Bud's Poem Page
          Sunni/Shiite/Iraq/Iran
Lemley Yarling Management Co
15624 Lemley Drive
Soldiers Grove, Wi 54655
Bud: 312-925-5248       Kathy: 630-323-8422

31 December 2009

Portfolio Update

Model Portfolio Value As of 31 December 2009

$ 587,004

30 December 2009

Portfolio Update

Model Portfolio Value As of 30 December 2009

$ 589,953

29 December 2009

Thoughts

Model Portfolio Value As of 29 December 2009

$ 588,298

This is our last post of the year. The next post will be on January 4, 2010. It’s been an interesting ride this year, hopefully 2010 will be boring. Happy New Year.
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Asian and European markets were mildly higher in light trading. With the collapse and rally of the past year it seems that most folks are glad to get the year over with little activity. The Dollar is weaker at $1.44 to the Euro and Oil has a $79 handle with Gold up $2 in early trading.
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December Consumer Confidence was 52 versus 50 in November.
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Watching today’s markets is like watching paint dry. We are heading off to snowshoe with stock measures flat at 11 AM. Enjoy the holiday and we’ll be back next year.
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28 December 2009

Thoughts

Model Portfolio Value As of 28 December 2009

$ 589,028

Hundreds Gather to Protest Global Warming


http://coeruleus.blogspot.com/
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The plane bomber is the big news this morning, if there is any big news during this vacation/holiday week. Asian markets were higher and European bourses are higher. Trading is light. Retail sales rose over 3% in the Christmas holiday season.
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(http://digbysblog.blogspot.com/) For those who aren't covered by an employer for health insurance, here's a handy tool to figure out what would be owed under health care reform under the two plans. (Be sure to put in your age in 2014.)
http://healthreform.kff.org
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European shares posted mild gains in holiday-shortened trade, allowing both the French and U.K. markets to close at fresh annual highs ahead of the Christmas break.
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We added shares of Pep Boys to some larger accounts.
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Oil ended at $78.68 and Gold gained $5. Treasuries were lower in price and the dollar was firm at $1.41.
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The major measures traded flat with the numbers negative on the day. Volume was holiday light.
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24 October Thoughts

Dec. 24 (Bloomberg) -- Stocks gained around the world, with China’s benchmark index posting its biggest advance this month, on expectations the global economic recovery will strengthen. Copper rose, heading for the best year in more than two decades.
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An interesting story about Goldman and others who sold to clients instruments that they thought would crash in price; http://www.nytimes.com/2009/12/25/business/25fannie.html?hpw .

By the by, McClatchy newspapers had this story two months ago at http://www.mcclatchydc.com/goldman/
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Nice work if you can get it.

The top executives at the mortgage lending giants, Fannie Mae and Freddie Mac, could get paid as much as $6 million for 2009, despite the companies’ dismal performance this year.
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Dec. 24 (Bloomberg) – Durable Goods Orders (orders for goods meant to last several years) rose in November, pointing to increases in spending and production that will help sustain the expansion into 2010. Bookings minus demand for transportation equipment, which is often volatile, gained 2 percent last month, almost twice as much as forecast, figures from the Commerce Department showed today in Washington. A 33 percent slump in civilian aircraft limited the gain in total durable goods orders to 0.2 percent.
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Dec. 24 (Bloomberg) -- The number of Americans filing claims for unemployment benefits last week declined to the lowest level since September 2008, signaling firings are easing as employers gain confidence in the economic recovery.

Initial jobless claims fell by 28,000, more than forecast, to 452,000 in the week ended Dec. 19, from 480,000 the prior week, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance dropped in the prior week to 5.08 million, and those receiving extended benefits decreased.
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U.S. benchmark 30-year mortgage rate climbs back above 5%.
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24 December 2009

Portfolio Update

Model Portfolio Value As of 24 December 2009

$ 591,702

23 December 2009

Thoughts

Model Portfolio Value As of 23 December 2009

$ 588,241

This is the last post this week. Next post Monday December 28. Happy Holidays.
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Asian and European bourses were higher overnight. Oil has a $74 handle and Gold continues its retreat. The dollar continues to gain.
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Ford said Wednesday that it aims to complete the sale of its loss-making Volvo Cars unit to a privately held Chinese auto maker in the second quarter of 2010. No more Volvos in the Lemley family.
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Everyone's Defaulting, Why Don't You? If billionaires don't feel guilty about walking away from their debts, should homeowners? http://www.slate.com/id/2239555/
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Personal spending rose by 0.5% in November, while incomes increased by 0.4%. Both figures came in slightly lower than economists' expectations, though the gain in incomes was the largest in six months. October spending was revised to a gain of 0.6% from 0.7%, while incomes were revised to a 0.3% gain from 0.2%.
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Sales of new single-family homes sank 11.3% in November to a seasonally adjusted annual rate of 355,000, the Commerce Department said. Economists expected only a 1.2% drop to a 425,000 annual rate. The big drop in new-home sales comes a day after the National Association of Realtors reported strong sales of existing homes in November.
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Oil was up $1.92 at $76.32. Gold gained $4 to $1090. Europe closed higher.
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The major stock measures were mixed slightly in very light trading. Breadth was 2/1 positive. Stocks close at noon central time tomorrow with no trading on Friday.
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22 December 2009

Thoughts

Model Portfolio Value As of 22 December 2009

$ 586,943

Asian markets were higher except China was down 2%. European bourse indexes are also higher at midday and Gold is down another $4 while Oil has a $73 handle.
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U.S. gross domestic product rose at a 2.2% annual rate in the third quarter, the government said, revising its growth estimate down for the second time to show lower construction and inventory investments.
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OPEC agreed to keep its production quotas steady, as expected, and called for members to improve their compliance with production cuts.
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Moody's became the third ratings agency to downgrade Greece's sovereign debt rating, saying there was mounting evidence that the Greek government's long-term credit strength was "eroding materially."
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Existing home sales in November were up 7%. Year over year November sales rose 44%.
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The FTC/Intel/Nvidia conflict from:
http://news.cnet.com/8301-13924_3-10416699-64.html

The Federal Trade Commission's complaint against Intel for alleged anticompetitive practices has a new twist: graphics chips.

To date, the antitrust actions of regulators worldwide toward Intel have focused on sale practices for central processing units, or CPUs, a market over which the company has fought heavily with Advanced Micro Devices. On Wednesday, however, the FTC spelled out a litany of allegations about Intel's alleged anticompetitive behavior in the market for graphics-processing units, or GPUs, in which Nvidia is a major player.

Nvidia is the world's leading supplier of "discrete," or standalone, graphics chips but takes a distant second place in overall market share to Intel, which supplies "integrated" graphics built into the chipsets that accompany all of its processors. Mercury Research estimates the total market for graphics chips, including integrated graphics, at almost $10 billion in 2009.

Why graphics, and why now? "It would be really hard to sell the public on expending resources to take Intel through administrative proceedings when it had already paid over a billion dollars to AMD," said Joshua D. Wright, a professor at George Mason University School of Law and a scholar in residence at the Federal Trade Commission until 2008.

"[The FTC] needed to be seen as doing something new," Wright said.

"[Nvidia] becomes the remaining star witness, now that AMD has left the field," said Roger Kay, principal at Endpoint Technologies. "And the FTC's focus, which begins to look toward the future, has to take into account how graphics will fit in as computer technology develops," Kay said.

Intel General Counsel Doug Melamed asserted in a statement that the FTC complaint "is based largely on claims that the FTC added at the last minute and has not investigated," referring to the GPU allegations. And Melamed added in a conference call that some of these GPU allegations were made as recently as December 8.

One of the areas the FTC case zeroes in on is the burgeoning competition for chipsets in Netbooks--small, inexpensive laptops that are typically priced around $350. Netbooks are powered by Intel's Atom processor--and integrated graphics silicon built into the chipset. In this market, Nvidia also sells its Ion chipset, which competes with Intel's integrated graphics product.

"To combat [Atom] competition, Intel charged [PC makers] significantly higher prices because they used a non-Intel graphics chipset or GPU. Intel would offer the bundled pricing only to OEMs that would then use the Intel chipset in the end product--and not use a competitive product," the FTC said.

Nvidia CEO Jen Hsun Huang on Wednesday chimed in with a statement. "Today's filing is sorely needed to stop Intel from using unlawful tactics to lock out the GPU and block consumers from its revolutionary benefits," he said.

And he provided more detailed allegations to CNET last month. "A customer can't even choose to resell the chipset and use Ion instead. What's the point of Nvidia getting an Intel bus license, if it's impossible to overcome Intel's pricing bundles?" Huang said in a statement provided to CNET.

Specifically, Huang accused Intel of offering the Atom bundle (a total of three chips) for $25; but if vendors switched to an Nvidia solution (which requires only one Intel chip) based on the Ion chipset, Intel would charge $45, according to Huang.

Intel says what it is doing is legal. "It's all above cost. And that meets the legal standard worldwide," Intel spokesman Chuck Mulloy said.

In Netbooks, Nvidia has made some headway this year: its Ion chipset has been used in Netbooks from Hewlett-Packard and Lenovo, among others, and Huang concedes this.

On top of the charges related to the Atom processor, there's a second major front in the FTC complaint, which stems from an Intel legal action filed in February that forced Nvidia to halt development of chipsets for Intel's new "Nehalem" processor technology (marketed as the Core i series of chips).

"Intel now has reversed its previous course of allowing Nvidia integrated GPU chipsets to interoperate with Intel CPUs, thereby foreclosing Nvidia's integrated GPU chipsets from connecting to Intel's future CPU platforms," the FTC complaint alleges.

Intel said in its motion for a declaratory judgment that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated memory controllers," which includes Intel's newest Nehalem Core i processors. Intel contends that it discussed the matter with Nvidia for more than a year and that the two sides simply couldn't reach an agreement.
*****

http://news.cnet.com/8301-13924_3-10397263-64.html

Nvidia calls Intel's graphics chip tactics 'aggressive'

by Brooke Crothers

Advanced Micro Devices is not the only large Intel competitor to rail against Intel's alleged strong-arm tactics.

Nvidia has also complained loudly for years about Intel business practices in the graphics chip market, where Intel commands about 50 percent of the market.

Nvidia is the world's leading supplier of "discrete," or standalone, graphics chips but takes a distant second place in overall market share to Intel, which supplies "integrated" graphics built into the chipsets that accompany all of its processors. Mercury Research estimates the total market for graphics chips, including integrated graphics, at almost $10 billion in 2009.

In the third quarter, Intel had 53 percent of the graphics chip market, up from the 49 percent share in the same period last year, according to Jon Peddie Research, which tracks the graphics chip market. Nvidia took about 24 percent, down from the 28 percent in the third quarter of last year.

These figures get even more lopsided for Intel when the market is segmented into integrated graphics only. "Put your seatbelt on. They've got 80 percent of the notebook integrated market," said Jon Peddie, president of Jon Peddie Research. Though this is a much smaller and more segmented market than overall PC processor market, which was at the center of last week's $1.25 billion settlement between Intel and AMD, it still shows the level of Intel's dominance, according to Peddie.

Nvidia claims these latter market share figures reflect Intel's "bundling" tactics--the same carrot-and-stick tactics that AMD has cited for years and that were spelled out in a complaint filed by New York's attorney general earlier this month.

Intel is trying to impede competition on two chipset fronts, according to Nvidia. One front is the burgeoning market for chipsets in Netbooks--tiny, inexpensive laptops that are typically priced around $350. In this market, Nvidia sells its Ion chipset, which competes with Intel's integrated graphics product.

"Intel's tactics with Ion have been the most aggressive we've seen from a competitor. They have offered the Atom [a total of three chips] for $25, but when the one-chip Atom is used with Ion, it sells for $45," Nvidia CEO Jen Hsun Huang said in a statement provided to CNET. "A customer can't even choose to resell the chipset and use Ion instead. What's the point of Nvidia getting an Intel bus license if it's impossible to overcome Intel's pricing bundles?" he asked, referring the licensing fee that Nvidia pays Intel.

"We'll keep growing as a company, but further action needs to be taken to protect consumers," Huang said.

Intel disputes this. "He's playing a trick of numbers, said Intel spokesman Chuck Mulloy. "He's giving you a $45 list price--that nobody pays--for a part and then a negotiated price (which is more realistic). He's mixing apples and oranges. We have scrubbed and continue to scrub our pricing practices as it relates to chipsets and processors. It's all above cost. And that meets the legal standard worldwide."

In Netbooks, Nvidia has made some headway this year; its Ion chipset has been used in Netbooks from Hewlett-Packard and Lenovo, among others--and Huang concedes this. But Peddie said Nvidia still faces a formidable challenge. "They're nibbling away it at. But it's a pretty big hill to climb," Peddie said.

In the second front of Nvidia's most hotly-contested feuds with Intel, the former has halted development of chipsets for Intel's new "Nehalem" processor technology (marketed as the Core i series of chips), following a complaint filed by Intel in February--which Nvidia then countered in March. Intel alleged in its motion for a declaratory judgment that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated memory controllers," which includes Intel's newest Nehalem Core i processors.

"It's meant to get Nvidia to cease and desist from citing that they have a license," Peddie said. "That's an interesting tactic because if the court rules in favor of keeping Nvidia from saying they have a license, it also creates the burden on the OEMs [PC makers] of not wanting to get in crossfire between Nvidia and Intel," he said.

Intel again disputes this. "It's not seeking to prevent them from doing anything. For well over a year and including mediation, we argued with Nvidia about their rights under that agreement. And we tried multiple times to reach an agreement. And we could not," Mulloy said. "We asked the court to tell the parties what the agreement means. At the end of that process, we'll work with them and try to figure out what to do next."
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A story mentioning a few congress folks who get large farm subsidy payments even though they are against the socialist policy of government handouts.
http://www.truthdig.com/report/item/michelle_bachman_welfare_queen_20091221/
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Shares in Europe rose for the second straight day, lifted by strong gains among oil majors and a rebound among selected banks. Gold lost another $122 to $1084 and Oil was up pennies at $74.01.
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The major stocks measures all closed higher with the S&P 500 at 1118. Breadth was 5/4 positive and volume was light.
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21 December 2009

Thoughts

Model Portfolio Value As of 21 December 2009

$ 583,906

Happy winter and remember summer is on its way now.

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The Senate is on its way to passing the health care bill and Health Insurance companies and Drug makers and Hospitals are breathing a sigh of relief. For the rest of us, not so much. There is good and bad in the bill depending on one’s point of view. But the 30 million folks who now have to step up to the plate and buy health care insurance to the tune of 10% of their gross earnings are not going to be happy campers. Will they take one for the team or vote to change the team next year?
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Asian markets were mixed overnight ad European bourses are higher at midday. Oil has a $75 handle and Gold is up $5 in the early going.
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How health lobbyists influenced reform bill: Former staffers of lawmakers from Harry Reid to Mitch McConnell push clients' agenda.
http://www.chicagotribune.com/health/chi-health-lobbyists
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One financial executive does the right thing:

Morgan Stanley Chief Executive John Mack is forgoing a year-end bonus for the third straight year, he said in a memo obtained by Reuters. Mack is the second bank chief executive not to receive a bonus, but the first to forgo it voluntarily.
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10 years of fat followed by 10 years of lean:

The 2000s were, according to The Wall Street Journal, the worst decade ever for stocks. The 0.5 percent that stocks on the New York Stock Exchange have lost on average per year since 1999 is the most in the nearly 200 years of recorded stock-market history—more even than the 1930s. The 1990s were the best decade ever, with a 17.6 percent average annual gain. That’s called reverting to the mean which is 9% annual gain since 1900.
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NY Post take on Jeff Immelt of GE:
http://www.nypost.com
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With our accounts acting well we just aren’t comfortable holding the low priced bank stocks (KEY, HBAN, MI). We would rather have the funds in companies that aren’t’ broke as those three are. They will probably survive but only because the Fed and Treasury can’t afford to take them over. We sold. We added shares of Hain and Nokia to accounts.
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Oil closed at $72.60 and Gold closed on a six week low at $1092. Europe closed lower on the day.
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The major market indexes closed higher but off their best levels. The S&P 500 regained 1111 and closed just above the 1114 mark. Breadth was 2/1 to the good and volume was light.
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18 December 2009

Thoughts

Model Portfolio Value As of 18 December 2009

$ 575,860

Research in Motion (Blackberry) and Oracle announced good numbers last night and that has given strength to the techs which in turn have the major market indices higher in early trade after two down days. Unfortunately today is a Quadruple Witching day and according to our guru the pressure is to the downside on expiring S&P futures contracts. Oil is up $1.50 and Gold is testing $1100 to the downside. Asia ended lower.
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We switched JC Penney at a loss to the money Center Bank ETF (KBE). JC Penney broke our mental stop and since we bought for a trade- not to own- we stopped ourselves out. KBE is down as much as JCP in the same time period and it is a good way to own the banks in which we have wanted to raise our exposure. We also sold AT&T for cash to use on more aggressive purchases

We are adding shares of Palm to some accounts. Palm disappointed (http://blogs.barrons.com/techtraderdaily/2009/12/18/palm-can ) this morning and the shares are down 15% in price. The following story is from September when Palm sold 20 million shares of stock at $16.25. We are buying ours today at $9.85. In addition to Nokia as a party that should be interested we also think Dell should be looking rather than trying to develop a phone. But we aren’t’ Michael Dell.

From: http://news.softpedia.com/news/Palm-Sells-More-Shares-Nokia-Eyes-Them

Sunnyvale-based mobile phone maker Palm announced on Wednesday that it offered even more shares for sale, raising their total number to 20,000,000 common stock shares. The company also announced the public offering price for these, which was set at $16.25 each, and stated that “the underwriters will also have a 30-day over-allotment option to purchase 3,000,000 additional shares of common stock from Palm at the public offering price.”

According to the handset maker, it expects to receive net proceeds of around $313.1 million, which will be used for “working capital and general corporate purposes.” While this is not the first time when Palm makes a similar move to earn some money, it is the first time when we hear that one of the buyers of Palm's stock might be none other than the world's largest phone vendor, Nokia.

For the time being, however, neither Palm nor Nokia commented on the possibility that the Finnish company might own shares in Palm, yet the speculations on this matter helped Palm's shares reach$17.50 on Nasdaq, the highest level in the past two years. According to Reuters, the 10 percent increase seems to be the result of rumors about a possible takeover from Nokia.

“It could make sense,” said analyst Shaw Wu of Kaufman Brothers, referring to the possibility of an acquisition by Nokia, Reuters reports. “The other thing that is powering Palm's stock is a short squeeze. The stock is pretty heavily shorted. It’s probably a combination of both.” Rumors on Palm raising the interest of some of the world’s largest handset makers emerged into the wild before, yet this seems to be the first time when they prove to be so consistent.

Palm has had some bad quarters lately, and registered loss even during the latest three-month period, yet the launch of Palm Pre helped it beat expectations and prove that it has the power to turn to profitability once again.
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Harvard loses $1 billion on interest rate swaps. Sometimes smart guys are too smart.
http://www.bloomberg.com/apps/news?pid=20601109&sid=abvB2xzkNEyI&pos=10
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We sold Carpenter Tech for a $2 per share profit.
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European shares on Friday failed to hold early gains, closing lower on concerns over the need for fund raising by banks, Gold gained $7 to $1115 and Oil was up 70 pennies at $73.40.
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The major stock measures opened higher traded lower through most of the day and closed mildly on expiration settlement. Breadth was positive and volume (ex Citi) was light. Financials were market positive and retailers were negative.
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17 December 2009

Thoughts

Model Portfolio Value As of 17 December 2009

$ 573,585

Citi offered gillions of shares of stock last night at $3.15. Since the Feds own their shares at $3.19 they didn’t sell any. Now Citi can pay its folks salaries at Goldman Sachs rates. Hopefully the taxpayers won’t have to rescue Citi again.
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Markets around the world are lower this morning while the dollar is stronger. The dollar has rallied 5% in the last week but still has a long way to go. Unfortunately traders view the dollar rally as negative except when they don’t think it is negative. Gold is down $15 and Oil has a $73 handle in the early going.
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(WSJ) Militants in Iraq have used $26 off-the-shelf software to intercept live video feeds from U.S. Predator drones, potentially providing them with information they need to evade or monitor U.S. military operations... the stolen video feeds also indicate that U.S. adversaries continue to find simple ways of counteracting sophisticated American military technologies.
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We have become Mexico with our water:
http://www.nytimes.com/2009/12/17/us/17water.html
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There is a Santa Claus - sort of:

Citigroup Inc. will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season.
The New York-based bank said Thursday the suspension will run from Friday through Jan. 17. It applies only to borrowers whose loans are owned by Citi. Borrowers who make payments to Citi but whose loans are owned by other investors are out of luck. "We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.
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First time claims for unemployment were 480,000, up 7,000 on the week.
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(WSJ) Bank of America Corp. promoted Brian T. Moynihan to president and chief executive, ending an 11-week search with a unanimous boardroom vote in favor of a longtime insider.

The 50-year-old Mr. Moynihan now runs the Charlotte, N.C., bank's sprawling consumer and small-business operations, including about 6,000 retail branches in the U.S. An Ohio-born lawyer, he is one of the few high-ranking holdovers from the 2004 acquisition of FleetBoston Financial Corp. Long considered a potential CEO, Mr. Moynihan nearly left last year after spurning an offer to run Bank of America's credit-card unit in Delaware.
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Citi has already traded 2 billion shares at 10AM.  With today’s offering it has 28 billion shares outstanding with another 7 billion to come. Can anyone say 10/1 reverse split.
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Europe closed lower and Oil gained 20 pennies to $72.80 while Gold dropped $32 to $1104.
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Stocks were lower all day with the major measures all closing down over 1% on their lows. Breadth was 3/1 negative and volume was light if Citi was excluded. The bears are waking.
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16 December 2009

Thoughts

Model Portfolio Value As of 16 December 2009

$ 581,040

The European Commission settled its 10 year fight with Microsoft over monopoly practices today and today the FTC began a civil action against Intel for monopoly practices. Intel is lower on the news. The FTC grants Intel’s lawyers their Christmas wish.

Asian markets were mixed overnight and European markets are higher at midday. CPI was as expected and Gold is up $10 while Oil has a $71 handle.
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U.S. consumer prices rose 0.4% in November while a measure of inflation that strips away volatile energy and food costs remained unchanged. Home construction rebounded last month.
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The FTC suit against Intel may be the reason Intel announced it was stopping its graphic chip development.  NVDIA and AMD are higher on the Intel news.
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We sold Intel and Wells Fargo, the first for a small loss and the other for a small gain. The FTC complaint is going to place on damper on Intel price action for the next year and also on Intel competitive market actions as evidenced by the graphic chip close down. The rise in NVDIA today well offsets the loss in Intel and we placed half the Intel money in NVDA since it is the big winner. We bought the same number of shares in Fifth Third and we sold of Wells Fargo. FITB is down 10% in the last few days. We also sold St Jude for a profit.
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Everyone who bought Citi in the last five years has the same complaint. But Abu Dhabi can afford the lawyers to prevail.

(AP) -Abu Dhabi's main sovereign wealth fund, which is alleging fraud over its $7.5 billion investment in Citigroup Inc., vowed Wednesday to fight for its "legal rights" as it seeks compensation or an exit from the deal.... In exchange for its November 2007 investment, ADIA received equity units that paid a high annual dividend. The units were to be converted into Citigroup common shares at a price of up to $37.24 a share starting next March and continuing through September 2011, making the fund one of Citi's largest shareholders with a 4.9 percent stake.
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The U.S. Federal Reserve said interest rates will remain near zero "for an extended period," but acknowledged recent signs that the economy is gaining momentum after its worst slump in decades.

The Fed left its target for the federal-funds rate unchanged at range of 0% to 0.25%. Its assessment of the economic landscape was more upbeat than a month ago, suggesting that central bankers are edging closer to withdrawing some of their support for the economy.
*****

Europe closed higher. Gold gained to $1135 and Oil jumped $2 to $72.73.
*****

For the second day in row the major stock measures were unable to hold their early trading gains and closed mixed. Breadth was negative and volume was light. The S&P 500 failed to hold 1111 again today after trading at 1114 in the first hour.
*****

 

15 December 2009

Thoughts

Model Portfolio Value As of 15 December 2009

$ 579,621

Sources tell CNBC that Wells Fargo will price the $10 billion share offering at $25 per share. The sources must have read our Friday post. Asian markets were lower overnight and European bourse indexes are lower at midday. The dollar is strong this morning and Oil has a $69 handle while Gold is $1115.
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(Bloomberg) -- Wholesale prices in the U.S. increased more than anticipated in November, led by a jump in fuel costs and a rebound in truck prices.

The 1.8 percent increase in prices paid to factories, farmers and other producers was more than twice as large as anticipated and followed a 0.3 percent gain in October, according to Labor Department data released today in Washington. Excluding food and fuel, so-called core prices also exceeded the median estimate of economists surveyed by Bloomberg News.

Near-record excess capacity and a jobless rate that is projected to average 10 percent in 2010 may prevent suppliers from passing on a rebound in commodity costs even as the economy recovers. Federal Reserve policy makers, meeting this week, have said they expect inflation to remain “subdued” in coming months, allowing them to keep interest rates low.
*****

Starbucks is a drug stock?

(Bloomberg) Coffee can now add a lower risk of Type 2 diabetes to a resume of health benefits that grew last week when researchers found the wake-up drink helped against the deadliest form of prostate cancer.

Drinking four cups of coffee, decaf or tea daily can reduce the chances of getting Type 2 diabetes by about 25 percent to 35 percent, according to a study published today in the Archives of Internal Medicine. The researchers reviewed 18 studies of almost 500,000 people.

The analysis found that for each cup of coffee people drank, their likelihood of getting diabetes dropped by 7 percent. On Dec. 8, Harvard researchers reported that men who drank 6 or more cups of coffee a day had a 60 percent lower risk of developing the advanced form of prostate cancer than those who didn’t consume any.
*****

Boeing’s Dreamliner flies today. We won’t be on it.
*****

Oil ended up $1.04 to $70.53. European stocks closed mixed.

The major stock measures gave back yesterday’s gains with the S&P 500 not able to stay above 1111. Breadth was negative and volume was light. The pull back was contained.
*****

 

 

Beware, Liberal claptrap:

 

The new Hessians:

Private contractors will make up at least half of the total military workforce in Afghanistan going forward, according to Defense Department officials cited in a new congressional study.

As President Obama's escalation of the war in Afghanistan unfolds, the number of contractors will likely jump by between 16,000 and 56,000, adding up to a total of 120,000-160,000, according to an updated study from the Congressional Research Service.
*****

We couldn’t have said it better: http://host.madison.com/wsj/news/opinion/column/guest/article_3cc2eb2a-e98f-11de-b1a5-001cc4c002e0.html

Just so you know: We're against it. We were against it before, and we're still against it. We thought it was a terrible idea when President Barack Obama proposed it, and we still think it's a terrible idea.

It was terrible when it went through the House of Representatives. And it's terrible now that it's in the Senate. If it gets through the Senate, it will still be terrible. And it goes without saying that if the Senate version goes to a conference committee with the House version, the version that comes out of the conference committee will also be terrible. And we'll still be against it.

Now, we could go all Joe Lieberman on you, with that serious look on his face which means "I'm struggling with my conscience" - or maybe "I have acid indigestion" - but why bother? We don't need the attention the way Joe does. Besides, there's nothing they can put into the bill, or take out of the bill, which will change our position, so why try to sound like we're on the fence? We're not even in the fence's neighborhood. We're against it.

We hate the public option, and we wouldn't dream of voting for a bill with a public option. Now we hear they may be dumping the public option. Big deal. We wouldn't dream of voting for a bill without a public option either. Did we mention we're against it?

Or we could go all Mary Landrieu on you, with that sweet Louisiana smile of hers which means she's ready to deal, and if you throw a little more into the pot for the folks back home she'll think real hard about voting for it. But that's Mary - she's looking for a way to be with Obama on this one.

That's not what we're looking for. That's why we were so riled up when Obama and his liberal Senate friends wanted to cut Medicare. Were we against that? You bet we were! How dare they cut a penny out of old reliable Medicare!

And that's why we're so riled up now that Obama and his liberal Senate friends suddenly want to expand Medicare. Are we against that? You bet we are! How dare they add a penny to old reliable Medicare! It's important to stay flexible.

Anyway, what's the idea of them claiming that they might have come up with something they like even more than a public option? The whole point of having to give up on the public option was that they couldn't get the votes for it, was that they lost. Which means we won. Not that we'd ever vote for it anyway, but a win is a win.

But now some of them are out there saying this new thing they've come up with could turn out even better than the public option. They're trying to pretend that they won, which would mean that we lost. Which is completely ridiculous. And which changes our bottom line not even a little.

It's important to stay flexible. But our principles don't flex, whether it's health care or job creation, stimulating the economy or protecting the environment. Our fundamental principles are exactly what they've always been, or at least what they've always been since Jan. 20.

If he's for it, we're against it. If he wants it, we don't like it. If he needs it, what's the rush?

It's good to have principles.
*****

PhRMA Hack: Campaign Promises Are Just That

                                                            By Matt Taibbi

The dispute traps Obama between his campaign rhetoric and the political realities of health-care reform, which depends in large part on tacit support from drugmakers and other industry groups. Under the earlier agreement with the White House, the pharmaceutical industry agreed to contribute $80 billion toward reform over 10 years in exchange for protection from further cuts.

“It’s about being a candidate as opposed to being president,” said Ken Johnson, senior vice president of the Pharmaceutical Research & Manufacturers of America (PhRMA). “When you become president, you realize that the sound bites don’t always work in reality. . . . I think they’ve looked at the problems now and have concluded there’s no way to ensure the safety of medicines reimported into the United States right now.”

This is hilarious and doesn’t really need much in the way of commentary.

As a candidate, Barack Obama endorsed the idea of allowing consumers to import cheaper pharmaceuticals from other industrialized countries. In the Senate he co-sponsored a bill that pushed the idea.

But now that he’s president and is taking money from the pharmaceutical lobby (PhRMA) to help get his bullshit health care bill passed, his administration is backtracking. His FDA chief Margaret Hamburg is pulling out the old safety canard. The CBO has estimated that a bill sponsored by Byron Dorgan to allow drug re-importation would save the government $19 billion over 10 years, and save consumers $80 billion.

There’s no legitimate reason to bar re-importation, except one: to preserve a subsidy for the pharmaceutical industry and, by extension, preserve the flow of campaign contributions to the Democratic Party. That is why President Obama is now opposing the sensible measures he endorsed as a candidate. He is pursuing this year’s expedient goal of getting a campaign war chest now that he’s already achieved last year’s expedient goal of getting elected.

To have a PhRMA hack openly defending this flip-flip as justifiable shows how morally lost these people (and their defenders in the media) are. They really think that expediency is a defensible ideology and they are legitimately flabbergasted when people expect that a president follow through on his campaign promises. Apparently we are supposed to assume that a political candidate always lies and just accept that, and those of us who do not are “naive.” As my friend David Sirota put it:

There is no substantive reason why what a president cannot push what he promises on the campaign trail – especially when it comes to something like pharmaceutical reimportation, which every other industrialized country has legalized. I repeat – there is simply no substantive reason why a president cannot push what he has promised on the campaign trail. The platitudes from corporate lobbyists insisting that the alleged difference between “campaigning and governing” somehow absolves politicians from breaking their promise is deliberately designed to perpetuate the status quo.

There are a lot of people in DC who are drinking the same Kool-Aid this dingbat from PhRMA has been drinking. You know the disease has reached an advanced stage when they start saying this stuff out loud.
*****

 

14 December 2009

Thoughts

Model Portfolio Value As of 14 December 2009

$ 583,362

“It is difficult to get a man to understand something when his salary depends on his not understanding it.”
                                                   Upton Sinclair courtesy of Paul Krugman
*****

Abu Dhabi announced a $10 billion rescue of ailing Dubai to the tune of a $10 billion guarantee, and Citigroup reached agreement to pay back $20 billion in TARP so it could pay a new CEO and outrageous salary. Asian and European markets were higher overnight on the Dubai news. Gold is up $10 and Oil has a $69 handle.
*****

Ciena is being removed from the S&P 500 on Friday and that has added to the weakness in the share price. We may add more. Ciena is priced at $1 billion the market place with a net $500 million in cash. Nokia is trying to pay $800 million for the Nortel Ethernet business that Ciena was set to buy and for which they are now competing. Nokia can buy Ciena for a net of $1.2 billion (50% premium to market price less net cash position) and get the Ethernet business plus Ciena’s business.
*****

Google is going to sell its own cell phone next year using its drooped system in direct completion with all the other smart phone makers including those using Google’s system.
*****

Exxon is acquiring XTO for $40 billion in stock and cash. That has other natural gas producers moving higher.
*****

Who knew? From NY Obit page:

Giorgio Carbone, Elected Prince of Seborga, Dies at 73

Nestled near the beaches of the Italian Riviera and the snow-capped Alps sits the tiny principality of Seborga, a place that floats on legends. Over the centuries, plagues and earthquakes have struck the region and missed Seborga, or so the stories say. Some insist that knights took the Holy Grail there.

But the true miracle of Seborga may have been the 46-year reign of Prince Giorgio I, the constitutionally elected royal ruler of its five square miles and 2,000 people, about 350 of whom are enfranchised citizens.

Prince Giorgio, a bewhiskered grower of mimosa flowers from a family of mimosa growers, was seized by a glorious vision: that Seborga was not part of the surrounding Italian nation. It was an ancient principality, cruelly robbed of its sovereignty.

After convincing his Seborgan neighbors of their true significance, Giorgio Carbone was elected prince in 1963. He gracefully accepted the informal title of His Tremendousness, and was elected prince for life in 1995 by a vote of 304 to 4. Voters then ratified Seborga’s independence, which, by the prince’s interpretation, it already had.

Prince Giorgio established a palace, wrote a Constitution, and set up a cabinet and a parliament. He chose a coat of arms, minted money (with his picture), issued stamps (with his picture) and license plates, selected a national anthem and mobilized a standing army, consisting of Lt. Antonello Lacala. He adopted a motto: Sub umbra sede (Sit in the shade).

For more: http://www.nytimes.com/2009/12/13/world/europe/13carbone.html
*****

European stock markets closed higher on Monday. Oil ended at $69.67 and Gold finished up $5.
*****

The Major measures gained slightly in light trading. The S&P 500 did break through the 1111 resistance number to end at 1114 and that may engender a rally to 1120. This is an expiration week so anything is possible.
*****

 

11 December 2009

Thoughts

Model Portfolio Value As of 11 December 2009

$ 580,435

And today we learn the reason NCR was up 5% yesterday as Analysts at J.P. Morgan raised their rating Friday on NCR Corp. (NCR) to overweight from neutral, citing expected 5% revenue growth from the ramp-up of  its Blockbuster Express operations. The broker said it believes the core business for the maker of automated tellers and related technology products remains weak, however. "There's still a ton of execution risk in this story, and company guidance has been poor recently, but we think risks are priced into the stock," the analysts wrote in a note to clients.
*****

Asian shares ended mostly higher Friday after data from China appeared to show that the economic recovery there is gaining momentum while brighter U.S. jobs data lifted stocks on Wall Street. The Nikkei was up 2.5% and Europe is higher. Retail Sales for November were better than and that has given a positive spin on stock in the early going. Gold has bounced back another $15 and Oil has a $71 handle.
*****

Retail Sales rose in November nearly twice as much as expected, making a broad-based increase that suggested consumers were buying aggressively and supporting the economy in the holiday shopping season. Retail sales rose 1.3% last month, the Commerce Department said Friday. Wall Street had predicted a 0.7% increase. October sales were revised down, to a 1.1% increase from a previously estimated 1.4% increase.
*****

Boeing plans to fly its new 787 Dreamliner for the first time as early as Tuesday. The exact timing of the much-anticipated flight depends on external factors, such as weather.
*****

Erin Burnett of CNBC is in Rio interviewing a fund manager whose fund is up 150% for the year and they are talking about the growth in commerce and building that Rio is going to experience from the 2016 Olympics. The interview and staging remind of Burnett in Dubai a few years ago talking of the wonders of the building boom there. We all know how that turned out. And as in Dubai, CNBC is showing the wonderful waterfront and not the hovels that the folks who build the palaces live in.
*****

Matt Taibbi on Obama’s sellout from Rolling Stone: http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout/print
*****

Obama admin's sweetheart deal with drug companies holding up vote on cheaper drug import

(http://www.americablog.com/)

When you make deals with the devil, there's a price. Unfortunately, the price is paid by American consumers. We first wrote about the secret deal between the White House and the drug industry's lobbying group on August 6, 2009 when the New York Times exposed it. Now, we're seeing that deal's negative implications. Democrats are blocking a vote on an amendment to the health care bill on drug imports:

A deal between the White House and the pharmaceutical industry is holding up a bipartisan amendment to allow the importation of cheaper prescription drugs from abroad, according to a member of the Senate Democratic leadership.

The Senate has been debating the amendment, sponsored by Sen. Byron Dorgan (D-N.D.), since Tuesday but has not held a vote, which is contributing to a stall in the floor action on healthcare reform.

Dorgan’s measure, which would permit bulk exports of medicines from countries such as Canada, enjoys broad and bipartisan support and likely has the backing of more than 60 senators, which would guarantee its adoption on the healthcare reform bill.

Tension between the White House and Democratic supporters of the so-called drug reimportation amendment is primarily behind the delay, Senate Majority Whip Dick Durbin (D-Ill.) said Thursday.

As a Senator, Obama supported this legislation. But, Obama's top staffers, Rahm Emanuel and Jim Messina, cut a deal with Pharma and it's holding up the process.

Drugs could be cheaper in the U.S. if the federal government bargained like those countries from which we'd be buying drugs if the Dorgan amendment passed. Ezra Klein explained: Many of these drugs were invented by American companies and produced in American factories. But Canada gets them at a discount. Why?

Well, Canada's government bargains its prices down. So does the French government, and the German government, and the British government. The results of this strategy are not in doubt: These countries pay far less than we do for the exact same drugs. Our solution? We will go to these countries and buy these drugs!

Yeah, that's the American solution, instead of having our government bargain. But, not letting the federal government bargain was believed to be part of the White House deal with Pharma, too. And that's why John pays nearly $290 a month for his asthma drugs when he bought the same drug, produced by the same company, for 60 euros (90 bucks) in France.
*****

(The Guardian) An Iraqi taxi driver may have been the source of the claim that Saddam Hussein could unleash weapons of mass destruction within 45 minutes, a Tory MP claimed today.

Adam Holloway, a defense specialist, said MI6 obtained information indirectly from a taxi driver who had overheard two Iraqi military commanders talking about Saddam's weapons.

The 45-minute claim was a key feature of the dossier about Iraq's weapons of mass destruction that was released by Tony Blair in September 2002. Blair published the information to bolster public support for war.
*****

Wells Fargo is going to sell shares next week to raise capital to pay off the Feds. The share price has lost $2 since the deal was suggested and $4 in the last month. We think the deal will be priced at $25 and since the minimum purchase is $250 million only the big boys and girls will get to participate. We are buying shares at $25.20 and sold KBE for the cash. We also traded our Natural Gas ETF with a $1 profit for Ford and bought more GE and initiated a holding in Deutsch Telecom which yields 7%. We also bought a few share of Barnes Group.
*****

Europe ended higher and Gold lost $10 to $1115. Oil dropped below $70 to $69.88. The dollar continued to rise versus the euro but still ahs a long way to go.
*****

Stock Measures ended the week higher but without much enthusiasm. The DJIA was up 65 and the NAZZ lost 1. The S&P 500 finished up 3 at 1106. Breadth was positive on the NYSE and negative on the NAZZ. Volume was slight.
*****

 

10 December 2009

Thoughts

Model Portfolio Value As of 10 December 2009

$ 574,388

“I believe in an America that is officially neither Catholic, Protestant nor Jewish; where no public official either requests or accepts instructions on public policy from the Pope, the National Council of Churches of any other ecclesiastical source; where no religious body seeks to impose its will directly or indirectly upon the general population or the public actions of its officials.”

John Fitzgerald Kennedy       

*****

The blizzard is history and now the cold is here. But we are warm by our 100 year old Engdahl/Mathews wood cook stove and ready for whatever the markets am present.
*****

Asian markets were lower yesterday night and last night and European markets have recovered their losses of Tuesday in early Wednesday trading. After the 1% down day on Monday U.S. markets closed moderately higher on Tuesday and look to open a bit higher today. Gold is at $1125 and Oil has a $70 handle as the trading day begins.
*****

Citi is going to sell equity of some kind to repay the government and so we sold the shares we owned with the idea of looking again when the new equity is priced. We sold Genzyme and CVZ. We added shares of Kroger, Boston Scientific and Goodyear Tire to accounts in the early sell off yesterday.
*****

Jobless claims were 475,000 when 450,000 were expected. Continuing claims dropped by 300,000. The trade deficit was $33 billion which was less than he forecast $37 billion. In the last century the trade deficit was the looked for trading number of the month. That was before widespread use of personal computers and the internet. Now that number is a yawn in the myriad of daily reports that the OCD trading folks use.
*****

Ciena’s earnings disappointed but revenues beat. We added shares to accounts on the 10% price drop.
*****

AT&T has been experiencing complaints from customers about dropped calls. 30% of iPhone calls in NYC are dropped. AT&T has responded to this complaining by pointing out that iPhones use a huge amount of bandwidth with all their apps. In fact 3% of phone users (iPhone) comprise 40% of AT&T bandwidth usage. The Apple contract with AT&T ends soon and so the iPhone platform may spread to other carriers. That will also point up the deficiencies in other carriers that haven’t yet experienced unprecedented increased bandwidth demand.

All of this is good news for Ciena, especially if CIEN can acquire the Nortel Ethernet business. If not, Nokia will wind up with the business. We own both.
*****

Britain has imposed a 50% excess profits tax on bank and investment banking bonuses. The U.S. of course won’t consider such a tax because in this country not taxing undeserved profits is a religion even if the profits were made possible by government actions that the Republicans and blue dog Democrats opposed but allowed to be passed by a Republican administration. And the supposed Liberal Democrat president of change is too cautious to even propose such a tax. Plus ca change, plus c'est la meme chose
*****

(huffingtonpost.com) Goldman Sachs’ top executives will not receive cash bonuses this year, as the Wall Street giant bows to sharp criticism over its pay practices. The executives will instead receive stock that cannot be sold for at least five years, the New York-based bank said Thursday.

So this is a big deal? Why? Shares of stock is the same as cash to them since all they have to do is sell the shares they currently own to get cash. The plain fact is that $13 billion of the bonus is U.S. tax payer money.
*****

The U.K. sovereign debt market tumbled as investors fretted about the government's ability to manage its burgeoning budget deficit. Stocks and gold both moved higher.
*****

Natural-gas futures jumped 8% to 11-month high after inventory report
*****

Gold gained $10 to $1130 and Oil was down pennies to $70.52.
*****

The S&P 500 successfully tested 1086 resistance yesterday. It needs to close above 1111 for an upside breakout. The S&P has tried to break out above 1111 by touching or exceeding 1111 intraday five times in the last two months but has failed each time.
*****

Health Care for Almost One-Third of Everyone (Who is Left-Handed and Over 50)!
Go to: http://trueslant.com/matttaibbi/
*****

Stocks closed higher with the S&P 500 ending at 1100. Breadth was 5/4 to the good on the NYSE and thee opposite on the NAZZ and volume was light.
*****

 

9 December 2009

Portfolio Update

Model Portfolio Value As of 9 December 2009

$ 572,067

8 December 2009

Thoughts

Model Portfolio Value As of 8 December 2009

$ 571,717

We have a blizzard bearing down on us and unlike the Post Office there will be no post tomorrow. Next post will be Thursday December 10.
*****

Asian markets and European bourses were lower overnight by up to 1% and U.S. markets are going to open lower this morning. Gold is down another $14 and Oil has a $72 handle as the trading day begins.
*****

(MarketWatch) McDonald's said Tuesday that its November same-store sales, or sales at restaurants in operations for at least 13 months, rose 0.7%. Sales dropped 0.6% in the U.S.; rose 2.5% in Europe and fell 1% in Asia, Middle East and Africa. The company also said it expects to record an 8-cent benefit in the fourth quarter related to resolving certain liabilities.
*****

We like to buy good companies on analyst disappointing news. Kroger is on its 3 year low today down $3 per share and we added to accounts. The news was: (MarketWatch) Supermarket chain Kroger Co. said Tuesday that it swung to a fiscal third-quarter loss, hurt by hefty charges stemming from a goodwill write-down at its Ralphs division. Its quarterly loss was $874.9 million, or $1.35 a share, compared with net income of $238 million, or 36 cents a share, in the year-earlier period. Excluding charges, earnings in the latest quarter would have been 27 cents a share. Total sales rose to $17.7 billion from $17.6 billion. Analysts had forecast Kroger to earn 36 cents a share on sales of $17.7 billion, according to FactSet Research.
*****

We also added shares of Intel, GE, AT&T and JC Penney to accounts that didn’t own them.
*****

Most European bourses closed over 1% lower with Greece down 6%.
*****

Feinberg Said To Lift $500,000 Salary Limit For AIG Executives (Bloomberg)

At least for the five senior executives who were threatening to leave. Now they can stay, and continue doing a bang-up job running the best company in the world. (http://dealbreaker.com/ )
*****

Gold dropped another $35 to $1128 and Oil finished at $72.76 down $1.15.
*****

The major measures closed 1% lower on the day. Breadth was 2/1 negative and volume was light.
*****

 

7 December 2009

Thoughts

Model Portfolio Value As of 7 December 2009

$ 574,924

While we were away the Employment Report was released. The numbers reported a net of 11,000 jobs were lost in November and the numbers from the previous two months were revised by 160,000 less job losses than previously reported. Those numbers cause the major stock measures to zoom higher at the opening Friday only to be followed by a complete retracement of the opening jump to negative territory. Later in the day a small rally helped the major stock measures to close positive.

Gold is down $24 this morning and almost $100 in the last three days. European markets are mixed and Asian markets were mostly higher overnight.
*****

With the good employment report on Friday we added Barnes&Noble, KBE (Large Bank ETF), Ford, DuPont and BankAmerica to accounts and sold Hershey and Kraft.
*****

Intel has decided to scrap its graphic chip project which is good news for NVDIA. The shares are 10% higher in the early going.
*****

(NYT) The Treasury Department expects to recover all but $42 billion of the $370 billion it has lent to ailing companies since the financial crisis began last year, with the portion lent to banks actually showing a slight profit, according to a new Treasury report.... Of course, the government’s potential losses extend beyond the Treasury program. The Federal Reserve, for example, still holds a trillion-dollar portfolio of mortgage-backed securities whose market value is unknown.
*****

Maybe they had information (see Goldman Sachs) that most folks didn’t:

(NYT) Kuwait’s sovereign wealth fund said on Sunday that it had booked a $1.1 billion profit on the stake it took in Citigroup in January 2008. That equals a 37 percent annualized return on its initial $3 billion investment. Other sovereign wealth funds — including those backed by the governments of Singapore, Qatar and Abu Dhabi — have also recently cashed out stakes in foreign banks for comparably large gains.

The hefty returns highlight how some savvy government funds have been able to profit from the financial crisis, even as most ordinary investors have been pummeled by billions of dollars of losses. It also calls into question whether such funds will act as long-term investors, as many initially suggested, or merely short-term profiteers.

Many sovereign funds invested in the early days of the crisis as banks scrambled to find investors willing to plow in money and exacted lucrative terms. (Swings through Asia and the Middle East were so common that bankers coined the phrase “Shanghai, Mumbai, Dubai, Goodbye” to describe their fund-raising tours.)

But as financial stocks continued to plummet last year, the so-called smart money supplied by foreign governments no longer looked so sure. Now, as bank shares have rebounded faster than most analysts had projected and governments face internal political pressure at home, the funds are racing to lock in gains.

“They didn’t panic into selling at the bottom of the market,” said Mohamed El-Erian, chief of Pimco. “And now they can sell.”
*****

From government to reward:

Pimco also hired Neel Kashkari, the former administrator of the U.S. Treasury’s bank-rescue program, to head new investment initiatives. Kashkari, 36, was the head of the government’s Troubled Asset Relief Program under former Treasury Secretary Henry Paulson. An ex-investment banker at Goldman Sachs Group Inc., Kashkari was at the helm when Citigroup Inc. and Bank of America Corp. were issued a combined $90 billion in rescue funds last year during the peak of the global financial crisis.
*****

We added Intel, JC Penney, CVS, Genzyme, and St Jude to our largest accounts.
*****

Oil was down $1.60 at $73.89. Gold dropped $15 to $1154. European bourses closed mildly lower. Natural gas surged more than 8% on cold weather in the U.S. Northeast and Midwest.
*****

Stocks closed mixed with positive breadth on the NYSE and negative breadth on the NAZZ. The DJIA was up  while the S&P 500 and NAZZ were lower. Volume was light. Time passing without a correction works in favor of the bulls.
*****

 

4 December 2009

Portfolio Update

Model Portfolio Value As of 4 December 2009

$ 574,338

3 December 2009

Portfolio Update

Model Portfolio Value As of 3 December 2009

$ 570,635

2 December 2009

Thoughts

Model Portfolio Value As of 2 December 2009

$ 573,870

We will be traveling tomorrow and Friday and so the next post will be Monday December 7. This is our last trip for a while.
*****

Asian markets were mildly better overnight and Europe is mixed at midday. Gold is at $1212 and Oil is down with a $77 handle.
*****

Investors Intelligence again has 50% bulls and bears are down to 16%. This is worry territory. Our guru calls today as a top before a correction.
*****

Carpenter Technology produces and distributes specialty alloys, including stainless steels, titanium alloys and superalloys, and various engineered products. Detailed information about Carpenter Technology can be accessed at: www.cartech.com.
*****

Fool me once.... http://dealbreaker.com/2009/12/old-lane-revived-sort-of.php#more
*****

Fool me twice... http://dealbreaker.com/2009/12/more-cmbs-for-the-masses.php#more
*****

In accounts in which we bought Alcoa yesterday we bought beginning positions in Goodyear, Nokia and BankAmerica today. We also added Carpenter Tech to accounts that own Whole Foods. These are all beginning positions to be added to in a correction.
*****

Europe closed higher. Oil dropped $1.65 to $76.65 and Gold ended at $1213.
*****

The major measures opened higher and then traded lower most of the day moving back to positive on the S&P 500 and the NAZZ at the close. Breadth was negative and volume was light. The bulls are in control.
*****

 

1 December 2009

Thoughts

Model Portfolio Value As of 1 December 2009

$ 571,972

The dollar in at new lows against the Euro; Asian and European markets were and are up 2% and more; Gold is closing in on $1200 and Oil is up $1 at $78.35. How quickly we forget.
*****

GE is buying Vivendi’s 20% stake in NBC for $6 billion. That places a $30 billion value on NBC and allows GE to sell a 51% stake in NBC to Comcast for $5 billion and other consideration. It seems like a deal for deals sake since GE is out $1 billion initially on the cash exchange but what do we know. We own a trading position in GE. We presume they only sold a portion because they don’t need the whole gain on sale now to offset losses in GE capital and are hoping NBC’s value will increase.
*****

(Huffingtonpost.com) Only $100 billion of the $787 billion stimulus package passed nine months ago has actually been spent by the federal government so far, with another $90 billion of stimulus coming in the form of tax reductions, the nonpartisan Congressional Budget Office reported Monday evening. That leaves three quarters of the package -- and its stimulative effects -- yet to come.

Slow as that pace may seem, it's in line with initial CBO estimates.

But much of the spending hasn't had the full impact it could, the report says, because "it appears that stimulus funds substituted for some spending from regular appropriations."
*****

A run of the mill $1 billion Ponzi scheme: http://www.miamiherald.com/
*****

Bad timing:

(NY Daily News) A businessman who invested $10 million with Bernard Madoff six days before his Ponzi scheme collapsed can't jump the line to recoup his money, a federal judge ruled. Manhattan federal Judge Naomi Buchwald said although she felt "great sympathy" for Martin Rosenman, president of a New York fuel service company, his ill-timed investment doesn't entitle him to get paid off first. "We share that sympathy with all of the victims," the judge wrote, as she dismissed Rosenman's claim, upholding a bankruptcy court finding. Rosenman invested $10 million with Madoff on Dec. 5, 2008 - days before Madoff was busted. Rosenman's lawyers said he should get back the full amount because Madoff never got legal control over the money.
*****

And a penny ante Ponzi scheme of only $200 million: http://ow.ly/FChh
*****

We added Marshall & Ilsley and Citi to our low priced bank holdings and also increased our positions in Huntington and Key. We added small amounts of the Regional Bank ETF (KRE) and Alcoa to accounts that own Whole Foods and repurchased Dell at lower than we sold last Friday. We added beginning positions in Hain, Carpenter Technology (specialty steel and metals), and Hershey to a few larger accounts.
*****

Vanity Fair takes on Goldman from Huffington Post:
http://www.huffingtonpost.com
*****

Oil ended up $1.16 to $78.44 and Gold gained $15 to $1197.
*****

Bob Benmosche, the loudmouth CEO of AIG, claimed today that AIG had paid the government back $25 billion when the Treasury agreed to convert debt owed by AIG into Equity preferred stock of two AIG subsidiaries. Say what? http://money.cnn.com
*****

The major measures closed 1% higher. Breadth was 3/1 positive and volume was light. The bulls continue their winning streak.
*****

 

 

 

 

 

 

 

 

 



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