level to "severe".
Dow industrials off 217 pts at 10,172 at close. S&P 500 index down 24 points, or 2.2%, at 1,091. Nasdaq Composite down 60 points, or 2.7%, at 2,205.
McDonald's Corp said Friday that its fourth-quarter net income rose to $1.22 billion, or $1.11 a share, from $985.3 million, or 87 cents a share, in the year-earlier period. The fourth-quarter results included a 7-cent benefit from foreign currency translations and an 8-cent benefit tied to resolution of certain liabilities, the company said. Revenue rose to $5.97 billion from $5.57 billion. Analysts, on average, estimated the fast-food giant to earn $1.01 a share with revenue of $5.92 billion, according to FactSet. Comparable sales rose 2.3% with all segments reporting positive results, McDonald's said.
Trader Mark:"While everyone focuses on flagrantly inaccurate government reports or how companies such as IBM are doing (with 70% of revenues overseas) as some sort of tell on the US economy, I like looking at the railroads. With Burlington Northern (BNI), CSX (CSX), and Union Pacific (UNP) all reporting their fourth quarters we can now pass judgement on the morphine filled US economy. Despite (literally) trillions of injections - it's limp as a dish rag. Don't even bother to ask what it would look like without the morphine - you'd be depressed. Don't think how the economy would work with a 3-5% interest rate, or the lack of now annual stimulus.
For those few who wish to leave the Matrix, let us look at what we are seeing from the railroad sector (keep in mind, these are partially "international" tells as well, as American exports also are loaded on these rail cars)
* The nation's railroad operators expect a tepid recovery for the U.S. economy in 2010, as both businesses and consumers continue to wrestle with the effects of the recession. The severe economic slump cut shipping demand for the railroads because American consumers and industries have been buying fewer of the cars, chemicals, crops, lumber and containers of imported goods the railroads carry.
* Union Pacific Corp., Burlington Northern Santa Fe Corp. and CSX Corp. -- the nation's top three railroad companies -- all say demand for coal, once a lucrative segment, is slumping as U.S. factories and homeowners use less electricity. (as much as I am a coal bull in the long run, the performance of the coal stocks smack of people going to the investing playbook and saying "these stocks should move up ahead of a recovery, therefore I will buy them anticipating such" rather than actually observing what is happening in the US economy) And as people continue to spend sparingly, shipments of consumer goods will show a slight increase at best.
* The companies reported lower fourth-quarter profits this week and said results won't improve until they see a firm turnaround in the economy. (I've been told we've had genetically alterered green shoots everywhere? I believe they cost about $18 million a shoot. Is that not a firm turnaround?)
* "Until employment shows some signs of improvement, you're going to have consumers stay on the sideline, and I think it's going to be pretty tough to see any kind of a strong recovery," Union Pacific Chairman and CEO Jim Young said in an interview with The Associated Press on Thursday.
Rob Hanna: "The VIX provided some notable action Thursday. It closed up over 19% and is now stretched over 20% above its 10ma. Below is a test of other times we saw the VIX stretched this much while the SPX was trading above its 200ma.
The VIX is one of several indicators I am seeing that is suggesting a bounce is near."
The average sector yield of utilities is 4.2%, topped only be telecommunication that yields about 5.2%.
Air America, a politically liberal talk-radio network, said on Thursday it would cease operations and file for Chapter 7 bankruptcy protection to begin an orderly wind down of its business.
The radio network was launched in 2004 by comedian Al Franken, now a U.S. Senator and has helped launch other careers such as that of liberal television personality Rachel Maddow.
The network, which had about 100 radio outlets nationwide, has suffered a decline in advertising amid the U.S. recession and a search for new investors failed, Air America Media chairman Charlie Kireker said in a memo to staff on Thursday.
Air America, which has struggled under a succession of management changes since its inception, had previously been forced into bankruptcy in 2006 when efforts to resolve an outstanding debt with a creditor from the network's earliest days broke down.
Tim Iacono: "To this day, it striking to me that perhaps the greatest lessons of the Great Depression have still not yet been learned."
According to AMG Data, for the week ended 1/20, Equity Fund Outflows -$4.2 Bil; Taxable Bond Fund Inflows $4 Bil
xETFs - Equity Fund Inflows $1.4 Bil; Taxable Bond Fund Inflows $3.5 Bil
T. Boone Pickens, founder and chairman of Dallas-based BP Capital, said a U.S. bill with new incentives for natural-gas vehicles will pass by late May.
"We've got a bill that's set to go," Pickens told Bloomberg Television. "It will pass by Memorial Day."
Joblessness in four states—South Carolina (12.6 percent), Delaware (9.0 percent), Florida (11.8 percent) and North Carolina (11.2 percent)—and the District of Columbia (12.1 percent) reached record highs.
In all, 43 states and the District of Columbia saw their rates increase last month, while four states reported a decrease and three states had no change in their unemployment, according to the Labor Department.
The December data is a reversal from the previous month, when 36 states reported lower unemployment.
March crude ends down 2% at $74.54 a barrel.
U.S. Rig Count is up 34 from last week at 1282; down 233 year over year.
Dr. Marc Faber
Axel Griesch | ASFM | Getty Images
Dr. Marc Faber
President Barack Obama on Thursday proposed new limits on the size and trading practices of big banks, to prevent excessive risk-taking.
"I don't have a very high opinion of Mr. Obama," Marc Faber told "Squawk Box Europe." "I was negative of Mr. Bush but I think Mr. Obama makes him look like a genius."
"Basically I think everybody will agree that in an economic system the market solves problems best."
U.K. raises terrorism threat level to "severe".
Dow industrials off 217 pts at 10,172 at close. S&P 500 index down 24 points, or 2.2%, at 1,091. Nasdaq Composite down 60 points, or 2.7%, at 2,205.
Thursday, January 21, 2010
EUC
1/21/10 EUC
EUC, or Emergency Unemployment Compensation, shot up by a stunning 652,364 to 5,654,544. The Emergency Unemployment Compensation (EUC) program provides benefits for an additional 34 weeks in all states. First-time claims for state unemployment benefits jumped unexpectedly by the largest amount in eight months, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 16 rose 36,000 to 482,000. The consensus forecast of Wall Street economists was for claims to inch lower to 438,000. This is the highest level of claims since November. The four-week average rose 7,000 to 448,250. This is the first increase after 19 straight declines. Claims in the previous week were revised to an increase of 13,000 to 446,000 compared with the initial estimate of an increase of 11,000 to 444,000. A Labor Department official said that there were more estimates this week because of the holiday on Monday. In addition, some of the increase may be due to administrative delays in reporting claims since the Christmas and New Year holidays. Overall, a record 12 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 2, the latest period for which the data is available. This is up from 10.9 million in the prior week.
Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.
The Mayan calendar actually ends on October 28, 2011.
China’s growth accelerated to the fastest pace since 2007 in the fourth quarter, capping Premier Wen Jiabao’s success in shielding the nation from the global recession and adding pressure to rein in a surge in credit.
Gross domestic product rose 10.7 percent from a year before, more than the median forecast of 10.5 percent in a Bloomberg News survey, a statistics bureau report showed in Beijing today. Asset-price gains, particularly in property, are creating problems for the government to guide the economy, Ma Jiantang, who heads the bureau, told reporters after the release.
Lenders have seized the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month.
The EU approved Oracle's takeover of Sun.
A global rally in stocks may end in the second half of the year amid a muted recovery in the world’s largest economies and as deflationary pressures limit gains in corporate earnings, Nouriel Roubini said.
Failure to restrain asset-price bubbles in emerging markets, fueled by loose monetary policies in the U.S. and around the world, may also cause an “unraveling and a significant correction of asset prices which will be damaging to global and regional economic growth,” Roubini, the Harvard- schooled New York University professor who in 2006 foresaw the financial crisis, said in Hong Kong today.
“The recession isn’t over,” Martin Feldstein, former president of the Cambridge, Massachusetts-based NBER and a member of its Business Cycle Dating Committee, said in an interview with Bloomberg Radio today. “2010 is going to be a very weak year,” Feldstein also said, as American consumers limit spending and home prices may resume their slide.
Bank of England Governor Mervyn King said, "Families face years of pain...The patience of UK households is likely to be sorely tried over the next couple of years" as inflation cuts into their meager wages in order to pay for this. Families Face Years of Pain - UK Telegraph.
Japanese demand for bank loans dropped the most in more than 5 years on lower spending.
In my view, Scott Brown's election to the Senate qualifies as a Black Swan event. It will be felt
for years to come. Fortunately, it arrived just in the nick of time.
The U.S. dollar hit a five-month high versus the euro and gained on other currencies amid continuing sovereign-debt worries in the periphery of the euro zone and further signs that the region's recovery is losing momentum.
The dollar received a general boost as strong economic data from China raised concern that Beijing may tighten policy.
Since the downturn began two years ago, 7.5 million jobs have been lost.
The Philly Fed diffusion index fell to 15.2 in January from 22.5 in December. The decline was sharper than expected Economists polled by MarketWatch were expecting the index to fall to 17.0. Indexes for new orders and shipments fell back from December readings. The employment index remained in negative territory but rose to its highest level since February 2008.
U.S. Inventories of natural gas stood at 2,607 billion cubic feet in the week ended January 15, a drop of 245 billion cubic feet from the prior week. The average forecast of analysts surveyed by Platts was for a drop ranging from 223 billion to 227 billion cubic feet. The inventory level was 0.2 percent below the five-year average of about 2.61 trillion cubic feet, and 0.9 percent above last year's storage level of about 2.59 trillion cubic feet, according to the government data.
Xerox to cut 2,500 jobs in restructuring.
Gold futures ended floor trading on the New York Mercantile Exchange Thursday with a $9.4, or 0.8% loss, at $1,103.2 an ounce, for the second straight daily loss. March crude ends down $1.66 at $76.08 a barrel.
The Industrials are seeing their worst 2 day drop since August 2009, and have dropped below their 50 day moving average Thursday for the first time since July 2009.
The Dow Jones Industrial Average fell 213.27 points, or 2%, to 10,389.88. The S&P 500 Index shed 21.56 points, or 1.9%, to 1,116.48. The Nasdaq Composite Index declined 25.55 points, or 1.1%, to end at 2,265.7.
Google Inc. said Thursday its fourth-quarter net income rose to $1.97 billion, or $6.13 a share, from $382 million, or $1.21 a share in the same period a year earlier. Net revenue rose to $4.95 billion, Google said. Excluding special items, Google said earnings for the quarter were $6.79 a share. Wall Street analysts have been expecting Mountain View, Calif.-based Google to post earnings excluding items of $6.48 a share, and $4.92 billion in net revenue, according to Thomson Reuters data.
EUC, or Emergency Unemployment Compensation, shot up by a stunning 652,364 to 5,654,544. The Emergency Unemployment Compensation (EUC) program provides benefits for an additional 34 weeks in all states. First-time claims for state unemployment benefits jumped unexpectedly by the largest amount in eight months, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 16 rose 36,000 to 482,000. The consensus forecast of Wall Street economists was for claims to inch lower to 438,000. This is the highest level of claims since November. The four-week average rose 7,000 to 448,250. This is the first increase after 19 straight declines. Claims in the previous week were revised to an increase of 13,000 to 446,000 compared with the initial estimate of an increase of 11,000 to 444,000. A Labor Department official said that there were more estimates this week because of the holiday on Monday. In addition, some of the increase may be due to administrative delays in reporting claims since the Christmas and New Year holidays. Overall, a record 12 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 2, the latest period for which the data is available. This is up from 10.9 million in the prior week.
Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.
The Mayan calendar actually ends on October 28, 2011.
China’s growth accelerated to the fastest pace since 2007 in the fourth quarter, capping Premier Wen Jiabao’s success in shielding the nation from the global recession and adding pressure to rein in a surge in credit.
Gross domestic product rose 10.7 percent from a year before, more than the median forecast of 10.5 percent in a Bloomberg News survey, a statistics bureau report showed in Beijing today. Asset-price gains, particularly in property, are creating problems for the government to guide the economy, Ma Jiantang, who heads the bureau, told reporters after the release.
Lenders have seized the assets of Intrawest ULC, including the Whistler ski resort that will be home to the Olympic downhill races next month.
The EU approved Oracle's takeover of Sun.
A global rally in stocks may end in the second half of the year amid a muted recovery in the world’s largest economies and as deflationary pressures limit gains in corporate earnings, Nouriel Roubini said.
Failure to restrain asset-price bubbles in emerging markets, fueled by loose monetary policies in the U.S. and around the world, may also cause an “unraveling and a significant correction of asset prices which will be damaging to global and regional economic growth,” Roubini, the Harvard- schooled New York University professor who in 2006 foresaw the financial crisis, said in Hong Kong today.
“The recession isn’t over,” Martin Feldstein, former president of the Cambridge, Massachusetts-based NBER and a member of its Business Cycle Dating Committee, said in an interview with Bloomberg Radio today. “2010 is going to be a very weak year,” Feldstein also said, as American consumers limit spending and home prices may resume their slide.
Bank of England Governor Mervyn King said, "Families face years of pain...The patience of UK households is likely to be sorely tried over the next couple of years" as inflation cuts into their meager wages in order to pay for this. Families Face Years of Pain - UK Telegraph.
Japanese demand for bank loans dropped the most in more than 5 years on lower spending.
In my view, Scott Brown's election to the Senate qualifies as a Black Swan event. It will be felt
for years to come. Fortunately, it arrived just in the nick of time.
The U.S. dollar hit a five-month high versus the euro and gained on other currencies amid continuing sovereign-debt worries in the periphery of the euro zone and further signs that the region's recovery is losing momentum.
The dollar received a general boost as strong economic data from China raised concern that Beijing may tighten policy.
Since the downturn began two years ago, 7.5 million jobs have been lost.
The Philly Fed diffusion index fell to 15.2 in January from 22.5 in December. The decline was sharper than expected Economists polled by MarketWatch were expecting the index to fall to 17.0. Indexes for new orders and shipments fell back from December readings. The employment index remained in negative territory but rose to its highest level since February 2008.
U.S. Inventories of natural gas stood at 2,607 billion cubic feet in the week ended January 15, a drop of 245 billion cubic feet from the prior week. The average forecast of analysts surveyed by Platts was for a drop ranging from 223 billion to 227 billion cubic feet. The inventory level was 0.2 percent below the five-year average of about 2.61 trillion cubic feet, and 0.9 percent above last year's storage level of about 2.59 trillion cubic feet, according to the government data.
Xerox to cut 2,500 jobs in restructuring.
Gold futures ended floor trading on the New York Mercantile Exchange Thursday with a $9.4, or 0.8% loss, at $1,103.2 an ounce, for the second straight daily loss. March crude ends down $1.66 at $76.08 a barrel.
The Industrials are seeing their worst 2 day drop since August 2009, and have dropped below their 50 day moving average Thursday for the first time since July 2009.
The Dow Jones Industrial Average fell 213.27 points, or 2%, to 10,389.88. The S&P 500 Index shed 21.56 points, or 1.9%, to 1,116.48. The Nasdaq Composite Index declined 25.55 points, or 1.1%, to end at 2,265.7.
Google Inc. said Thursday its fourth-quarter net income rose to $1.97 billion, or $6.13 a share, from $382 million, or $1.21 a share in the same period a year earlier. Net revenue rose to $4.95 billion, Google said. Excluding special items, Google said earnings for the quarter were $6.79 a share. Wall Street analysts have been expecting Mountain View, Calif.-based Google to post earnings excluding items of $6.48 a share, and $4.92 billion in net revenue, according to Thomson Reuters data.
Wednesday, January 20, 2010
China
1/20/10 China
U.S. housing starts fell 4% to a seasonally adjusted annual rate of 557,000 in December, the Commerce Department estimated Wednesday. For all of 2009, an estimated 554,000 homes were started, down 39% from 2008's total and the lowest on record. Starts of single-family homes dropped 29% to a record-low 444,000 in 2009. The number of building permits rose 10.9% in December to a seasonally adjusted annual rate of 653,000, the highest in 14 months. In December, building permits for single-family homes rose 8.3% to a seasonally adjusted annual rate of 508,000, the highest in 15 months.
Separately, the government's producer price-index rose 0.2% in December. Core prices, excluding food and energy, were flat last month. The euro fell to a five-month low versus the U.S. dollar, at $1.4141, as fears that Chinese efforts to rein in lending led investors to shun risky assets and ongoing worries about Greece's budget problems kept pressure on the single currency.
On an unadjusted basis, prices for finished goods advanced 4.4 percent in 2009, after falling 0.9 percent in 2008. "
The Independent Director Committee of Alcon Inc.said Wednesday that the terms of Novartis' offer to acquire the minority publicly traded shares of Alcon are "grossly inadequate." It also said that the financial analysis upon which Novartis' proposal is based is "fundamentally flawed." The Independent Director Committee also said that "coercive tactics" deployed by Novartis are "offensive" and demonstrate a "profound disrespect" for Alcon's minority shareholders. Novartis offered 2.8 shares of Novartis for each share of Alcon, valued at $151.43 a share on Jan. 19, the Committee said. It noted that's below the $180 in cash that will be paid by Novartis to acquire its majority position.
The downtown Seattle office vacancy rate topped 20 percent during the fourth quarter, according to one brokerage.
China has told some banks to limit lending and will restrict overall credit growth in the nation to 7.5 trillion yuan ($1.1 trillion) this year, banking regulator Liu Mingkang said. Some lenders were asked to rein in credit because they failed to meet regulatory requirements including those for capital, Liu, chairman of the China Banking said.
After every financial crisis there's a sovereign debt crisis, Marc Faber says. Countries that borrowed too much during the boom times start struggling to pay their competitors back, and eventually some of them default.
The countries most likely to blow up this time around are the "PIIGS": Portugal, Ireland, Italy, Greece, and Spain. One ore more of them, Faber says, will likely default in the next couple of years. And, that could result in the death of the Euro currency.
Longer-term, Faber says, Japan and the US are in line for the same fate.
A January survey of 209 fund managers responsible for $539 billion of assets has found them more excited about equities than they've been in four years.
New Zealand should cut its corporate and personal tax rates, the Tax Working Group said in a report on Wednesday.
The group set up to recommend options for tax reform said that the structure of the tax system needs to be improved significantly by making changes that involve a combination of changes to the tax bases and tax mix, to tax rates, and by improving some of the supporting tax rules.
The group recommended the government to align company, top personal and trust tax rates. Further, New Zealand's company tax rate needs to be competitive with other countries' company tax rates, particularly that in Australia. The government also needs to reduce the top personal tax rates of 38% and 33% as part of an alignment strategy and to better position the tax system for growth.
The Street.com: "The trend is clearly in place, and you just can't have enough exposure to natural gas this year. I believe it is the energy opportunity of the year, if not the decade."
Wheat fell to a three-month low on signs of slack demand for supplies from the U.S., the world’s biggest shipper of the grain, and rising global stockpiles.
About 9.4 million metric tons of wheat for export were inspected in the week through Jan. 14, down 24 percent from the previous week, the U.S. Department of Agriculture said yesterday in a report. That was the lowest amount since June 1, when the current marketing year began, the USDA indicated. The department has said world inventories may jump 19 percent by May 31.
Zero Hedge: "As expected, the ES channel hit resistance yesterday... and went straight down. And the fear for bulls may materialize as the resistance is on the edge of getting taken out, just as the dollar is poised for a break out. Look for a major fight between bulls and bears at the 1,126 ES level....The DXY is about to break the 78.449 high last achieved on December 22: at 78.320 we are very close. Greece is helping. When that resistance is breached, look for Europe to start panicking and also all those who still have the dollar short trade on to start rushing through the exits."
[BRIEFING.COM] The S&P 500 recently made its way off of its session low, which coincided with the July to January trendline that runs just above the 1130 mark. A pullback and close below the trendline would mark a significant technical event for traders. Even if the line isn't violated this session, it will remain a point of focus in sessions to come.
In the event that the trendline is violated, some traders believe that the event could cause at least a short-term change in sentiment among broader market participants. Bullish sentiment in recent months has made pullbacks short and shallow as participants look for entry points to the stock market's rally from the multiyear lows that it hit this past year.
Analysts surveyed by Platts expect U.S. natural gas inventories to have fallen in the week ended Jan. 15, with forecasts for a drop ranging from 223 billion to 227 billion cubic feet. The U.S. Energy Information Administration is expected to report its estimate on Thursday at 10.30 a.m. Eastern. Last week, the EIA reported a 266 billion cubic feet draw from storage, one of the largest on record, as cold temperatures boosted heating demand. On Wednesday, natural gas for February delivery fell 5.7 cents to $5.50 per million British thermal units.
Crude-oil futures rose briefly and then tipped lower late Wednesday after weekly inventories data showed oil supplies dropped last week, in contrast to a gain forecast by some analysts. For the week ended Jan. 15, oil inventories fell 1.8 million barrels, compared to a 2.8 million-barrel increase expected by analysts polled by Platts. Gasoline stocks rose 667,000 barrels compared to forecasts for a rise of 2.1 million barrels. Distillate supplies tumbled 3.385 million barrels versus an anticipated rise of 1.1 million barrels. Oil for March delivery, the new front-month contract, recently traded at $77.67 a barrel compared to a floor settlement of $77.74 a barrel.
The Dow Jones Industrial Average fell 122.28 points to 10,603.15. The S&P 500 Index shed 12.19 points to 1,138.04. The Nasdaq Composite declined 29.15 points to 2,291.25.
Gold for February delivery finished the session down $27.40, or 2.4%, at $1,112.60 an ounce. Copper for March delivery fell 8.7 cents, or 2.5%, to $3.36 a pound.
U.S. housing starts fell 4% to a seasonally adjusted annual rate of 557,000 in December, the Commerce Department estimated Wednesday. For all of 2009, an estimated 554,000 homes were started, down 39% from 2008's total and the lowest on record. Starts of single-family homes dropped 29% to a record-low 444,000 in 2009. The number of building permits rose 10.9% in December to a seasonally adjusted annual rate of 653,000, the highest in 14 months. In December, building permits for single-family homes rose 8.3% to a seasonally adjusted annual rate of 508,000, the highest in 15 months.
Separately, the government's producer price-index rose 0.2% in December. Core prices, excluding food and energy, were flat last month. The euro fell to a five-month low versus the U.S. dollar, at $1.4141, as fears that Chinese efforts to rein in lending led investors to shun risky assets and ongoing worries about Greece's budget problems kept pressure on the single currency.
On an unadjusted basis, prices for finished goods advanced 4.4 percent in 2009, after falling 0.9 percent in 2008. "
The Independent Director Committee of Alcon Inc.said Wednesday that the terms of Novartis' offer to acquire the minority publicly traded shares of Alcon are "grossly inadequate." It also said that the financial analysis upon which Novartis' proposal is based is "fundamentally flawed." The Independent Director Committee also said that "coercive tactics" deployed by Novartis are "offensive" and demonstrate a "profound disrespect" for Alcon's minority shareholders. Novartis offered 2.8 shares of Novartis for each share of Alcon, valued at $151.43 a share on Jan. 19, the Committee said. It noted that's below the $180 in cash that will be paid by Novartis to acquire its majority position.
The downtown Seattle office vacancy rate topped 20 percent during the fourth quarter, according to one brokerage.
China has told some banks to limit lending and will restrict overall credit growth in the nation to 7.5 trillion yuan ($1.1 trillion) this year, banking regulator Liu Mingkang said. Some lenders were asked to rein in credit because they failed to meet regulatory requirements including those for capital, Liu, chairman of the China Banking said.
After every financial crisis there's a sovereign debt crisis, Marc Faber says. Countries that borrowed too much during the boom times start struggling to pay their competitors back, and eventually some of them default.
The countries most likely to blow up this time around are the "PIIGS": Portugal, Ireland, Italy, Greece, and Spain. One ore more of them, Faber says, will likely default in the next couple of years. And, that could result in the death of the Euro currency.
Longer-term, Faber says, Japan and the US are in line for the same fate.
A January survey of 209 fund managers responsible for $539 billion of assets has found them more excited about equities than they've been in four years.
New Zealand should cut its corporate and personal tax rates, the Tax Working Group said in a report on Wednesday.
The group set up to recommend options for tax reform said that the structure of the tax system needs to be improved significantly by making changes that involve a combination of changes to the tax bases and tax mix, to tax rates, and by improving some of the supporting tax rules.
The group recommended the government to align company, top personal and trust tax rates. Further, New Zealand's company tax rate needs to be competitive with other countries' company tax rates, particularly that in Australia. The government also needs to reduce the top personal tax rates of 38% and 33% as part of an alignment strategy and to better position the tax system for growth.
The Street.com: "The trend is clearly in place, and you just can't have enough exposure to natural gas this year. I believe it is the energy opportunity of the year, if not the decade."
Wheat fell to a three-month low on signs of slack demand for supplies from the U.S., the world’s biggest shipper of the grain, and rising global stockpiles.
About 9.4 million metric tons of wheat for export were inspected in the week through Jan. 14, down 24 percent from the previous week, the U.S. Department of Agriculture said yesterday in a report. That was the lowest amount since June 1, when the current marketing year began, the USDA indicated. The department has said world inventories may jump 19 percent by May 31.
Zero Hedge: "As expected, the ES channel hit resistance yesterday... and went straight down. And the fear for bulls may materialize as the resistance is on the edge of getting taken out, just as the dollar is poised for a break out. Look for a major fight between bulls and bears at the 1,126 ES level....The DXY is about to break the 78.449 high last achieved on December 22: at 78.320 we are very close. Greece is helping. When that resistance is breached, look for Europe to start panicking and also all those who still have the dollar short trade on to start rushing through the exits."
[BRIEFING.COM] The S&P 500 recently made its way off of its session low, which coincided with the July to January trendline that runs just above the 1130 mark. A pullback and close below the trendline would mark a significant technical event for traders. Even if the line isn't violated this session, it will remain a point of focus in sessions to come.
In the event that the trendline is violated, some traders believe that the event could cause at least a short-term change in sentiment among broader market participants. Bullish sentiment in recent months has made pullbacks short and shallow as participants look for entry points to the stock market's rally from the multiyear lows that it hit this past year.
Analysts surveyed by Platts expect U.S. natural gas inventories to have fallen in the week ended Jan. 15, with forecasts for a drop ranging from 223 billion to 227 billion cubic feet. The U.S. Energy Information Administration is expected to report its estimate on Thursday at 10.30 a.m. Eastern. Last week, the EIA reported a 266 billion cubic feet draw from storage, one of the largest on record, as cold temperatures boosted heating demand. On Wednesday, natural gas for February delivery fell 5.7 cents to $5.50 per million British thermal units.
Crude-oil futures rose briefly and then tipped lower late Wednesday after weekly inventories data showed oil supplies dropped last week, in contrast to a gain forecast by some analysts. For the week ended Jan. 15, oil inventories fell 1.8 million barrels, compared to a 2.8 million-barrel increase expected by analysts polled by Platts. Gasoline stocks rose 667,000 barrels compared to forecasts for a rise of 2.1 million barrels. Distillate supplies tumbled 3.385 million barrels versus an anticipated rise of 1.1 million barrels. Oil for March delivery, the new front-month contract, recently traded at $77.67 a barrel compared to a floor settlement of $77.74 a barrel.
The Dow Jones Industrial Average fell 122.28 points to 10,603.15. The S&P 500 Index shed 12.19 points to 1,138.04. The Nasdaq Composite declined 29.15 points to 2,291.25.
Gold for February delivery finished the session down $27.40, or 2.4%, at $1,112.60 an ounce. Copper for March delivery fell 8.7 cents, or 2.5%, to $3.36 a pound.
Tuesday, January 19, 2010
Cadbury
1/19/10 Cadbury
Venezuela's socialist President Hugo Chavez on Sunday nationalized a chain of supermarkets controlled by France's Casino on charges of price gauging after the government devalued the bolivar currency.
Kraft's CEO Irene Rosenfeld had to inject more cash into her bid and drop the number of new Kraft shares in the offer to win over Roger Carr, chairman of the 186-year-old Cadbury and mollify her top shareholder, billionaire investor Warren Buffett.
Kraft's cash-and-share acquisition, which dealmakers said was struck after all-night negotiations at the London headquarters of investment bank Lazard, values each Cadbury share at 840 pence, with shareholders also set to get a 10p special dividend, bringing it to a total of 850p.
The enlarged group will pip privately owned Mars-Wrigley to the title of the world's top sweet maker, bringing under one roof Cadbury's Dairy Milk chocolate and Trident gum and Kraft's Milka, Toblerone and Terry's chocolate brands.
On January 19, 2010 there were 1093 potentially hazardous asteroids but no sunspots. The weather
will get colder and natural gas usage will continue to increase and this is not reflected in its price.
Japan Airlines Corp filed for bankruptcy protection on Tuesday, owing more than $25 billion, and vowed to slash 15,700 jobs and unprofitable routes as it tries to survive volatile fuel costs and fickle flyers.
The Oil Drum: "It seems to me that the current recession is very much energy-related, and is likely to continue. The recession is occurring because the current US “system” (individual homes, private cars, many imports) was built for cheap ($20 barrel) oil and gas, and cannot function well using expensive oil and gas.
I expect that the recession will experience some ups and downs, but will generally be worse by the end of 2010. Government revenues will continue to decline, making it increasingly difficult to support subsidies for renewables and to provide funding guarantees for nuclear and wind."
Florida farmers will sustain at least a 30% crop loss due to freezing temperatures.
Williams Cos. says it will create one of the largest natural gas partnerships in the nation by combining pipeline and processing units.
The new company will have a presence from the Rocky Mountains and the Gulf Coast to the Northeast.
Williams, based in Tulsa, Okla., will get about $3.5 billion in cash from Williams Partners to help pay down debt and will contribute its substantial assets to the new, larger Williams Partners.
The parent company gets about 203 million in shares and its ownership share increases from 24 percent to 80 percent.
One key asset that Williams will contribute to the partnership is the Texas Transcontinental Gas pipeline, which runs to the bountiful Marcellus Shale of Pennsylvania.
President Barack Obama will deliver his first State of the Union address on Jan. 27 and his budget plan on Feb. 1.
The Bank of Canada did the expected Tuesday morning, leaving its key interest rate unchanged at 1/4 percent while backing up its conditional commitment to hold the current rate steady until the end of the second quarter of 2010. Policy makers noted a global economic recovery is under way, supported by continued improvements in financial conditions and stronger domestic demand growth in many emerging-market economies. However, the BOC acknowledged that the recovery is fragile, and continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.
Security and industrial products manufacturer Tyco International Ltd. said Monday that it has agreed to buy security and protection services provider Brink's Home Security Holdings, Inc., now operating as Broadview Security, in a cash and stock deal valued at $42.50 per share or about $2.0 billion.
The purchase price represents a premium of more than 35% to Brink's Friday closing stock price of $31.42.
German economic confidence deteriorated for the fourth month in a row, suggesting a slow recovery in the largest Eurozone economy, results of a closely watched survey showed Tuesday. Economic sentiment dropped 3.2 points in January to 47.2 points, the Mannheim-based Centre for European Economic Research or ZEW revealed.
Layers of money managers that don't bear the brunt of losses but walk away with big payouts when things go well have turned the US economy to a type of "ersatz capitalism," Joseph Stiglitz, Columbia University professor and Nobel laureate, told CNBC Tuesday. "An awful lot of people are not managing their own money," Stiglitz said. "In old-style 19th Century capitalism, I owned my company, I made a mistake, I bore the consequences."
"Today, (at) most of the big companies you have managers who, when things go well, walk off with a lot of money. When things go bad the shareholders bear the costs," he said.
Even worse, those giving the money to the companies are entities like pension funds that are managing money on behalf of other people, so there are "layers and layers of agency costs," Stiglitz said."
“I think that first we’re going to err on the high side. We don’t want to do any damage,” Commissioner Bart Chilton said in a video interview with Reuters Insider. The limits will apply to futures and options contracts of light, sweet crude oil, RBOB gasoline, No. 2 heating oil and Henry Hub natural gas futures traded on both the NYMEX and the Intercontinental Exchange.
According to the CFTC, limits for the each commodity would be set annually at the sum of 10 percent of the first 25,000 contracts plus 2.5 percent of the remaining interest, allowing a regular annual adjustment to the limits rather than the fixed caps the CFTC applies to grain markets. Such limits would affect only the ten biggest position holders in the oil and gas markets. To put this in perspective, note that over the past two years, only the “unique owners” in the crude oil market and only one in the natural gas market would have been affected by the proposed caps, according to Steve Sherrod, Acting Director of Surveillance at the CFTC.
“It seems as though the CFTC has really pulled back,” said John Brodman, a former Energy Department official under the Bush administration. “A few months ago, they sounded rabid about going after speculators in energy markets. But it looks like their bark was worse than their bite.” Still, the CFTC maintains that the proposed limits will prevent out-sized trading firms from putting the stability of the entire market at risk. For example, the CFTC said that under the new limits, hedge fund Amaranth would not have been able to hold the large number of natural gas contracts it did in 2006, which had a harmful effect on the market in that year.
The exchanges themselves will continue to grant exemptions to bone fide end-users, companies who need to hedge their physical positions. In turn, the CFTC will provide “risk management” exemptions to swap dealers; but such firms as Goldman and Morgan Stanley would not be allowed to take on speculative positions that exceed the exemptions, preventing them from placing additional bets with their own money in addition to contracts purchased on behalf of their clients.
US home builder sentiment unexpectedly fell in January to the lowest level since June on concerns over the weak labor market and high foreclosure volume, according to a survey on Tuesday that pointed to a patchy recovery in the housing sector. The National Association of Home Builders/Wells Fargo Housing Market Index for January slipped to 15 from 16 in December, below market expectations for a reading of 17. The survey blamed the setback in sentiment on the weak labor market, which has produced the highest unemployment rate in 26 years.
Oil for February delivery closed the floor session at $79.02 a barrel, up $1.02 a barrel, or 1.3%. . Gold for February delivery gained $9.50, or 0.8%, to end at $1,140 an ounce on the New York Mercantile Exchange. Among other metals, palladium and platinum continued their recent rally, buoyed by investor demand following the recent launch of exchange-traded funds in the U.S. Palladium for March delivery gained $14.20, or 3.2%, to end at $461.95 an ounce. April platinum rose $43.30, or 2.7%, to $1,639.40 an ounce.
Chevron Corp. plans to cut an undetermined number of jobs in its global marketing and refining operations, according to a report Tuesday from Dow Jones Newswires. The move comes as refining margins remain under pressure.
Railroad operator CSX Corp. blamed lower coal and merchandise shipments for a drop in fourth-quarter profit. Earnings from continuing operations came in at $305 million, or 77 cents a share, down from $361 million, or 92 cents a share, a year earlier. Revenue fell 13% to $2.3 billion.
IBM Corp. reported a fiscal fourth-quater profit of $4.8 billion, or $3.59 a share, compared with earnings of $4.4 billion or $3.27 a share in the prior year's fourth quarter. Revenue rose slighty to $27.23 billion from last year's $27 billion. Analysts surveyed by Thomson Reuters had forecast IBM to earn $3.47 a share on $26.96 billion in revenue.
The Dow Jones Industrial Average was up 116 points, or 1.1%, to 10,725. The Nasdaq Composite Index had added 32 points, 1.4%, to 2,320, and the Standard & Poor's 500 Index had gained 1,150.
Venezuela's socialist President Hugo Chavez on Sunday nationalized a chain of supermarkets controlled by France's Casino on charges of price gauging after the government devalued the bolivar currency.
Kraft's CEO Irene Rosenfeld had to inject more cash into her bid and drop the number of new Kraft shares in the offer to win over Roger Carr, chairman of the 186-year-old Cadbury and mollify her top shareholder, billionaire investor Warren Buffett.
Kraft's cash-and-share acquisition, which dealmakers said was struck after all-night negotiations at the London headquarters of investment bank Lazard, values each Cadbury share at 840 pence, with shareholders also set to get a 10p special dividend, bringing it to a total of 850p.
The enlarged group will pip privately owned Mars-Wrigley to the title of the world's top sweet maker, bringing under one roof Cadbury's Dairy Milk chocolate and Trident gum and Kraft's Milka, Toblerone and Terry's chocolate brands.
On January 19, 2010 there were 1093 potentially hazardous asteroids but no sunspots. The weather
will get colder and natural gas usage will continue to increase and this is not reflected in its price.
Japan Airlines Corp filed for bankruptcy protection on Tuesday, owing more than $25 billion, and vowed to slash 15,700 jobs and unprofitable routes as it tries to survive volatile fuel costs and fickle flyers.
The Oil Drum: "It seems to me that the current recession is very much energy-related, and is likely to continue. The recession is occurring because the current US “system” (individual homes, private cars, many imports) was built for cheap ($20 barrel) oil and gas, and cannot function well using expensive oil and gas.
I expect that the recession will experience some ups and downs, but will generally be worse by the end of 2010. Government revenues will continue to decline, making it increasingly difficult to support subsidies for renewables and to provide funding guarantees for nuclear and wind."
Florida farmers will sustain at least a 30% crop loss due to freezing temperatures.
Williams Cos. says it will create one of the largest natural gas partnerships in the nation by combining pipeline and processing units.
The new company will have a presence from the Rocky Mountains and the Gulf Coast to the Northeast.
Williams, based in Tulsa, Okla., will get about $3.5 billion in cash from Williams Partners to help pay down debt and will contribute its substantial assets to the new, larger Williams Partners.
The parent company gets about 203 million in shares and its ownership share increases from 24 percent to 80 percent.
One key asset that Williams will contribute to the partnership is the Texas Transcontinental Gas pipeline, which runs to the bountiful Marcellus Shale of Pennsylvania.
President Barack Obama will deliver his first State of the Union address on Jan. 27 and his budget plan on Feb. 1.
The Bank of Canada did the expected Tuesday morning, leaving its key interest rate unchanged at 1/4 percent while backing up its conditional commitment to hold the current rate steady until the end of the second quarter of 2010. Policy makers noted a global economic recovery is under way, supported by continued improvements in financial conditions and stronger domestic demand growth in many emerging-market economies. However, the BOC acknowledged that the recovery is fragile, and continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.
Security and industrial products manufacturer Tyco International Ltd. said Monday that it has agreed to buy security and protection services provider Brink's Home Security Holdings, Inc., now operating as Broadview Security, in a cash and stock deal valued at $42.50 per share or about $2.0 billion.
The purchase price represents a premium of more than 35% to Brink's Friday closing stock price of $31.42.
German economic confidence deteriorated for the fourth month in a row, suggesting a slow recovery in the largest Eurozone economy, results of a closely watched survey showed Tuesday. Economic sentiment dropped 3.2 points in January to 47.2 points, the Mannheim-based Centre for European Economic Research or ZEW revealed.
Layers of money managers that don't bear the brunt of losses but walk away with big payouts when things go well have turned the US economy to a type of "ersatz capitalism," Joseph Stiglitz, Columbia University professor and Nobel laureate, told CNBC Tuesday. "An awful lot of people are not managing their own money," Stiglitz said. "In old-style 19th Century capitalism, I owned my company, I made a mistake, I bore the consequences."
"Today, (at) most of the big companies you have managers who, when things go well, walk off with a lot of money. When things go bad the shareholders bear the costs," he said.
Even worse, those giving the money to the companies are entities like pension funds that are managing money on behalf of other people, so there are "layers and layers of agency costs," Stiglitz said."
“I think that first we’re going to err on the high side. We don’t want to do any damage,” Commissioner Bart Chilton said in a video interview with Reuters Insider. The limits will apply to futures and options contracts of light, sweet crude oil, RBOB gasoline, No. 2 heating oil and Henry Hub natural gas futures traded on both the NYMEX and the Intercontinental Exchange.
According to the CFTC, limits for the each commodity would be set annually at the sum of 10 percent of the first 25,000 contracts plus 2.5 percent of the remaining interest, allowing a regular annual adjustment to the limits rather than the fixed caps the CFTC applies to grain markets. Such limits would affect only the ten biggest position holders in the oil and gas markets. To put this in perspective, note that over the past two years, only the “unique owners” in the crude oil market and only one in the natural gas market would have been affected by the proposed caps, according to Steve Sherrod, Acting Director of Surveillance at the CFTC.
“It seems as though the CFTC has really pulled back,” said John Brodman, a former Energy Department official under the Bush administration. “A few months ago, they sounded rabid about going after speculators in energy markets. But it looks like their bark was worse than their bite.” Still, the CFTC maintains that the proposed limits will prevent out-sized trading firms from putting the stability of the entire market at risk. For example, the CFTC said that under the new limits, hedge fund Amaranth would not have been able to hold the large number of natural gas contracts it did in 2006, which had a harmful effect on the market in that year.
The exchanges themselves will continue to grant exemptions to bone fide end-users, companies who need to hedge their physical positions. In turn, the CFTC will provide “risk management” exemptions to swap dealers; but such firms as Goldman and Morgan Stanley would not be allowed to take on speculative positions that exceed the exemptions, preventing them from placing additional bets with their own money in addition to contracts purchased on behalf of their clients.
US home builder sentiment unexpectedly fell in January to the lowest level since June on concerns over the weak labor market and high foreclosure volume, according to a survey on Tuesday that pointed to a patchy recovery in the housing sector. The National Association of Home Builders/Wells Fargo Housing Market Index for January slipped to 15 from 16 in December, below market expectations for a reading of 17. The survey blamed the setback in sentiment on the weak labor market, which has produced the highest unemployment rate in 26 years.
Oil for February delivery closed the floor session at $79.02 a barrel, up $1.02 a barrel, or 1.3%. . Gold for February delivery gained $9.50, or 0.8%, to end at $1,140 an ounce on the New York Mercantile Exchange. Among other metals, palladium and platinum continued their recent rally, buoyed by investor demand following the recent launch of exchange-traded funds in the U.S. Palladium for March delivery gained $14.20, or 3.2%, to end at $461.95 an ounce. April platinum rose $43.30, or 2.7%, to $1,639.40 an ounce.
Chevron Corp. plans to cut an undetermined number of jobs in its global marketing and refining operations, according to a report Tuesday from Dow Jones Newswires. The move comes as refining margins remain under pressure.
Railroad operator CSX Corp. blamed lower coal and merchandise shipments for a drop in fourth-quarter profit. Earnings from continuing operations came in at $305 million, or 77 cents a share, down from $361 million, or 92 cents a share, a year earlier. Revenue fell 13% to $2.3 billion.
IBM Corp. reported a fiscal fourth-quater profit of $4.8 billion, or $3.59 a share, compared with earnings of $4.4 billion or $3.27 a share in the prior year's fourth quarter. Revenue rose slighty to $27.23 billion from last year's $27 billion. Analysts surveyed by Thomson Reuters had forecast IBM to earn $3.47 a share on $26.96 billion in revenue.
The Dow Jones Industrial Average was up 116 points, or 1.1%, to 10,725. The Nasdaq Composite Index had added 32 points, 1.4%, to 2,320, and the Standard & Poor's 500 Index had gained 1,150.
Monday, January 18, 2010
Change
1/17/10 Change
Tim Wood: "Not much has changed of late, but I do see change on the horizon for 2010. From a Dow theory perspective, the bullish trend confirmation that occurred in 2009 remains intact. From a cyclical perspective, the higher degree low that began at the March low remains intact as well. Longer-term, my opinion has not changed in that based on my data, I continue to believe that in spite of the now 11 month rally this is nonetheless a counter-trend advance within the context of a much longer-term secular bear market. Once this rally is over, I think that most people will be very surprised to see the return of the bear as the Phase II decline takes root. History shows us that Phase II declines are the most destructive and this is because the masses think that the bear market has ended and then once the realization begins, so does the panic. Furthermore, I don't think the Fed and the politicians in Washington will be able to stop it and I hope that this time around the people will not allow the continued waste of stimulus packages."
Mike Burk: "The market is overdue for some kind of correction and the deterioration in new highs suggest that may have begun. The preponderance of recent breadth indicator confirmations suggest any correction will be shallow and brief. I expect the major averages to be lower on Friday January 22 than they were on Friday January 15."
John Mauldin: "There is just so much that is uncertain, and all we can do is wait to see how it unfolds. My best guess is that we see a solid GDP number posted for the 4th quarter (which will get revised down over time), due mostly to stimulus and inventory rebuilding. By the middle of the year the stimulus will be far less. And while inventories are rebuilding and that is good for the GDP numbers, the sales-to-inventories number has not risen. And final demand is what drives inventory rebuilding.
The latter half of the year looks to be weaker, and then we hit what right now looks like the largest tax increase in history, much of it on the small businesses that are the drivers of job creation. The National Federation of Independent Businesses just released their latest survey. It was brutal. There is little optimism in it.
The Fed is going to stop the music in March. There will be a scramble for the chairs. This is a huge experiment with no precedent. The entire developed world is the test subject. Risk assets will be subject to uncertainty. And markets hate uncertainty.
Hopefully, we can Muddle Through this year before a relapse into recession in 2011 (because of the tax increase). I wish I could see it like Larry Kudlow, but I don't. I would be very cautious about being long the stock market. It is now a trader's market. I would not be buying long-duration bonds. It is still an absolute-return world."
Kraft Foods Inc. must raise its hostile 11 billion-pound ($17.9 billion) bid for Cadbury Plc by at least 10 percent to stand a chance of capturing the U.K. maker of Dairy Milk chocolate, an investor survey shows.
Kraft, whose offer is worth about 771 pence a share, needs to raise that to at least 850 pence, the median price named by 9 Cadbury shareholders, who together account for about 11 percent of the shares. Responses ranged from 800 pence to 900 pence. A deadline to increase the bid passes on Jan. 19.
Cadbury closed at 793.5 pence on Jan. 15, 2.9 percent above the value of Kraft’s bid, reflecting the chance the offer will be raised or a rival suitor such as Hershey Co. will emerge. Hershey is stepping up efforts to prepare a bid and plans to make a decision after Kraft’s final offer, according to people with knowledge of the matter. Kraft Chief Executive Officer Irene Rosenfeld has vowed to stay “disciplined” on price.
A GOP win in Massachusetts on Tuesday would likely kill that plan, because Republicans could block Senate action on the reconciled bill.
The newly discussed fallback would require House Democrats to swallow hard and approve the Senate-passed bill without changes. President Barack Obama could sign it into law without another Senate vote needed.
House leaders would insist that the Senate make some changes later under a complex plan called "budget reconciliation." It requires only a simple majority, but it's unclear whether that could happen.
The plan is highly problematic.
Delhaize Group announced the closure of 15 Food Lion stores as part of its restructuring plan.
Continuing layoffs at hospitals and law firms and supermarkets.
Tim Wood: "Not much has changed of late, but I do see change on the horizon for 2010. From a Dow theory perspective, the bullish trend confirmation that occurred in 2009 remains intact. From a cyclical perspective, the higher degree low that began at the March low remains intact as well. Longer-term, my opinion has not changed in that based on my data, I continue to believe that in spite of the now 11 month rally this is nonetheless a counter-trend advance within the context of a much longer-term secular bear market. Once this rally is over, I think that most people will be very surprised to see the return of the bear as the Phase II decline takes root. History shows us that Phase II declines are the most destructive and this is because the masses think that the bear market has ended and then once the realization begins, so does the panic. Furthermore, I don't think the Fed and the politicians in Washington will be able to stop it and I hope that this time around the people will not allow the continued waste of stimulus packages."
Mike Burk: "The market is overdue for some kind of correction and the deterioration in new highs suggest that may have begun. The preponderance of recent breadth indicator confirmations suggest any correction will be shallow and brief. I expect the major averages to be lower on Friday January 22 than they were on Friday January 15."
John Mauldin: "There is just so much that is uncertain, and all we can do is wait to see how it unfolds. My best guess is that we see a solid GDP number posted for the 4th quarter (which will get revised down over time), due mostly to stimulus and inventory rebuilding. By the middle of the year the stimulus will be far less. And while inventories are rebuilding and that is good for the GDP numbers, the sales-to-inventories number has not risen. And final demand is what drives inventory rebuilding.
The latter half of the year looks to be weaker, and then we hit what right now looks like the largest tax increase in history, much of it on the small businesses that are the drivers of job creation. The National Federation of Independent Businesses just released their latest survey. It was brutal. There is little optimism in it.
The Fed is going to stop the music in March. There will be a scramble for the chairs. This is a huge experiment with no precedent. The entire developed world is the test subject. Risk assets will be subject to uncertainty. And markets hate uncertainty.
Hopefully, we can Muddle Through this year before a relapse into recession in 2011 (because of the tax increase). I wish I could see it like Larry Kudlow, but I don't. I would be very cautious about being long the stock market. It is now a trader's market. I would not be buying long-duration bonds. It is still an absolute-return world."
Kraft Foods Inc. must raise its hostile 11 billion-pound ($17.9 billion) bid for Cadbury Plc by at least 10 percent to stand a chance of capturing the U.K. maker of Dairy Milk chocolate, an investor survey shows.
Kraft, whose offer is worth about 771 pence a share, needs to raise that to at least 850 pence, the median price named by 9 Cadbury shareholders, who together account for about 11 percent of the shares. Responses ranged from 800 pence to 900 pence. A deadline to increase the bid passes on Jan. 19.
Cadbury closed at 793.5 pence on Jan. 15, 2.9 percent above the value of Kraft’s bid, reflecting the chance the offer will be raised or a rival suitor such as Hershey Co. will emerge. Hershey is stepping up efforts to prepare a bid and plans to make a decision after Kraft’s final offer, according to people with knowledge of the matter. Kraft Chief Executive Officer Irene Rosenfeld has vowed to stay “disciplined” on price.
A GOP win in Massachusetts on Tuesday would likely kill that plan, because Republicans could block Senate action on the reconciled bill.
The newly discussed fallback would require House Democrats to swallow hard and approve the Senate-passed bill without changes. President Barack Obama could sign it into law without another Senate vote needed.
House leaders would insist that the Senate make some changes later under a complex plan called "budget reconciliation." It requires only a simple majority, but it's unclear whether that could happen.
The plan is highly problematic.
Delhaize Group announced the closure of 15 Food Lion stores as part of its restructuring plan.
Continuing layoffs at hospitals and law firms and supermarkets.
Saturday, January 16, 2010
Monetization
1/16/10 Monetization
Doug Noland: "I strongly believe years of massive U.S. current account deficits created a global financial backdrop that foments historic booms and busts. Our system’s Credit excesses were indeed the root cause of the imbalances that ensured financial crisis. And I have to admit that I have difficulty these days grasping how analysts could see it any other way. A big stock market recovery and resurgent optimism have emboldened views that should have been thoroughly discredited....Trillions of combined federal government debt issuance and Federal Reserve monetization have become this cycle’s ammo for battling “deflation.” I have stated my belief that this unprecedented inflation of government Credit is both delaying necessary economic adjustment and creating a very dangerous Bubble backdrop. I have argued that reducing our economy’s dependence on massive Credit expansion is fundamental to creating a more stable financial and economic environment. Comprehensive economic restructuring is essential for reducing Credit dependency and dramatically shrinking our current account deficits. But with the markets up and the economy rebounding, focus on structural problems and imbalances has been relegated to the “permabears” - who have apparently learned little during the past 25 years."
Diana Olick: "In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.
"They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."
The Federal Deposit Insurance Corp said that Town Community Bank and Trust of Antioch, Illinois, and St. Stephen State Bank of St. Stephen, Minnesota, had failed. Other banks agreed to assume the deposits at those failed institutions.
Barnes Banking Co of Kaysville, Utah, was also seized, and the FDIC created a bridge bank to protect depositors as they move their accounts to other institutions.
The agency did not give the causes of their collapses. The FDIC has said that the pace of bank failures will remain elevated this year because of extensive loan losses tied to home mortgages and commercial real estate.
Bloomberg: “China’s retail sales grew at the fastest pace in more than two decades in 2009 as government stimulus spurred demand for home appliances, cars and electronics in the world’s most populous nation. Retail sales in real terms, which are adjusted for inflation, posted their biggest gain since 1986… Rural consumption expanded around 15.5% from a year earlier, outpacing urban spending for the first time, Yao added.”
The holding company for MediaNews Group Inc. newspapers, including The Denver Post and San Jose Mercury News, says it plans to file for Chapter 11 bankruptcy protection.
“A record 3 million U.S. homes will be repossessed by lenders this year… according to a RealtyTrac Inc. forecast. Last year there were 2.82 million foreclosures… More than 4.5 million filings are expected this year, including default or auction notices and bank seizures, said Rick Sharga, senior vice president for the…the seller of default data and forecasts. There were 3.96 million filings in 2009.”
Doug Noland: "I strongly believe years of massive U.S. current account deficits created a global financial backdrop that foments historic booms and busts. Our system’s Credit excesses were indeed the root cause of the imbalances that ensured financial crisis. And I have to admit that I have difficulty these days grasping how analysts could see it any other way. A big stock market recovery and resurgent optimism have emboldened views that should have been thoroughly discredited....Trillions of combined federal government debt issuance and Federal Reserve monetization have become this cycle’s ammo for battling “deflation.” I have stated my belief that this unprecedented inflation of government Credit is both delaying necessary economic adjustment and creating a very dangerous Bubble backdrop. I have argued that reducing our economy’s dependence on massive Credit expansion is fundamental to creating a more stable financial and economic environment. Comprehensive economic restructuring is essential for reducing Credit dependency and dramatically shrinking our current account deficits. But with the markets up and the economy rebounding, focus on structural problems and imbalances has been relegated to the “permabears” - who have apparently learned little during the past 25 years."
Diana Olick: "In order to get the second lien holder to drop the lien, the first lien holder generally negotiates some partial payment to the second lien holder. The second lien holder doesn't have to agree, but more and more are doing so.
That's all legal.
But here's what's not legal and what's apparently happening quite often recently. Since many second lien holders are getting very little, they are now allegedly requesting money on the side from either real estate agents or the buyers in the short sale. When I say "on the side," I mean in cash, off the HUD settlement statements, so the first lien holder doesn't see it.
"They are pretty clear and pretty upfront about the fact that if the first lender knows they are getting paid, the first lender will kill the short sale," says Brandt. "So these second lenders are asking for the payments off the closing documents, off the HUD statement, usually in a cashiers check prior to closing. Once they receive that payment, they will allow the short sale to go through, which according to RESPA laws and the lawyers that we have spoken to on the topic is not legal."
The Federal Deposit Insurance Corp said that Town Community Bank and Trust of Antioch, Illinois, and St. Stephen State Bank of St. Stephen, Minnesota, had failed. Other banks agreed to assume the deposits at those failed institutions.
Barnes Banking Co of Kaysville, Utah, was also seized, and the FDIC created a bridge bank to protect depositors as they move their accounts to other institutions.
The agency did not give the causes of their collapses. The FDIC has said that the pace of bank failures will remain elevated this year because of extensive loan losses tied to home mortgages and commercial real estate.
Bloomberg: “China’s retail sales grew at the fastest pace in more than two decades in 2009 as government stimulus spurred demand for home appliances, cars and electronics in the world’s most populous nation. Retail sales in real terms, which are adjusted for inflation, posted their biggest gain since 1986… Rural consumption expanded around 15.5% from a year earlier, outpacing urban spending for the first time, Yao added.”
The holding company for MediaNews Group Inc. newspapers, including The Denver Post and San Jose Mercury News, says it plans to file for Chapter 11 bankruptcy protection.
“A record 3 million U.S. homes will be repossessed by lenders this year… according to a RealtyTrac Inc. forecast. Last year there were 2.82 million foreclosures… More than 4.5 million filings are expected this year, including default or auction notices and bank seizures, said Rick Sharga, senior vice president for the…the seller of default data and forecasts. There were 3.96 million filings in 2009.”
Friday, January 15, 2010
Nonperforming Loans
1/15/10 Nonperforming Loans
J.P. Morgan Chase & Co. on Friday said fourth-quarter commercial banking net income fell more than 50% from the year-ago period to $224 million. Provision for credit losses in commercial banking rose 160% to $494 million. J.P. Morgan said the increase was driven by continued weakness in the credit environment, particularly real estate-related segments. The net charge-off rate rose to 1.92% from 0.4%. Nonperforming loans in the fourth quarter were $2.8 billion, compared with $1.8 billion in the year-earlier quarter, the bank said.
The Empire State index rose to 15.9 in January from an upwardly revised 4.5 in December.
The rate of U.S. consumer inflation decelerated in December, the Labor Department said Friday. The consumer price index increased 0.1%, after a 0.4% rise in November. This is the slowest pace since July. Energy prices rose 0.2% after a 4.1% spike in November. Food prices rose 0.2% after a 0.1% gain in the prior month. The core CPI, excluding food and energy costs, was up 0.1% in December after remaining flat in November. Economists were expecting the CPI to rise 0.2% and the core rate to rise 0.1%.
The Dow adjusting for inflation needs to be around 15,000 just to equal 2000 purchasing power.
Shiseido Co Ltd , Japan's largest cosmetics company, has agreed to buy U.S.-based Bare Escentuals for $1.7 billion, as it looks to speed up its expansion and break into a new part of the North American market.
George Ure: "Port of Long Beach was down 13.6% for the fiscal year overall, and imports were down 10.1% the the FY, but down even more (-13.4%) in December. No recovery there.
The Port of Los Angeles was only down 4.41% compared with December 2008 and look at this! Exporters were up 40.23% for the month. Still, for the calendar year, Port of L.A. is down 14.02% overall. Damn, thought we might had something going there.
Up the coast, Seattle, Portland and Tacoma are still running numbers, but Oakland loaded inbound was up 17.9% in December. For the year they were down 8.2% on twenty-foot-equivalent units (TEU's). No surprise why Oakland doing well - they are close to many Asian ports. 5,230 maybe to Oakland from Tokyo while Los Angeles is closer to 5,440. Couple of hundred miles at 20 knots is 10-hours of operating costs inbound and another 10-hours outbound. Seattle is a little closer than LA to some ports, but 5,260-miles only gets about even with Victoria, B.C. or Port Angeles, WA., then there's the run down Puget Sound in the Vessel Traffic System which means a slowdown to pick up a pilot at Port Angeles and then there's fees for that (both ways) going to Tacoma or the POS. Toss in lots of recreational boaters, occasional fog and it's more workload in the wheelhouse."
China's foreign exchange reserves swelled to record levels in December, up 23% from a year ago to $2.4T. Chinese banks extended 379.8B yuan ($55.6B) in new loans, taking the annual total to an unprecedented 9.59T yuan, and stoking further fears of an asset price bubble.
Foreign Direct Investment in China more than doubles to $12.1B in December.
According to CMA, a unit of the CME Group that provide data on credit derivatives, California is ranked as No. 10 of the Top 10 default candidates among sovereign debtors, right behind Greece. No. 1 and 2 are Argentina and Venezuela.
“Hershey coming in as a standalone bidder is fraught with
difficulties given the size of the cash required to compete with
Kraft,” said Icap’s Smith. A bid “would almost certainly
require a massive rights issue,” he added.
Kraft has until Jan. 19 under U.K. law to raise its offer, and Hershey may conclude that a higher Kraft bid puts the maker of Dairy Milk chocolate and Creme Eggs out of its reach, the people said. Hershey will have another four days, until Jan. 23, to decide whether to enter the fray. In addition to financing the bid through loans and new Hershey shares, the company is also trying to raise cash by selling equity stakes to new investors, the people said.
The Reuters/University of Michigan consumer sentiment index rose to 72.8 from 72.5 in December. The consensus forecast of Wall Street economists surveyed by MarketWatch was for sentiment to rise to 75.0.
Wyoming natural gas production declined in 2009, 1st time since 1997.
The output of the nation's factories, mines and utilities rose a seasonally adjusted 0.6% in December, the sixth increase in a row following the worst downturn since the end of World War II, the Federal Reserve reported Friday. Colder-than-usual weather contributed to the gain in December, with utility production rising a seasonally adjusted 5.9%. The output of factories dropped 0.1% in November after a 0.9% gain in November, repeating the see-saw pattern of the past four months. Output of mines rose 0.2%. For all of 2009, output plunged 9.7%, the steepest yearly decline since output fell 13.7% in 1946.
American families were squeezed last year as their inflation-adjusted weekly wages fell 1.6 percent — the sharpest drop since 1990 — even as consumer prices rose only modestly. Over the year, real average hourly earnings decreased 1.3 percent.
The Dow Jones Industrial Average fell 100.9 points, or 0.9%, to 10,609.65, leaving the blue chips off nearly 0.1% from the week-ago close. The S&P 500 Index shed 12.43 points, or 1.1%, to 1,136.03, down 0.8% for the week. The Nasdaq Composite Index declined 28.75 points, or 0.2%, to 2,287.99, off 1.3% for the week.
The longest, ring-like solar eclipse of the millennium started on Friday, with astronomers saying the Maldives was the best place to view the phenomenon that will not happen again for over 1,000 years.
U.S. space agency NASA said on its website the eclipse was annular, meaning the moon will block most of the sun's middle, but not its edges, causing it to look like a ring.
This blockage will last for 11 minutes, 8 seconds, an annual duration NASA said would not be exceeded until December 23, 3043.
J.P. Morgan Chase & Co. on Friday said fourth-quarter commercial banking net income fell more than 50% from the year-ago period to $224 million. Provision for credit losses in commercial banking rose 160% to $494 million. J.P. Morgan said the increase was driven by continued weakness in the credit environment, particularly real estate-related segments. The net charge-off rate rose to 1.92% from 0.4%. Nonperforming loans in the fourth quarter were $2.8 billion, compared with $1.8 billion in the year-earlier quarter, the bank said.
The Empire State index rose to 15.9 in January from an upwardly revised 4.5 in December.
The rate of U.S. consumer inflation decelerated in December, the Labor Department said Friday. The consumer price index increased 0.1%, after a 0.4% rise in November. This is the slowest pace since July. Energy prices rose 0.2% after a 4.1% spike in November. Food prices rose 0.2% after a 0.1% gain in the prior month. The core CPI, excluding food and energy costs, was up 0.1% in December after remaining flat in November. Economists were expecting the CPI to rise 0.2% and the core rate to rise 0.1%.
The Dow adjusting for inflation needs to be around 15,000 just to equal 2000 purchasing power.
Shiseido Co Ltd , Japan's largest cosmetics company, has agreed to buy U.S.-based Bare Escentuals for $1.7 billion, as it looks to speed up its expansion and break into a new part of the North American market.
George Ure: "Port of Long Beach was down 13.6% for the fiscal year overall, and imports were down 10.1% the the FY, but down even more (-13.4%) in December. No recovery there.
The Port of Los Angeles was only down 4.41% compared with December 2008 and look at this! Exporters were up 40.23% for the month. Still, for the calendar year, Port of L.A. is down 14.02% overall. Damn, thought we might had something going there.
Up the coast, Seattle, Portland and Tacoma are still running numbers, but Oakland loaded inbound was up 17.9% in December. For the year they were down 8.2% on twenty-foot-equivalent units (TEU's). No surprise why Oakland doing well - they are close to many Asian ports. 5,230 maybe to Oakland from Tokyo while Los Angeles is closer to 5,440. Couple of hundred miles at 20 knots is 10-hours of operating costs inbound and another 10-hours outbound. Seattle is a little closer than LA to some ports, but 5,260-miles only gets about even with Victoria, B.C. or Port Angeles, WA., then there's the run down Puget Sound in the Vessel Traffic System which means a slowdown to pick up a pilot at Port Angeles and then there's fees for that (both ways) going to Tacoma or the POS. Toss in lots of recreational boaters, occasional fog and it's more workload in the wheelhouse."
China's foreign exchange reserves swelled to record levels in December, up 23% from a year ago to $2.4T. Chinese banks extended 379.8B yuan ($55.6B) in new loans, taking the annual total to an unprecedented 9.59T yuan, and stoking further fears of an asset price bubble.
Foreign Direct Investment in China more than doubles to $12.1B in December.
According to CMA, a unit of the CME Group that provide data on credit derivatives, California is ranked as No. 10 of the Top 10 default candidates among sovereign debtors, right behind Greece. No. 1 and 2 are Argentina and Venezuela.
“Hershey coming in as a standalone bidder is fraught with
difficulties given the size of the cash required to compete with
Kraft,” said Icap’s Smith. A bid “would almost certainly
require a massive rights issue,” he added.
Kraft has until Jan. 19 under U.K. law to raise its offer, and Hershey may conclude that a higher Kraft bid puts the maker of Dairy Milk chocolate and Creme Eggs out of its reach, the people said. Hershey will have another four days, until Jan. 23, to decide whether to enter the fray. In addition to financing the bid through loans and new Hershey shares, the company is also trying to raise cash by selling equity stakes to new investors, the people said.
The Reuters/University of Michigan consumer sentiment index rose to 72.8 from 72.5 in December. The consensus forecast of Wall Street economists surveyed by MarketWatch was for sentiment to rise to 75.0.
Wyoming natural gas production declined in 2009, 1st time since 1997.
The output of the nation's factories, mines and utilities rose a seasonally adjusted 0.6% in December, the sixth increase in a row following the worst downturn since the end of World War II, the Federal Reserve reported Friday. Colder-than-usual weather contributed to the gain in December, with utility production rising a seasonally adjusted 5.9%. The output of factories dropped 0.1% in November after a 0.9% gain in November, repeating the see-saw pattern of the past four months. Output of mines rose 0.2%. For all of 2009, output plunged 9.7%, the steepest yearly decline since output fell 13.7% in 1946.
American families were squeezed last year as their inflation-adjusted weekly wages fell 1.6 percent — the sharpest drop since 1990 — even as consumer prices rose only modestly. Over the year, real average hourly earnings decreased 1.3 percent.
The Dow Jones Industrial Average fell 100.9 points, or 0.9%, to 10,609.65, leaving the blue chips off nearly 0.1% from the week-ago close. The S&P 500 Index shed 12.43 points, or 1.1%, to 1,136.03, down 0.8% for the week. The Nasdaq Composite Index declined 28.75 points, or 0.2%, to 2,287.99, off 1.3% for the week.
The longest, ring-like solar eclipse of the millennium started on Friday, with astronomers saying the Maldives was the best place to view the phenomenon that will not happen again for over 1,000 years.
U.S. space agency NASA said on its website the eclipse was annular, meaning the moon will block most of the sun's middle, but not its edges, causing it to look like a ring.
This blockage will last for 11 minutes, 8 seconds, an annual duration NASA said would not be exceeded until December 23, 3043.
Thursday, January 14, 2010
Emergency Action
1/14/10 Emergency Action
U.S. foreclosure actions shattered all records in 2009 and will do so again this year, with unemployment and wage cuts overcoming programs to remedy failing home loans, RealtyTrac said on Thursday.
A record 2.8 million properties with a mortgage got a foreclosure notice last year, jumping 21 percent from 2008 and 120 percent from 2007, the Irvine, California-based real estate data company found.
The loan failure rate -- and thus the fallout for home prices and the economy -- would have been even worse without foreclosure prevention programs and loan processing delays caused by sheer volume, the company said.
First-time claims for state unemployment benefits rose in the latest week by the most in five weeks, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 8 rose 11,000 to 444,000. The consensus forecast of Wall Street economists was for claims to inch lower to 433,000. Claims in the previous week were revised to 433,000 down from 434,000. This is the highest level since the week ended Dec. 19. The four-week average of initial claims fell 9,000 to 440,750. Meanwhile, the number of Americans receiving state jobless benefits fell 211,000 to 4.60 million in the week ending Jan. 2. The four-week moving average of continuing claims fell 151,500 to 4.86 million.
Import prices were unchanged in December after four months of gains, the Labor Department reported Thursday. A decline in fuel prices offset gains in other sectors, the government said. Economists had expected import prices to be flat as imported oil prices had fallen in the month. Fuel import prices fell 1.4% in December after a 7.1% gain in November. Non-fuel import prices rose 0.4% for the fifth straight month. Export prices rose 0.6% in December. Excluding the farm sector, export prices were up 0.5%. For the year, export prices were up 3.4% after falling 2.9% in 2008.
U.S. retail sales fell a seasonally adjusted 0.3% in December on widespread weakness across different kinds of stores, the Commerce Department estimated Thursday. The decline was unexpected, as economists surveyed by MarketWatch were forecasting a 0.5% gain. Auto sales disappointed, dropping 0.8% in dollar terms despite an increase in unit sales reported by the automakers. Excluding auto sales, retail sales fell 0.2%. Sales for all of 2009 fell 6.2% compared with 2008 to $4.14 trillion. It was the largest decline on record, dating back to 1992. It was only the second decline on record; the other was the 0.5% drop in 2008.
January 6, 2010
Anchorage Daily News
Alaska will participate at 10 a.m. in the first-ever test of the Emergency Action Notification system designed to alert the entire nation in the event of an emergency.
The system has never been tested before and can only be activated by the president during a national emergency.
January 12, 2010
By Holly Deyo
"I received a disturbing email yesterday regarding massive amounts of grain shipping out of the U.S. to foreign countries. Granaries that long stood idle are going full-bore. Miles and miles of rail cars are filled and ready to transport our wheat, oats and corn reserves for shipment out of country."
"We are pursuing intensive dialogue with the Chinese on the subject of energy security, in which we have raised our concerns about Chinese efforts to lock up oil reserves with long-term contracts," David Shear, deputy assistant secretary of state for East Asian and Pacific affairs, told the House Armed Services Committee yesterday.
January 13, 2010
Watch This Commodity in 2010
by Guy Lerner
If there is one commodity that I believe will be worth watching in 2010, it will be natural gas. Natural gas has the technical characteristics of an asset poised for a secular trend change from down to up, and I believe the price action over the past 4 months has already confirmed that a trend change is underway."
Calgary — Apache Canada Ltd. has taken a majority ownership position in Kitimat LNG Inc.'s planned natural gas export facility.
In a major step forward for the $3-billion project, Apache said it will fund engineering and design costs and operate the facility when it is built – although a decision to construct won't likely come until 2011. The company is paying for a 51 per cent stake in the project, and reserved 51 per cent of the terminal's export capacity.
Apache is a major land holder in northeastern British Columbia, where technological advances have opened up vast new natural gas reservoirs in a pair of plays called the Horn River and the Montney.
“Development of the Kitimat LNG project has the potential to open new markets in the Asia-Pacific region for gas from Apache's Canadian operations, including the Horn River Basin in northeast British Columbia, where our net estimated resource potential exceeds 10 trillion cubic feet of gas,” G. Steven Farris, Apache's chairman and chief executive officer, said in a statement.
If it is built, the export terminal on the B.C. coast at Kitimat is expected to begin shipping 700-million cubic feet per day of natural gas to Asia in liquefied form, starting in 2014.
There's a dollar crisis on the horizon unless the U.S. drastically reins in its debt, warns the Committee on the Fiscal Future of the U.S., while the World Economic Forum reports the global deterioration of public finances is one of 2010's top threats and could push economies into full-fledged debt crises.
madhedgefundtrader: "Use this strength in the greenback to scale into core long positions in the currencies of countries that are major commodity exporters, boast rising trade and current account surpluses, and possess small consuming populations. I’m talking about the Canadian dollar (FXC), the Australian dollar (FXA), and the New Zealand dollar (BNZ), all of which will eventually hit parity with the greenback. Think of these as emerging markets where they speak English, best played through the local currencies.
If you’re looking for a risk controlled pairs trade, I vote for going long the Canadian dollar and short the Euro. For a sleeper, buy the Chinese Yuan ETF (CYB) for your back book. A major revaluation by the Middle Kingdom is just a matter of time."
Manhattan apartment rents dropped 9.4 percent in the fourth quarter of 2009 from a year earlier as Wall Street jobs vanished in the recession.
The median rent fell for all apartment sizes except two- bedrooms, which were little changed, according to a report today by broker Prudential Douglas Elliman Real Estate and appraiser Miller Samuel Inc. A separate tally by broker Citi-Habitats Inc. showed the average apartment price declined 7.3 percent for the year. The company didn’t report medians.
New York City lost 25,200 finance jobs in the 12 months ended Nov. 30 and the unemployment rate climbed to 10 percent, curbing tenants’ appetite for bigger and more expensive apartments. Joblessness also forced landlords across the U.S. to cut prices as the nationwide vacancy rate reached a record 8 percent in the fourth quarter, New York-based research firm Reis Inc. said Jan. 7.
The Commerce Department said Thursday that business inventories rose by 0.4 percent in November, double the 0.2 percent rise that economists had expected. It was the second consecutive rise in inventories after 13 months of declines. The hope is that businesses will begin restocking their depleted shelves, helping to support the economic recovery.
Global job crisis could get worse: IMF chief.
Working gas in storage was 2,852 Bcf as of Friday, January 8, 2010, according to EIA estimates. This represents a net decline of 266 Bcf from the previous week. Stocks were 103 Bcf higher than last year at this time and 121 Bcf above the
5-year average of 2,731 Bcf. In the East Region, stocks were 6 Bcf above the
5-year average following net withdrawals of 146 Bcf. Stocks in the Producing
Region were 62 Bcf above the 5-year average of 844 Bcf after a net withdrawal of
100 Bcf. Stocks in the West Region were 53 Bcf above the 5-year average after a
net drawdown of 20 Bcf. At 2,852 Bcf, total working gas is within the 5-year
historical range.
Natural gas stockpile levels fell more than expected last week, the government said Thursday.
The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states dropped by 266 billion cubic feet to about 2.85 trillion cubic feet for the week ended Jan. 8.
Analysts expected a draw of between 253 billion and 258 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The inventory level was 4.4 percent above the five-year average of about 2.73 trillion cubic feet, and 3.7 percent above last year's storage level of about 2.75 trillion cubic feet, according to the government data.
Bair blames the Federal Reserve for the financial crisis.
Feb. gold ends up $6.20 at $1,143 an ounce.
The Dow Jones industrial average added 29.78 points, or 0.28 percent, to 10,710.55. The Standard & Poor's 500 Index rose 2.78 points, or 0.24 percent, to 1,148.46. The Nasdaq Composite Index gained 8.84 points, or 0.38 percent, to 2,316.74.
U.S. foreclosure actions shattered all records in 2009 and will do so again this year, with unemployment and wage cuts overcoming programs to remedy failing home loans, RealtyTrac said on Thursday.
A record 2.8 million properties with a mortgage got a foreclosure notice last year, jumping 21 percent from 2008 and 120 percent from 2007, the Irvine, California-based real estate data company found.
The loan failure rate -- and thus the fallout for home prices and the economy -- would have been even worse without foreclosure prevention programs and loan processing delays caused by sheer volume, the company said.
First-time claims for state unemployment benefits rose in the latest week by the most in five weeks, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 8 rose 11,000 to 444,000. The consensus forecast of Wall Street economists was for claims to inch lower to 433,000. Claims in the previous week were revised to 433,000 down from 434,000. This is the highest level since the week ended Dec. 19. The four-week average of initial claims fell 9,000 to 440,750. Meanwhile, the number of Americans receiving state jobless benefits fell 211,000 to 4.60 million in the week ending Jan. 2. The four-week moving average of continuing claims fell 151,500 to 4.86 million.
Import prices were unchanged in December after four months of gains, the Labor Department reported Thursday. A decline in fuel prices offset gains in other sectors, the government said. Economists had expected import prices to be flat as imported oil prices had fallen in the month. Fuel import prices fell 1.4% in December after a 7.1% gain in November. Non-fuel import prices rose 0.4% for the fifth straight month. Export prices rose 0.6% in December. Excluding the farm sector, export prices were up 0.5%. For the year, export prices were up 3.4% after falling 2.9% in 2008.
U.S. retail sales fell a seasonally adjusted 0.3% in December on widespread weakness across different kinds of stores, the Commerce Department estimated Thursday. The decline was unexpected, as economists surveyed by MarketWatch were forecasting a 0.5% gain. Auto sales disappointed, dropping 0.8% in dollar terms despite an increase in unit sales reported by the automakers. Excluding auto sales, retail sales fell 0.2%. Sales for all of 2009 fell 6.2% compared with 2008 to $4.14 trillion. It was the largest decline on record, dating back to 1992. It was only the second decline on record; the other was the 0.5% drop in 2008.
January 6, 2010
Anchorage Daily News
Alaska will participate at 10 a.m. in the first-ever test of the Emergency Action Notification system designed to alert the entire nation in the event of an emergency.
The system has never been tested before and can only be activated by the president during a national emergency.
January 12, 2010
By Holly Deyo
"I received a disturbing email yesterday regarding massive amounts of grain shipping out of the U.S. to foreign countries. Granaries that long stood idle are going full-bore. Miles and miles of rail cars are filled and ready to transport our wheat, oats and corn reserves for shipment out of country."
"We are pursuing intensive dialogue with the Chinese on the subject of energy security, in which we have raised our concerns about Chinese efforts to lock up oil reserves with long-term contracts," David Shear, deputy assistant secretary of state for East Asian and Pacific affairs, told the House Armed Services Committee yesterday.
January 13, 2010
Watch This Commodity in 2010
by Guy Lerner
If there is one commodity that I believe will be worth watching in 2010, it will be natural gas. Natural gas has the technical characteristics of an asset poised for a secular trend change from down to up, and I believe the price action over the past 4 months has already confirmed that a trend change is underway."
Calgary — Apache Canada Ltd. has taken a majority ownership position in Kitimat LNG Inc.'s planned natural gas export facility.
In a major step forward for the $3-billion project, Apache said it will fund engineering and design costs and operate the facility when it is built – although a decision to construct won't likely come until 2011. The company is paying for a 51 per cent stake in the project, and reserved 51 per cent of the terminal's export capacity.
Apache is a major land holder in northeastern British Columbia, where technological advances have opened up vast new natural gas reservoirs in a pair of plays called the Horn River and the Montney.
“Development of the Kitimat LNG project has the potential to open new markets in the Asia-Pacific region for gas from Apache's Canadian operations, including the Horn River Basin in northeast British Columbia, where our net estimated resource potential exceeds 10 trillion cubic feet of gas,” G. Steven Farris, Apache's chairman and chief executive officer, said in a statement.
If it is built, the export terminal on the B.C. coast at Kitimat is expected to begin shipping 700-million cubic feet per day of natural gas to Asia in liquefied form, starting in 2014.
There's a dollar crisis on the horizon unless the U.S. drastically reins in its debt, warns the Committee on the Fiscal Future of the U.S., while the World Economic Forum reports the global deterioration of public finances is one of 2010's top threats and could push economies into full-fledged debt crises.
madhedgefundtrader: "Use this strength in the greenback to scale into core long positions in the currencies of countries that are major commodity exporters, boast rising trade and current account surpluses, and possess small consuming populations. I’m talking about the Canadian dollar (FXC), the Australian dollar (FXA), and the New Zealand dollar (BNZ), all of which will eventually hit parity with the greenback. Think of these as emerging markets where they speak English, best played through the local currencies.
If you’re looking for a risk controlled pairs trade, I vote for going long the Canadian dollar and short the Euro. For a sleeper, buy the Chinese Yuan ETF (CYB) for your back book. A major revaluation by the Middle Kingdom is just a matter of time."
Manhattan apartment rents dropped 9.4 percent in the fourth quarter of 2009 from a year earlier as Wall Street jobs vanished in the recession.
The median rent fell for all apartment sizes except two- bedrooms, which were little changed, according to a report today by broker Prudential Douglas Elliman Real Estate and appraiser Miller Samuel Inc. A separate tally by broker Citi-Habitats Inc. showed the average apartment price declined 7.3 percent for the year. The company didn’t report medians.
New York City lost 25,200 finance jobs in the 12 months ended Nov. 30 and the unemployment rate climbed to 10 percent, curbing tenants’ appetite for bigger and more expensive apartments. Joblessness also forced landlords across the U.S. to cut prices as the nationwide vacancy rate reached a record 8 percent in the fourth quarter, New York-based research firm Reis Inc. said Jan. 7.
The Commerce Department said Thursday that business inventories rose by 0.4 percent in November, double the 0.2 percent rise that economists had expected. It was the second consecutive rise in inventories after 13 months of declines. The hope is that businesses will begin restocking their depleted shelves, helping to support the economic recovery.
Global job crisis could get worse: IMF chief.
Working gas in storage was 2,852 Bcf as of Friday, January 8, 2010, according to EIA estimates. This represents a net decline of 266 Bcf from the previous week. Stocks were 103 Bcf higher than last year at this time and 121 Bcf above the
5-year average of 2,731 Bcf. In the East Region, stocks were 6 Bcf above the
5-year average following net withdrawals of 146 Bcf. Stocks in the Producing
Region were 62 Bcf above the 5-year average of 844 Bcf after a net withdrawal of
100 Bcf. Stocks in the West Region were 53 Bcf above the 5-year average after a
net drawdown of 20 Bcf. At 2,852 Bcf, total working gas is within the 5-year
historical range.
Natural gas stockpile levels fell more than expected last week, the government said Thursday.
The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states dropped by 266 billion cubic feet to about 2.85 trillion cubic feet for the week ended Jan. 8.
Analysts expected a draw of between 253 billion and 258 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The inventory level was 4.4 percent above the five-year average of about 2.73 trillion cubic feet, and 3.7 percent above last year's storage level of about 2.75 trillion cubic feet, according to the government data.
Bair blames the Federal Reserve for the financial crisis.
Feb. gold ends up $6.20 at $1,143 an ounce.
The Dow Jones industrial average added 29.78 points, or 0.28 percent, to 10,710.55. The Standard & Poor's 500 Index rose 2.78 points, or 0.24 percent, to 1,148.46. The Nasdaq Composite Index gained 8.84 points, or 0.38 percent, to 2,316.74.
Subscribe to:
Posts (Atom)