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Bud's Poem Page Bud's Prairie Populist Sunni/Shiite/Iraq/Iran |
Our better half is on a coast to coast bicycle ride of 3200 miles from San Diego California to St. Augustine Florida. A link to her blog of the trip is above. We also will be giving daily weather and mileage updates. 11 March 2010
***** Thoughts
Early market
action suggests the pullback from the run up is upon us. As long as it doesn’t
turn into a route (always the caveat) this correction will be healthy for a
further advance to our target of 1250 on the S&P 500 by May. The reason the
talking heads and wire services are giving for the pullback is that traders are
worried about Chinese inflation. Say What? How about the markets being up a
gilllion days in a row on light volume with a rest needed as the more likely
reason. (WSJ) --British oil giant BP PLC said Thursday it bought into a diverse and
broad deepwater exploration portfolio that includes assets off the shores of
Brazil, Azerbaijan and the U.S., in a $7 billion deal with U.S. independent oil
and gas producer Devon Energy Corp. The deal gives BP a greater footprint
in two of its core areas--the Gulf of Mexico and the Caspian Sea--and its first
entry into Brazil's prolific offshore basins.
Oops!! He
was just doing his civic duty and will probably refuse any cash reward. HSBC account data theft affects 24,000 accounts. http://dealbreaker.com/ The bank was just kidding when it
said previously that “less than 10 clients” were affected after a former HSBC
computer specialist stole client data from the bank which he handed over to
French tax authorities.
Why is it that the supposed socialist Obama folk have the backs of the
financial titans on Wall Street? (WSJ) Geithner (Treasury Timmy) has warned the European Commission that its
proposals for more restrictive regulation of alternative fund managers could
affect cross-border investment, demonstrating how the controversial European
Union directive could have transatlantic ramifications. Europe wants to regulate hedge
funds and other financial entities to prevent what occurred last year but Trusting Timmy is afraid the markets
will collapse. Of course he and his Congressional allies also think that making
hedge fund managers pay regular income tax and Medicare tax on their individual
billions in earnings would hamper the system also. The remarkable reality is
that the hedge funds get all this protection from a tax rates all the rest of
us have to pay for a mere pittance –for them- of political contributions. Hooray? U.S. foreclosure filings
rose 6% in February from a year earlier, the smallest increase in four years.
(WSJ) The U.S. trade deficit
narrowed to $37.29 billion in January, the Commerce Department said. A 1.7%
decline in imports outpaced a 0.3% drop in exports as the volume of oil imports
hit its lowest level in more than a decade. Separately, the number of idled U.S.
workers applying for jobless benefits fell by 6,000 to 462,000 last week, the
Labor Department reported, but total claims lasting more than one week rose and
the four-week moving average of new claims also climbed.
The bank stocks are not rolling over with the rest of the
markets. That is mitigating this morning’s downdraft. It is probably the result
of traders’ dawning understanding the Senate fiancé bill is to the likening of
the banks. It should be since the banks wrote it.
(WSJ) Verizon Wireless will have its first next-generation 4G handset in
mid-2011, about six months earlier than the company had said before. The
carrier could have a phone that runs on Long Term Evolution, a type of
high-speed wireless technology, three to six months after it launches the
service, Anthony Melone, chief technology officer at Verizon Wireless, said in
an interview. The company expects to launch the service in some markets by the
end of the year. The move is a key step in making faster, next-generation
networks useable by consumers. Earlier uses will involve data cards for
laptops. It will be some time before full coverage is available, however, and
the first LTE phones will feature dual chipsets so they can work on Verizon's
existing mobile-phone network.
The gods are not happy with Chile: Three strong earthquakes rattled Chile's central-south on Thursday, minutes before Sebastian Pinera was sworn in as the country's new president. The first aftershock, one of the
strongest since a massive 8.8-magnitude quake devastated large swaths of
Chile's Maule and Bio Bio regions, was magnitude-7.2, according to the U.S.
Geological Service.
We were interested in this article for what the panel expected 7th graders to know. We didn’t have equations and rational numbers (whatever they are-as opposed to irrational numbers?) until high school. We don’t think we could explain the concepts now. (NYT) A panel of educators
convened by the nation’s governors and state school superintendents proposed a
uniform set of academic standards on Wednesday, laying out their vision for
what all the nation’s public school children should learn in math and English,
year by year, from kindergarten to high school graduation. The new proposals
could transform American education, replacing the patchwork of standards
ranging from mediocre to world-class that have been written by local educators
in every state. Under the proposed standards for English, for example, fifth
graders would be expected to explain the differences between drama and prose,
and to identify elements of drama like characters, dialogue and stage
directions. Seventh graders would study,
among other math concepts, proportional relationships, operations with rational
numbers and solutions for linear equations. The new standards are likely to
touch off a vast effort to rewrite textbooks, train teachers and produce
appropriate tests, if a critical mass of states adopts them in coming months,
as seems likely. But there could be opposition in some states, like
Massachusetts, which already has high standards that advocates may want to
keep.
Germany and France launched a
proposal that calls for European trading in credit default swaps to be
conducted on transparent exchanges and subjected to minimum holding periods.
Again we note that the population
of Greece is 12 million while the population of California is 36 million. The
population of Illinois is 12 million and yet the fear mongers seldom mention
that the financial crisis in California and/or Illinois is going to bring down
the world financial system. We actually are more worried about California and
Illinois and would like to see the $100 billion a year being spent in Afghanistan
being spent in the states of the U.S. but then Congress and the White House
find it more politically palatably to spend for a war that for a severe
recession.
News to some folks (men & women) we know: Sex Life Ends at 70 as Health Declines, Study Says (Update1) By Andrea Gerlin March 10 (Bloomberg) -- The
average person’s sex life ends by the age of 70, according to a report
published today in the British Medical Journal. Men age 30 have an average of
35 years of sexually active life remaining, compared with 31 years for women,
researchers at the University of Chicago’s department of obstetrics and
gynecology estimated after reviewing a survey of 3,000 people. A separate
survey of older people showed that by 55, men have an average sexual life
expectancy of 15 years and women can expect 10 more years, the researchers
found. People in very good or excellent health were almost twice as likely to
be interested in sex as people in poorer health, according to the study. Men
lost more years of sexual activity as a result of poor health than women, the
researchers said. That may motivate men to pursue healthier lifestyles, they
said. “Translation of expectations about the duration and quality of sexually
active life may, at the individual level, influence important health behaviors
to promote or prolong sexual functioning, such as adherence to medical
treatment or maintenance of a healthy lifestyle,” the researchers wrote. In
statistics, projections of how long people will live vary according to age.
Life expectancy increases as people reach middle age because they have survived
risks that earlier in life reduced their chances of making it to old age. The
team led by Stacy Tessler Lindau, used data from a 1995-1996 survey of 3,000
men and women between ages 25 and 74 and a 2005-2006 survey of 3,000 men and
women between 57 and 85. Men were more likely than women to be sexually active,
report a having a good quality sex life and be interested in sex, according to
the study. The gap was largest among 75- to 85-year-olds. About 40 percent of
men in that group were sexually active, compared with 17 percent of women, the
researchers found. The study was funded by the University of Chicago and the
U.S. National Institutes of Health.
European stocks closed lower as
investors fretted about potential tightening of monetary policy in China, while
lackluster U.S. economic data weighed on Wall Street. Gold ended at $1107 down
$1 and Oil was $81.86 of 30 pennies. 1
Euro = 1.3674 U.S. dollars, 1 Japanese yen = 0.011048 U.S. dollars
10 March 2010
***** Thoughts
Bluebirds and migrating starlings arrived. (Wikipedia- After a
number of misguided attempts to introduce starlings to North America, perhaps
60-100 starlings were released into Central Park, in New York City, in 1890 and
1891, by an acclimatization society headed by Eugene Schieffelin. Their goal
was to introduce all birds mentioned in Shakespeare's works. The entire North
American population, now numbering more than 200,000,000, descended from these
birds.)
(MarketWatch) European shares continued the week's muted moves, with
gains for mining stocks and some financial firms helping push the region's main
indexes slightly higher. Major Asian indexes ended mixed after trading in a
tight range as investors looked toward crucial economic data due this week,
while Chinese stocks snapped a three-day advance amid concerns about policy tightening.
The dollar is lower against the
euro at $1.36 and higher against the yen at 90 yen.
Bulls are higher at Investors Intelligence at 44% up from
42% last week and Bears are lower at 23% from 24%.
(Bloomberg) -- Hedge funds that trade currencies are taking hits from politicians casting them as speculators out to sink the euro and push Greece into insolvency. They are also losing money. Macro funds, so named because they try to profit from macroeconomic trends, fell 1 percent in the first two months of the year, according to data compiled by Chicago-based Hedge Fund Research Inc. Brevan Howard Asset Management LLC, Europe’s largest hedge-fund firm, Moore Capital Management LLC and Tudor Investment Corp. were among those reporting fund losses. The euro dropped 4.8 percent
against the dollar in January and February, while the British pound tumbled 5.8
percent and the cost to insure Greek government debt rose by a third through
the beginning of February. Still, macro managers said the lack of sustained
moves in markets they favor, such as developing- country stocks and
commodities, made it difficult to profit.
Bond underwriters handling the administration-backed Build America bonds have collected fees topping $1 billion. The fees the banks are earning on these bonds are 50% greater than the fees they normally earn. Contrast the love the Congress has for the large investment banks with the protection it gives to consumers: (NYT) A Consumer Bill Gives Exemption on Payday Loans: Senator Bob Corker, the Tennessee Republican who is playing a crucial role in bipartisan negotiations over financial regulation, pressed to remove a provision from draft legislation that would have empowered federal authorities to crack down on payday lenders, people involved in the talks said. The industry is politically influential in his home state and a significant contributor to his campaigns, records show. The Senate Banking Committee’s chairman, Christopher J. Dodd, Democrat of Connecticut, proposed legislation in November that would give a new consumer protection agency the power to write and enforce rules governing payday lenders, debt collectors and other financial companies that are not part of banks. Late last month, Mr. Corker pressed Mr. Dodd to scale back substantially the power that the consumer protection agency would have over such companies, according to three people involved in the talks. Mr. Dodd went along, these people said, in an effort to reach a bipartisan deal with Mr. Corker after talks had broken down between Democrats and the committee’s top Republican, Senator Richard C. Shelby of Alabama. The individuals, both Democrats and Republicans, spoke on condition of anonymity because they were not authorized to discuss the negotiations. Under the proposal agreed to by Mr. Dodd and Mr. Corker, the new consumer agency could write rules for nonbank financial companies like payday lenders. It could enforce such rules against nonbank mortgage companies, mainly loan originators or servicers, but it would have to petition a body of regulators for authority over payday lenders and other nonbank financial companies. Consumer advocates said that writing
rules without the inherent power to enforce them would leave the agency
toothless.
On our afternoon walk yesterday we thought of the cost of
the War in Afghanistan. U.S. taxpayers are spending about $80 billion out of
pocket per year and with future cost of veterans’ health care and other
benefits the cost is at least $100 billion per year. The population of
Afghanistan is 12 million give or take. If the average Afghan family average 3
people that means there are 4 million families. The U.S. could offer sanctuary
to 2.5 million Afghan units (more than half the population) and pay
$40,000 per year to each unit and still spend less that the war is
costing per year. Those refugees could be allowed to buy the
foreclosed houses taking care of another problem. And no more
troops would die in a useless cause.
AEO said Q4 revenue rose 7.3% to $972 million, beating the average $969 million estimate, and yielding profit per share of 33 cents, in line with estimates. Same-store sales rose 5%, almost double the rate analysts were expecting and gross profit as a percentage of sales increased, year over year, from 34% to 39%. For this quarter, the company sees profit per share of 15 cents to 17 cents, better than the 15 cents analysts have been projecting. Last night, the company said it would close its “Martin” group of 28
stores, after the division continued to lose money, boosting the stock in
after-hours trading by more than 5%.
We switched KBE
with a $1 profit to Deutsch Telecom
with half our money left to add to cash. Bank stocks are higher on
takeover rumors. Our guess is that this pop in bank stocks will let the
Treasury try to sell part of its Citi
stake. Citi is trading close to $4
per share. The Treasury owns its billions of shares at $3.25. With a close over
$4 a secondary at $3.75 is just around the corner.
European stocks closed higher,
with an upbeat session on Wall Street providing support after
stronger-than-expected economic data from China and the U.S. Oil ended at
$82.02 up 40 pennies and Gold was down $15 at $1107.
9 March 2010
***** Thoughts
Turnaround Tuesday is upon us and
given that the markets have been meandering higher the last 6 days a rest and
recharge is probably in order. (MarketWatch) Most Asian markets ended higher Tuesday, as Shanghai and Hong Kong
shares rose after an upbeat forecast from China Life Insurance Co., while China
Southern Airlines Co. jumped on plans to raise funds through a private
placement. European shares marked the one-year anniversary of multi-year lows
with mild losses on Tuesday, as worries about Greece and earnings-related
weakness from EADS and Deutsche Post weighed. Oil has backed down to $80.45
overnight and Gold is down $7 as the trading day in the land of milk and honey
begins.
All the better to make more folks resistant to antibiotics: (MarketWatch) Health care giants Merck & Co. and Sanofi-Aventis
said Tuesday that they will combine their animal-health divisions in a 50-50
joint venture that will create the world's biggest seller of veterinary drugs.
France's Sanofi-Aventis said it's exercised an option to combine its Merial
division with Merck's Intervet/Schering-Plough arm.
(WSJ) German Chancellor Angela Merkel called for fast action against
credit-default swaps Tuesday, as European Central Bank Governor Christian Noyer
said (CDS) should be traded through
clearing houses under the control of a supervisor. "Clearing houses
should be set up in each of the largest currency zones where CDS are
traded...under the control of each zone's supervisors," Mr. Noyer said at
a press conference in Paris. The clearing should "take place at conditions
that would make the recourse to the central bank possible in case of
need," Mr. Noyer said. The EU also wants to ban short
selling which is a mistake since without shorting there is no discipline on
bullish investors. Shorting only on upticks worked for 70 years.
(WSJ) The European Union's executive arm said on Monday it is preparing proposals that could lead to the creation of a bailout fund for financially troubled euro-zone countries. The comments—coming a day after German Finance Minister Wolfgang Schäuble said in a newspaper interview he backed a plan for a European institution with "comparable powers of intervention to the International Monetary Fund"—signal that Greece's financial problems are speeding efforts to address important failings in the euro zone. While members share a currency
and a central bank, they have no institution that can rescue countries in
trouble or enforce rules to limit budget...
From the BLS: Job
Openings and Labor Turnover Summary There were 2.7 million job openings on the last business day of January
2010, the U.S. Bureau of Labor Statistics reported today. The job openings rate
rose over the month to 2.1 percent, the highest the rate has been since
February 2009. The hires rate (3.1 percent) and the separations rate (3.2
percent) were unchanged in January. The internet is greeeeeeeeat: (WSJ) The Securities Investor Protection Corporation on Tuesday issued a
warning about a group masquerading as another investor protection group in an
apparent attempt to lure in victims of Bernard L. Madoff. In a press
release, SIPC highlighted
the site of the “International Securities Investor Protection Corporation,”
which mimics the design of its own site. The so-called “I-SIPC” group calls on
Madoff victims to submit their claims, with assertions like the purported discovery of $1.3 billion of Madoff assets found in
Malaysia. Its claim form asks investors for their Madoff case claim number, as
well as copies of their most recent brokerage account statement.
How to make lawyers rich: (WSJ) Goldman Sachs Group was sued on Monday by a large union pension
fund that accused the Wall Street investment bank of overpaying its executives,
Reuters reported. The International Brotherhood of Electric Workers fund filed the
lawsuit in Delaware Chancery Court, seeking to recover money for the company on
behalf of other shareholders. It seeks to stop Goldman from allocating roughly 47 percent of 2009 net
revenue as compensation, saying such allocations “vastly overcompensate
management and constitute corporate waste.” The lawsuit also wants Chief Executive Lloyd Blankfein and others in
management, rather than shareholders, to be responsible for charitable
contributions that Goldman is making, Reuters said.
Cisco (today announced a major advancement in Internet networking
-- the Cisco® CRS-3 Carrier Routing System
(CRS) -- designed to serve as the foundation of the next-generation
Internet and set the pace for the astonishing growth of video transmission,
mobile devices and new online services through this decade and beyond. With more than 12 times the traffic capacity
of the nearest competing system, the Cisco CRS-3 is designed to transform the
broadband communication and entertainment industry by accelerating the delivery
of compelling new experiences for consumers, new revenue opportunities for
service providers, and new ways to collaborate in the workplace.
(MarketWatch) Sprint Nextel jumped more than 5% Tuesday after a top
executive said the company plans to cut debt faster and hinted that quarterly
revenue could grow in 2010 for the first time in four years. Chief Financial
Officer Bob Brust made his remarks Monday afternoon at an investors’
conference.
Matt Taibbi: Shorting America Rocks! Lower
credit risk means a lower price for protection. Zero implies zero risk. The
higher the basis points, the higher the implied risk. When U.S. credit default
swaps were first introduced, the
price of protection was around two basis points. According to Bloomberg, the
price for five-year protection was around 38 basis points (per annum) on
Friday. But the price in the over-the-counter market — where this stuff
actually trades — was almost double or around 75 basis points. Since
most traders in U.S. credit default swaps don’t think the U.S. will default any
time soon, why are they trading U.S. credit default swaps? They are speculating
on price movements the way a day trader buys and sells stocks to speculate on
stock price movements. via Janet
Tavakoli: Washington Must Ban U.S.
Credit Derivatives as Traders Demand Gold. I’d like someone to explain to me how trading a credit default swap on
a U.S. Treasury note isn’t gambling. This is purely betting on crowd behavior —
after all, nobody really thinks the U.S. will default. It is weird enough living in a country where a man can legally own an
arsenal of machine guns, but his neighbor growing a pot plant will send a team
of DEA agents kicking his door in with a no-knock warrant. But this goes even
beyond that. If I go online today to HaveNoLifeAndBetOnSports.com and bet fifty
dollars on the Bucks against the Celtics tonight, I’m a criminal. But some
gazillionaire firm in New York can legally bet against the United States of
America in unlimited amounts in a trade that has nothing to do with anything,
but a guess about how many other people will make the same bet. So the Israelis are insulted
that after 14 months in office, Barack Obama has yet to come and visit them. Yet
Bush went almost
his entire term before he visited Israel, and did we ever hear them
bitching about being insulted between January 2001 and January 2008? Nope. http://www.theleftcoaster.com/
(AP) -- Nvidia Corp. shares rose Tuesday after a Raymond James analyst said chip supplies are tight and Wall Street is underestimating the maker of graphics chips. Nvidia "remains a
controversial name in the near term," Hans Mosesmann wrote in a note to
investors. He said the stock "presents an opportunity as the Street
appears to significantly underestimate the momentum in new products for
2010" as well as "upward movement in gross margins."
Gold finished at $1122 down $2.
Oil was $81.50. European stocks
recovered earlier losses to finish mostly flat, as positive U.S. stocks offered
support despite continuing concerns about the euro zone's sovereign debt crisis
Wonder if Mustard was a Colonel? ☺ Robert Mustard, Jr., the man
accused of shooting two men at a Dallas office building on Monday morning, was
apparently trying to get his revenge on a financial advisory firm that he
believed had lost all his money. According to the Fort Worth
News, when Mustard approached his financial adviser, Richard Smith,
66, and his son, Chris, 39, in their office yesterday, he accused them of
taking "all my money," before opening fire with a 45-caliber weapon.
Mustard shot the
elder Smith in the legs and his son -- who fled down an escalator
into the lobby -- in the neck. With blood "gushing from both sides of his
neck," witnesses told the AP that the younger Smith begged bank employees
and customers for help: "He was screaming and crying," said Abraham
Achar, who was visiting his friend at the United Texas Bank on the first floor.
"He said, 'He shot my dad.'" When police arrived, Mustard was still
on the premises, authorities said.
Police shot at -- but missed -- the gunman, a disbarred lawyer, who then
barricaded himself in an office and shot himself in the head.
***** 8 March 2010
***** Thoughts
Greece is saved (maybe) and
markets around the world are higher until the big boys and girls decide to
attack another weak European country by blowing out the CDS (Credit Default
Swaps) on the underlying sovereign debt of the target country.
(yahoo.com) this morning's
mood remains subdued as participants sit on strong gains of more than 3% from
last week -- the S&P 500 advanced in all five sessions, including an
incremental gain midweek. Though there haven't been any economic items to act
as catalysts ahead of the opening bell, there have been a few noteworthy items,
including news that AIG
(AIG) has divested another chunk of its business in further merger and
acquisition activity. This time the insurance giant has offloaded its American
Life Insurance Company to MetLife
(MET) in a $15.5 billion deal. Shares of AIG are up 4.2% to $29.27 each in
premarket trade and MET shares are up 4.3% to $40.55 per share in premarket
trade. In other corporate news, Hewlett-Packard
(HPQ) revised lower its previously announced first quarter earnings to $1.07
per share. Its stock price is down 0.7% to $51.66 per share in premarket
action. Meanwhile, the dollar remains a focal point of market participants; the
greenback is currently down 0.3% against competing currencies.
(Bloomberg) -- Emerging-market
stocks rose to a six-week high, currencies of commodity-producing nations
strengthened and oil and metals advanced as Greece and Dubai moved closer to
resolving their debt woes. The MSCI Emerging Markets Index climbed 1.3 percent
at 12:47 p.m. in London, while Greece’s ASE Index
gained 1.4 percent. The gap between Greek and German two-year notes narrowed 19
basis points to 359. Futures on the Standard & Poor’s 500 Index fluctuated
between gains and losses. The Australian and New Zealand dollars strengthened
against the U.S. currency and the yen, and oil increased as much as 1.1 percent
in New York. French President Nicolas
Sarkozy said the euro region is ready to rescue Greece should the
government struggle to fund Europe’s biggest budget deficit, while former
Federal Reserve Chairman Paul Volcker
said the challenges posed by Greece’s debt aren’t “insuperable.” Dubai World,
the state-owned holding company that’s trying to renegotiate about $26 billion
of debt, will present a plan to creditors this month, said three bankers
familiar with the negotiations.
(http://www.calculatedriskblog.com/ ) From James Sterngold at Bloomberg: ‘On the Edge’ Banks Facing Writedowns After FDIC Loan Auctions (ht jb) A Federal Deposit Insurance Corp. plan to auction more than $1 billion in assets seized from failed banks next month ... may trigger write downs that weaken lenders nationwide. ... The auctions may have wider repercussions. Of the $50.4 billion in loans seized from failed banks currently held by the FDIC, 63 percent involve participations by other lenders, according to data provided by agency spokesman Greg Hernandez. “These banks can’t believe that the regulator they pay to protect them is going to sell these loans to someone who can flip them and cause them serious losses,” said Robert Reynolds, a lawyer at Reynolds Reynolds & Duncan LLC in Tuscaloosa, Alabama, ... “Our banks just cannot believe they’re being treated in a way that ultimately hurts the FDIC’s insurance fund, because some of them are right on the edge.” ... “We have a number of banks teetering on the edge, and we don’t need this problem,” [John J. Collins, president of Community Bankers of Washington in Lakewood, Washington] said in an interview. "This problem" is many
small and regional banks are carrying loans above market value. The FDIC
auction will establish market value, and that will probably lead to significant
losses for many banks - and more bank failures.
Despite the lack of economic and
corporate data, European stocks closed mostly flat as concerns about Greece
receded. The dollar weakened. Earlier, Asian markets closed mostly up 1% and
more. Oil ended up $23 pennies at $81.70 and Gold lost $12 to $1122.
5 March 2010
***** Thoughts
One year ago tomorrow the Markets
made their decade low in a huge sell off that cleared the air. In hindsight the
bottom seems obvious. At the time it was scary, scary, and scary. Since then
the major market measures have doubled and the fear of those days has again
been replaced by greed. We try not to forget as we go about our daily trading.
We must admit that we felt a lot better this morning when we awoke than we did
a year ago.
Our market outlook remains positive with an
expectation of another 10% rise in the S&P 500 to 1250 before a major pull
back. Markets like gridlock in Washington. The Employment report was a loss of 36,000 jobs for the month of
February which was below expectations. And the news was greeted positively by
the markets both here and overseas. January job losses were revised to down
26,000 from the first reported down 20,000 numbers. The unemployment rate is
9.7%.
Stocks in Japan climbed on
reports the Bank of Japan could take further easing measures. Europe stocks
rose in midday trade, putting the market on track for six straight days of
gains.
European shares jumped Friday to
stretch a winning run to six sessions after a report painted a much
better-than-expected picture of the U.S. jobs market. Gold $1132 and Oil ended
at $81.75. The euro was $1.36.
4 March 2010
***** Thoughts
Asia was lower overnight and
Europe is mixed a midday. U.S. futures are flat as the trading day begins. Gold
is down $3 and Oil is touching $81.
(MarketWatch) European shares pulled off early lows to trade broadly flat, with the European Central Bank and the Bank of England both keeping rates on hold. Asian markets closed mostly lower, with Japan's Nikkei 225 closing down over 1%, with export-related stocks among the fallers. U.S. stock market futures held broadly flat Thursday as data showed a fall in initial jobless claims and as productivity figures were revised higher, with Coca-Cola, Boeing and Walt Disney in focus after receiving broker upgrades. U.S. nonfarm businesses were more
productive in the second half of the year than previously reported, slashing
hours by 1.3% even as they boosted their output by 2.5%, the Labor Department
reported. In the fourth quarter, productivity increased at a 6.9% annual rate,
revised up from 6.2%. In the third quarter, productivity was revised higher to
a 7.8% annual rate from 7.2%. For all of 2009, productivity increased 3.8%, the
most in seven years.
American Eagle
Outfitters said
Thursday that a key sales figure rose past analyst expectations last month and
reiterated its fourth-quarter outlook. The company said sales at stores open at
least a year rose 6 percent in the four-week period ending Feb. 27. Analysts
surveyed by Thomson Reuters forecast an increase of 2 percent. Sales at
stores open at least a year are considered a key measure of retailer
performance since they measure growth at existing stores rather than newly
opened ones. Total sales for the period rose 6 percent to $188 million, from
$177 million in the same period last year. American Eagle maintained its
fourth-quarter adjusted profit outlook, which it previously raised based on its
sales performance in January. The retailer expects earnings in a range of 32
cents to 33 cents per share, excluding possible investment security or store
impairment charges. Analysts predict fourth-quarter earnings of 33 cents per
share. Analyst estimates typically exclude one-time items. The company is due to
announce fourth quarter results next Wednesday. The share price sold off $1 on the news- our guess is either
an analyst downgraded the stock or that traders were disappointed in that the
fourth quarter estimate wasn’t’ raise again as it was several weeks ago. We bought shares for accounts on the drop.
Women's apparel retailer Coldwater Creek posted a smaller quarterly loss that missed
estimates by a penny, but said it expects to improve merchandise margins this
year as the company looks to revamp its offerings and adjust price points. We didn’t like the report (profits are promised but not
until next fall) and sold for a 20%
profit. We are more comfortable with our positions in the ANN, AEO and CHS.
The Natural Gas
ETF is on its all time low and is priced at only a 1% premium to NAV. As the
price of oil continues to rise we would guess that Natural gas should
eventually stabilize. Of course we have been wrong before but the disconnect
doesn’t make sense to us. Whatever, we are buying the UNG ETF in larger/
aggressive accounts for a trade. NAR: Pending Home Sales Down; Severe Weather Impacting
Market The Pending Home Sales Index, a
forward-looking indicator based on contracts signed in January, fell 7.6
percent to 90.4 from an upwardly revised 97.8 in December ...
Unemployment
insurance claims: In the week ending Feb. 27, the advance figure for seasonally adjusted
initial claims was 469,000, a decrease of 29,000 from the previous week's
revised figure of 498,000. The 4-week moving average was 470,750, a decrease of
3,500 from the previous week's revised average of 474,250. The advance number
for seasonally adjusted insured unemployment during the week ending Feb. 20 was
4,500,000, a decrease of 134,000 from the preceding week's revised level of
4,634,000. European shares closed lower after amid mixed U.S. economic data and a
further easing of the Greece fiscal crisis. The euro slipped to $1.35 against
the dollar and oil closed at $80.02 and gold fell $4.
The U.S. sold its warrants to purchase shares of Bank of America stock for $1.5 billion, the most Treasury has
earned from selling warrants in a single institution.
Nice story from chicagotribune.com. Not all news is bad. Amazing Grace: Lake Forest
secret millionaire donates fortune to college Woman who lived frugally donates $7 million to alma mater By John Keilman, Tribune reporter Like many people who lived through the Great Depression, Grace Groner
was exceptionally restrained with her money. She got her clothes from rummage sales. She walked everywhere rather
than buy a car. And her one-bedroom house in Lake Forest held little more than
a few plain pieces of furniture, some mismatched dishes and a hulking TV set
that appeared left over from the Johnson administration. Her one splurge was a small scholarship program she had created for
Lake Forest College, her alma mater. She planned to contribute more upon her
death, and when she passed away in January, at the age of 100, her attorney
informed the college president what that gift added up to. "Oh, my God," the president said. Groner's estate, which stemmed from a $180 stock purchase she made in
1935, was worth $7 million. The money is going into a foundation that will enable many of Lake
Forest's 1,300 students to pursue internships and study-abroad programs they
otherwise might have had to forgo. It will be an appropriate memorial to a
woman whose life was a testament to the higher possibilities of wealth. "She did not have the (material) needs that other people
have," said William Marlatt, her attorney and longtime friend. "She
could have lived in any house in Lake Forest but she chose not to. … She
enjoyed other people, and every friend she had was a friend for who she was.
They weren't friends for what she had." Groner was born in a small Lake County farming community, but by the
time she was 12 both of her parents had died. She was taken in by George
Anderson, a member of one of Lake Forest's leading families and an apparent
friend to Groner's parents. The Andersons raised her and her twin sister, Gladys, and paid for them
to attend Lake Forest College. After Groner graduated in 1931, she took a job
at nearby Abbott Laboratories, where she would work as a secretary for 43
years. It was early in her time there that she made a decision that would
secure her financial future. In 1935, she bought three $60 shares of specially issued Abbott stock
and never sold them. The shares split many times over the next seven decades,
Marlatt said, and Groner reinvested the dividends. Long before she died, her
initial outlay had become a fortune. Marlatt was one of the few who knew about it. Lake Forest is one of
America's richest towns, filled with grand estates and teeming with luxury
cars, yet Groner felt no urge to keep up with the neighbors. She lived in an apartment for many years before a friend willed her a
tiny house in a part of town once reserved for the servants. Its single bedroom
could barely accommodate a twin bed and dresser; its living room was
undoubtedly smaller than many Lake Forest closets. Though Groner was frugal, she was no miser. She traveled widely upon
her retirement from Abbott, volunteered for decades at the First Presbyterian
Church and occasionally funneled anonymous gifts through Marlatt to needy local
residents. "She was very sensitive to people not having a whole lot,"
said Pastor Kent Kinney of First Presbyterian. "Grace would see those
people, would know them, and she would make gifts." Groner never wed or had children — the sister of one prospective groom
blocked the marriage, Marlatt said — but with her gregarious personality she
had plenty of friends. She remained connected to Lake Forest College, too,
attending football games and cultural events on campus and donating $180,000
for a scholarship program. That allowed a few students a year to study internationally, including
Erin McGinley, 34, a junior from Lake Zurich. She traveled to Falmouth,
Jamaica, to help document and preserve historic buildings in the former slave
port. The experience was so satisfying that she is trying to get Lake Forest to
create a similar architectural preservation program. "It affected my (career ambitions) in a way I didn't expect,"
she said. But Groner was interested in doing more, so two years ago she set up a
foundation to receive her estate. Stephen Schutt, Lake Forest's president, knew
of the plan for the past year, but had no idea how large the gift would be
until after Groner passed away Jan. 19. The foundation's millions should generate more than $300,000 a year for
the college, enabling dozens more students to travel and pursue internships.
Many probably wouldn't be able to pursue those opportunities without a
scholarship: 75 percent of the student body receives financial aid, Schutt
said. But the study and internship program is not the end of Groner's legacy.
She left that small house to the college, too. It will be turned into living
quarters for women who receive foundation scholarships, and perhaps something
more: an enduring symbol that money can buy far more than mansions. It will be called, with fitting simplicity, "Grace's
Cottage." 3 March 2010Thoughts
Oil is $80 and Gold $1141 as the
trading day begins. Asian and European markets were higher overnight.
ADP reported this morning that
private-sector payrolls drop 20,000 in February, the fewest in two years. This
report precedes Friday’s Monthly Employment Report which is the next number on
which the big boys and girls are focused.
To complete our wireless exposure we added shares of Sprint to most accounts. It is the
cheapest and also the worst of the four major wireless providers in the U.S. Our
guess is that consolidation will lead Deutsch
Telecom (T Mobile) to acquire Sprint.
DT could pay twice the current price and still be buying Sprint at half the
value the markets currently give to AT&T
and Verizon’s wireless operations.
Diane Swonk, Chief Economist Mesirow Financial Wednesday, March 3, 2010 Precursor to Friday Employment
Report Not Encouraging Today's ADP report, which is a precursor to the employment
report for February, showed a decline of 20,000 in February - the smallest
decline since early 2008, but still negative instead of positive. Moreover, the
ADP report is less sensitive to weather-related losses than the report that
will be released on Friday by the government, and hence, is understating (by as
much as 100,000-200,000) the losses we will see in the official data for
February. Separately, the government started hiring for the 2010
census during the month, which means that private sector job losses were even
greater. The blow to construction was particularly large, especially once you
add weather-related disruptions back into the equation. On the bright side, manufacturing employment looks like it
may have posted its second monthly gain. Production has picked up as
inventories have fallen even below lackluster demand in recent months, and now
must be replenished. The Bottom Line: Firing continued to outpace hiring in
February, but the pace of layoffs is clearly abating, and we are close to a
tipping point. Increased hiring associated with the census, and the catch-up
from weather delays in February, virtually ensure a RISE in employment in
March. An economy that must rely upon census hiring and better weather to
produce employment gains, however, is not exactly something to pop champagne
corks over. Indeed, preliminary data suggest that the economy is losing instead
of gaining momentum in the first quarter - an uncomfortable but predictable
reality, given the ravages of the financial crisis.
We repurchased shares of the Money Center Bank ETF (KBE) in many accounts.
Flagstaff Arizona is on the main Santa Fe RR route from the west coast to the east. There are five RR crossings in town and the city has finally won a long fight to have the train whistles silenced as the trains pass those five crossings. The article in the Flagstaff paper is here: http://www.azdailysun.com/news/local/article_e67b70f1-bb2b-5384-9f7c-49df8e19cd30.html An economically interesting
sentence in that article is: A Burlington
Northern Santa Fe Railway official said during the ceremony that currently 60 trains pass through town, down
from a peak of 125 trains per day a few years ago before the recession.
(http://www.calculatedriskblog.com/ ) From the Institute for Supply Management: February 2010 Non-Manufacturing ISM Report On
Business® "The NMI (Non-Manufacturing
Index) registered 53 percent in February, 2.5 percentage points higher than the
seasonally adjusted 50.5 percent registered in January, indicating growth in
the non-manufacturing sector. The Non-Manufacturing Business Activity Index
increased 2.6 percentage points to 54.8 percent, reflecting growth for the
third consecutive month. The New Orders Index increased 0.3 percentage point to
55 percent, and the Employment Index increased 4 percentage points to 48.6
percent. The Prices Index decreased 0.8 percentage points to 60.4 percent in
February, indicating an increase in prices paid from January. According to the
NMI, nine non-manufacturing industries reported growth in February.
Respondents' comments vary by industry and company about business
conditions."
ADP reports: Nonfarm private employment decreased 20,000 from January to February
2010 on a seasonally adjusted basis, according to the ADP National Employment Report®.
The estimated change of employment from December 2009 to January 2010 was
revised down, from a decline of 22,000 to a decline of 60,000. The February
employment decline was the smallest since employment began falling in February
of 2008. Two large blizzards smothered parts of the east coast during the
reference period for the BLS establishment survey. The adverse weather had only
a very small effect on today’s ADP Report due to the methodology used to
construct it. However, the adverse weather is widely expected to depress the
BLS estimate of the monthly change in employment for February, but boost it for
March. Therefore, it would not be unreasonable to expect the BLS estimate for
February (due out this Friday) to be less than today’s ADP Report even though
the BLS estimate will include the hiring of temporary Census workers not
captured in the ADP Report. Note: ADP is private nonfarm employment only (no government jobs).
Oil gained $1.12 to close at
$80.80 and Gold finished at $1140 up $3. European
stocks rose, boosted by a fresh set of austerity measures from Greece and
better-than-expected U.S. private sector employment data. The euro gained
against the pound.
2 March 2010Portfolio Update
1 March 2010
We will be
traveling tomorrow and so the next post will be on Wednesday March 3.
Happy Casimir Pulaski Day. Casimir Pulaski Day is a holiday
observed in Illinois
on the first Monday of every March in memory of Casimir Pulaski (March 4, 1745[1]
– October 11, 1779), a Revolutionary War cavalry officer born in Poland as
Kazimierz Pułaski. He is known for his contributions to the U.S. military
in the American Revolution by training its soldiers
and cavalry. For more http://www.polishamericancenter.org/Pulaski.htm
Asian and European markets were
higher overnight. Oil has an $80 handle and Gold is at $1115. Copper is strong
on the Chile earthquake.
(Marketwatch) European shares advanced overall on the first day of March, although Prudential shares and sterling slumped after the London-based insurance giant announced a large-scale rights issue to partially fund the purchase of American International Group's Asian operations. Asian markets rose Monday as resource stocks advanced after a massive earthquake in Chile raised expectations of higher prices for copper. U.S. stock futures rose Monday as a slate of merger activity, including the sale of American International Group's Asia operations, greeted the new month and consumer spending rose in January. Merrill Lynch unit upgraded oil giant BP to buy from neutral on Monday. "The recent sell-off in the market opens a compelling valuation opportunity," the broker said. Britain's Prudential plc said it's going to buy AIA, the Asia operation of American International Group, for $35.5 billion in cash and stock. Prudential will sell $20 billion in discounted shares to existing holders to fund the deal which will give it leading positions in seven countries with highly complementary products and distribution channels across the region. Prudential intends to seek a dual primary-listing on the Hong Kong Stock Exchange. Real consumer spending increased a seasonally adjusted 0.3% in January to the highest level since May 2008 in a further sign of a modest economic recovery, the Commerce Department estimated Monday. Adjusted for inflation, real spending on goods increased 0.8%, while spending on services remained anemic, rising 0.1%.
From the BEA: Personal Income and Outlays, January 2010 (http://www.calculatedriskblog.com/) Personal income increased $11.4
billion, or 0.1 percent, and disposable personal income (DPI) decreased $47.6
billion, or 0.4 percent, in January, according to the Bureau of Economic
Analysis. ... Personal consumption expenditures (PCE) increased $52.4 billion,
or 0.5 percent.
Real PCE -- PCE adjusted to
remove price changes -- increased 0.3 percent in January, compared with an
increase of 0.1 percent in December.
Personal saving -- DPI less
personal outlays -- was $367.2 billion in January, compared with $467.9 billion
in December. Personal saving as a percentage of disposable personal income was
3.3 percent in January, compared with 4.2 percent in December.
Krugman on the need for financial regulation: Many opponents of the House version of banking reform present their
position as one of principle. House Republicans, offering their alternative
proposal, claimed that they would end banking excesses by introducing “market
discipline” — basically, by promising not to rescue banks in the future. But that’s a fantasy. For one thing, governments always, when push
comes to shove, end up rescuing key financial institutions in a crisis. And
more broadly, relying on the magic of the market to keep banks safe has always
been a path to disaster. Even Adam Smith knew that: he may have been the father
of free-market economics, but he argued that bank regulation was as necessary
as fire codes on urban buildings, and called for a ban on high-risk,
high-interest lending, the 18th-century version of subprime. And the lesson has
been confirmed again and again, from the Panic of 1873 to Iceland today. .... That said, some Republicans might, just possibly, be persuaded to sign on
to a much-weakened version of reform — in particular, one that eliminates a key
plank of the Obama administration’s proposals, the creation of a strong,
independent agency protecting consumers. Should Democrats accept such a
watered-down reform? I say no. There are times when even a highly imperfect reform is much better than
nothing; this is very much the case for health care. But financial reform is
different. An imperfect health care bill can be revised in the light of
experience, and if Democrats pass the current plan there will be steady
pressure to make it better. A weak financial reform, by contrast, wouldn’t be
tested until the next big crisis. All it would do is create a false sense of
security and a fig leaf for politicians opposed to any serious action — then
fail in the clinch....
From the Institute for Supply Management: February 2010 Manufacturing ISM Report On Business® Economic activity in the manufacturing sector expanded in February for the seventh consecutive month, and the overall economy grew for the 10th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business®. The report was issued today by
Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™
Manufacturing Business Survey Committee. "The manufacturing sector grew
for the seventh consecutive month during February. While new orders and
production were not as strong as they were in January, they still show
significant month-over-month growth. Additionally, the Employment Index is very
encouraging, as it is up 2.8 percentage points for the month to 56.1 percent.
This is the third consecutive month of growth in the Employment Index. With
these levels of activity, manufacturers are seemingly willing to hire where
they have orders to support higher employment."
ISM's Employment Index registered 56.1 percent in February, which is 2.8 percentage points higher than the seasonally adjusted 53.3 percent reported in January. This is the third month of growth in manufacturing employment, and the highest reading since January 2005 (58.7 percent). An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment. Emphasis added As noted, any reading above 50
shows expansion.
European stocks rose, supported
by a surge in mergers and acquisitions news but sterling sank to a ten-month
low against the dollar. Oil ended at $78.79 down 8 pennies and Gold was $1117
down $2.
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72/50 and the coast2caost crew ride a mere 67 miles on to Phoenix on
Friday with clear warm weather ahead for at least the next few days.
Spring is here as the redwing blackbird
males arrived this morning warbling to stake out their territory for the females
that will follow. The snow is melting and the fog hangs low over the remaining
snow piles as ugly March gives promise of nicer times to come.
This ☺ picture
of Katie was taken before she began her 2000 foot climb on Day 2 of her ride. (She
was also smiling afterwards.) Tomorrow’s (Thursday) ride is 57 miles to
Wickenburg, Az.
63/38
at which time she will meet up with our daughter Christine (Kelle) for a one
day ride for the both of them to Phoenix. Christine then leaves the ride to fly
to Costa Rica for Spring Break with special friend Gerald. Rush is not going
along. The bike riders and Katie especially will be happy for the sunshine and
Phoenix promises 70 degree weather for them on Friday. 
(Barron’s) 
Wednesday the 10th the bikesters will head for Salome, Az. ☺
The ride for Katie and her cohorts is 64 miles. Weather
Merkel
wants to do what Obama and Treasury
Timmy are too timid to attempt:
(Bloomberg)
-- In California’s Napa Valley, producer of the most expensive U.S. wines, 2010
may be a vintage year for 
Today’s market.
Last year’s market.
50/38 (warmer in the land of milk and honey).
65/49.
The euro is $1.36. According to the WSJ 
(AP)Natural
gas stockpiles fell less than expected last week, the government said Thursday.
The Energy Department's Energy Information Administration said in its weekly
report that natural gas inventories held in underground storage in the lower 48
states dropped by 116 billion cubic feet to about 1.74 trillion cubic feet for
the week ended Feb. 26. Analysts expected stocks to fall between 128 billion
and 132 billion cubic feet, according to a survey by Platts, the energy
information arm of McGraw-Hill Cos. The inventory level was 1.2 percent above
the five-year average of about 1.7 trillion cubic feet, and 3.9 percent below
last year's storage level of about 1.81 trillion cubic feet, according to the
government data. Natural gas prices dropped 10.2 cents, or 2 percent, to $4.655
per 1,000 cubic feet on the New York Mercantile Exchange.
(WSJ) 
Worldwide
semiconductor sales in January rose 47.2% to $22.5 billion from $15.3
billion a year earlier, according to data from the Semiconductor Industry
Association Monday. Sales were up 0.3% from $22.4 billion December, the
association added. "January and February of 2009 were the low point of the
industry downturn as the semiconductor industry and electronics manufacturers
quickly responded to the global economic recession," said SIA President
George Scalise. "We are currently seeing strength across a range of demand
drivers for semiconductors, including personal computers, cell phones,
automobiles, and industrial applications," he added.
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