3/20/10 37 Bank Failures
Four additional banks in
Georgia, Alabama and Minnesota were closed by regulators Friday,
bringing the national total to 37 for the year to date. Ellijay,
Ga.-based Appalachian Community Bank,
Hiawassee, Ga.-based Bank of Hiawassee, Fort Deposit, Ala.-based First
Lowndes Bank and Aurora, Minn.-based State Bank of Aurora were all
closed. The four bank failures will cost the deposit-insurance fund
$599.5 million, according to the Federal Deposit Insurance Corp. Largest of Friday's seven bank failures is Advanta Bank of Draper, Utah, with $1.6B in assets. The FDIC found no acquiring
bank, so the cost to the Deposit Insurance Fund will be roughly $636M.
Greece is pressing for a concrete standby
package from its European Union partners to help bring its borrowing
costs down. The overborrowed country currently pays almost twice as
much as Germany to refinance its debt.
European
Union leaders are set to discuss a support mechanism for Greece when
they meet in Brussels on March 25-26. Greece has said it may have to
turn to the IMF if a European solution is not found to help it manage
its debt mountain.
Barry Ritholtz: "My own views are that this is a cyclical bull rally within a secular
bear market, and that it ends with an approximate 20-30% correction,
followed by a broader trading range. As of today, we see no signs that
the end is imminent. However, the closer we get to the day when the
market believe a Fed removal of accommodation is imminent, the closer
we will be to the top. Alternatively, once the current unwind of the armageddon trade encounters the heavier resistance of Dow 11,500k and S&P 1250, the upwards momentum is likely to wane.
Until then, the bias remains to the upside."
Doug Noland: "I wish we could implement a gold standard. Global Credit systems and
economies are in dire need of a mechanism that would work to promote at
least a semblance of stability. Regrettably, at this stage of massive
global debt and synchronized global inflationism, a gold-based monetary
regime is implausible. As such, I am a proponent of sound central
banking – the kind that doesn’t exist today. It’s our last resort.
And it’s in this vein that I am so frustrated with Mr. Greenspan. He
just refuses to address the dangerous flaws of contemporary central
banking.
So we learn so little from the past and set course for another
historic Bubble – The Global Government Finance Bubble. Flawed central
banking doctrine leads to mistake after bigger mistake. The
consequences of previous government market interventions ensure only
more intrusive interference. And Alan Greenspan, the seeming
free-market ideologue, works to ensure he goes down in history as the
father of modern inflationism."
Jim Rogers Says 2012 Recession Will be Worse
The lies of Lehman were multifold. Three times, in late 2007 and the
first half of 2008, Lehman used "balance sheet manipulation," according
to the examiner's report, to hide debt of $38.6 billion,
$49.1 billion
and $50.4 billion.
Germany's central bank - the Deutsche
Bundesbank (German for German Federal Bank) - has admitted in writing
that banks create credit out of thin air.
As the Bundesbank states in a publication entitled "Money and Monetary Policy" (pages
88-93; translation provided by Google translate, but German speaker and
economic writer Festan von Geldern confirmed the basic translation).
ZeroHedge:"Federated Investors' David Tice has a thing or two to say about the
rally - "We've been the beneficiary of a massive credit bubble that
we've not yet worked off the excesses... This secular bear market will
not bottom until we get back until we get back below book value." In a
portion of the interview not caught by the Bloomberg clip below, Tice
says that the decline potential for the market is "huge." Don't tell
that to the algos whose one and only program for the past month and a
half is Buy.The.Dips."
Bharti Airtel Ltd., the Indian phone company planning
a $9 billion purchase of Zain’s African wireless assets, intends to
make an offer next week, after Bharti’s board today approved the bid,
according to two people with knowledge of the negotiations.
Zain, Kuwait’s biggest phone company, may be asked
to provide legal protection from a dispute in Nigeria, one of the
people said, declining to be identified because the discussions aren’t
public. The board didn’t specifically ask for this protection, and was
satisfied with the proposals that Bharti management made with regards
to Nigeria, the second person said.
Bharti and Zain are in exclusive talks until March
25 to complete a transaction that would give India’s largest wireless
carrier 42 million new subscribers in 15 African countries. Bharti has
sought overseas businesses as competition at home has reduced call
rates for many of its 122 million Indian subscribers to as little as
half a U.S. cent a minute. This is Bharti’s third attempt to enter
Africa, after being thwarted twice in efforts to merge with South
Africa’s MTN Group Ltd.
Thespread between 2- and 10-year yields, charted on the
yield curve, dropped yesterday to 2.70 percentage points, the
lowest level on a closing basis since Jan. 1. The yield on the
10-year note was little changed at 3.69 percent at the end of
this week.
The last time the yield curve flattened for five
consecutive weeks or more was in June 2005, when then Fed
Chairman Alan Greenspan said in congressional testimony that
underlying inflation remained “contained.”
Saturday, March 20, 2010
Friday, March 19, 2010
Greece
3/19/10 Greece
China’s yuan is destined to become a global reserve currency rivaling
the dollar and the euro, as the nation’s economic power increases the
currency’s allure, said Jim O’Neill, chief economist at Goldman Sachs
Group Inc.
Stephen Roach: "Isn't it the height of hypocrisy that America can articulate a
particular position in its currency but the Chinese are not allowed to
do that."
House
Ways and Means Republicans on Thursday assailed a provision in the
proposed health care reform bill under consideration this week. Subcommittee
on Oversight ranking member Charles Boustany (R-La.) said the IRS
provision in the bill "dangerously expands, in an ominous way the
tentacles of the IRS and it's reach into every American family," he
said today during a press conference. "This is a vast expanse of power," he said. Boustany said the bill would allow the IRS to confiscate refunds if there are penalties for not buying health care.
Earthfiles: "
March 18, 2010 - Huge V-Shaped UFO Emitted Beam
On C-5 At Vandenberg AFB. Click for report.“The big V-shaped craft was in its silent hover position
and it turned on a beam of light ... and directed it like a laser
beam onto the C-5, like it was aiming the beam right towards the cargo
bay area.” - “Steve,” former USAF Airman, Southern California"
The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system. (Are you for real Ben?)
Democrats need about six more votes
from House members to pass a U.S. health-care overhaul, Obama
administration officials said today. White House and Democratic leaders aim to collect those
votes from a pool of about 14 to 15 undecided lawmakers to get
to the 216 votes needed to pass the measure, according to the
officials, who spoke on condition of anonymity.
Why drill with natural gas at $4? May as well have producers donate it for a tax deduction.
The Senate bill requires insurers to spend at
least 85 cents of every premium dollar on medical care in small group
markets and 80 cents in large group markets. The proposed changes also
would require Medicare Advantage insurers to spend at least 85 percent
of revenues on medical care.
Firms with more than 50 workers who do not offer medical coverage could face fines of $2,000 per full-time employee.
Federal
subsidies would be provided to help people with incomes up to 400
percent of the poverty level purchase coverage on the exchange.
Proposed changes would sweeten those subsidies for lower income people.
The Senate bill included a 40 percent excise
tax on high-cost health insurance plans. The proposed changes would
delay implementation of the tax until 2018 instead of 2013. The tax
would kick in on plans costing $10,200 for individuals and $27,500 for
family coverage. A higher threshold is allowed for plans covering
mostly women, older workers and retirees as well as those in high-risk
professions.
The bill calls for
raising the payroll taxes for Medicare, the government health insurance
plan for the elderly, to 2.35 percent from the current 1.45 percent for
individuals earning $200,000 or more and for couples earning $250,000
or more. The proposed changes would apply the tax to some investment
income as well for those high-income groups.
The legislation would freeze payments to
insurers that provide coverage to Medicare patients in 2011 and begin
reducing the subsidy in 2012.
It
would also gradually close the gap in drug coverage for Medicare
beneficiaries by 2020. Those who enter the coverage gap, the so-called
doughnut hole, in 2010 will get a $250 rebate. In 2011 they would get a
50 percent discount on brand-name drugs.
Supply of foreclosed homes on the rise again, putting pressure on home prices.
.In the account given by the Merrill officials, the SEC, the lead
regulator, and the New York Federal Reserve were given warnings about
Lehman’s balance sheet calculations as far back as March 2008."
American National Bank of
Parma, Ohio, became the 31st bank failure of the year, according to the
Federal Deposit Insurance Corp. Friday. National Bank and Trust Co. of
Wilmington, Ohio, will assume all of the deposits and buy the assets of
American National. The bank had about $70.3 million in assets and $66.8
million in deposits.
Gold for April delivery finished down $19.90, or 1.8%, at $1,107.60 an ounce at the New York Mercantile Exchange.
The Federal Reserve will be
required to identify the names of banks that could have collapsed if
not for the central bank's emergency lending, a federal appeals court
said Friday. The U.S. Court of Appeals for the Second Circuit in New
York ruled on Friday that the Fed needs to disclose documents in
response to Freedom of Information Act requests by Bloomberg L.P. and
other news organizations. "We are reviewing the decision and
considering our options for reconsideration or appeal," said Fed
spokeswoman Barbara Hagenbaugh.
Greece is just a step away from
being unable to borrow, Greek Prime Minister George Papandreou told
union members Friday, according to Reuters, as he sought to drum up
support for the government's austerity measures. "With full honesty
towards Greeks, we talked about the point we have reached -- one step
from being unable to borrow," he said. "We must avoid paying usurious
interest for decades, condemning the country to a deep recession."
Papandreou has pressed European Union leaders to come up with a
concrete standby aid plan next week, saying it is essential to reduce
the nation's borrowing costs and allow it to meet its deficit-reduction
goals.
The Reserve Bank of India
raised its key lending and borrowing rates by a quarter-percentage
point on Friday to contain inflation and anchor expectations of rising
prices, the central bank said in a release. The RBI raised the
repurchase rate, or key lending rate, to 5.00% and the reverse
repurchase rate, or the borrowing rate, to 3.50% with immediate effect,
it said.
Dick Bove: Housing Market Will Fall 10%-15% When Fed Stops Subsidizing Home Prices
The Dow Jones industrial average dropped 37.19 points, or 0.35 percent, to end at 10,741.98. The Standard & Poor's 500 Index lost 5.93 points, or 0.51 percent, to 1,159.90. The Nasdaq Composite Index shed 16.87 points, or 0.71 percent, to 2,374.41.
For the week, the Dow rose 1.1 percent, the S&P added 0.9 percent and the Nasdaq gained 0.3 percent.
China’s yuan is destined to become a global reserve currency rivaling
the dollar and the euro, as the nation’s economic power increases the
currency’s allure, said Jim O’Neill, chief economist at Goldman Sachs
Group Inc.
Stephen Roach: "Isn't it the height of hypocrisy that America can articulate a
particular position in its currency but the Chinese are not allowed to
do that."
House
Ways and Means Republicans on Thursday assailed a provision in the
proposed health care reform bill under consideration this week. Subcommittee
on Oversight ranking member Charles Boustany (R-La.) said the IRS
provision in the bill "dangerously expands, in an ominous way the
tentacles of the IRS and it's reach into every American family," he
said today during a press conference. "This is a vast expanse of power," he said. Boustany said the bill would allow the IRS to confiscate refunds if there are penalties for not buying health care.
Earthfiles: "
March 18, 2010 - Huge V-Shaped UFO Emitted Beam
On C-5 At Vandenberg AFB. Click for report.“The big V-shaped craft was in its silent hover position
and it turned on a beam of light ... and directed it like a laser
beam onto the C-5, like it was aiming the beam right towards the cargo
bay area.” - “Steve,” former USAF Airman, Southern California"
The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system. (Are you for real Ben?)
Democrats need about six more votes
from House members to pass a U.S. health-care overhaul, Obama
administration officials said today. White House and Democratic leaders aim to collect those
votes from a pool of about 14 to 15 undecided lawmakers to get
to the 216 votes needed to pass the measure, according to the
officials, who spoke on condition of anonymity.
Why drill with natural gas at $4? May as well have producers donate it for a tax deduction.
The Senate bill requires insurers to spend at
least 85 cents of every premium dollar on medical care in small group
markets and 80 cents in large group markets. The proposed changes also
would require Medicare Advantage insurers to spend at least 85 percent
of revenues on medical care.
Firms with more than 50 workers who do not offer medical coverage could face fines of $2,000 per full-time employee.
Federal
subsidies would be provided to help people with incomes up to 400
percent of the poverty level purchase coverage on the exchange.
Proposed changes would sweeten those subsidies for lower income people.
The Senate bill included a 40 percent excise
tax on high-cost health insurance plans. The proposed changes would
delay implementation of the tax until 2018 instead of 2013. The tax
would kick in on plans costing $10,200 for individuals and $27,500 for
family coverage. A higher threshold is allowed for plans covering
mostly women, older workers and retirees as well as those in high-risk
professions.
The bill calls for
raising the payroll taxes for Medicare, the government health insurance
plan for the elderly, to 2.35 percent from the current 1.45 percent for
individuals earning $200,000 or more and for couples earning $250,000
or more. The proposed changes would apply the tax to some investment
income as well for those high-income groups.
The legislation would freeze payments to
insurers that provide coverage to Medicare patients in 2011 and begin
reducing the subsidy in 2012.
It
would also gradually close the gap in drug coverage for Medicare
beneficiaries by 2020. Those who enter the coverage gap, the so-called
doughnut hole, in 2010 will get a $250 rebate. In 2011 they would get a
50 percent discount on brand-name drugs.
Supply of foreclosed homes on the rise again, putting pressure on home prices.
.In the account given by the Merrill officials, the SEC, the lead
regulator, and the New York Federal Reserve were given warnings about
Lehman’s balance sheet calculations as far back as March 2008."
American National Bank of
Parma, Ohio, became the 31st bank failure of the year, according to the
Federal Deposit Insurance Corp. Friday. National Bank and Trust Co. of
Wilmington, Ohio, will assume all of the deposits and buy the assets of
American National. The bank had about $70.3 million in assets and $66.8
million in deposits.
Gold for April delivery finished down $19.90, or 1.8%, at $1,107.60 an ounce at the New York Mercantile Exchange.
The Federal Reserve will be
required to identify the names of banks that could have collapsed if
not for the central bank's emergency lending, a federal appeals court
said Friday. The U.S. Court of Appeals for the Second Circuit in New
York ruled on Friday that the Fed needs to disclose documents in
response to Freedom of Information Act requests by Bloomberg L.P. and
other news organizations. "We are reviewing the decision and
considering our options for reconsideration or appeal," said Fed
spokeswoman Barbara Hagenbaugh.
Greece is just a step away from
being unable to borrow, Greek Prime Minister George Papandreou told
union members Friday, according to Reuters, as he sought to drum up
support for the government's austerity measures. "With full honesty
towards Greeks, we talked about the point we have reached -- one step
from being unable to borrow," he said. "We must avoid paying usurious
interest for decades, condemning the country to a deep recession."
Papandreou has pressed European Union leaders to come up with a
concrete standby aid plan next week, saying it is essential to reduce
the nation's borrowing costs and allow it to meet its deficit-reduction
goals.
The Reserve Bank of India
raised its key lending and borrowing rates by a quarter-percentage
point on Friday to contain inflation and anchor expectations of rising
prices, the central bank said in a release. The RBI raised the
repurchase rate, or key lending rate, to 5.00% and the reverse
repurchase rate, or the borrowing rate, to 3.50% with immediate effect,
it said.
Dick Bove: Housing Market Will Fall 10%-15% When Fed Stops Subsidizing Home Prices
The Dow Jones industrial average dropped 37.19 points, or 0.35 percent, to end at 10,741.98. The Standard & Poor's 500 Index lost 5.93 points, or 0.51 percent, to 1,159.90. The Nasdaq Composite Index shed 16.87 points, or 0.71 percent, to 2,374.41.
For the week, the Dow rose 1.1 percent, the S&P added 0.9 percent and the Nasdaq gained 0.3 percent.
Thursday, March 18, 2010
Current Account Deficit
3/18/10 Current Account Deficit
The U.S. current account deficit widened less than expected to
$115.6 billion in the fourth quarter of 2009, largely driven by the
swelling U.S. trade deficit, a Commerce Department report showed on
Thursday.
The
current account gap rose from a downwardly revised $102.3 billion in
the third quarter. Analysts had expected the fourth quarter deficit to
widen to $119 billion.
The fourth quarter deficit equaled 3.2 percent of gross domestic product, up from 2.9 percent in the July-September period.
The
current account deficit for all of 2009 narrowed to $419.9 billion, the
smallest since 2001. It equaled 2.9 percent of GDP, down from 4.9
percent in 2008.
The number of people applying for unemployment benefits fell by 5,000 to a
seasonally adjusted 457,000 in the week ended March 13, marking the
third straight decline, the Labor Department reported Thursday. It was
in line with expectations. The four-week average of initial claims - a
better gauge of employment trends than the volatile weekly number -
fell by 4,250 to 471,250. The number of people who continue to get
regular unemployment checks rose by 12,000 to a seasonally adjusted
4.58 million in the week ended March 6.
U.S. consumer prices were
unchanged on a seasonally adjusted basis in February, with falling
energy prices offsetting increases in prices of cars, medical care and
food, the Labor Department reported Thursday. Economists surveyed by
MarketWatch had predicted the flat reading on the consumer price index.
The core CPI - which excludes food and energy prices - rose 0.1%, also
as expected. In the past year, the CPI has risen 2.1%. The core rate is
up 1.3% in the past year, the smallest year-over-year increase in six
years. Shelter prices were unchanged last month. Energy prices fell
0.5%, while food prices rose 0.1%.
German industrial conglomerate Siemens AG said Thursday it will eliminate 4,200 jobs worldwide by 2011 in its IT business unit.
Greece raised the stakes on Thursday in its quest for EU help to
tackle its debt crisis, warning it cannot achieve promised deficit cuts
if its borrowing costs remain so high and may have to call in the IMF.
The
country, however, strongly denied a report that it was scheduled to
turn to the international lender as soon as April and said all options
for getting support were still open.
"This (report) is ridiculous," Finance Minister George Papaconstantinou told Reuters.
"We
have said from the beginning that all options are open ... we are not
any closer now to the IMF (than before). These reports are just plain
silly."
Brett Steenbarger: "We've once again seen the equity
put-call ratio dip below .50, indicating a relatively high level of
bullishness among traders. With 2706 20-day highs and 272 lows on
Wednesday, however, we still don't see a level of deterioration in the
broad market that would normally be associated with a significant
market reversal. Demand continues to outpace Supply and we're seeing
Supply expansion at successively higher price levels, characteristic of
an uptrending market. We're also seeing fresh bull market highs in the
advance-decline line specific to NYSE common stocks."
During the evening news on March 15, 2010, KTVU (Channel 2) in the San Francisco Bay Area reported, "State of California issued 23,255 pink slips to CA teachers." The state is required to notify teachers no later than March 15th if they might be terminated and not teaching the following fall semester.
More Americans Disapprove of Obama's Performance Than Approve, Polls Finds.
For the first time since President Obama took office, more Americans
are unhappy with the job he's doing than are happy with it, according
to the latest Gallup poll. In the poll, 47 percent of Americans
disapprove of Obama's job performance compared to 46 percent who
approve. Obama's job approval rating fell to 46 percent last week, an
all-time low for the president.
The Energy Department on Thursday is expected to report a draw of 27
billion to 31 billion cubic feet of natural gas storage inventories for
the week ended March 12, according to a survey of analysts by Platts,
the energy information arm of McGraw-Hill Cos.
Natural gas burns clean and is the preferred fuel for industrial use.
Transportation is as simple as hooking up to the underground line
running down most streets in America. Natural gas is also used for
demand load electrical generation. Natural gas electrical plants are
inexpensive and can be built quickly. At present prices, electricity
produced with natural gas is cheaper than from coal.
Natural gas supplies down 11 Bcfs -- EIA. Working gas in storage was 1,615 Bcf as of Friday, March 12, 2010, according to
EIA estimates. This represents a net decline of 11 Bcf from the previous week.
Natural gas for April delivery was down 17 cents, or 3.8%, at $4.14 per
million British thermal units. It earlier traded as high as $4.33 per
million Btus.
A slow recovery is expected this
summer, and economic conditions will improve moderately in the near
term, the Conference Board said Thursday. As expected by analysts, the
index of leading economic indicators rose 0.1% in February, marking 11
consecutive gains, following an increase of 0.3% in January. The
interest rate spread and real money supply made the largest positive
contributions in February, while average weekly manufacturing hours and
stock prices made the largest negative contributions. "Going forward,
the big question remains the strength of demand," said Ken Goldstein,
economist at the Conference Board. "Without increased consumer demand,
job growth will likely be minimal over the next few months."
The Philiadelphia Federal Reserve's index on manufacturing in the region rose to 18.9 last month from 17.6 in January.
The Dow finished up 46 points to 10,779. The Nasdaq Composite Index was up 2 points to 2,391.
The Standard & Poor's 500 Index slid a half-point to 1,166.
The U.S. current account deficit widened less than expected to
$115.6 billion in the fourth quarter of 2009, largely driven by the
swelling U.S. trade deficit, a Commerce Department report showed on
Thursday.
The
current account gap rose from a downwardly revised $102.3 billion in
the third quarter. Analysts had expected the fourth quarter deficit to
widen to $119 billion.
The fourth quarter deficit equaled 3.2 percent of gross domestic product, up from 2.9 percent in the July-September period.
The
current account deficit for all of 2009 narrowed to $419.9 billion, the
smallest since 2001. It equaled 2.9 percent of GDP, down from 4.9
percent in 2008.
The number of people applying for unemployment benefits fell by 5,000 to a
seasonally adjusted 457,000 in the week ended March 13, marking the
third straight decline, the Labor Department reported Thursday. It was
in line with expectations. The four-week average of initial claims - a
better gauge of employment trends than the volatile weekly number -
fell by 4,250 to 471,250. The number of people who continue to get
regular unemployment checks rose by 12,000 to a seasonally adjusted
4.58 million in the week ended March 6.
U.S. consumer prices were
unchanged on a seasonally adjusted basis in February, with falling
energy prices offsetting increases in prices of cars, medical care and
food, the Labor Department reported Thursday. Economists surveyed by
MarketWatch had predicted the flat reading on the consumer price index.
The core CPI - which excludes food and energy prices - rose 0.1%, also
as expected. In the past year, the CPI has risen 2.1%. The core rate is
up 1.3% in the past year, the smallest year-over-year increase in six
years. Shelter prices were unchanged last month. Energy prices fell
0.5%, while food prices rose 0.1%.
German industrial conglomerate Siemens AG said Thursday it will eliminate 4,200 jobs worldwide by 2011 in its IT business unit.
Greece raised the stakes on Thursday in its quest for EU help to
tackle its debt crisis, warning it cannot achieve promised deficit cuts
if its borrowing costs remain so high and may have to call in the IMF.
The
country, however, strongly denied a report that it was scheduled to
turn to the international lender as soon as April and said all options
for getting support were still open.
"This (report) is ridiculous," Finance Minister George Papaconstantinou told Reuters.
"We
have said from the beginning that all options are open ... we are not
any closer now to the IMF (than before). These reports are just plain
silly."
Brett Steenbarger: "We've once again seen the equity
put-call ratio dip below .50, indicating a relatively high level of
bullishness among traders. With 2706 20-day highs and 272 lows on
Wednesday, however, we still don't see a level of deterioration in the
broad market that would normally be associated with a significant
market reversal. Demand continues to outpace Supply and we're seeing
Supply expansion at successively higher price levels, characteristic of
an uptrending market. We're also seeing fresh bull market highs in the
advance-decline line specific to NYSE common stocks."
During the evening news on March 15, 2010, KTVU (Channel 2) in the San Francisco Bay Area reported, "State of California issued 23,255 pink slips to CA teachers." The state is required to notify teachers no later than March 15th if they might be terminated and not teaching the following fall semester.
More Americans Disapprove of Obama's Performance Than Approve, Polls Finds.
For the first time since President Obama took office, more Americans
are unhappy with the job he's doing than are happy with it, according
to the latest Gallup poll. In the poll, 47 percent of Americans
disapprove of Obama's job performance compared to 46 percent who
approve. Obama's job approval rating fell to 46 percent last week, an
all-time low for the president.
The Energy Department on Thursday is expected to report a draw of 27
billion to 31 billion cubic feet of natural gas storage inventories for
the week ended March 12, according to a survey of analysts by Platts,
the energy information arm of McGraw-Hill Cos.
Natural gas burns clean and is the preferred fuel for industrial use.
Transportation is as simple as hooking up to the underground line
running down most streets in America. Natural gas is also used for
demand load electrical generation. Natural gas electrical plants are
inexpensive and can be built quickly. At present prices, electricity
produced with natural gas is cheaper than from coal.
Natural gas supplies down 11 Bcfs -- EIA. Working gas in storage was 1,615 Bcf as of Friday, March 12, 2010, according to
EIA estimates. This represents a net decline of 11 Bcf from the previous week.
Natural gas for April delivery was down 17 cents, or 3.8%, at $4.14 per
million British thermal units. It earlier traded as high as $4.33 per
million Btus.
A slow recovery is expected this
summer, and economic conditions will improve moderately in the near
term, the Conference Board said Thursday. As expected by analysts, the
index of leading economic indicators rose 0.1% in February, marking 11
consecutive gains, following an increase of 0.3% in January. The
interest rate spread and real money supply made the largest positive
contributions in February, while average weekly manufacturing hours and
stock prices made the largest negative contributions. "Going forward,
the big question remains the strength of demand," said Ken Goldstein,
economist at the Conference Board. "Without increased consumer demand,
job growth will likely be minimal over the next few months."
The Philiadelphia Federal Reserve's index on manufacturing in the region rose to 18.9 last month from 17.6 in January.
The Dow finished up 46 points to 10,779. The Nasdaq Composite Index was up 2 points to 2,391.
The Standard & Poor's 500 Index slid a half-point to 1,166.
Wednesday, March 17, 2010
Seven
3/17/10 Seven
Wholesale prices fell a
larger-than-expected 0.6% in February after seasonable adjustments,
with energy prices falling 2.9%, the Labor Department reported
Wednesday. This is the largest decline since last July.The producer
price index has risen 4.4% in the past year, the government said. The
core PPI - which excludes food and energy prices - rose 0.1% in
February, more than expected. Core prices are up 1.0% in the past year.
Economists surveyed by MarketWatch expected a 0.3% fall in the headline
PPI and a 0.1% decline in the core rate. The PPI had risen 1.4% in
January, while the core rate was up 0.3%.
Members of the Organization of
the Petroleum Exporting Countries have agreed to keep the cartel's
production quota unchanged at 24.845 million barrels a day, as
expected, according to media reports on Wednesday citing delegates.
OPEC is holding a meeting in Vienna. An official announcement is
expected later on Wednesday.
The Bank of Japan loosened monetary policy on Wednesday in a split
vote that suggested the central bank would struggle in the future to
meet government demands for easier monetary conditions.
The
government has prodded the BOJ for weeks to ease policy, a tactic
analysts say is aimed at preventing a rise in the yen from derailing an
export-driven recovery and deepening deflation.
The BOJ doubled
to 20 trillion yen ($221 billion) the funds available to banks for
three-month loans at the policy rate of 0.1 percent. The outcome was in
line with expectations.
The euro is unlikely to still exist as a currency over the longer term,
the pound will fall substantially in the next few years and US
Treasurys and some real estate in China are the world's two current
bubbles, legendary investor Jim Rogers told CNBC.com Wednesday.
Sol Palha: "Clearly, the US does not favour stronger dollar policy for though it mouths this, its actions speak otherwise. The bandits in congress want to print all the money in the world, and then they want other nations to let their currencies appreciate. China is too smart to fall for this game and the US is no longer the big bad wolf that can huff and puff and blow all the straw houses down. Now many of the houses are built with brick and steel and so no matter how hard this big bad wolf blows the Chinese house is not going to fall down.
One must remember that the one that controls the strings to the purse is the one that is in command and at this point China with its huge holding of US treasuries appears to be in charge. Thus the US can make a lot of noise out there but China will not listen because they know that all they have to do is threaten to unload their treasury holdings (they do not even have to really sell them) and it could have a severe impact on our markets. The story below clearly indicates that China is not going to be bullied into allowing its currency to appreciate against the dollar.
A Commerce Ministry spokesman repeated Chinese complaints that Washington was acting unreasonably by expecting other countries to raise their value of their currencies in order to boost U.S. exports. The United States and other trading partners complain Beijing keeps the yuan undervalued and are pressing for it to rise.
"Politicizing the exchange rate issue is not helpful to coordination among all parties in the course of fighting the global financial crisis," spokesman Yao Jian said at a news briefing.
An obscure parliamentary maneuver favored by House Speaker Nancy Pelosi (D-Calif.) suddenly ignited Tuesday as the latest tinder in the year-long partisan strife over reshaping the nation's health-care system, triggering debate over the strategy's legitimacy and political wisdom.
Republicans condemned Pelosi's idea -- in which House members would make a final decision on broad health-care changes without voting directly on the Senate version of the bill -- as an abuse of the legislative process.
House Minority Leader John A. Boehner (R-Ohio) called it "the ultimate in Washington power grabs." Pelosi
shot back: "I didn't hear any of that ferocity when the Republicans
used this, perhaps, hundreds of times."
Off Capitol Hill, parliamentary experts of both parties said the
tactic has been used with increasing frequency in recent years by
Democrats and Republicans alike, usually earlier in the legislative
process. And political analysts wrangled over whether the use of the "self-executing rule," also known as a "deem and pass," would further antagonize an electorate
whose enthusiasm for Democrats has dimmed in the past year.
Legal scholars disagreed about whether it would be a constitutional
way to pass the legislation. Yet even critics said they doubt that the
procedure would put the measure at risk of being struck down by the
courts.
"I feel pretty confident it is unconstitutional," said Michael W. McConnell, director of Stanford Law School's Constitutional Law Center and a former appellate judge appointed by President George W. Bush. "What a court would do about it is a murkier problem."
"The economy is poised to start seeing unemployment begin to drop,"
says John Challenger, CEO of Challenger, Gray & Christmas.
"Employers
who've been very cautious [will] begin to start turning the temp
workers they are hiring into permanent people," Challenger says,
predicting positive growth in payrolls will emerge by the second half
of 2010.
Rigzone: "Indian conglomerate Reliance Industries Ltd. is in late-stage talks
to buy a big stake in a U.S. natural-gas field, according to several
people familiar with the matter.
Reliance is nearing a deal to partner with Atlas Energy Inc., which
controls about 584,000 acres in the expansive Marcellus Shale, a huge
gas-bearing formation that stretches from West Virginia to New York.
The deal would likely make Reliance the first Indian company to buy
into the Marcellus, which has drawn big investments from other foreign
firms.
Under the deal as considered, Reliance would pay between $1 billion
and $1.5 billion to take a joint-venture stake with Atlas, which has
been seeking a joint-venture partner for several months. It was not
clear how the size of Reliance's stake in the deal, but Atlas is said
to be seeking a 50-50 partner, said these people."
Siemens AG's information-technology unit SIS is facing job cuts in
the four-digit range, a person familiar with the matter said Wednesday. "World-wide, probably more than 1,000 positions will be
eliminated," the person said. Currently, the unit has around 35,000
employees.
Shell will cut a further 1,000 global jobs by the end of 2011.
The amount California workers contributed to their employer-backed
health coverage increased 83 percent between 2000 and 2008 while their
income stayed the same, according to a report released today.
Daniel Dicker: "Natural gas prices have nowhere to go but up, and I think they are headed there. Now's the time to get involved. "
Democrats remain 16 votes short of the overall majority needed
to pass health care reform, at 190 Yes and 206 No, according to David
Dayen's Whip Count. There is still time to get the floaters on board,
however, it remains extremely close.
An Energy Department storage report on March 18 may show that supplies
fell 35 billion cubic feet last week, based on the median of six
analyst estimates compiled by Bloomberg. The five- year average decline
for the week is 65 billion. Above-normal temperatures are predicted for
the Midwest and Northeast through March 20, crimping demand for the
furnace and power-plant fuel.
Companies will get a tax break
if they hire new workers under a bill approved by the Senate on
Wednesday. The Senate voted 68-29 to approve the bill and send it to
President Barack Obama for his signature. The bill also extends highway
spending through the end of the year, and extends a tax break for small
businesses that buy new equipment.
The US housing market will face another retreat while mortgage-backed
securities and Treasurys are likely to go through a "material"
correction, Meredith Whitney, CEO of Meredith Whitney Advisory Group,
told CNBC Tuesday. "The housing market surely will double dip," Whitney told "Worldwide Exchange." "The asset classes of MBS and Treasurys are
priced for a material correction in my opinion," she said. "The only
buyers of agency MBS are the Fed and banks so you see how precarious
that market is."
"If the Fed pulls back, that's a really big deal... because there's no substitute buyer."
Up for a seventh day, the Dow industrials added 47.69 points, or 0.5%, to 10,733.67. The S&P 500 Index rose 6.75 points, or 0.6%, to 1,166.21. The Nasdaq Composite Index climbed 11.08 points, or 0.5%, to 2,389.0
Wholesale prices fell a
larger-than-expected 0.6% in February after seasonable adjustments,
with energy prices falling 2.9%, the Labor Department reported
Wednesday. This is the largest decline since last July.The producer
price index has risen 4.4% in the past year, the government said. The
core PPI - which excludes food and energy prices - rose 0.1% in
February, more than expected. Core prices are up 1.0% in the past year.
Economists surveyed by MarketWatch expected a 0.3% fall in the headline
PPI and a 0.1% decline in the core rate. The PPI had risen 1.4% in
January, while the core rate was up 0.3%.
Members of the Organization of
the Petroleum Exporting Countries have agreed to keep the cartel's
production quota unchanged at 24.845 million barrels a day, as
expected, according to media reports on Wednesday citing delegates.
OPEC is holding a meeting in Vienna. An official announcement is
expected later on Wednesday.
The Bank of Japan loosened monetary policy on Wednesday in a split
vote that suggested the central bank would struggle in the future to
meet government demands for easier monetary conditions.
The
government has prodded the BOJ for weeks to ease policy, a tactic
analysts say is aimed at preventing a rise in the yen from derailing an
export-driven recovery and deepening deflation.
The BOJ doubled
to 20 trillion yen ($221 billion) the funds available to banks for
three-month loans at the policy rate of 0.1 percent. The outcome was in
line with expectations.
The euro is unlikely to still exist as a currency over the longer term,
the pound will fall substantially in the next few years and US
Treasurys and some real estate in China are the world's two current
bubbles, legendary investor Jim Rogers told CNBC.com Wednesday.
Sol Palha: "Clearly, the US does not favour stronger dollar policy for though it mouths this, its actions speak otherwise. The bandits in congress want to print all the money in the world, and then they want other nations to let their currencies appreciate. China is too smart to fall for this game and the US is no longer the big bad wolf that can huff and puff and blow all the straw houses down. Now many of the houses are built with brick and steel and so no matter how hard this big bad wolf blows the Chinese house is not going to fall down.
One must remember that the one that controls the strings to the purse is the one that is in command and at this point China with its huge holding of US treasuries appears to be in charge. Thus the US can make a lot of noise out there but China will not listen because they know that all they have to do is threaten to unload their treasury holdings (they do not even have to really sell them) and it could have a severe impact on our markets. The story below clearly indicates that China is not going to be bullied into allowing its currency to appreciate against the dollar.
A Commerce Ministry spokesman repeated Chinese complaints that Washington was acting unreasonably by expecting other countries to raise their value of their currencies in order to boost U.S. exports. The United States and other trading partners complain Beijing keeps the yuan undervalued and are pressing for it to rise.
"Politicizing the exchange rate issue is not helpful to coordination among all parties in the course of fighting the global financial crisis," spokesman Yao Jian said at a news briefing.
An obscure parliamentary maneuver favored by House Speaker Nancy Pelosi (D-Calif.) suddenly ignited Tuesday as the latest tinder in the year-long partisan strife over reshaping the nation's health-care system, triggering debate over the strategy's legitimacy and political wisdom.
Republicans condemned Pelosi's idea -- in which House members would make a final decision on broad health-care changes without voting directly on the Senate version of the bill -- as an abuse of the legislative process.
House Minority Leader John A. Boehner (R-Ohio) called it "the ultimate in Washington power grabs." Pelosi
shot back: "I didn't hear any of that ferocity when the Republicans
used this, perhaps, hundreds of times."
Off Capitol Hill, parliamentary experts of both parties said the
tactic has been used with increasing frequency in recent years by
Democrats and Republicans alike, usually earlier in the legislative
process. And political analysts wrangled over whether the use of the "self-executing rule," also known as a "deem and pass," would further antagonize an electorate
whose enthusiasm for Democrats has dimmed in the past year.
Legal scholars disagreed about whether it would be a constitutional
way to pass the legislation. Yet even critics said they doubt that the
procedure would put the measure at risk of being struck down by the
courts.
"I feel pretty confident it is unconstitutional," said Michael W. McConnell, director of Stanford Law School's Constitutional Law Center and a former appellate judge appointed by President George W. Bush. "What a court would do about it is a murkier problem."
"The economy is poised to start seeing unemployment begin to drop,"
says John Challenger, CEO of Challenger, Gray & Christmas.
"Employers
who've been very cautious [will] begin to start turning the temp
workers they are hiring into permanent people," Challenger says,
predicting positive growth in payrolls will emerge by the second half
of 2010.
Rigzone: "Indian conglomerate Reliance Industries Ltd. is in late-stage talks
to buy a big stake in a U.S. natural-gas field, according to several
people familiar with the matter.
Reliance is nearing a deal to partner with Atlas Energy Inc., which
controls about 584,000 acres in the expansive Marcellus Shale, a huge
gas-bearing formation that stretches from West Virginia to New York.
The deal would likely make Reliance the first Indian company to buy
into the Marcellus, which has drawn big investments from other foreign
firms.
Under the deal as considered, Reliance would pay between $1 billion
and $1.5 billion to take a joint-venture stake with Atlas, which has
been seeking a joint-venture partner for several months. It was not
clear how the size of Reliance's stake in the deal, but Atlas is said
to be seeking a 50-50 partner, said these people."
Siemens AG's information-technology unit SIS is facing job cuts in
the four-digit range, a person familiar with the matter said Wednesday. "World-wide, probably more than 1,000 positions will be
eliminated," the person said. Currently, the unit has around 35,000
employees.
Shell will cut a further 1,000 global jobs by the end of 2011.
The amount California workers contributed to their employer-backed
health coverage increased 83 percent between 2000 and 2008 while their
income stayed the same, according to a report released today.
Daniel Dicker: "Natural gas prices have nowhere to go but up, and I think they are headed there. Now's the time to get involved. "
Democrats remain 16 votes short of the overall majority needed
to pass health care reform, at 190 Yes and 206 No, according to David
Dayen's Whip Count. There is still time to get the floaters on board,
however, it remains extremely close.
An Energy Department storage report on March 18 may show that supplies
fell 35 billion cubic feet last week, based on the median of six
analyst estimates compiled by Bloomberg. The five- year average decline
for the week is 65 billion. Above-normal temperatures are predicted for
the Midwest and Northeast through March 20, crimping demand for the
furnace and power-plant fuel.
Companies will get a tax break
if they hire new workers under a bill approved by the Senate on
Wednesday. The Senate voted 68-29 to approve the bill and send it to
President Barack Obama for his signature. The bill also extends highway
spending through the end of the year, and extends a tax break for small
businesses that buy new equipment.
The US housing market will face another retreat while mortgage-backed
securities and Treasurys are likely to go through a "material"
correction, Meredith Whitney, CEO of Meredith Whitney Advisory Group,
told CNBC Tuesday. "The housing market surely will double dip," Whitney told "Worldwide Exchange." "The asset classes of MBS and Treasurys are
priced for a material correction in my opinion," she said. "The only
buyers of agency MBS are the Fed and banks so you see how precarious
that market is."
"If the Fed pulls back, that's a really big deal... because there's no substitute buyer."
Up for a seventh day, the Dow industrials added 47.69 points, or 0.5%, to 10,733.67. The S&P 500 Index rose 6.75 points, or 0.6%, to 1,166.21. The Nasdaq Composite Index climbed 11.08 points, or 0.5%, to 2,389.0
Tuesday, March 16, 2010
The Fed
3/16/10 The Fed
ZeroHedge: "The Herald of Scotland, however, may have credible
proof that a US-led attack on Iran approaches and could be just days
away. The newspaper has procured proof of an arms shipment to Diego
Garcia, which consists of "of 195 smart, guided, Blu-110 bombs and 192
massive 2000lb Blu-117 bombs...put in place for an assault on Iran’s
controversial nuclear facilities." Additional insight comes from Dan
Plesch, director of the Centre for International Studies and Diplomacy
at the University of London: “They are gearing up totally for the
destruction of Iran. US bombers are ready today to destroy 10,000
targets in Iran in a few hours." Is war imminent? And will Obama repeat
Bush's mistake with Iraq, resulting in a huge spike in oil, coupled
with a rush to safety in dollars and/or gold? If inflation will not
start on its own, its has to be kindled: preferably by a Blu-117 bomb.
Is the relatively long period of market stability and low volatility
about to come to a sudden end?
U.S.housing starts fell about 5.9% to a seasonally adjusted annual rate of
575,000 in February as several massive snow storms hit the East and
South, according to data released Tuesday by the Commerce Department.
New construction was down in the Northeast and South, but up in the
Midwest and West. Starts of single-family homes fell 0.6% to a 499,000
pace, while starts of large condos and apartment building plunged 43%.
In the past year, starts of single-family homes are up 39%, while
starts of multifamily units are down 41%. Building permits - which
aren't as affected by weather as starts are - dropped 1.6% to 612,000
in February. Permits for single-family homes fell 0.2% to a 503,000
rate.
Chain-store sales for the week
ended March 13 rose 3.2% from the year-earlier period, according to a
survey released Tuesday by the International Council of Shopping
Centers and Goldman Sachs. On a week-over-week basis, sales fell 0.4%.
A magnitude 4.4 earthquake hit
the greater Los Angeles area at 4:04 a.m. local time, the U.S.
Geological Survey said on its Web site.
Ambac said it is evaluating the
need for additional or modified disclosures as a result of ongoing
discussions with financial counterparties and the Office of the
Commissioner of Insurance of the State of Wisconsin. "The company
anticipates that the outcome of these discussions could have a material
impact on the disclosure and financial statements included in its form
10-K" Ambac said.
Bankruptcy?
Official forecasts may be underestimating the future demand for oil by
30 million barrels a day, according to a research paper by Joyce Dargay
of the University of Leeds and Dermot Gately of New York University. If
so, the next oil crisis is going to be a whopper. Dargay and Gately base their logic on the observation that the demand for oil no longer appears to respond to price.
A report says nearly a quarter of Californians under age 65 had no health insurance in 2009. The UCLA Center for Health Policy Research study reported in Monday's
Los Angeles Times said the state's uninsured population jumped to 8.2
million last year. That's up from 6.4 million in 2007, marking the
highest number of uninsured over the last decade.
After laying the groundwork for a decisive vote this week on the Senate's health-care bill, House Speaker Nancy Pelosi suggested Monday that she might attempt to pass the measure without having members vote on it.
Instead, Pelosi (D-Calif.) would rely on a procedural sleight of hand:
The House would vote on a more popular package of fixes to the Senate
bill; under the House rule for that vote, passage would signify that
lawmakers "deem" the health-care bill to be passed.
The tactic -- known as a "self-executing rule" or a "deem and pass" -- has been commonly used, although never to pass
legislation as momentous as the $875 billion health-care bill.
Democrats would thus send the
Senate bill to President Obama for his signature even as they claimed
to oppose the same Senate bill. They would be declaring themselves to
be for and against the Senate bill in the same vote.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 26%
of the nation's voters Strongly Approve of the way that Barack Obama is
performing his role as President. Forty-two percent (42%) Strongly
Disapprove giving Obama a Presidential Approval Index rating of -16.
Economic Disconnect: "Not to worry those of you with a bullish mind, reality has long since departed the collective soul of US markets."
* Technical Analyst Charles Nenner Predicts the Market May Crash in April
Posted by: madhedgefundtrader
Post date: 03/15/2010 - 23:09
A second deflationary tidal wave may hit the US early as April. The Dow
is going to crash, possibly heading for a double bottom at 6,000, and
bonds are going up for the rest of the year. Gold has had it for the
foreseeable future. First, deflation, then inflation. The greatest
trade of your lifetime is setting up. This trend could start tomorrow,
or in two years. Blow your entry point, and you’ll get wiped out. Oh,
and by the way, crude oil futures are discounting war with Iran by
2013!Wal-Mart StoresInc., years after a failed effort to obtain a bank charter, plans a 50%
increase this year in the number of the company's stores offering
bank-like services. The expansion would push the number of
Wal-Marts with "Money Centers" to 1,500, or a little less than one for
every two Wal-Marts in the U.S., giving the nation's biggest retailer a
financial presence that only a handful of banks have. Wal-Mart plans to
open its 1,000th money center Tuesday.
Xinjiang oilfield, a subsidiary oilf ield of PetroChina, is to build a large-sized na tural gas storage facility in
Hutubi gasfield to cushion natural gas s hortage in northern part of
Xinjiang during the cold winter, a local g overnment official said
Monday.
According to an official with the local government of
Karamay, t he storage, with a capacity of about several billion cubic
meters, wil l be part of a national energy security plan that focuses
on solving natural gas shortage.
U.S. import prices fell 0.3 percent in February, led by a drop in
prices for crude oil and other petroleum products, the Labor Department
reported on Tuesday.
The Federal
Reserve kept its benchmark interest rate at a record low level Tuesday
and made no changes to the key "extended period" policy pledge. The
Fed's policy statement, released after a closed-door meeting, said the
economic situation is "likely to warrant exceptionally low levels of
the federal funds rate for an extended period." The Fed's description
of the economy was a little more upbeat about the job market. But Fed
officials also noted that housing remained weak. The Fed said that its
purchases of more than a trillion dollars of mortgage-backed securities
would be finished by the end of the month as scheduled. The Fed kept
the door open for more purchases, saying that it will employ its policy
tools as necessary to promote growth. There was one dissent to the
policy stance. Thomas Hoenig, the president of the Kansas City Federal
Reserve Bank, objected to the extended period wording for the second
straight meeting.
Crude oil futures added to gains
in late afternoon electronic trade Tuesday after the American Petroleum
Institute said U.S. crude oil inventories rose 403,000 in the week
ended March 12, less than analysts expected. Analysts polled by Platts
expected an increase of 1.9 million barrels for the week ending March
12. Crude oil for April delivery recently gained 27 cents, or 0.3%, to
$81.97 a barrel in electronic trade. The API said gasoline supplies
fell 3.654 million barrels and distillate stocks fell 756,000 barrels.
Analysts polled by Platts expected gasoline supplies to fall by 1.5
million barrels and distillate stocks to fall by 1.6 million barrels.
The Dow Jones Industrial Average rose 43.83 points, or 0.4%, to 10,685.98. The S&P 500 Index climbed 8.95 points, or 0.8%, to 1,159.46. The Nasdaq Composite Index added 15.8 points, or 0.7%, to 2,378.01.
ZeroHedge: "The Herald of Scotland, however, may have credible
proof that a US-led attack on Iran approaches and could be just days
away. The newspaper has procured proof of an arms shipment to Diego
Garcia, which consists of "of 195 smart, guided, Blu-110 bombs and 192
massive 2000lb Blu-117 bombs...put in place for an assault on Iran’s
controversial nuclear facilities." Additional insight comes from Dan
Plesch, director of the Centre for International Studies and Diplomacy
at the University of London: “They are gearing up totally for the
destruction of Iran. US bombers are ready today to destroy 10,000
targets in Iran in a few hours." Is war imminent? And will Obama repeat
Bush's mistake with Iraq, resulting in a huge spike in oil, coupled
with a rush to safety in dollars and/or gold? If inflation will not
start on its own, its has to be kindled: preferably by a Blu-117 bomb.
Is the relatively long period of market stability and low volatility
about to come to a sudden end?
U.S.housing starts fell about 5.9% to a seasonally adjusted annual rate of
575,000 in February as several massive snow storms hit the East and
South, according to data released Tuesday by the Commerce Department.
New construction was down in the Northeast and South, but up in the
Midwest and West. Starts of single-family homes fell 0.6% to a 499,000
pace, while starts of large condos and apartment building plunged 43%.
In the past year, starts of single-family homes are up 39%, while
starts of multifamily units are down 41%. Building permits - which
aren't as affected by weather as starts are - dropped 1.6% to 612,000
in February. Permits for single-family homes fell 0.2% to a 503,000
rate.
Chain-store sales for the week
ended March 13 rose 3.2% from the year-earlier period, according to a
survey released Tuesday by the International Council of Shopping
Centers and Goldman Sachs. On a week-over-week basis, sales fell 0.4%.
A magnitude 4.4 earthquake hit
the greater Los Angeles area at 4:04 a.m. local time, the U.S.
Geological Survey said on its Web site.
Ambac said it is evaluating the
need for additional or modified disclosures as a result of ongoing
discussions with financial counterparties and the Office of the
Commissioner of Insurance of the State of Wisconsin. "The company
anticipates that the outcome of these discussions could have a material
impact on the disclosure and financial statements included in its form
10-K" Ambac said.
Bankruptcy?
Official forecasts may be underestimating the future demand for oil by
30 million barrels a day, according to a research paper by Joyce Dargay
of the University of Leeds and Dermot Gately of New York University. If
so, the next oil crisis is going to be a whopper. Dargay and Gately base their logic on the observation that the demand for oil no longer appears to respond to price.
A report says nearly a quarter of Californians under age 65 had no health insurance in 2009. The UCLA Center for Health Policy Research study reported in Monday's
Los Angeles Times said the state's uninsured population jumped to 8.2
million last year. That's up from 6.4 million in 2007, marking the
highest number of uninsured over the last decade.
After laying the groundwork for a decisive vote this week on the Senate's health-care bill, House Speaker Nancy Pelosi suggested Monday that she might attempt to pass the measure without having members vote on it.
Instead, Pelosi (D-Calif.) would rely on a procedural sleight of hand:
The House would vote on a more popular package of fixes to the Senate
bill; under the House rule for that vote, passage would signify that
lawmakers "deem" the health-care bill to be passed.
The tactic -- known as a "self-executing rule" or a "deem and pass" -- has been commonly used, although never to pass
legislation as momentous as the $875 billion health-care bill.
Democrats would thus send the
Senate bill to President Obama for his signature even as they claimed
to oppose the same Senate bill. They would be declaring themselves to
be for and against the Senate bill in the same vote.
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 26%
of the nation's voters Strongly Approve of the way that Barack Obama is
performing his role as President. Forty-two percent (42%) Strongly
Disapprove giving Obama a Presidential Approval Index rating of -16.
Economic Disconnect: "Not to worry those of you with a bullish mind, reality has long since departed the collective soul of US markets."
* Technical Analyst Charles Nenner Predicts the Market May Crash in April
Posted by: madhedgefundtrader
Post date: 03/15/2010 - 23:09
A second deflationary tidal wave may hit the US early as April. The Dow
is going to crash, possibly heading for a double bottom at 6,000, and
bonds are going up for the rest of the year. Gold has had it for the
foreseeable future. First, deflation, then inflation. The greatest
trade of your lifetime is setting up. This trend could start tomorrow,
or in two years. Blow your entry point, and you’ll get wiped out. Oh,
and by the way, crude oil futures are discounting war with Iran by
2013!Wal-Mart StoresInc., years after a failed effort to obtain a bank charter, plans a 50%
increase this year in the number of the company's stores offering
bank-like services. The expansion would push the number of
Wal-Marts with "Money Centers" to 1,500, or a little less than one for
every two Wal-Marts in the U.S., giving the nation's biggest retailer a
financial presence that only a handful of banks have. Wal-Mart plans to
open its 1,000th money center Tuesday.
Xinjiang oilfield, a subsidiary oilf ield of PetroChina, is to build a large-sized na tural gas storage facility in
Hutubi gasfield to cushion natural gas s hortage in northern part of
Xinjiang during the cold winter, a local g overnment official said
Monday.
According to an official with the local government of
Karamay, t he storage, with a capacity of about several billion cubic
meters, wil l be part of a national energy security plan that focuses
on solving natural gas shortage.
U.S. import prices fell 0.3 percent in February, led by a drop in
prices for crude oil and other petroleum products, the Labor Department
reported on Tuesday.
The Federal
Reserve kept its benchmark interest rate at a record low level Tuesday
and made no changes to the key "extended period" policy pledge. The
Fed's policy statement, released after a closed-door meeting, said the
economic situation is "likely to warrant exceptionally low levels of
the federal funds rate for an extended period." The Fed's description
of the economy was a little more upbeat about the job market. But Fed
officials also noted that housing remained weak. The Fed said that its
purchases of more than a trillion dollars of mortgage-backed securities
would be finished by the end of the month as scheduled. The Fed kept
the door open for more purchases, saying that it will employ its policy
tools as necessary to promote growth. There was one dissent to the
policy stance. Thomas Hoenig, the president of the Kansas City Federal
Reserve Bank, objected to the extended period wording for the second
straight meeting.
Crude oil futures added to gains
in late afternoon electronic trade Tuesday after the American Petroleum
Institute said U.S. crude oil inventories rose 403,000 in the week
ended March 12, less than analysts expected. Analysts polled by Platts
expected an increase of 1.9 million barrels for the week ending March
12. Crude oil for April delivery recently gained 27 cents, or 0.3%, to
$81.97 a barrel in electronic trade. The API said gasoline supplies
fell 3.654 million barrels and distillate stocks fell 756,000 barrels.
Analysts polled by Platts expected gasoline supplies to fall by 1.5
million barrels and distillate stocks to fall by 1.6 million barrels.
The Dow Jones Industrial Average rose 43.83 points, or 0.4%, to 10,685.98. The S&P 500 Index climbed 8.95 points, or 0.8%, to 1,159.46. The Nasdaq Composite Index added 15.8 points, or 0.7%, to 2,378.01.
Monday, March 15, 2010
Indices
3/15/10 Indices
Mike Burk: "The market is about as over bought as it has ever been.
Two significant, although not major, indices have been up for 13 consecutive days, they are:
The NASDAQ 100 (NDX) up 7.3%, its longest run since January 1992.
The S&P mid cap (MID) up 7.3%, the longest run in its slightly less than 20 year history.
The extreme overbought condition is only a short term negative because all of the major indices and indicators are confirming the high.
Volume is what's been missing from this rally...
Nearly everything that matters confirmed last week's highs. The implications of that are if a cycle top were to begin to develop next Monday, a final top would take 4-6 weeks to develop.
I expect the major averages to be higher on Friday March 19 than they were on Friday March 12."
Chinese Premier Wen Jiabao rebuffed calls for the yuan to appreciate and sought assurances
that the U.S. will protect the value of China’s dollar assets.
“I don’t think the yuan is undervalued,” Wen said at a
press conference in Beijing marking the end of China’s annual
parliamentary meetings. Dollar volatility is a “big” concern
and “I’m still worried” about China’s U.S. currency holdings,
he said.
Wen urged America to “take concrete steps to reassure
investors” about the safety of dollar assets, repeating
concerns that he expressed a year ago, sparked by a growing U.S.
fiscal deficit. Treasury Department figures show China’s
holdings of Treasury securities dropped for a second month in
December to $894.8 billion.
Cnooc to Buy 50% of Argentina Crude Exporter Bridas Corp. for $3.1 Billion
“Dick Fuld is going to be bankrupted and he’s going to spend the rest of his life in court fighting legal battles,” observes Dick Bove of Rochedale Securities in
a phone call this afternoon. Bove, who said he’s having the nine
volumes of the examiner’s report printed and bound, added, “There maybe
others forced to do the same.”
John Hussman: "It should be evident that the recent credit
crisis did not emerge as some unpredictable surprise, but was instead
the very ordinary outcome of extraordinary recklessness. Though the
mounting problems in 2005 were utterly ignored by the stock market for
more than two years after this analysis was published, the fact is that
even with the recent rebound, the S&P 500 remains below where it
was in mid-2005. Overvaluation and reckless lending do not always
translate into near-term market weakness, but they invariably haunt
investors in the form of poor long-term returns."
Apparel company Phillips-Van Heusen Corp said it will buy fashion
brand Tommy Hilfiger in a cash and stock deal for about $3 billion in a
bid to boost its presence in markets like Europe and Asia.Tommy Hilfiger is currently owned by private equity firm Apax Partners.
Walmart is planning for another big weekend, preparing all 24-hour
stores to entertain fans shortly after twilight, Friday evening.
"Twilight-themed" giveaways will go to the first 100 in line.
Additionally some stores will have more giveaways to fans that can
prove their "Twilight trivia" knowledge in the run-up to the midnight
release. Among the many offerings in its Twilight Saga Shops, Walmart
will bring out at midnight the "New Moon Ultimate Fan Edition" -- the
only DVD to be released with a "sneak peek" of "The Twilight Saga:
Eclipse." Last year "Twilight" became one of the most pre-ordered DVD
movies in Walmart history, and the most successful DVD release event.
Net foreign purchases of
long-term securities slowed markedly in January, the Treasury
Department said Monday. Total holdings of equities, notes and bonds
increased a net $19.1 billion in January. This is down from $63.3
billion in the previous month. Including short-term securities and bank
lending data, foreigners sold a net $33.4 billion compared with
purchases of $53.6 billion a month earlier. The Treasury Department said Monday that China's holdings dipped by
$5.8 billion to $889 billion in January compared to December. Japan,
the second largest foreign holder of U.S. government debt, also trimmed
its holdings but by a much smaller $300 million to $765.4 billion.
Rob Hanna: "Some readers may recall that I’ve previously labeled December op-ex week “The Most Wonderful Time of the Year”.
Op-ex week in general is normally pretty good. And while December has
been the most reliable month, both March and April have produced more
profits going back to 1984."
US gas heating demand last week was 16.5% below normal vs. forecast of 28.5% below normal.
The retirement nest egg of an entire
generation is stashed away in this small town along the Ohio River:
$2.5 trillion in IOUs from the federal government, payable to the
Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money
in payroll taxes than it paid out in benefits - billions more each
year.
Not anymore. This year, for the first time since the 1980s, when
Congress last overhauled Social Security, the retirement program is
projected to pay out more in benefits than it collects in taxes -
nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad
the federal government already spent that money over the years on
other programs, preferring to borrow from Social Security rather
than foreign creditors. In return, the Treasury Department issued a
stack of IOUs - in the form of Treasury bonds - which are kept in a
nondescript office building just down the street from Parkersburg's
municipal offices.
Now the government will have to borrow even more money, much of
it abroad, to start paying back the IOUs, and the timing couldn't
be worse. The government is projected to post a record $1.5
trillion budget deficit this year, followed by trillion-dollar
deficits for years to come.
But to
illustrate the government's commitment to repaying Social Security,
the Treasury Department has been issuing special bonds that earn
interest for the retirement program. The bonds are unique because
they are actually printed on paper, while other government bonds
exist only in electronic form.
They are stored in a three-ring binder, locked in the bottom
drawer of a white metal filing cabinet in the Parkersburg offices
of Bureau of Public Debt.
The agency, which is part of the Treasury Department, opened
offices in Parkersburg in the 1950s as part of a plan to locate
important government functions away from Washington, D.C., in case
of an attack during the Cold War.
Michael Lynch: "Natural gas consumption has been on the rise for decades. According to
the BP Statistical Review of World Energy which is published each June,
for 2008, natural gas accounted for 24.1% of total world energy
consumption. For the year 1978, total consumption of natural gas was
1,212 million tonnes of oil equivalent. By 2008, that figure had
increased to 2,726 million tonnes. Consumption has more than doubled in
the last 30 years. A major contributor to consumption growth has been
the liquefied natural gas (LNG) sector which has grown from 150 million
cubic meters in 1994 to 380 million in 2008. Just in the last decade,
shale gas has also become a powerful sector of the market, particularly
in the U.S. Besides the substantial price advantage, natural gas now
has two other important factors that drive consumption. Being a clean
burning fuel is one factor. Realization that natural gas can be a
transportation fuel is the other. Worldwide, over 10 million natural
gas vehicles NGV) are on the road. Asia is the high growth region with
Pakistan, Iran, China, India and Bangladesh leading the way.The U.S.
has been a laggard but this is changing fast as the advantages of
natural gas as vehicle fuel become evident."
The NAHB/Wells Fargo housing market index fell two points to 15 in March, reversing a slight pop in February.
Buyer traffic dropped from 12 to 10, the lowest since March 2009. Current sales fell from 17 to 15. Expected sales fell from 27 to 24, the lowest since April 2009.
The Dow Jones Industrial Average, once off 54 points, finished with a 17-point gain to 10,642. The Standard & Poor's 500 Index, ended up a half-point to 1,151, its best close of the year. But the Nasdaq Composite Index was off about 5 points to 2,362.
Mike Burk: "The market is about as over bought as it has ever been.
Two significant, although not major, indices have been up for 13 consecutive days, they are:
The NASDAQ 100 (NDX) up 7.3%, its longest run since January 1992.
The S&P mid cap (MID) up 7.3%, the longest run in its slightly less than 20 year history.
The extreme overbought condition is only a short term negative because all of the major indices and indicators are confirming the high.
Volume is what's been missing from this rally...
Nearly everything that matters confirmed last week's highs. The implications of that are if a cycle top were to begin to develop next Monday, a final top would take 4-6 weeks to develop.
I expect the major averages to be higher on Friday March 19 than they were on Friday March 12."
Chinese Premier Wen Jiabao rebuffed calls for the yuan to appreciate and sought assurances
that the U.S. will protect the value of China’s dollar assets.
“I don’t think the yuan is undervalued,” Wen said at a
press conference in Beijing marking the end of China’s annual
parliamentary meetings. Dollar volatility is a “big” concern
and “I’m still worried” about China’s U.S. currency holdings,
he said.
Wen urged America to “take concrete steps to reassure
investors” about the safety of dollar assets, repeating
concerns that he expressed a year ago, sparked by a growing U.S.
fiscal deficit. Treasury Department figures show China’s
holdings of Treasury securities dropped for a second month in
December to $894.8 billion.
Cnooc to Buy 50% of Argentina Crude Exporter Bridas Corp. for $3.1 Billion
“Dick Fuld is going to be bankrupted and he’s going to spend the rest of his life in court fighting legal battles,” observes Dick Bove of Rochedale Securities in
a phone call this afternoon. Bove, who said he’s having the nine
volumes of the examiner’s report printed and bound, added, “There maybe
others forced to do the same.”
John Hussman: "It should be evident that the recent credit
crisis did not emerge as some unpredictable surprise, but was instead
the very ordinary outcome of extraordinary recklessness. Though the
mounting problems in 2005 were utterly ignored by the stock market for
more than two years after this analysis was published, the fact is that
even with the recent rebound, the S&P 500 remains below where it
was in mid-2005. Overvaluation and reckless lending do not always
translate into near-term market weakness, but they invariably haunt
investors in the form of poor long-term returns."
Apparel company Phillips-Van Heusen Corp said it will buy fashion
brand Tommy Hilfiger in a cash and stock deal for about $3 billion in a
bid to boost its presence in markets like Europe and Asia.Tommy Hilfiger is currently owned by private equity firm Apax Partners.
Walmart is planning for another big weekend, preparing all 24-hour
stores to entertain fans shortly after twilight, Friday evening.
"Twilight-themed" giveaways will go to the first 100 in line.
Additionally some stores will have more giveaways to fans that can
prove their "Twilight trivia" knowledge in the run-up to the midnight
release. Among the many offerings in its Twilight Saga Shops, Walmart
will bring out at midnight the "New Moon Ultimate Fan Edition" -- the
only DVD to be released with a "sneak peek" of "The Twilight Saga:
Eclipse." Last year "Twilight" became one of the most pre-ordered DVD
movies in Walmart history, and the most successful DVD release event.
Net foreign purchases of
long-term securities slowed markedly in January, the Treasury
Department said Monday. Total holdings of equities, notes and bonds
increased a net $19.1 billion in January. This is down from $63.3
billion in the previous month. Including short-term securities and bank
lending data, foreigners sold a net $33.4 billion compared with
purchases of $53.6 billion a month earlier. The Treasury Department said Monday that China's holdings dipped by
$5.8 billion to $889 billion in January compared to December. Japan,
the second largest foreign holder of U.S. government debt, also trimmed
its holdings but by a much smaller $300 million to $765.4 billion.
Rob Hanna: "Some readers may recall that I’ve previously labeled December op-ex week “The Most Wonderful Time of the Year”.
Op-ex week in general is normally pretty good. And while December has
been the most reliable month, both March and April have produced more
profits going back to 1984."
US gas heating demand last week was 16.5% below normal vs. forecast of 28.5% below normal.
The retirement nest egg of an entire
generation is stashed away in this small town along the Ohio River:
$2.5 trillion in IOUs from the federal government, payable to the
Social Security Administration.
It's time to start cashing them in.
For more than two decades, Social Security collected more money
in payroll taxes than it paid out in benefits - billions more each
year.
Not anymore. This year, for the first time since the 1980s, when
Congress last overhauled Social Security, the retirement program is
projected to pay out more in benefits than it collects in taxes -
nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad
the federal government already spent that money over the years on
other programs, preferring to borrow from Social Security rather
than foreign creditors. In return, the Treasury Department issued a
stack of IOUs - in the form of Treasury bonds - which are kept in a
nondescript office building just down the street from Parkersburg's
municipal offices.
Now the government will have to borrow even more money, much of
it abroad, to start paying back the IOUs, and the timing couldn't
be worse. The government is projected to post a record $1.5
trillion budget deficit this year, followed by trillion-dollar
deficits for years to come.
But to
illustrate the government's commitment to repaying Social Security,
the Treasury Department has been issuing special bonds that earn
interest for the retirement program. The bonds are unique because
they are actually printed on paper, while other government bonds
exist only in electronic form.
They are stored in a three-ring binder, locked in the bottom
drawer of a white metal filing cabinet in the Parkersburg offices
of Bureau of Public Debt.
The agency, which is part of the Treasury Department, opened
offices in Parkersburg in the 1950s as part of a plan to locate
important government functions away from Washington, D.C., in case
of an attack during the Cold War.
Michael Lynch: "Natural gas consumption has been on the rise for decades. According to
the BP Statistical Review of World Energy which is published each June,
for 2008, natural gas accounted for 24.1% of total world energy
consumption. For the year 1978, total consumption of natural gas was
1,212 million tonnes of oil equivalent. By 2008, that figure had
increased to 2,726 million tonnes. Consumption has more than doubled in
the last 30 years. A major contributor to consumption growth has been
the liquefied natural gas (LNG) sector which has grown from 150 million
cubic meters in 1994 to 380 million in 2008. Just in the last decade,
shale gas has also become a powerful sector of the market, particularly
in the U.S. Besides the substantial price advantage, natural gas now
has two other important factors that drive consumption. Being a clean
burning fuel is one factor. Realization that natural gas can be a
transportation fuel is the other. Worldwide, over 10 million natural
gas vehicles NGV) are on the road. Asia is the high growth region with
Pakistan, Iran, China, India and Bangladesh leading the way.The U.S.
has been a laggard but this is changing fast as the advantages of
natural gas as vehicle fuel become evident."
The NAHB/Wells Fargo housing market index fell two points to 15 in March, reversing a slight pop in February.
Buyer traffic dropped from 12 to 10, the lowest since March 2009. Current sales fell from 17 to 15. Expected sales fell from 27 to 24, the lowest since April 2009.
The Dow Jones Industrial Average, once off 54 points, finished with a 17-point gain to 10,642. The Standard & Poor's 500 Index, ended up a half-point to 1,151, its best close of the year. But the Nasdaq Composite Index was off about 5 points to 2,362.
Sunday, March 14, 2010
Borrowing
3/13/10 Borrowing
Neither recession nor gadget overload shall slow the mania surrounding the introduction of Apple's iPad mobile computer.
On Friday, the first day that buyers could pre-order the device (it
arrives in stores next month), Apple racked up an estimated 91,000
sales in just the first six hours of availability, putting temporarily
to rest the Internet's persistent "iPad fail" meme. Analysts predict
the first-year sales could reach 5 million.
Doug Noland: "I have asserted that the monetary and fiscal policy response to the
2008 bursting of the Wall Street/Mortgage Finance Bubble fostered the
emergence of the Global Government Finance Bubble. Over the past 6
quarters, Treasury debt has jumped $2.531 TN, or 48%, to $7.782 TN.
During the same period, federally-backed GSE-MBS expanded $624bn, or
13%, to $5.383 TN. Combined “federal” finance ballooned an incredible
$3.155 TN in just 18 months. At the same time, the Federal Reserve’s
balance sheet jumped $1.315 TN, or 138%, to $2.267 TN....The market today perceives that essentially no amount of stimulus or
monetization is out of bounds. The Fed is there as a backstop bid for
debt securities, while the Treasury and Federal Reserve have teamed to
establish a floor under GDP/national income. Market malformations now
lie at the heart of the unfolding Bubble and go a long way toward
explaining the market’s complacency when it comes to the simultaneous
contraction in private-sector Credit and explosion of federal debt and
obligations....As we look forward to 2010 data, I would expect a meaningful uptick in
the rate of system Credit expansion. It is my view that, in a more
normal rate/liquidity environment, it will take in the neighborhood of
$2.0 TN of system Credit growth to sustain our current economic
structure. I expect that – until the debt markets say otherwise – the
majority of this will be “federal” Credit. "
Tim W. Wood: "As equities moved into their January highs, a very short-term Dow
theory non-confirmation developed. The Transports made their January
closing high on January 11th at 4,262.86 while the Industrials pressed
higher marking their January closing high 5 trading days later at
10,725.43. On March 9th the Transports closed above their January high
and this time around the Industrials have lagged. As a result, we now
have another Dow theory non-confirmation that spans a couple of months
in duration. It seems that this latter non-confirmation is getting some
attention.... So, my point here is to warn those that are jumping to
conclusions just because one average beat the other one back above its
previous closing high. Now, if the averages begin to breakdown from
this point and it becomes much more apparent that this non-confirmation
is going to stand, then at that time it will serve to give more merit
to any such downturn. Until such time, this non-confirmation should be
kept in perspective. This is only a warning of caution and is not an
automatic death sentence to the market. It is what develops from here
that will serve to validate or invalidate this non-confirmation.Now,
that all being said, the orthodox Dow theory primary bullish trend
change that occurred in conjunction with the advance out of the March
2009 low still remains intact. However, it is very important to
understand that this bullish primary trend change continues to operate
within the context of a much longer-term secular bear market in
accordance with Dow theory phasing."
Last month the U.S. borrowed two dollars out of every three dollars spent! Revenue was $107 billion, expenditures $328 billion.
Neither recession nor gadget overload shall slow the mania surrounding the introduction of Apple's iPad mobile computer.
On Friday, the first day that buyers could pre-order the device (it
arrives in stores next month), Apple racked up an estimated 91,000
sales in just the first six hours of availability, putting temporarily
to rest the Internet's persistent "iPad fail" meme. Analysts predict
the first-year sales could reach 5 million.
Doug Noland: "I have asserted that the monetary and fiscal policy response to the
2008 bursting of the Wall Street/Mortgage Finance Bubble fostered the
emergence of the Global Government Finance Bubble. Over the past 6
quarters, Treasury debt has jumped $2.531 TN, or 48%, to $7.782 TN.
During the same period, federally-backed GSE-MBS expanded $624bn, or
13%, to $5.383 TN. Combined “federal” finance ballooned an incredible
$3.155 TN in just 18 months. At the same time, the Federal Reserve’s
balance sheet jumped $1.315 TN, or 138%, to $2.267 TN....The market today perceives that essentially no amount of stimulus or
monetization is out of bounds. The Fed is there as a backstop bid for
debt securities, while the Treasury and Federal Reserve have teamed to
establish a floor under GDP/national income. Market malformations now
lie at the heart of the unfolding Bubble and go a long way toward
explaining the market’s complacency when it comes to the simultaneous
contraction in private-sector Credit and explosion of federal debt and
obligations....As we look forward to 2010 data, I would expect a meaningful uptick in
the rate of system Credit expansion. It is my view that, in a more
normal rate/liquidity environment, it will take in the neighborhood of
$2.0 TN of system Credit growth to sustain our current economic
structure. I expect that – until the debt markets say otherwise – the
majority of this will be “federal” Credit. "
Tim W. Wood: "As equities moved into their January highs, a very short-term Dow
theory non-confirmation developed. The Transports made their January
closing high on January 11th at 4,262.86 while the Industrials pressed
higher marking their January closing high 5 trading days later at
10,725.43. On March 9th the Transports closed above their January high
and this time around the Industrials have lagged. As a result, we now
have another Dow theory non-confirmation that spans a couple of months
in duration. It seems that this latter non-confirmation is getting some
attention.... So, my point here is to warn those that are jumping to
conclusions just because one average beat the other one back above its
previous closing high. Now, if the averages begin to breakdown from
this point and it becomes much more apparent that this non-confirmation
is going to stand, then at that time it will serve to give more merit
to any such downturn. Until such time, this non-confirmation should be
kept in perspective. This is only a warning of caution and is not an
automatic death sentence to the market. It is what develops from here
that will serve to validate or invalidate this non-confirmation.Now,
that all being said, the orthodox Dow theory primary bullish trend
change that occurred in conjunction with the advance out of the March
2009 low still remains intact. However, it is very important to
understand that this bullish primary trend change continues to operate
within the context of a much longer-term secular bear market in
accordance with Dow theory phasing."
Last month the U.S. borrowed two dollars out of every three dollars spent! Revenue was $107 billion, expenditures $328 billion.
Saturday, March 13, 2010
Lehman's Collapse
3/12/10 Lehman's Collapse
AccuWeather.com, which just issued its early hurricane season forecast, not only believes that the 2010 season will be more active than last year, but the private company sees the potential for an "extreme season" with an above-normal threat all along the Atlantic and Gulf coasts.
In a 2,200-page report made public on Thursday, examiner Anton
Valukas, chairman of law firm Jenner & Block, reported the results
of his more than year-long investigation into the firm's collapse,
which worsened the global financial crisis.
The examiner said
that while some of Lehman's management's decisions "can be questioned
in retrospect" and the firm's valuation procedures for its assets "may
have been wanting," those responsible for the firm had used their
business judgment and were largely not liable for the firm's collapse.
He did not find that Lehman's directors had explicitly violated their fiduciary duty.
However,
in the report the examiner also revealed explosive allegations about a
gimmick, known as "Repo 105," that was used for the sole purpose of
manipulating Lehman's books.
The examiner concluded that the
gimmick, which dated back to 2001 and was used without telling
investors or regulators, gave the appearance that Lehman was reducing
its overall leverage levels in 2008 when in reality it was not,
partially leading to its collapse.
He also said Lehman could have
potential claims against JPMorgan Chase & Co and Citibank in
connection with demands for collateral and certain changes made to
guaranty agreements in Lehman's final days.
Led by a big gain in
electronics, U.S. retail sales increased a seasonally adjusted 0.3% in
February, despite three major snow storms in the East, the Commerce
Department estimated Friday. Sales have risen in four of the past five
months, and were up 3.9% compared with a year earlier. Most categories
of retailers recorded month-over-month increases. Auto and truck sales
were an exception, falling 2% compared with January. Excluding autos
and trucks, retail sales increased 0.8%.
Economists surveyed by MarketWatch were expecting sales to be
unchanged, and for sales excluding autos to rise 0.1%.
Norwegian fertilizer company Yara International ASA (NO:YAR)
said Friday it will not propose an improvement to the cash merger
agreement signed on Feb. 12 by Yara and U.S.-based Terra Industries
Inc. In March, CF Industries Holdings Inc.
made a better offer to buy Terra. The merger agreement between Yara and
Terra may be terminated under certain circumstances, including if Terra
receives a superior proposal, Yara said. If Terra terminates the merger
agreement under such circumstances, Yara will be entitled to a $123
million break-up fee. "Terra would be a perfect fit to Yara and
attractive at our proposed valuation, but we will not increase our
offer that was first accepted by the Terra board," said Jorgen Ole
Haslestad, president and CEO of Yara International ASA. The "U.S.
remains an attractive market for us and we will continue to search for
opportunities to grow our business in the region," Haslestad said.
Chris Vermeulen: "
Natural Gas - Daily Trading Chart
This chart is actually very attractive looking. Even if you do not understand how to read charts I think it's safe to say this one is a no brainer
I will be closely watching for a potential low risk setup in the coming days.
George Ure: "So if you want a fine zoom-in on irrational, try this one on for size: The Dow has run up from last year about this time being 6,627 to yesterday's close around 10,612.
That's a 60.1% increase for stocks and all this teetering on a retail sales increase of a whopping 3.9% increase from year ago retail sales...but that doesn't take into account whatever monetary inflation is.
Say, you don't think it would be a fine time to look at how much more M1 money is sloshing around the system, do you? Lemme see,Feb 2009 was 1.5621 trillion and this year it's 1.7104 trillion...an increase of 9.5% in M1."
The bulk of 2009's drop in credit card debt
instead came because banks were forced to write off loans consumers
failed to pay, according to an analysis of Federal Reserve data.
Loans are typically charged off by banks once they're 180 days past due, under the assumption that the debt won't be repaid.
U.S. companies increasingly exposed to unwanted takeover attention, FT reports.
Swelling ranks of homeowners who are seriously delinquent but haven't
yet lost their homes may soon lead to a new round of foreclosures.
Middle Class Money Angst Still Apparent in Data
By RANDALL W. FORSYTH
Fed's Flow of Funds numbers again show average Americans' net worth gaining more by mortgage defaults than asset appreciation.
U.S. consumer sentiment dipped
in early March, according to media reports on Friday of the
Reuters/University of Michigan index. Amid signs that the labor market
is approaching a trough but remains frail, the consumer sentiment index
declined to 72.5 in March from 73.6 in February. Economists surveyed by
MarketWatch had been expecting the sentiment index to hit 74 in March.
John Dalt: "Natural gas burns clean and is the
preferred fuel for industrial use. Transportation is as simple as
hooking up to the underground line running down most streets in
America. Natural gas is also used for demand load electrical
generation. Natural gas electrical plants are inexpensive and can be
built quickly. At present prices, electricity produced with natural
gas is cheaper than from coal.
Natural gas storage was down 111 billion
cubic feet (Bcf) last week. Storage is below last year's level dropping
6.4% in the last week. Last year storage dropped 4.2% and the five year
average shows a 1.2% build during the same week. Traders seem stuck in
a view that gas will reappear as UNG fell today after the storage
report was released. Your editor owns UNG, or as I like to call it
"ugh."
Repo 105 Accounting Policy document, according to the report:
"Repos generally cannot be treated as sales in the United
>States because lawyers cannot provide a true sale opinion under U.S.
>law."
The closures of Florida's Old Southern Bank and Louisiana's Statewide Bank on Friday brought the tally of bank failures for the year to 30, according to the Federal Deposit Insurance Corp. Centennial Bank of Conway, Ark., will assume all the $319.7 million in deposits of Old Southern Bank, and buy its $315.6 million in assets. Home Bank of Lafayette, La., will assume Statewide's $208.8 million in deposits and buy its $243.2 million in assets.
New York City's Park Avenue Bank became the 28th bank failure of 2010, according to the Federal Deposit Insurance Corp. Valley National Bank of Wayne, N.J., will assume the $494.5 million in deposits and buy the bank's $520.1 million in assets. The cost to FDIC's Deposit Insurance Fund is estimated at $50.7 million.
The Dow Jones Industrial Average rose 12.85 points to 10,624.69, leaving it 0.6% higher from the week-ago close. The S&P 500 Index fell a quarter of 1 point to 1,149.99, a level that translates into a 1% gain on the week, while the Nasdaq Composite Index fell nearly 1 point to finish at 2,367.66, up 1.8% from the week-ago close.
AccuWeather.com, which just issued its early hurricane season forecast, not only believes that the 2010 season will be more active than last year, but the private company sees the potential for an "extreme season" with an above-normal threat all along the Atlantic and Gulf coasts.
In a 2,200-page report made public on Thursday, examiner Anton
Valukas, chairman of law firm Jenner & Block, reported the results
of his more than year-long investigation into the firm's collapse,
which worsened the global financial crisis.
The examiner said
that while some of Lehman's management's decisions "can be questioned
in retrospect" and the firm's valuation procedures for its assets "may
have been wanting," those responsible for the firm had used their
business judgment and were largely not liable for the firm's collapse.
He did not find that Lehman's directors had explicitly violated their fiduciary duty.
However,
in the report the examiner also revealed explosive allegations about a
gimmick, known as "Repo 105," that was used for the sole purpose of
manipulating Lehman's books.
The examiner concluded that the
gimmick, which dated back to 2001 and was used without telling
investors or regulators, gave the appearance that Lehman was reducing
its overall leverage levels in 2008 when in reality it was not,
partially leading to its collapse.
He also said Lehman could have
potential claims against JPMorgan Chase & Co and Citibank in
connection with demands for collateral and certain changes made to
guaranty agreements in Lehman's final days.
Led by a big gain in
electronics, U.S. retail sales increased a seasonally adjusted 0.3% in
February, despite three major snow storms in the East, the Commerce
Department estimated Friday. Sales have risen in four of the past five
months, and were up 3.9% compared with a year earlier. Most categories
of retailers recorded month-over-month increases. Auto and truck sales
were an exception, falling 2% compared with January. Excluding autos
and trucks, retail sales increased 0.8%.
Economists surveyed by MarketWatch were expecting sales to be
unchanged, and for sales excluding autos to rise 0.1%.
Norwegian fertilizer company Yara International ASA (NO:YAR)
said Friday it will not propose an improvement to the cash merger
agreement signed on Feb. 12 by Yara and U.S.-based Terra Industries
Inc. In March, CF Industries Holdings Inc.
made a better offer to buy Terra. The merger agreement between Yara and
Terra may be terminated under certain circumstances, including if Terra
receives a superior proposal, Yara said. If Terra terminates the merger
agreement under such circumstances, Yara will be entitled to a $123
million break-up fee. "Terra would be a perfect fit to Yara and
attractive at our proposed valuation, but we will not increase our
offer that was first accepted by the Terra board," said Jorgen Ole
Haslestad, president and CEO of Yara International ASA. The "U.S.
remains an attractive market for us and we will continue to search for
opportunities to grow our business in the region," Haslestad said.
Chris Vermeulen: "
Natural Gas - Daily Trading Chart
This chart is actually very attractive looking. Even if you do not understand how to read charts I think it's safe to say this one is a no brainer
I will be closely watching for a potential low risk setup in the coming days.
George Ure: "So if you want a fine zoom-in on irrational, try this one on for size: The Dow has run up from last year about this time being 6,627 to yesterday's close around 10,612.
That's a 60.1% increase for stocks and all this teetering on a retail sales increase of a whopping 3.9% increase from year ago retail sales...but that doesn't take into account whatever monetary inflation is.
Say, you don't think it would be a fine time to look at how much more M1 money is sloshing around the system, do you? Lemme see,Feb 2009 was 1.5621 trillion and this year it's 1.7104 trillion...an increase of 9.5% in M1."
The bulk of 2009's drop in credit card debt
instead came because banks were forced to write off loans consumers
failed to pay, according to an analysis of Federal Reserve data.
Loans are typically charged off by banks once they're 180 days past due, under the assumption that the debt won't be repaid.
U.S. companies increasingly exposed to unwanted takeover attention, FT reports.
Swelling ranks of homeowners who are seriously delinquent but haven't
yet lost their homes may soon lead to a new round of foreclosures.
Middle Class Money Angst Still Apparent in Data
By RANDALL W. FORSYTH
Fed's Flow of Funds numbers again show average Americans' net worth gaining more by mortgage defaults than asset appreciation.
U.S. consumer sentiment dipped
in early March, according to media reports on Friday of the
Reuters/University of Michigan index. Amid signs that the labor market
is approaching a trough but remains frail, the consumer sentiment index
declined to 72.5 in March from 73.6 in February. Economists surveyed by
MarketWatch had been expecting the sentiment index to hit 74 in March.
John Dalt: "Natural gas burns clean and is the
preferred fuel for industrial use. Transportation is as simple as
hooking up to the underground line running down most streets in
America. Natural gas is also used for demand load electrical
generation. Natural gas electrical plants are inexpensive and can be
built quickly. At present prices, electricity produced with natural
gas is cheaper than from coal.
Natural gas storage was down 111 billion
cubic feet (Bcf) last week. Storage is below last year's level dropping
6.4% in the last week. Last year storage dropped 4.2% and the five year
average shows a 1.2% build during the same week. Traders seem stuck in
a view that gas will reappear as UNG fell today after the storage
report was released. Your editor owns UNG, or as I like to call it
"ugh."
Repo 105 Accounting Policy document, according to the report:
"Repos generally cannot be treated as sales in the United
>States because lawyers cannot provide a true sale opinion under U.S.
>law."
The closures of Florida's Old Southern Bank and Louisiana's Statewide Bank on Friday brought the tally of bank failures for the year to 30, according to the Federal Deposit Insurance Corp. Centennial Bank of Conway, Ark., will assume all the $319.7 million in deposits of Old Southern Bank, and buy its $315.6 million in assets. Home Bank of Lafayette, La., will assume Statewide's $208.8 million in deposits and buy its $243.2 million in assets.
New York City's Park Avenue Bank became the 28th bank failure of 2010, according to the Federal Deposit Insurance Corp. Valley National Bank of Wayne, N.J., will assume the $494.5 million in deposits and buy the bank's $520.1 million in assets. The cost to FDIC's Deposit Insurance Fund is estimated at $50.7 million.
The Dow Jones Industrial Average rose 12.85 points to 10,624.69, leaving it 0.6% higher from the week-ago close. The S&P 500 Index fell a quarter of 1 point to 1,149.99, a level that translates into a 1% gain on the week, while the Nasdaq Composite Index fell nearly 1 point to finish at 2,367.66, up 1.8% from the week-ago close.
Thursday, March 11, 2010
Debt Accumulation
3/11/10 Debt Accumulation
Tom Walters, president of gas and power marketing for Exxon Mobil Corp., said ever increasing demand will create a "supply gap."
ZeroHedge: "How is it possible that unprecedented debt accumulation can result in ever declining interest rates, and Treasury auctions, such as today's 10 Year reopening, in which the Bid To Cover hit an all time high? One answer: The Federal Reserve, which through complete domination of the entire capital market courtesy of ZIRP and QE has now turned market logic upside down by 180 degrees. In a normal world, the more money you borrow, the greater the associated risk, and the greater the interest payments on this debt. Not in America though. So can we assume that the Fed can forever keep rates on debt at record low levels? No. Which begs the question: what happens when interest rates do finally start going up? "
The number of people applying
for unemployment benefits fell by 6,000 in the latest week, the second
decline in a row. In the week ended March 6, initial claims fell to a
seasonally adjusted 462,000 from a revised 468,000 in the prior week,
the Labor Department reported Thursday. Economists surveyed by
MarketWatch were expecting claims to dip to 460,000. The four-week
average of initial claims rose by 5,000 to 475,500, the highest rate
since November. The number of people continuing to receive regular
unemployment checks climbed 37,000 in the week of Feb. 27 to a
seasonally adjusted 4.56 million. The number of people receiving
extended federal benefits fell 159,000 to 5.53 million, not seasonally
adjusted, in the week of Feb. 20. All told, 11.36 million people were
collecting some type of unemployment benefits in the week of Feb. 20,
not seasonally adjusted.
The U.S. trade deficit narrowed
by 6.6% in January to $37.29 billion, the Commerce Department said
Thursday. The decline in the trade deficit caught economists by
surprise. The consensus forecast of Wall Street economists of a deficit
of $41.0 billion. Both imports and exports fell in January. Imports
fell at a faster pace. The U.S. trade deficit with China narrowed to
$18.30 billion in compared with $20.57 billion in the same month last
year. The government also revised the deficit in December to $39.9
billion from $40.2 billion.
BP Plc has agreed to buy Brazilian, Azeri and Gulf of Mexico fields
from Devon Energy Corp for $7 billion. Devon shares up 2.3 percent to
$73.35 in premarket trading.
Foreclosure filings -- including mortgage default notices, house
auctions and home repossessions by banks -- were reported on 308,524
properties in February, down 2 percent from January, but still up 6
percent from the year-ago month, real estate data firm RealtyTrac said.
"The
6 percent year-over-year increase we saw in February was the smallest
annual increase we've seen since January 2006, when we began
calculating year-over-year increases, but it still marked the 50th
consecutive month of year-over-year increases in foreclosure activity,"
said James J. Saccacio, chief executive officer of RealtyTrac, in a
statement.
The Energy Department on Thursday is expected to report a draw of 108
billion to 112 billion cubic feet of natural gas storage inventories
for the week ended March 5, according to a survey of analysts by
Platts, the energy information arm of McGraw-Hill Cos.If the storage estimate is correct, inventories as of March 5 will
total 1.629 trillion cubic feet, 1.4% above the five-year average and
4% below last year's level.
Natural gas supplies down 111 Bcf -- EIA
China’s inflation reached a 16-
month high, industrial output climbed and new loans exceeded
forecasts, adding to the case for the government to pare back
stimulus measures.
Consumer prices rose 2.7 percent in February from a year
earlier, the National Bureau of Statistics said in Beijing today,
compared with the 2.5 percent median estimate of 29 economists
surveyed by Bloomberg News. Seasonal factors stemming from a
weeklong holiday may have boosted prices. Production rose 20.7
percent in the first two months of 2010, the most in more than
five years.
Premier Wen Jiabao aims to hold full-year inflation around
3 percent after banks flooded the financial system with money to
drive a rebound from the global recession. Gross domestic
product grew 10.7 percent last quarter and central bank Governor Zhou Xiaochuan said March 6 that anti-crisis policies, including
the yuan’s peg to the dollar, must end “sooner or later.”
Facing potential bankruptcy, the board that governs the once
flush-with-cash Kansas City school district is taking the unusual and
contentious step of shuttering almost half its schools.
Chinese property prices were 10.7% higher than a year earlier in February: Govt agency.
Business Week: "Icelandic journalist Iris Erlingsdottir wrote in the Huffington Post,
"While we have been endlessly debating IceSave, our unemployment rate
has continued to climb, the number of insolvencies has continued to
increase, and the number of public services has continued to decrease.
Other scandals of comparable magnitude and abuse of taxpayer money --
but involving only Icelanders -- are being ignored by the Icelandic
media." Change a few nouns -- health care, Citigroup (C, Fortune 500) -- and Erlingsdottir is writing about Washington as Reykjavik.
Just because the crisis has been "managed" doesn't mean it's over. As economist Simon Johnson writes,
"The true fiscal cost arising from our recent financial excesses is the
increase in net government debt held by the private sector. This will
likely amount to around 40 percentage points of GDP." Servicing that
debt will likely affect our promise as a nation, not for years, but decades."
For the second straight year, more hedge funds closed than were
launched in 2009, according to data released today by Hedge Fund
Research. Last year, 1,023 hedge funds closed, compared to 784 that started.
In 2008, 1,471 funds closed while 659 were launched, according to HFR’s
March hedge fund report, which provided analysis of the hedge fund
researcher’s year-end 2009 data.
For the second straight week, just 25% of U.S. voters say the
country is heading in the right direction, according to the latest
Rasmussen Reports national telephone survey. Last week’s finding marked
the lowest level of voter confidence since just before President Obama
took office in January 2009. A
sizable majority (71%) believe the nation is heading down the wrong
track, the highest level of pessimism measured in 14 months.
The Congressional Budget Office is also slated to release its cost assessment of the White House health care bill any day, which could alter the dynamics.
Late Wednesday night, Democrats emerged from a closed door meeting and
said they were close to an agreement on a compromise bill that could
pass both the House and the Senate.
Exxon, the world’s second-largest company, plans to
start 12 new gas and crude projects in the next two years, according to
a presentation the Irving, Texas-based company delivered to analysts
today in New York. Capital spending on wells, floating platforms,
gas-export plants and refineries will rise 3.4 percent this year to $28
billion, according to the presentation.
Chief Executive Officer Rex Tillerson is counting on
a $28.8 billion acquisition of Fort Worth, Texas-based gas producer XTO
Energy Inc. as well as new gas developments from the South Pacific to
the Celtic Sea to counter a 6.7 percent drop in output in the past five
years.
“Everyone would like to find more oil,” says Richard Herbert, an
executive at Talisman Energy, a Canadian firm using a conventional
North Sea oil business to finance heavy investment in North American
shale. “The problem is, where do you go? It’s either in deep water or
in countries that aren’t accessible.” This is forcing big oil companies
to get gassier.
Natural gas for April delivery
was last down 9 cents, or 2%, at $4.47 per million British thermal
units in electronic trade. It earlier rose as high as $4.59 per million
Btus.
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 111 billion cubic feet to about 1.63 trillion cubic feet for the week ended March 5.
The inventory level was 1.2 percent above the five-year average of about 1.61 trillion cubic feet, and 4.2 percent below last year's storage level of about 1.7 trillion cubic feet, according to government data.
Natural gas lost 8.8 cents at $4.471 per 1,000 cubic feet on the New York Mercantile Exchange.
The Dow Jones Industrial Average added 44.51 points, or 0.4%, to 10,611.84. The S&P 500 Index gained 4.63 points, or 0.4%, to 1,150.24. The Nasdaq Composite Index rose 9.51 points, or 0.4%, to 2,368.46.
Tom Walters, president of gas and power marketing for Exxon Mobil Corp., said ever increasing demand will create a "supply gap."
ZeroHedge: "How is it possible that unprecedented debt accumulation can result in ever declining interest rates, and Treasury auctions, such as today's 10 Year reopening, in which the Bid To Cover hit an all time high? One answer: The Federal Reserve, which through complete domination of the entire capital market courtesy of ZIRP and QE has now turned market logic upside down by 180 degrees. In a normal world, the more money you borrow, the greater the associated risk, and the greater the interest payments on this debt. Not in America though. So can we assume that the Fed can forever keep rates on debt at record low levels? No. Which begs the question: what happens when interest rates do finally start going up? "
The number of people applying
for unemployment benefits fell by 6,000 in the latest week, the second
decline in a row. In the week ended March 6, initial claims fell to a
seasonally adjusted 462,000 from a revised 468,000 in the prior week,
the Labor Department reported Thursday. Economists surveyed by
MarketWatch were expecting claims to dip to 460,000. The four-week
average of initial claims rose by 5,000 to 475,500, the highest rate
since November. The number of people continuing to receive regular
unemployment checks climbed 37,000 in the week of Feb. 27 to a
seasonally adjusted 4.56 million. The number of people receiving
extended federal benefits fell 159,000 to 5.53 million, not seasonally
adjusted, in the week of Feb. 20. All told, 11.36 million people were
collecting some type of unemployment benefits in the week of Feb. 20,
not seasonally adjusted.
The U.S. trade deficit narrowed
by 6.6% in January to $37.29 billion, the Commerce Department said
Thursday. The decline in the trade deficit caught economists by
surprise. The consensus forecast of Wall Street economists of a deficit
of $41.0 billion. Both imports and exports fell in January. Imports
fell at a faster pace. The U.S. trade deficit with China narrowed to
$18.30 billion in compared with $20.57 billion in the same month last
year. The government also revised the deficit in December to $39.9
billion from $40.2 billion.
BP Plc has agreed to buy Brazilian, Azeri and Gulf of Mexico fields
from Devon Energy Corp for $7 billion. Devon shares up 2.3 percent to
$73.35 in premarket trading.
Foreclosure filings -- including mortgage default notices, house
auctions and home repossessions by banks -- were reported on 308,524
properties in February, down 2 percent from January, but still up 6
percent from the year-ago month, real estate data firm RealtyTrac said.
"The
6 percent year-over-year increase we saw in February was the smallest
annual increase we've seen since January 2006, when we began
calculating year-over-year increases, but it still marked the 50th
consecutive month of year-over-year increases in foreclosure activity,"
said James J. Saccacio, chief executive officer of RealtyTrac, in a
statement.
The Energy Department on Thursday is expected to report a draw of 108
billion to 112 billion cubic feet of natural gas storage inventories
for the week ended March 5, according to a survey of analysts by
Platts, the energy information arm of McGraw-Hill Cos.If the storage estimate is correct, inventories as of March 5 will
total 1.629 trillion cubic feet, 1.4% above the five-year average and
4% below last year's level.
Natural gas supplies down 111 Bcf -- EIA
China’s inflation reached a 16-
month high, industrial output climbed and new loans exceeded
forecasts, adding to the case for the government to pare back
stimulus measures.
Consumer prices rose 2.7 percent in February from a year
earlier, the National Bureau of Statistics said in Beijing today,
compared with the 2.5 percent median estimate of 29 economists
surveyed by Bloomberg News. Seasonal factors stemming from a
weeklong holiday may have boosted prices. Production rose 20.7
percent in the first two months of 2010, the most in more than
five years.
Premier Wen Jiabao aims to hold full-year inflation around
3 percent after banks flooded the financial system with money to
drive a rebound from the global recession. Gross domestic
product grew 10.7 percent last quarter and central bank Governor Zhou Xiaochuan said March 6 that anti-crisis policies, including
the yuan’s peg to the dollar, must end “sooner or later.”
Facing potential bankruptcy, the board that governs the once
flush-with-cash Kansas City school district is taking the unusual and
contentious step of shuttering almost half its schools.
Chinese property prices were 10.7% higher than a year earlier in February: Govt agency.
Business Week: "Icelandic journalist Iris Erlingsdottir wrote in the Huffington Post,
"While we have been endlessly debating IceSave, our unemployment rate
has continued to climb, the number of insolvencies has continued to
increase, and the number of public services has continued to decrease.
Other scandals of comparable magnitude and abuse of taxpayer money --
but involving only Icelanders -- are being ignored by the Icelandic
media." Change a few nouns -- health care, Citigroup (C, Fortune 500) -- and Erlingsdottir is writing about Washington as Reykjavik.
Just because the crisis has been "managed" doesn't mean it's over. As economist Simon Johnson writes,
"The true fiscal cost arising from our recent financial excesses is the
increase in net government debt held by the private sector. This will
likely amount to around 40 percentage points of GDP." Servicing that
debt will likely affect our promise as a nation, not for years, but decades."
For the second straight year, more hedge funds closed than were
launched in 2009, according to data released today by Hedge Fund
Research. Last year, 1,023 hedge funds closed, compared to 784 that started.
In 2008, 1,471 funds closed while 659 were launched, according to HFR’s
March hedge fund report, which provided analysis of the hedge fund
researcher’s year-end 2009 data.
For the second straight week, just 25% of U.S. voters say the
country is heading in the right direction, according to the latest
Rasmussen Reports national telephone survey. Last week’s finding marked
the lowest level of voter confidence since just before President Obama
took office in January 2009. A
sizable majority (71%) believe the nation is heading down the wrong
track, the highest level of pessimism measured in 14 months.
The Congressional Budget Office is also slated to release its cost assessment of the White House health care bill any day, which could alter the dynamics.
Late Wednesday night, Democrats emerged from a closed door meeting and
said they were close to an agreement on a compromise bill that could
pass both the House and the Senate.
Exxon, the world’s second-largest company, plans to
start 12 new gas and crude projects in the next two years, according to
a presentation the Irving, Texas-based company delivered to analysts
today in New York. Capital spending on wells, floating platforms,
gas-export plants and refineries will rise 3.4 percent this year to $28
billion, according to the presentation.
Chief Executive Officer Rex Tillerson is counting on
a $28.8 billion acquisition of Fort Worth, Texas-based gas producer XTO
Energy Inc. as well as new gas developments from the South Pacific to
the Celtic Sea to counter a 6.7 percent drop in output in the past five
years.
“Everyone would like to find more oil,” says Richard Herbert, an
executive at Talisman Energy, a Canadian firm using a conventional
North Sea oil business to finance heavy investment in North American
shale. “The problem is, where do you go? It’s either in deep water or
in countries that aren’t accessible.” This is forcing big oil companies
to get gassier.
Natural gas for April delivery
was last down 9 cents, or 2%, at $4.47 per million British thermal
units in electronic trade. It earlier rose as high as $4.59 per million
Btus.
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 111 billion cubic feet to about 1.63 trillion cubic feet for the week ended March 5.
The inventory level was 1.2 percent above the five-year average of about 1.61 trillion cubic feet, and 4.2 percent below last year's storage level of about 1.7 trillion cubic feet, according to government data.
Natural gas lost 8.8 cents at $4.471 per 1,000 cubic feet on the New York Mercantile Exchange.
The Dow Jones Industrial Average added 44.51 points, or 0.4%, to 10,611.84. The S&P 500 Index gained 4.63 points, or 0.4%, to 1,150.24. The Nasdaq Composite Index rose 9.51 points, or 0.4%, to 2,368.46.
Wednesday, March 10, 2010
OPEC
3/10/10 OPEC
The Organization of the
Petroleum Exporting Countries said Wednesday it raised its forecast for
global oil demand this year. In its monthly oil report, OPEC said it
now expects world oil demand to grow by 900,000 barrels a day in 2010.
This represents an upward revision of 100,000 barrels a day from the
previous assessment.
The survey of over 70 economists suggests U.S. gross domestic
product will grow at a 2.6 percent annualized rate between January and
March, less than half the pace of the fourth quarter of 2009, when it
expanded at a 5.9 percent rate.
For all of 2009, the world's
biggest economy contracted by 2.4 percent, but the poll predicts it
will grow by 2.9 percent in 2010 on an annual basis.
The Oil Drum: "If employment is inversely proportional to oil prices (it is), and oil
prices are only going to trend up…then employment by necessity is going
down. Because oil is so fundamental to our economy, oil price increases
ripple through the entire economy."
Poor economic data in the US coupled with Europe's debt crisis are
contributing to an increase of the risk of the US economy going through
a double-dip recession, Nouriel Roubini, who predicted the 2007
financial crisis, wrote in a research paper.
China's trade surplus with the United
States in the January-February period shrank by 27 percent to $20.9
billion. The gap with the 27-nation European Union, China's biggest
trading partner, extended by 34 percent to $22.3 billion.
However,
China' s commerce minister, Chen Deming, cautioned Saturday that
despite stronger recent trade, it will be two to three years before
China's exports return to pre-crisis levels.
In 2007, the number of people employed in the US is listed at 146,047,000. In the latest month, the number of people working was 138,641,000. You do the math.
Iron ore shipments from Australia’s Port Hedland, the world’s largest
bulk exporting port, dropped to 13.05 million metric tons in February
from 15.1 million tons in January. Shipments
to China fell to 8.7 million tons, the Port Hedland Authority said on
its Web-site, compared with 11 million tons in the previous month.
Diana Olick: "The problem is prices. Home prices have fallen so far in the hardest
hit areas, the areas where the bulk of the troubled loans are, that
banks would have to write down principal 30 to 50 percent to put
borrowers back in the green. Accounting rules require that banks write
down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they'd all be insolvent. "
Japan's Jan machinery orders fall 3.7%; business spending revival may be slow.
Manufacturing in U.K. unexpectedly plunges as it sees `fragile' economy.
John Dizard: " Policy should be based on material reality, which is that
maintaining, let alone increasing, US use of natural gas will require a
very substantial increase in prices over the present spot and futures
levels. On that point, the shale gas industry people and I are in
agreement. One set of data points might turn out to be revealing. Look
up the “balancing item” in the “natural gas navigator” on the US Energy
Information Administration’s website. This is how the difference
between reported gas storage, and the net of production and
consumption, is explained. For the last report, in December, the
“item”, or unexplained error, is about 100bn cu ft. That is a whole
bunch of gas, as they say out there.
The “item” has been
increasing steadily from the middle of last year. So production is
likely lower, or consumption much higher, than the EIA has been able to
count. Given that production is calculated from a sample of producers
that is probably overweighted to large companies with access to capital
markets, it is probably the case that production is lower than
Washington, or most of Wall Street, thinks. Smaller gas producers,
which are probably under-sampled, will have had their access to debt or
equity proportionately much more restricted than was the case in the
boom years.
If that analysis is correct, the US will run short of low priced gas sooner rather than later.
To
their credit, gas prophets such as Aubrey McClendon, chief executive of
Chesapeake Energy Corp, have been saying that gas at $5 per thousand
cubic foot is not sustainable. In their laudable enthusiasm for their
business, though, they may have understated just how unsustainable the
price is.
Ben Dell, of Bernstein Research in New York, who has,
so to speak, done some of the deepest drilling into the shale gas
industry numbers, believes that the full cost of finding, developing, and operating shale gas wells, and paying an average return on capital to investors, requires a spot gas price of $7.50 to $8 a thousand cubic foot.
As Mr Dell points out, the horizontal drilling rigs that are needed
to drill shale gas wells are in relatively short supply. “We think
there will be a 15 per cent to 20 per cent increase in costs from last
year to this year. That includes the costs of drilling and fracking
[hydraulic fracturing of rock layers holding gas].”
Furthermore,
the producers partially insulated themselves from gas price weakness
over the past year with hedges that are gradually running off. New
hedges have to be put on at lower prices. So revenues will be declining
while costs are increasing. Shale gas is not magic. Production
costs are high, and probably underestimated. An even more gas-dependent
policy will accelerate the coming price rise. For the producers’ sake,
it better."
"Gas will come full circle and we will need to prepare for a
tight market," he said.
Eni is addressing that future need in part by diversifying gas
transit routes, particularly after a dispute between Ukraine and
Russia caused interruptions serious enough to bring Eastern Europe
"to its knees," he said. Eni is the biggest western buyer of
Russian gas.
Eni is a partner of Russian gas giant Gazprom in the
South Stream gas pipeline project, which will transport up to 6
billion cubic feet per day of Russian and central Asian gas under
the Black Sea to the European Union.
Total wholesale inventories slipped 0.2 percent, smaller than the
revised 1 percent drop in December, the department said. December
inventories were previously reported as having dropped 0.8 percent.
The U.S. faces an extended recovery
from the recession even after the government infusion of cash
into stimulus programs and the banking system, said Andrew
Michael Spence, a Nobel laureate in economics.
“Right now the expectations are that somehow the
government can magically restore the economy to balance,”
Spence said in an interview today on Bloomberg Radio. “A more
realistic view is it’s going to take several years.”
The number of openings in January rose about 7.6 percent, to 2.7
million, compared with December, the Labor Department said. That's the
highest total since February 2009.
The report is a sign that the
economy is soon likely to generate consistent job gains. Some
economists expect employers to add up to a net 300,000 jobs in March,
though as many as a third of them could be temporary hiring for the
2010 Census. There are now about 5.5 unemployed people, on average, competing for
each opening. That's still far more than the 1.7 people who were
competing for each opening when the recession began. But it's down from
just over 6 people per opening in December 2009.
Job openings in information technology are also rising. Scot
Melland, CEO of Dice Holdings, said postings on its Dice.com job board
for IT professionals rose 7 percent as of March 1 compared with a year
ago.
"We're not seeing a huge rebound," Melland said. "What we're seeing is a nice steady increase in recruiting activity."
A bill that would extend unemployment benefits and health-care subsidies passed the Senate on Wednesday, and now moves on to the House. The vote was 62-36. The bill would extend through the end of the year jobless benefits for the long-term unemployed. It would also extend through Dec. 31 a 65% subsidy of health-insurance premiums for jobless workers.
The U.S. government recorded a budget deficit of $221 billion in February, the Treasury Department reported Wednesday, even as receipts posted a big increase for the month. Receipts totaled $107.5 billion in February, a 23% increase over last February's total, and marking the first monthly year-over-year increase since April 2008. Outlays were $328 billion in February, up 17% year over year. February was the 17th consecutive month that the government recorded a deficit.
The Dow Jones industrial average edged up 2.95 points, or 0.03 percent, to end at 10,567.33. The Standard & Poor's 500 Index rose 5.16 points, or 0.45 percent, to 1,145.61. The Nasdaq Composite Index gained 18.27 points, or 0.78 percent, to 2,358.95.
The benchmark S&P 500 Index extended its year-long advance and is now up 69.3 percent from its 12-year closing low hit a year ago on March 9.
---
The Organization of the
Petroleum Exporting Countries said Wednesday it raised its forecast for
global oil demand this year. In its monthly oil report, OPEC said it
now expects world oil demand to grow by 900,000 barrels a day in 2010.
This represents an upward revision of 100,000 barrels a day from the
previous assessment.
The survey of over 70 economists suggests U.S. gross domestic
product will grow at a 2.6 percent annualized rate between January and
March, less than half the pace of the fourth quarter of 2009, when it
expanded at a 5.9 percent rate.
For all of 2009, the world's
biggest economy contracted by 2.4 percent, but the poll predicts it
will grow by 2.9 percent in 2010 on an annual basis.
The Oil Drum: "If employment is inversely proportional to oil prices (it is), and oil
prices are only going to trend up…then employment by necessity is going
down. Because oil is so fundamental to our economy, oil price increases
ripple through the entire economy."
Poor economic data in the US coupled with Europe's debt crisis are
contributing to an increase of the risk of the US economy going through
a double-dip recession, Nouriel Roubini, who predicted the 2007
financial crisis, wrote in a research paper.
China's trade surplus with the United
States in the January-February period shrank by 27 percent to $20.9
billion. The gap with the 27-nation European Union, China's biggest
trading partner, extended by 34 percent to $22.3 billion.
However,
China' s commerce minister, Chen Deming, cautioned Saturday that
despite stronger recent trade, it will be two to three years before
China's exports return to pre-crisis levels.
In 2007, the number of people employed in the US is listed at 146,047,000. In the latest month, the number of people working was 138,641,000. You do the math.
Iron ore shipments from Australia’s Port Hedland, the world’s largest
bulk exporting port, dropped to 13.05 million metric tons in February
from 15.1 million tons in January. Shipments
to China fell to 8.7 million tons, the Port Hedland Authority said on
its Web-site, compared with 11 million tons in the previous month.
Diana Olick: "The problem is prices. Home prices have fallen so far in the hardest
hit areas, the areas where the bulk of the troubled loans are, that
banks would have to write down principal 30 to 50 percent to put
borrowers back in the green. Accounting rules require that banks write
down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they'd all be insolvent. "
Japan's Jan machinery orders fall 3.7%; business spending revival may be slow.
Manufacturing in U.K. unexpectedly plunges as it sees `fragile' economy.
John Dizard: " Policy should be based on material reality, which is that
maintaining, let alone increasing, US use of natural gas will require a
very substantial increase in prices over the present spot and futures
levels. On that point, the shale gas industry people and I are in
agreement. One set of data points might turn out to be revealing. Look
up the “balancing item” in the “natural gas navigator” on the US Energy
Information Administration’s website. This is how the difference
between reported gas storage, and the net of production and
consumption, is explained. For the last report, in December, the
“item”, or unexplained error, is about 100bn cu ft. That is a whole
bunch of gas, as they say out there.
The “item” has been
increasing steadily from the middle of last year. So production is
likely lower, or consumption much higher, than the EIA has been able to
count. Given that production is calculated from a sample of producers
that is probably overweighted to large companies with access to capital
markets, it is probably the case that production is lower than
Washington, or most of Wall Street, thinks. Smaller gas producers,
which are probably under-sampled, will have had their access to debt or
equity proportionately much more restricted than was the case in the
boom years.
If that analysis is correct, the US will run short of low priced gas sooner rather than later.
To
their credit, gas prophets such as Aubrey McClendon, chief executive of
Chesapeake Energy Corp, have been saying that gas at $5 per thousand
cubic foot is not sustainable. In their laudable enthusiasm for their
business, though, they may have understated just how unsustainable the
price is.
Ben Dell, of Bernstein Research in New York, who has,
so to speak, done some of the deepest drilling into the shale gas
industry numbers, believes that the full cost of finding, developing, and operating shale gas wells, and paying an average return on capital to investors, requires a spot gas price of $7.50 to $8 a thousand cubic foot.
As Mr Dell points out, the horizontal drilling rigs that are needed
to drill shale gas wells are in relatively short supply. “We think
there will be a 15 per cent to 20 per cent increase in costs from last
year to this year. That includes the costs of drilling and fracking
[hydraulic fracturing of rock layers holding gas].”
Furthermore,
the producers partially insulated themselves from gas price weakness
over the past year with hedges that are gradually running off. New
hedges have to be put on at lower prices. So revenues will be declining
while costs are increasing. Shale gas is not magic. Production
costs are high, and probably underestimated. An even more gas-dependent
policy will accelerate the coming price rise. For the producers’ sake,
it better."
"Gas will come full circle and we will need to prepare for a
tight market," he said.
Eni is addressing that future need in part by diversifying gas
transit routes, particularly after a dispute between Ukraine and
Russia caused interruptions serious enough to bring Eastern Europe
"to its knees," he said. Eni is the biggest western buyer of
Russian gas.
Eni is a partner of Russian gas giant Gazprom in the
South Stream gas pipeline project, which will transport up to 6
billion cubic feet per day of Russian and central Asian gas under
the Black Sea to the European Union.
Total wholesale inventories slipped 0.2 percent, smaller than the
revised 1 percent drop in December, the department said. December
inventories were previously reported as having dropped 0.8 percent.
The U.S. faces an extended recovery
from the recession even after the government infusion of cash
into stimulus programs and the banking system, said Andrew
Michael Spence, a Nobel laureate in economics.
“Right now the expectations are that somehow the
government can magically restore the economy to balance,”
Spence said in an interview today on Bloomberg Radio. “A more
realistic view is it’s going to take several years.”
The number of openings in January rose about 7.6 percent, to 2.7
million, compared with December, the Labor Department said. That's the
highest total since February 2009.
The report is a sign that the
economy is soon likely to generate consistent job gains. Some
economists expect employers to add up to a net 300,000 jobs in March,
though as many as a third of them could be temporary hiring for the
2010 Census. There are now about 5.5 unemployed people, on average, competing for
each opening. That's still far more than the 1.7 people who were
competing for each opening when the recession began. But it's down from
just over 6 people per opening in December 2009.
Job openings in information technology are also rising. Scot
Melland, CEO of Dice Holdings, said postings on its Dice.com job board
for IT professionals rose 7 percent as of March 1 compared with a year
ago.
"We're not seeing a huge rebound," Melland said. "What we're seeing is a nice steady increase in recruiting activity."
A bill that would extend unemployment benefits and health-care subsidies passed the Senate on Wednesday, and now moves on to the House. The vote was 62-36. The bill would extend through the end of the year jobless benefits for the long-term unemployed. It would also extend through Dec. 31 a 65% subsidy of health-insurance premiums for jobless workers.
The U.S. government recorded a budget deficit of $221 billion in February, the Treasury Department reported Wednesday, even as receipts posted a big increase for the month. Receipts totaled $107.5 billion in February, a 23% increase over last February's total, and marking the first monthly year-over-year increase since April 2008. Outlays were $328 billion in February, up 17% year over year. February was the 17th consecutive month that the government recorded a deficit.
The Dow Jones industrial average edged up 2.95 points, or 0.03 percent, to end at 10,567.33. The Standard & Poor's 500 Index rose 5.16 points, or 0.45 percent, to 1,145.61. The Nasdaq Composite Index gained 18.27 points, or 0.78 percent, to 2,358.95.
The benchmark S&P 500 Index extended its year-long advance and is now up 69.3 percent from its 12-year closing low hit a year ago on March 9.
---
Tuesday, March 09, 2010
One Year Anniversary
3/9/10 One Year Anniversary
An index measuring small-business optimism fell 1.3 points to 88.0 in February,
erasing January's gain, according to a monthly survey released Tuesday
by the National Association of Independent businesses. The index is far
below its average, but has gained from 81.0 in March 2009, the
second-lowest reading ever. Small businesses were cutting workers and
prices in an effort to increase sales, the survey said. Fewer
businesses reported problems getting credit, with 9% of firms saying
they couldn't find the credit they need.
Chevron Corp. said it plans to cut 2,000 jobs this year as part of an effort to save
costs in its refining business. First-quarter 2010 charges for
severance are currently estimated to be in the range of $150 million to
$200 million on an after-tax basis. Staff reductions will occur through
2011. Chevron plans to solicit bids for operations in Europe, including
its Pembroke refinery, the Caribbean and select Central America
markets. It's also reviewing operations in Hawaii and Africa, outside
of South Africa.
The 12 year low was set one year ago this week.
George Ure: " The release of the Wizard of Oz came just about 10-years after the 1929 market peak...and here we are, just about smack-dab at the 10-year mark after the Year 2000 market peak and what comes out? Alive in Wonderland.
Not that history replays or repeats precisely, but it does rhyme often enough that a serious student of the market might be asking "Gee, where are things in the great blender of time?"
The Oil Drum: "To the Mexican people, one of the great achievements in their history
was the day their president kicked out foreign oil companies in 1938.
Thus, they celebrate March 18 as a civic holiday.
Yet today, that 72-year-old act has put Mexico in a straitjacket,
one that threatens both the welfare of the country and the oil supply
of the United States.
The national oil company created after the 1938 seizure, Pemex,
is entering a period of turmoil. Oil production in its aging fields is
sagging so rapidly that Mexico, long one of the world’s top
oil-exporting countries, could begin importing oil within the decade.
Mexico is among the three leading foreign suppliers of oil to
the United States, along with Canada and Saudi Arabia. Mexican barrels
can be replaced, but at a cost. It means greater American dependence on
unfriendly countries like Venezuela, unstable countries like Nigeria
and Iraq, and on the oil sands of Canada, an environmentally
destructive form of oil production.
“As you lose Mexican oil, you lose a critical supply,” said
Jeremy M. Martin, director of the energy program at the Institute of
the Americas at the University of California, San Diego. “It’s not just
about energy security but national security, because our neighbor’s
economic and political well-being is largely linked to its capacity to
produce and export oil.”
U.S. employers have toned down their hiring expectations mildly, according to Manpower's Q2 Employment Outlook (.pdf). A net 5% of employers expect to hire in Q2, down from 6% last
quarter, but an improvement from the net -2% reading a year ago.
Bloomberg Reports Roubini Says Cautious China to Limit Yuan Gain to 4%
A sovereign default within the euro zone is possible, Fitch Ratings said on Tuesday.
Brian
Coulton, managing director and head of Europe, Middle East and Africa
sovereigns at Fitch Ratings, said it was possible to have a sovereign
default within the euro currency bloc, but that would not necessarily
mean the break up of the euro zone.
“An index measuring wholesale prices of lentils, rice, vegetables and
other food articles compiled by the commerce ministry rose 17.87
percent in the week ended Feb. 20 from a year earlier, following a
17.58 percent gain the previous week, according to a statement in New
Delhi today.
Another sign of the shifting dynamics in the natural gas world emerged
Monday with the $3.4 billion US joint bid by PetroChina and Royal Dutch
Shell for Australia's Arrow Energy. The prize? Billions of cubic feet
of coal bed methane to be produced, converted to liquefied natural gas
and shipped to Asia.
The Dow Jones Industrial Average rose 11.86 points, or 0.1%, to end at 10,564.38. Up nearly 69% from the year-ago close, the S&P 500 added 1.95 points, or 0.2%, to end at 1,140.45. The Nasdaq rose 8.47 points, or 0.4%, to 2,340.68.
An index measuring small-business optimism fell 1.3 points to 88.0 in February,
erasing January's gain, according to a monthly survey released Tuesday
by the National Association of Independent businesses. The index is far
below its average, but has gained from 81.0 in March 2009, the
second-lowest reading ever. Small businesses were cutting workers and
prices in an effort to increase sales, the survey said. Fewer
businesses reported problems getting credit, with 9% of firms saying
they couldn't find the credit they need.
Chevron Corp. said it plans to cut 2,000 jobs this year as part of an effort to save
costs in its refining business. First-quarter 2010 charges for
severance are currently estimated to be in the range of $150 million to
$200 million on an after-tax basis. Staff reductions will occur through
2011. Chevron plans to solicit bids for operations in Europe, including
its Pembroke refinery, the Caribbean and select Central America
markets. It's also reviewing operations in Hawaii and Africa, outside
of South Africa.
The 12 year low was set one year ago this week.
George Ure: " The release of the Wizard of Oz came just about 10-years after the 1929 market peak...and here we are, just about smack-dab at the 10-year mark after the Year 2000 market peak and what comes out? Alive in Wonderland.
Not that history replays or repeats precisely, but it does rhyme often enough that a serious student of the market might be asking "Gee, where are things in the great blender of time?"
The Oil Drum: "To the Mexican people, one of the great achievements in their history
was the day their president kicked out foreign oil companies in 1938.
Thus, they celebrate March 18 as a civic holiday.
Yet today, that 72-year-old act has put Mexico in a straitjacket,
one that threatens both the welfare of the country and the oil supply
of the United States.
The national oil company created after the 1938 seizure, Pemex,
is entering a period of turmoil. Oil production in its aging fields is
sagging so rapidly that Mexico, long one of the world’s top
oil-exporting countries, could begin importing oil within the decade.
Mexico is among the three leading foreign suppliers of oil to
the United States, along with Canada and Saudi Arabia. Mexican barrels
can be replaced, but at a cost. It means greater American dependence on
unfriendly countries like Venezuela, unstable countries like Nigeria
and Iraq, and on the oil sands of Canada, an environmentally
destructive form of oil production.
“As you lose Mexican oil, you lose a critical supply,” said
Jeremy M. Martin, director of the energy program at the Institute of
the Americas at the University of California, San Diego. “It’s not just
about energy security but national security, because our neighbor’s
economic and political well-being is largely linked to its capacity to
produce and export oil.”
U.S. employers have toned down their hiring expectations mildly, according to Manpower's Q2 Employment Outlook (.pdf). A net 5% of employers expect to hire in Q2, down from 6% last
quarter, but an improvement from the net -2% reading a year ago.
Bloomberg Reports Roubini Says Cautious China to Limit Yuan Gain to 4%
A sovereign default within the euro zone is possible, Fitch Ratings said on Tuesday.
Brian
Coulton, managing director and head of Europe, Middle East and Africa
sovereigns at Fitch Ratings, said it was possible to have a sovereign
default within the euro currency bloc, but that would not necessarily
mean the break up of the euro zone.
“An index measuring wholesale prices of lentils, rice, vegetables and
other food articles compiled by the commerce ministry rose 17.87
percent in the week ended Feb. 20 from a year earlier, following a
17.58 percent gain the previous week, according to a statement in New
Delhi today.
Another sign of the shifting dynamics in the natural gas world emerged
Monday with the $3.4 billion US joint bid by PetroChina and Royal Dutch
Shell for Australia's Arrow Energy. The prize? Billions of cubic feet
of coal bed methane to be produced, converted to liquefied natural gas
and shipped to Asia.
The Dow Jones Industrial Average rose 11.86 points, or 0.1%, to end at 10,564.38. Up nearly 69% from the year-ago close, the S&P 500 added 1.95 points, or 0.2%, to end at 1,140.45. The Nasdaq rose 8.47 points, or 0.4%, to 2,340.68.
Monday, March 08, 2010
Hussman
3/8/10 Hussman
McDonald's Corp.
said Monday that its February comparable sales, or sales at all
restaurants open at least 13 months, rose 4.8%. McDonald's was expected
to see sales gains of 2.1%, according to the average estimate of two
analysts surveyed by FactSet. Same-store sales rose 0.6% in the U.S.,
increased 5.4% in Europe and surged 10.5% in Asia, Middle East and
Africa. Systemwide sales rose 11.2%, or 6.4% excluding the impact of
currency translations.
MetLife Inc. said that it has signed a
definitive agreement to acquire American Life Insurance Co. from American International Group
for around $15.5 billion. The consideration will consist of $6.8
billion in cash and approximately $8.7 billion in MetLife equity
securities, subject to closing adjustments. MetLife expects the cash
portion of the purchase price to be financed through issuing senior
debt and common stock as well as cash on hand. MetLife expects the
transaction to increase its 2011 operating earnings per share by
approximately 45 cents to 55 cents a share. The operating earnings per
share estimate does not include transition and other one-time expenses
estimated at 12 cents a share.
China should step up efforts to build up state reserves of crude oil
and refined fuel to enhance the country's energy security, state media
cited lawmakers as saying.
National crude demand would exceed 550 million tonnes by 2020,
compared with about 400 million tonnes in 2009, National People's
Congress member Chen Geng told the China Energy News in an interview
published on Monday.
John Hussman: "Although the 2010
peak in the Alt-A / Option-ARM reset schedule doesn't occur until July,
with a much larger peak in mid-2011, a small initial round of resets is
already in progress, having started about November of last year. I
would expect that if we are indeed at risk of a second wave of mortgage
defaults and credit strains, it will show up first as a surprising jump
in 30-day mortgage delinquencies in the data we see over the next 2-4
months. I do not expect quarters upon quarters of uncertainty. It may
take longer to observe the full effect of continued mortgage
delinquencies and foreclosures, but we are at about the point where the
data would depart from the market's "all clear" expectations if credit
pressures are likely to resume with force."
Mike Burk: "Last weeks run up was a little too much of a good thing and the market is overbought. However, if you are going to have a strong rally the action last week shows how it should be done with the secondaries leading, new highs expanding and no new lows.
I expect the major averages to be higher on Friday March 12 than they were on Friday March 5."
Nearly 25% of mortgage defaults are due to people who choose to give up their home because they're under water.
Iran said it has started a new production line of highly accurate,
short-range cruise missiles, which would add a new element to the
country's arsenal.
Gen. Ahmad Vahidi told Iranian state TV
Sunday that the cruise missile, called Nasr 1, would be capable of
destroying targets up to 3,000 tons in size.
Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009,
leaving managers with $172 billion in the quickest decrease since 1991,
Investment Company Institute data show. The last time stock managers
held such a small proportion was September 2007, a month before the
S&P 500 began a 57 percent drop, according to data compiled by
Bloomberg.”
The Australian dollar is being
overtaken by the Canadian dollar among commodity currencies as
the safety of Canada’s banking system and ties with the U.S.
economy spur investors to buy the loonie.
Options show demand for the right to sell the so-called
Aussie and buy the Canadian dollar reached the highest last
month in almost a year. A measure of traders’ expectations for
price fluctuations indicates the loonie is the most secure bet
relative to the Australian dollar since July as the global
recovery shows signs of wavering.
The Dow Jones Industrial Average fell 13.68 points, or 0.1%, to 10,552.52. After six sessions of gains, the S&P 500 Index lost less than 1 point to end at 1,138.5. The Nasdaq Composite rose 5.86 points, or 0.3%, to 2,332.21.
McDonald's Corp.
said Monday that its February comparable sales, or sales at all
restaurants open at least 13 months, rose 4.8%. McDonald's was expected
to see sales gains of 2.1%, according to the average estimate of two
analysts surveyed by FactSet. Same-store sales rose 0.6% in the U.S.,
increased 5.4% in Europe and surged 10.5% in Asia, Middle East and
Africa. Systemwide sales rose 11.2%, or 6.4% excluding the impact of
currency translations.
MetLife Inc. said that it has signed a
definitive agreement to acquire American Life Insurance Co. from American International Group
for around $15.5 billion. The consideration will consist of $6.8
billion in cash and approximately $8.7 billion in MetLife equity
securities, subject to closing adjustments. MetLife expects the cash
portion of the purchase price to be financed through issuing senior
debt and common stock as well as cash on hand. MetLife expects the
transaction to increase its 2011 operating earnings per share by
approximately 45 cents to 55 cents a share. The operating earnings per
share estimate does not include transition and other one-time expenses
estimated at 12 cents a share.
China should step up efforts to build up state reserves of crude oil
and refined fuel to enhance the country's energy security, state media
cited lawmakers as saying.
National crude demand would exceed 550 million tonnes by 2020,
compared with about 400 million tonnes in 2009, National People's
Congress member Chen Geng told the China Energy News in an interview
published on Monday.
John Hussman: "Although the 2010
peak in the Alt-A / Option-ARM reset schedule doesn't occur until July,
with a much larger peak in mid-2011, a small initial round of resets is
already in progress, having started about November of last year. I
would expect that if we are indeed at risk of a second wave of mortgage
defaults and credit strains, it will show up first as a surprising jump
in 30-day mortgage delinquencies in the data we see over the next 2-4
months. I do not expect quarters upon quarters of uncertainty. It may
take longer to observe the full effect of continued mortgage
delinquencies and foreclosures, but we are at about the point where the
data would depart from the market's "all clear" expectations if credit
pressures are likely to resume with force."
Mike Burk: "Last weeks run up was a little too much of a good thing and the market is overbought. However, if you are going to have a strong rally the action last week shows how it should be done with the secondaries leading, new highs expanding and no new lows.
I expect the major averages to be higher on Friday March 12 than they were on Friday March 5."
Nearly 25% of mortgage defaults are due to people who choose to give up their home because they're under water.
Iran said it has started a new production line of highly accurate,
short-range cruise missiles, which would add a new element to the
country's arsenal.
Gen. Ahmad Vahidi told Iranian state TV
Sunday that the cruise missile, called Nasr 1, would be capable of
destroying targets up to 3,000 tons in size.
Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009,
leaving managers with $172 billion in the quickest decrease since 1991,
Investment Company Institute data show. The last time stock managers
held such a small proportion was September 2007, a month before the
S&P 500 began a 57 percent drop, according to data compiled by
Bloomberg.”
The Australian dollar is being
overtaken by the Canadian dollar among commodity currencies as
the safety of Canada’s banking system and ties with the U.S.
economy spur investors to buy the loonie.
Options show demand for the right to sell the so-called
Aussie and buy the Canadian dollar reached the highest last
month in almost a year. A measure of traders’ expectations for
price fluctuations indicates the loonie is the most secure bet
relative to the Australian dollar since July as the global
recovery shows signs of wavering.
The Dow Jones Industrial Average fell 13.68 points, or 0.1%, to 10,552.52. After six sessions of gains, the S&P 500 Index lost less than 1 point to end at 1,138.5. The Nasdaq Composite rose 5.86 points, or 0.3%, to 2,332.21.
Saturday, March 06, 2010
CBO
3/6/10 CBO
The CBO, in an annual analysis of the White House budget proposal, said today that under Obama’s plan deficits would never shrink below 4 percent of the economy between now and 2020. The
cumulative deficits would total $9.76 trillion, and debt held by the
public would amount to 90 percent of the nation’s gross domestic
product by 2020, the CBO said.
Regulators shut banks in Maryland,
Illinois, Florida and Utah, pushing the number of U.S. failures
to 26 this year and placing more pressure on the Federal Deposit
Insurance Corp. to dispose of a growing pile of toxic assets.
The FDIC was unable to find buyers for two banks --
Centennial Bank in Ogden, Utah, and Waterfield Bank of
Germantown, Maryland -- according to statements posted on the
agency’s Web site. In the largest of yesterday’s failures by
assets, Boca Raton, Florida-based Sun American Bank was
purchased by First-Citizens Bank & Trust Co.
“Fannie Mae and Freddie Mac bondholders shouldn’t assume the government
will make them whole on their investments as Congress retools the
companies, House Financial Services Committee Chairman Barney Frank
said. ‘Please don’t think this is federally guaranteed, I don’t think
it is, I don’t think it should be, I don’t feel any obligation to bail
you out,’ Frank told reporters… Congress will ‘certainly not’ extend
any new protections to bond and mortgage-security investors beyond what
exists, Frank said. A ‘whole range’ of options is being considered for
investors in the two government-seized companies, ‘from paying nothing
to a haircut to whatever,’ Frank said.”
Doug Noland: "This week marked the one-year anniversary of a historic stock market
rally. The S&P500 enjoys a one-year gain of 66.8%. The broader
market has fared even better. The small cap Russell 2000 and
S&P400 Mid-Caps sport 12-month gains of 90.6% and 87.4%. The past
year also witnessed record junk debt issuance and an amazing turnabout
in financial conditions. Housing markets may be stuck in the mud, but
government-induced reflation has worked wonders for equities, corporate
debt and global risk assets more generally.
Long-time readers may have noticed that awhile back I stopped the
weekly presentation of bank Credit and asset data. For the record,
bank Credit declined $470bn over the past year, or about 5%. I
specifically have not emphasized this bank contraction, believing it
had become a deceptive indicator of financial conditions. Also luring
in those anticipating deflationary conditions, M2 “money supply”
expanded just under 2% over the past year. There has been no reason to
fret a substandard $200bn one-year expansion of narrow “money,” not
with Treasury and agency securities inflating a couple Trillion and the
Fed monetizing a Trillion of MBS.
One year ago, the Federal Reserve held $69bn of mortgage-backed
securities. Their hoard now surpasses $1.027 TN. Over the past year,
Treasury has run deficits of about $1.5 TN. Our government’s
“electronic printing press” has dispersed unprecedented purchasing
power to households and businesses throughout the economy. The Fed’s
Trillion dollar monetization has unleashed unmatched liquidity
throughout the financial markets....Massive U.S. deficits and near-zero interest rates ensure a steady flow
of finance (newly created as well as an ongoing exodus out of
low-yielding instruments) to debt markets around the world. Confidence
runs high that ultra-loose U.S. financial conditions will continue to
underpin Credit expansions globally. Politicians may talk tough, and
they do put on a good show. Meanwhile, markets function with reticent
aplomb, knowing they’ve got policymakers right where they want them."
Adoption of a value-added tax in the U.S. would be a fair, efficient
way to help restore the country's financial health, argues Bloomberg
BusinessWeek's Chris Farrell.
Barron's: "Workers who drew pay for even one hour during their pay period
(typically, two weeks to a month) were counted as employed in February.
Too, the BLS points out, some unknown number of workers could well have
been added for clean-up and repairs after the storm.... While the unemployment rate held at 9.7%, our preferred measure,
which includes the underemployed, edged back up to 16.8%, from the
previous month's 16.5%.
That insightful pair, Philippa Dunne and Doug Henwood, who run the
Liscio Report, deftly sum up the February employment story as "more of
the same -- minor losses that look good compared to the bloodletting of
early 2009, but rather sad compared to a textbook recovery."
Among other less-than-ebullient data they cite, the probability of
someone out of work in January finding a job in February fell to 20.1%,
from 24.5% the previous month. And though the rate at which folks
voluntarily left jobs also declined, from 2.7% to 2.4%, they comment
that, alas, "the hiring strike continues."
China is pushing for the yuan to be added to the basket of currencies
that comprise the IMF's special drawing rights, aiming for its
inclusion in 2015, Japanese daily Sankei Shimbun said on Saturday.
Non-Seasonally Adjusted Consumer credit was actually down by $4 billion.
ZeroHedge: "On a non-seasonally adjusted basis, consumer credit has declined by
$108 billion in the past 12 months. What may be surprising, is that
were one to strip away the contribution from the Federal Government of
$78 billion, the decline would have been almost double, or $187
billion. Furthermore, in January, NSA consumer credit would have
declined by $14 billion had it not been for the... wait for it...
Federal Government, which sourced $10.4 billion in new consumer credit."
China central bank Governor Zhou Xiaochuan said China would eventually
move away from its current exchange rate policies but he gave no
timetable.
The CBO, in an annual analysis of the White House budget proposal, said today that under Obama’s plan deficits would never shrink below 4 percent of the economy between now and 2020. The
cumulative deficits would total $9.76 trillion, and debt held by the
public would amount to 90 percent of the nation’s gross domestic
product by 2020, the CBO said.
Regulators shut banks in Maryland,
Illinois, Florida and Utah, pushing the number of U.S. failures
to 26 this year and placing more pressure on the Federal Deposit
Insurance Corp. to dispose of a growing pile of toxic assets.
The FDIC was unable to find buyers for two banks --
Centennial Bank in Ogden, Utah, and Waterfield Bank of
Germantown, Maryland -- according to statements posted on the
agency’s Web site. In the largest of yesterday’s failures by
assets, Boca Raton, Florida-based Sun American Bank was
purchased by First-Citizens Bank & Trust Co.
“Fannie Mae and Freddie Mac bondholders shouldn’t assume the government
will make them whole on their investments as Congress retools the
companies, House Financial Services Committee Chairman Barney Frank
said. ‘Please don’t think this is federally guaranteed, I don’t think
it is, I don’t think it should be, I don’t feel any obligation to bail
you out,’ Frank told reporters… Congress will ‘certainly not’ extend
any new protections to bond and mortgage-security investors beyond what
exists, Frank said. A ‘whole range’ of options is being considered for
investors in the two government-seized companies, ‘from paying nothing
to a haircut to whatever,’ Frank said.”
Doug Noland: "This week marked the one-year anniversary of a historic stock market
rally. The S&P500 enjoys a one-year gain of 66.8%. The broader
market has fared even better. The small cap Russell 2000 and
S&P400 Mid-Caps sport 12-month gains of 90.6% and 87.4%. The past
year also witnessed record junk debt issuance and an amazing turnabout
in financial conditions. Housing markets may be stuck in the mud, but
government-induced reflation has worked wonders for equities, corporate
debt and global risk assets more generally.
Long-time readers may have noticed that awhile back I stopped the
weekly presentation of bank Credit and asset data. For the record,
bank Credit declined $470bn over the past year, or about 5%. I
specifically have not emphasized this bank contraction, believing it
had become a deceptive indicator of financial conditions. Also luring
in those anticipating deflationary conditions, M2 “money supply”
expanded just under 2% over the past year. There has been no reason to
fret a substandard $200bn one-year expansion of narrow “money,” not
with Treasury and agency securities inflating a couple Trillion and the
Fed monetizing a Trillion of MBS.
One year ago, the Federal Reserve held $69bn of mortgage-backed
securities. Their hoard now surpasses $1.027 TN. Over the past year,
Treasury has run deficits of about $1.5 TN. Our government’s
“electronic printing press” has dispersed unprecedented purchasing
power to households and businesses throughout the economy. The Fed’s
Trillion dollar monetization has unleashed unmatched liquidity
throughout the financial markets....Massive U.S. deficits and near-zero interest rates ensure a steady flow
of finance (newly created as well as an ongoing exodus out of
low-yielding instruments) to debt markets around the world. Confidence
runs high that ultra-loose U.S. financial conditions will continue to
underpin Credit expansions globally. Politicians may talk tough, and
they do put on a good show. Meanwhile, markets function with reticent
aplomb, knowing they’ve got policymakers right where they want them."
Adoption of a value-added tax in the U.S. would be a fair, efficient
way to help restore the country's financial health, argues Bloomberg
BusinessWeek's Chris Farrell.
Barron's: "Workers who drew pay for even one hour during their pay period
(typically, two weeks to a month) were counted as employed in February.
Too, the BLS points out, some unknown number of workers could well have
been added for clean-up and repairs after the storm.... While the unemployment rate held at 9.7%, our preferred measure,
which includes the underemployed, edged back up to 16.8%, from the
previous month's 16.5%.
That insightful pair, Philippa Dunne and Doug Henwood, who run the
Liscio Report, deftly sum up the February employment story as "more of
the same -- minor losses that look good compared to the bloodletting of
early 2009, but rather sad compared to a textbook recovery."
Among other less-than-ebullient data they cite, the probability of
someone out of work in January finding a job in February fell to 20.1%,
from 24.5% the previous month. And though the rate at which folks
voluntarily left jobs also declined, from 2.7% to 2.4%, they comment
that, alas, "the hiring strike continues."
China is pushing for the yuan to be added to the basket of currencies
that comprise the IMF's special drawing rights, aiming for its
inclusion in 2015, Japanese daily Sankei Shimbun said on Saturday.
Non-Seasonally Adjusted Consumer credit was actually down by $4 billion.
ZeroHedge: "On a non-seasonally adjusted basis, consumer credit has declined by
$108 billion in the past 12 months. What may be surprising, is that
were one to strip away the contribution from the Federal Government of
$78 billion, the decline would have been almost double, or $187
billion. Furthermore, in January, NSA consumer credit would have
declined by $14 billion had it not been for the... wait for it...
Federal Government, which sourced $10.4 billion in new consumer credit."
China central bank Governor Zhou Xiaochuan said China would eventually
move away from its current exchange rate policies but he gave no
timetable.
Jobs
3/5/10 Payrolls
U.S. nonfarm payrolls declined
for the 25th time in the past 26 months, falling by 36,000 in February
to 129.5 million, the Labor Department estimated Friday. Job losses
were concentrated in construction, schools, retail and publishing.
Manufacturing jobs rose by 1,000, the second increase in a row. The
unemployment rate was steady at 9.7%. Severe snow storms during the
survey week may have depressed the payroll count, but the Bureau of
Labor Statistics said it could not quantify the impact. Total hours
worked fell by 0.6%, likely due to weather-related shutdowns. The
employment report was better than expected, as economists surveyed by
MarketWatch were forecasting a drop of 90,000. They expected the
unemployment rate to rise to 9.8%.
The Labor Department said job losses for December and January had been
revised to show 35,000 fewer jobs lost than previously reported.
Temporary hiring added 48,000.
The average workweek for all employees slipped to 33.8 hours from 33.9 hours in January.
The number of long-term unemployed (those jobless for 27 weeks and over) was 6.1 million in February and has been about that level since December. About 4 in 10 unemployed persons have been unemployed for 27 weeks or more. Census hiring was 15,000. So 51,000 jobs lost ex-Census.
In February, the civilian labor force participation rate (64.8 percent) and the employment-population ratio (58.5 percent) were little changed.
The CES Birth-Death Model numbers amounted to + 97,000 for Feb.
The economy has lost almost 3.3 million jobs over the last year, and
8.43 million jobs since the beginning of the current employment
recession.
The new millennium has been rough on older workers, who have seen a whopping 331% increase in unemployment over the last decade, according to the AARP.
The
number of unemployed workers older than 55 shot up to 2.1 million in
December from 490,000 in January 2000, according to an analysis of data
from the government Bureau of Labor Statistics by the nonprofit's
Public Policy Institute.Unemployment among workers older than 65 jumped 235%, to 479,000 from 143,000. For
the unemployed over age 55, the average jobless period has expanded
85.6% to 34.7 weeks from 18.7 weeks. The period has stretched 32.7% for
job hunters over age 65, who are now unemployed an average of 32.9
weeks compared to 24.8 weeks in 2000.Many graying workers, AARP said, are now attempting to postpone or come out of retirement.
The US rig count for February 2010 was 1,350, up 83 from the 1,267
counted in January 2010 and up 30 from the 1,320 counted in February
2009.
C.Fred Bergsten: "President Obama has smartly suggested that a new export strategy
could support 2 million very good American jobs, more than created by
his stimulus initiative. The United States already sells about $1.5
trillion worth of goods and services annually to the rest of the world,
which creates about 10 million high-paying jobs. Every $1 billion of
additional exports will produce about 7,000 very good jobs. Robust
export expansion would also reduce our large trade deficits and
resultant need to borrow abroad to finance them. Last week the president suggested an ambitious but realistic goal of
doubling exports over the next five years. An effective US export
strategy must focus on four variables: the exchange rate of the dollar,
trade agreements, our own export controls, and tax policy."
ZeroHedge: "Joseph Stiglitz - former head economist at the International
Monetary Fund (IMF) and a nobel-prize winner - said yesterday that the
very structure of the Federal Reserve system is so fraught with
conflicts that it is "corrupt" and undermines democracy.
Stiglitz said:
If
>we [i.e. the IMF] had seen a governance structure that corresponds to
>our Federal Reserve system, we would have been yelling and screaming
>and saying that country does not deserve any assistance, this is a
>corrupt governing structure."
>
>Michael Panzer: "Interestingly enough, if you look back at the history of the
>relationship between productivity and labor costs, the last time we saw
>a gap between the two as wide as it is now was -- you guessed it -- in
>the 1970s, before the Great Stagflation."
>
>Bill Bonner: "The Greek story is a universal tale… It will soon be played by the UK…and then it will be the US.
>Let us summarize: Innocent fellows are seduced by debt. They fall in
>love with deficits. Debt proves to be an evil temptress. Our heroes are
>ruined.
>Isn’t the story more or less the same in Britain and America too?"
>
>
>Copper demand in China, the world’s largest consumer of the
>metal, is “weak” because of lackluster consumption from the power
>industry, Tongling Nonferrous Metals Group Co. said. “From
>what we learned from our customers, copper demand is now weak,”
>Chairman Wei Jianghong said today in an interview in Beijing. Tongling
>is the country’s second-largest copper smelter. Demand “isn’t very strong,” bigger rival Jiangxi Copper Co. also said today. Slowing
>demand in China may indicate stockpiles in the country may continue to
>climb after reaching the highest level in more than seven years in
>February. “About 60 percent of copper is used in the power
>industry, and our sales to wire-and-cable users reflected that demand
>is rather weak,” Wei said while attending the National People’s
>Congress. “The demand is not very strong in the first place,” Jiangxi
>Copper Chairman Li Yihuang said in Beijing at the congress. “But a lot of people have long positions in the market, so I think in the first half of this year, copper prices will be good.”
>
>
>
>China’s banks are facing increasing
>risk in their lending policies, Premier Wen Jiabao said today in
>his annual report to the country’s legislature.
>“Latent risk in the banking and public finance sectors are
>increasing,” Wen said, according to a copy of his speech
>distributed today at the National People’s Congress meeting.
>
>
>
> * The Obama Health Reform Bill's Dishonesty on Cost. Any
>bill that counts 10 years of taxes but only six years of spending as a
>way to bring down the deficit is dishonest. Hopefully enough
>congressional Democrats will vote against this and start the process
>over again, in a more fiscally responsible way. As Ryan said to the
>president, "[W]e are all representatives of the American people. We all
>do town hall meetings. We all talk to our constituents. And I've got to
>tell you, the American people are engaged. And if you think they want a
>government takeover of healthcare, I would respectfully submit you're
>not listening to them."
Regulators on Friday closed Bank of Illinois, Normal, Ill., and Waterfield Bank, Germantown, Md., bringing the total tally of failed banks to 25 so far this year, the Federal Deposit Insurance Corporation said. The failure of Bank of Illinois marks the third bank closure in the state for this year while Waterfield Bank is the first to be shuttered in Maryland. Heartland Bank and Trust Company will assume all deposits of Bank of Illinois while the FDIC will act as a receiver for Waterfield Bank.
- Sun American Bank of Boca Raton, Fla., became the 23rd bank of the year to fail, according to the Federal Deposit Insurance Corp. on Friday. First Citizens Bank, the primary subsidiary of First Citizens BancShares, will assume the estimated $443.5 million in deposits and purchase the bank's $535.7 million in assets. The bank is also Florida's fourth failure of the year.
The Dow Jones Industrial Average added 122.06 points, or 1.2%, to 10,566.2, leaving it 2.3% higher for the week. The S&P 500 Index climbed 15.73 points, or 1.4%, to 1,138.7, a weekly advance of 3.1%, while the Nasdaq Composite rose 34.04 points, or 1.5%, to 2,326.35, up 3.9% from the week-ago close.
U.S. nonfarm payrolls declined
for the 25th time in the past 26 months, falling by 36,000 in February
to 129.5 million, the Labor Department estimated Friday. Job losses
were concentrated in construction, schools, retail and publishing.
Manufacturing jobs rose by 1,000, the second increase in a row. The
unemployment rate was steady at 9.7%. Severe snow storms during the
survey week may have depressed the payroll count, but the Bureau of
Labor Statistics said it could not quantify the impact. Total hours
worked fell by 0.6%, likely due to weather-related shutdowns. The
employment report was better than expected, as economists surveyed by
MarketWatch were forecasting a drop of 90,000. They expected the
unemployment rate to rise to 9.8%.
The Labor Department said job losses for December and January had been
revised to show 35,000 fewer jobs lost than previously reported.
Temporary hiring added 48,000.
The average workweek for all employees slipped to 33.8 hours from 33.9 hours in January.
The number of long-term unemployed (those jobless for 27 weeks and over) was 6.1 million in February and has been about that level since December. About 4 in 10 unemployed persons have been unemployed for 27 weeks or more. Census hiring was 15,000. So 51,000 jobs lost ex-Census.
In February, the civilian labor force participation rate (64.8 percent) and the employment-population ratio (58.5 percent) were little changed.
The CES Birth-Death Model numbers amounted to + 97,000 for Feb.
The economy has lost almost 3.3 million jobs over the last year, and
8.43 million jobs since the beginning of the current employment
recession.
The new millennium has been rough on older workers, who have seen a whopping 331% increase in unemployment over the last decade, according to the AARP.
The
number of unemployed workers older than 55 shot up to 2.1 million in
December from 490,000 in January 2000, according to an analysis of data
from the government Bureau of Labor Statistics by the nonprofit's
Public Policy Institute.Unemployment among workers older than 65 jumped 235%, to 479,000 from 143,000. For
the unemployed over age 55, the average jobless period has expanded
85.6% to 34.7 weeks from 18.7 weeks. The period has stretched 32.7% for
job hunters over age 65, who are now unemployed an average of 32.9
weeks compared to 24.8 weeks in 2000.Many graying workers, AARP said, are now attempting to postpone or come out of retirement.
The US rig count for February 2010 was 1,350, up 83 from the 1,267
counted in January 2010 and up 30 from the 1,320 counted in February
2009.
C.Fred Bergsten: "President Obama has smartly suggested that a new export strategy
could support 2 million very good American jobs, more than created by
his stimulus initiative. The United States already sells about $1.5
trillion worth of goods and services annually to the rest of the world,
which creates about 10 million high-paying jobs. Every $1 billion of
additional exports will produce about 7,000 very good jobs. Robust
export expansion would also reduce our large trade deficits and
resultant need to borrow abroad to finance them. Last week the president suggested an ambitious but realistic goal of
doubling exports over the next five years. An effective US export
strategy must focus on four variables: the exchange rate of the dollar,
trade agreements, our own export controls, and tax policy."
ZeroHedge: "Joseph Stiglitz - former head economist at the International
Monetary Fund (IMF) and a nobel-prize winner - said yesterday that the
very structure of the Federal Reserve system is so fraught with
conflicts that it is "corrupt" and undermines democracy.
Stiglitz said:
If
>we [i.e. the IMF] had seen a governance structure that corresponds to
>our Federal Reserve system, we would have been yelling and screaming
>and saying that country does not deserve any assistance, this is a
>corrupt governing structure."
>
>Michael Panzer: "Interestingly enough, if you look back at the history of the
>relationship between productivity and labor costs, the last time we saw
>a gap between the two as wide as it is now was -- you guessed it -- in
>the 1970s, before the Great Stagflation."
>
>Bill Bonner: "The Greek story is a universal tale… It will soon be played by the UK…and then it will be the US.
>Let us summarize: Innocent fellows are seduced by debt. They fall in
>love with deficits. Debt proves to be an evil temptress. Our heroes are
>ruined.
>Isn’t the story more or less the same in Britain and America too?"
>
>
>Copper demand in China, the world’s largest consumer of the
>metal, is “weak” because of lackluster consumption from the power
>industry, Tongling Nonferrous Metals Group Co. said. “From
>what we learned from our customers, copper demand is now weak,”
>Chairman Wei Jianghong said today in an interview in Beijing. Tongling
>is the country’s second-largest copper smelter. Demand “isn’t very strong,” bigger rival Jiangxi Copper Co. also said today. Slowing
>demand in China may indicate stockpiles in the country may continue to
>climb after reaching the highest level in more than seven years in
>February. “About 60 percent of copper is used in the power
>industry, and our sales to wire-and-cable users reflected that demand
>is rather weak,” Wei said while attending the National People’s
>Congress. “The demand is not very strong in the first place,” Jiangxi
>Copper Chairman Li Yihuang said in Beijing at the congress. “But a lot of people have long positions in the market, so I think in the first half of this year, copper prices will be good.”
>
>
>
>China’s banks are facing increasing
>risk in their lending policies, Premier Wen Jiabao said today in
>his annual report to the country’s legislature.
>“Latent risk in the banking and public finance sectors are
>increasing,” Wen said, according to a copy of his speech
>distributed today at the National People’s Congress meeting.
>
>
>
> * The Obama Health Reform Bill's Dishonesty on Cost. Any
>bill that counts 10 years of taxes but only six years of spending as a
>way to bring down the deficit is dishonest. Hopefully enough
>congressional Democrats will vote against this and start the process
>over again, in a more fiscally responsible way. As Ryan said to the
>president, "[W]e are all representatives of the American people. We all
>do town hall meetings. We all talk to our constituents. And I've got to
>tell you, the American people are engaged. And if you think they want a
>government takeover of healthcare, I would respectfully submit you're
>not listening to them."
Regulators on Friday closed Bank of Illinois, Normal, Ill., and Waterfield Bank, Germantown, Md., bringing the total tally of failed banks to 25 so far this year, the Federal Deposit Insurance Corporation said. The failure of Bank of Illinois marks the third bank closure in the state for this year while Waterfield Bank is the first to be shuttered in Maryland. Heartland Bank and Trust Company will assume all deposits of Bank of Illinois while the FDIC will act as a receiver for Waterfield Bank.
- Sun American Bank of Boca Raton, Fla., became the 23rd bank of the year to fail, according to the Federal Deposit Insurance Corp. on Friday. First Citizens Bank, the primary subsidiary of First Citizens BancShares, will assume the estimated $443.5 million in deposits and purchase the bank's $535.7 million in assets. The bank is also Florida's fourth failure of the year.
The Dow Jones Industrial Average added 122.06 points, or 1.2%, to 10,566.2, leaving it 2.3% higher for the week. The S&P 500 Index climbed 15.73 points, or 1.4%, to 1,138.7, a weekly advance of 3.1%, while the Nasdaq Composite rose 34.04 points, or 1.5%, to 2,326.35, up 3.9% from the week-ago close.
Subscribe to:
Posts (Atom)