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Madison, WI 53703
Bud: 312-925-5248       Kathy: 630-323-8422

Katie's Coast to Coast Biking Blog
Our better half is setting off next week 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.

26 February 2010


Model Portfolio Value As of 26 February 2010

$ 608,287

Present Market Outlook: The market anticipates. It looks six to nine months out. The fact that the financial system did not collapse was the reason for the rally off the lows. Earnings for this quarter have been good. The earning season is almost over, except for the retailers and so there is not much news on which to hang a hat. The pullback from mid-January to mid-February was about 10% which was also the pullback in July 2009. We think there may be a more significant pullback after May but think the odds of moving 10% higher from here are greater than going 10% lower.

Today is a snow day in NYC. And so the big boys and girls may decide not to come out and play. Asian and European markets were mildly higher overnight and U.S. futes are predicting a flat opening. Gold is unchanged and oil has a $78 handle as the trading day begins.

Looking in the rear view mirror Preliminary (the second of three reports, the better to trade- Advance, Second Estimate, and Final)  4th quarter GDP was a positive 5.9%. 5.6% was expected. Hooray. But unemployment remains over 10% so.....

(WSJ) Deutsche Telekom AG said Thursday it reduced its net loss in the fourth quarter on lower charges and write-downs but gave a weaker outlook for 2010 compared with the prior year, citing current economic uncertainty. The net loss for the quarter ended Dec. 31 was €3 million ($4.1 million) compared with a net loss of €730 million in the prior year. Deutsche Telekom's fourth-quarter bottom line was hit by a €900 million impairment on its South and Eastern Europe operations, chiefly due to Hellenic Telecommunications Organization and restructuring charges. A year earlier, write downs and charges totaled €1.6 billion. Sales for the period rose 0.6% to €16.2 billion.

The company committed to return €3.4 billion a year to its shareholders and said it will reduce its cost base further.

Closely watched earnings before interest, taxes, depreciation and amortization, or Ebitda, adjusted for one-time items and restructuring, the company's preferred measure of operating performance, rose 8.6% to €5.07 billion. Both figures were boosted by the contribution of OTE, which was fully consolidated by Deutsche Telekom from February last year. Excluding the OTE consolidation and at constant currencies, full-year sales were down €2.2 billion or 3.5%. For 2010, Deutsche Telekom said it expects adjusted Ebitda of around €20 billion and free cash flow of €6.2 billion. In 2009 the company achieved its target for adjusted Ebitda of €20.67 billion and free cash flow of €6.97 billion.

Deutsche Telekom late Wednesday committed to pay back €3.4 billion a year to shareholders in the next three years, guaranteeing a dividend of 70 European cents a share and mulling additional share buy backs to achieve the pay-out target. The Bonn-based company intends to pay a dividend of 78 cents a share for 2009, steady with 2008. Deutsche Telekom's dividend policy is closely watched by investors as the company has the highest dividend yield among the DAX companies to make up for sluggish share price development, underscoring the defensive character of the stock. In the last 12 months, Deutsche Telekom shares gained just 3.4%, significantly underperforming a 44% rise in the DAX.

Deutsche Telekom said it generated savings of €5.9 billion since it launched a cost-cutting program in 2006 and wants to reduce its gross cost base by another €4.2 billion by 2012.

In the U.S., once the company's growth engine, fourth-quarter service revenue was $4.65 billion, down from $4.73 billion in the third quarter and $4.9 billion a year ago. Still, T-Mobile USA, its wholly owned subsidiary, gained 371,000 customers in the December quarter, mainly for pre-paid services, after losing 77,000 customers in the third quarter.

From the National Association of Realtors: Existing-Home Sales Down in January

Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5 percent above the 4.53 million-unit level in January 2009.Total housing inventory at the end of January fell 0.5 percent to 3.27 million existing homes available for sale, which represents a 7.8-month supply at the current sales pace, up from a 7.2-month supply in December.

We added shares of Boston Scientific to accounts at $7.80. The company is priced at twice revenues and excluding debt 1.2X revenues, when most health care stocks are priced at three times and more. We have traded BSX profitably over the past few years, most recently selling shares at $9 in January.

Wage Freezes and Rate Increases

There are two stories on the front page of the Chicago Sun Times internet edition whose juxtaposition exemplify the times.

The first story is about a shortfall of revenue at the Chicago Public Schools. The Sun Times Editorial Board writes: Chicago Public Schools CEO Ron Huberman on Thursday painted the grimmest financial picture the Chicago schools have ever seen. The budget deficit could top $900 million, a hole so big that Huberman says he needs major concessions from teachers -- a move that could easily lead to a teachers' strike if the unions refuse to play ball. We're not alerting parents to cause a panic or to bash beleaguered teachers. We're alerting parents now, when there's still time, to try to resolve this crisis and avoid a strike. The best hope is for the Chicago teachers to accept a wage freeze.

The next article is about a rate increase for Commonwealth Edison: ComEd has tipped its hand. The electric utility plans to seek a rate increase this year on top of one it's due to receive this spring.

The company said it will ask the Illinois Commerce Commission for a rate hike in a few months. It declined to say how much it will seek. Spokesman Bennie Currie said the utility cut costs by $200 million in 2009 while still spending to upgrade its system. He said ComEd needs to be compensated for that work. The utility disclosed its plans at a Feb. 3 investor conference for its parent company, Exelon Corp. The ICC has given ComEd permission to implement a $70 million rate increase in April. The money will cover escalating costs from unpaid bills and is expected to cost the average residential customer about $1 per month. In September 2008, ComEd raised its rates by $270 million.

We aren’t holding our breath for a Sun Times editorial asking the ICC to freeze rates for CWE. By the by, CWE’s parent company Exelon reported earnings of $3 billion last year and free cash flow of $7 billion and its CEO John Rowe made $3 million in pay and exercised options granted to him over the years that netted him another $27 million.

When government works (and how many $$$$ have been saved by illnesses prevented. It must be billions.): From LaCrosse Tribune

Something’s missing from the traditional flu season this winter — the flu. The La Crosse area has yet to have a seasonal flu case reported so far despite being well into the colder months that normally mark the peak period for the illness, health officials said.

“I can’t think of a time when the seasonal flu wasn’t here by January,” said Dick Matushek, Franciscan Skemp infection preventionist. “But I don’t think we can say the flu season is over.”

H1N1 illness seems to have disappeared as well, officials said, and some now think a predicted third wave of H1N1 is unlikely.

That might be due to 1 in 5 Americans already having had H1N1 and 70 million immunized against it, said Dr. Rajiv Naik, a Gundersen Lutheran pediatrician and vaccination expert.

“Time will tell what happened this season,” Naik said. “We still know H1N1 was a serious and significant illness, causing three times as many pediatric deaths as usual, but it wasn’t doomsday.”

In fact, the rise of H1N1 might account for the lack of seasonal flu, officials said.

Europe closed up 1% and higher. Oil was up $1.50 at $79.70 and Gold gained $8 to $1120.

Stocks closed to the upside The S&P 500 was up 3 points. Breadth was positive and volume was snowstorm light.


25 February 2010


Model Portfolio Value As of 25 February 2010

$ 607,809

This morning the glass is half full as stocks look to open lower on a higher than expected Jobless claims number and snowstorm in NYC. Gold is under $1100 and Oil has a $78 handle. Asian and European markets were lower overnight. In the week ending Feb. 20, the advance figure for seasonally adjusted initial claims was 496,000, an increase of 22,000 from the previous week's revised figure of 474,000. The 4-week moving average was 473,750, an increase of 6,000 from the previous week's revised average of 467,750.

In the never ending trading market that is modern capitalism Coca Cola is going to repurchase the North American bottler of Coke that it spun off in the last century.  Coca Cola’s CEO says the time has come to realize the synergies that obviously the CEO in the last century didn’t see. And its investment bankers say thank you.

(WSJ) Deutsche Telekom on Thursday reported a narrower fourth-quarter loss and issued a cautious outlook for 2010. U.S. durable-goods orders rise 3%, fueled by aircraft deals. Weekly U.S. jobless claims rise -- sixth increase in 2010's first eight weeks.

In the shoulda coulda market we were going to sell Palm at $9 on Monday. Instead we bought more shares at $8.50 on Tuesday. The market action was telling us that bad news was in the offing but we were smarter. Today Palm said sales of its new phones were punk and that they would miss quarterly and yearly numbers and we sold at $6.50. The markets still punish dumb decisions. The dumb decision was to buy Palm. It is an also ran but we bought for a trade on the hope of takeover talk. Hope is not an investment criterion. Fortunately we haven’t had many dumb mistakes recently, but this one hurt. Trade and learn.

With the proceeds we bought Nokia (4% yield) which is largest smart phone seller in the world. We also sold BankAmerica and Walgreen for small trading profits

Two hours into the trading day the major measures are 2% lower and breadth is 5/1 negative. We should have gone snow shoeing.

Oil closed at $78.21 down $1.80 and Gold was $1105 up $8. (WSJ) Stocks fell across Europe amid rising concerns about Greece's fiscal woes and the British pound slid sharply as pessimism about the U.K.'s economic outlook mounted.

When the Madoff scandal first broke we told a friend that the money stolen went to prop up the trading firm. It’s always fun to be right.

F.B.I. Arrests Former Madoff Aide http://dealbook.blogs.nytimes.com/2010/02/25/f-b-i-arrests-former-madoff-aide/#more-185103

February 25, 2010, 9:54 am 1:25 p.m. | Updated

A senior executive who worked for Bernard L. Madoff for more than 30 years was arrested Thursday on federal fraud and conspiracy charges, including claims that he helped Mr. Madoff survive a cash crisis that almost derailed the gigantic Ponzi scheme five years ago, The New York Times’s Diana B. Henriques reports.

The executive, Daniel Bonventre, 63, joined the Madoff firm in 1968 and was its director of operations, overseeing the back office record-keeping staff, since at least 1978.

In a criminal complaint filed Thursday in Federal District Court in Manhattan, Mr. Bonventre was accused of doctoring records to conceal for a decade that the firm was being propped up with money illegally siphoned from investor accounts and that money borrowed by the firm was illegally used to cover withdrawals when the Ponzi scheme faced a cash shortage beginning in late 2005.

The United States attorney in Manhattan, Preet Bharara, said the phony records “effectively hid the doomed state of an investment firm founded in fraud,” adding that his investigation into “this colossal deception” was continuing.

In a parallel case, the Securities and Exchange Commission filed a civil fraud complaint against Mr. Bonventre, accusing him of helping “manufacture plausible lies” that concealed the fraud from regulators and investors.

Andrew Frisch, a lawyer for Mr. Bonventre, had no immediate comment on his client’s arrest. Mr. Bonventre was scheduled to appear before Federal Magistrate Judge Theodore H. Katz in Manhattan federal court on Thursday afternoon to arrange bail.

The charges against Mr. Bonventre are the first to report that a nearly calamitous cash crisis, caused by a spate of investor withdrawals, threatened Mr. Madoff’s Ponzi scheme beginning in late 2005.

According to the S.E.C. complaint, Mr. Madoff preserved his fraud, in part, by borrowing bonds from an unidentified investor and using them as collateral for loans to his brokerage firm, which he used to cover redemptions from his corrupt investment advisory business.

Mr. Bonventre arranged the loans and created the false paper trail that concealed the bailout, according to the regulatory complaint.

The Ponzi scheme got so low on cash during this crisis that Mr. Madoff had to draw on his firm’s operating accounts to meet four separate investor redemption requests totaling nearly $262 million from Jan. 30 to April 13, 2006. Prosecutors say that Mr. Bonventre handled the ledger entries that concealed the illicit use of the funds.

Federal prosecutors have previously said in court that Mr. Madoff sometimes used cash from his Ponzi scheme to sustain his apparently legitimate brokerage firm, which handled securities trades for other Wall Street institutions and traded for its own proprietary accounts.

But the S.E.C. complaint against Mr. Bonventre provides additional details about that support, asserting that the firm — widely considered to be a successful wholesale trading house on Wall Street — “normally operated at a significant loss.”

According to the S.E.C., Mr. Madoff used more than $750 million of his investors’ money to “artificially improve the firm’s reported revenue and income” from at least 1998 until his arrest in December 2008. As operations director, Mr. Bonventre concocted the ledger entries and financial statements that concealed the illegal cash infusion, the regulatory complaint said.

Mr. Bonventre is also accused of personally profiting from the scheme through phony transactions in his own Madoff accounts that generated nearly $2 million in illegal gains, and of failing to accurately report his income on his federal tax filings.

Mr. Bonventre, who reported directly to Mr. Madoff, is the fifth person to be arrested in the fraud case since Mr. Madoff pleaded guilty last March.

Analysis of Chico’s earnings report from www.minyanville.com

Last year, it appeared as if baby boomer-age women would be faced with a shortage of stylish retail options. Every retailer targeting older women was falling apart. Not only did its target market reign in spending at an unprecedented rate, but companies were missing major fashion trends and not offering attractive merchandise.

For the most part, that still stands as the case today. However, two companies -- Talbots (TLB) and Chico's (CHS) -- have demonstrated some success in their turnaround programs. An update from Chico's arrived yesterday in its fourth quarter and fiscal year-end results.

Sales increased 16.7% and comps increased 14.6%. Keep in mind, though, that that comps decreased 15.1% in 2008 and 8.1% in 2007. Total sales for the year fell just below those in fiscal 2007.

The quarterly gross margin expanded a whopping 1,000 basis points to 56%. Sounds impressive, but a little digging into the historical records shows that Chico's posted a 59% margin in 2006 and over 60% margins in the first half of the decade. Same story for its operating margin; it posted a 6% operating margin compared to last year, but its five-year average is over 11%.

Like its clientele, Chico's slowed down with age and will never return to its spunky growth days. But in comparison to its peers, Chico's may be the last brand standing. In addition to Talbots, Coldwater Creek (CWTR) and Ann Taylor (ANN) have achieved far less gross margin and no operating profit in the last 12 months.

Save for Coldwater Creek, all are expected to return to profitability next year, but Chico's has been the first to show signs of life. And with no debt and plentiful liquidity, it has the necessary balance-sheet strength to continue turning around. Like its peers, Chico's stock has had an enormous run over the past year, returning 220%. (At todays price it still sells at only half its 2007 price.) However, it was an anomaly caused by a correction from a mass sell-off due to internal problems combined with the financial crisis. Two years ago, I didn’t think Chico's stood a chance either.

The company's turnaround progress certainly warranted a higher stock price, but I’m concerned that too much optimism has been priced in. According to the historical price-to-sales ratio, Chico's still appears quite cheap. But on a forward P/E ratio basis, the stock seems expensive.

If the stock returns a more rationale 15% this year, a reasonable expectation given the stock’s risk, and it meets earnings expectations, Chico's will still sell at 18 times earnings -- an expensive price to pay for a recovering retailer facing years of slumped consumer spending.

Chico's deserves attention for its progress. At current prices though, any slipup could result in a sell-off; a sell-off I recommend watching for as an entry point. (We agree with the analysis but want to own the shares now with room to buy more lower.)

Stocks closed lower on Thursday but well above their worst levels of the day. The S&P 500 after being down almost 2% at 1085 closed down 0.3% at 1103. Breadth was 5/4 negative at the close and volume was active.


24 February 2010


Model Portfolio Value As of 24 February 2010

$ 607,809

The WSJ reports that U.S. banks posted last year their sharpest decline in lending since 1942, suggesting that the industry's continued slide is making it harder for the economy to recover. Since banks were making so many bad loans in the years before the financial crisis less lending would seem to bus to be a good thing over the long run.

(WSJ) Sales of new single-family homes in the U.S. sank 11% in January to a seasonally adjusted annual rate of 309,000. It was an unexpected tumble that sent sales to their lowest level since records began in 1963 and wiped out much of the progress made in the last year. Economists surveyed by Dow Jones Newswires had expected sales last month rose 3.8%. Sales in December fell 3.9%, revised from an originally reported 7.6% decline.

(RTTNews) - Women's specialty retailer Chico's FAS, Inc. on Wednesday reported a net profit for the fourth quarter, which surpassed Street view, as compared with a loss in the corresponding period last year. The profit reflects higher net sales, improvement in comparable store sales and a significant decline in impairment and restructuring charges. Separately, Chico's declared its first quarterly dividend since it became a publicly traded company in March 1993.

For the fourth quarter, the Fort Myers, Florida-based company's net earnings were $17.51 million or $0.10 per share compared to a loss of $40.54 million or $0.23 per share in the prior-year period. The quarter's results included a non-cash impairment charge of about $1.3 million, resulting from an additional write down of a note receivable to current market value.

On an adjusted basis, net income was $18.83 million or $0.10 per share versus a loss of $24.85 million or $0.14 per share a year earlier.

The Securities and Exchange Commission voted 3-2 Wednesday in favor of a final rule that will curb short selling for individual securities that decline at least 10% in a single day. http://sec.gov/news/speech/2010/spch022410mls-shortsales.htm

The rule change is a sham. It is the Index ETF’s that are moving markets and since the major index ETFs have corresponding futures components the disconnect is going to make trading screwy on volatile days. This rule change is like Obama’s health care bill, both are for show and will have few positive effects and may have unforeseen negative effects.

(WSJ) European stocks ended a choppy session in the green, as investors took heart from Fed Chairman Ben Bernanke's reassurance that interest rates will remain low for an extended period.

Oil closed at $80.08 and Gold was $1098.

The major measures closed higher but were up a tad less than they were down yesterday. The S&P 500 gained almost 1% after losing a bit more than 1% on Tuesday. Breadth was 2/1 to the good and volume was light.

Senate passed jobs bill with votes, 70 - 28, including support from six GOP hypocrites who voted for filibuster on Monday


Monday night, the Senate broke a GOP filibuster of the $15 billion jobs bill with votes from Senators Bond (MO), Collins (ME), Voinovich (OH), Snowe (ME) and Scott Brown (MA). And, wow, the tea baggers aren't too happy with Brown because of his vote. And, Ben Nelson sided with the GOP, but we're used to that.

Today, the final passage of the jobs was secured by a vote of 70 - 28.

So, this means that a number of GOP Senators who voted to block a vote on the bill on Monday, ended up voting for the bill today. Once the roll call list is online, I'll post the list of the GOP hypocrites. These are the hypocrites who were willing to prevent the jobs bill from even getting a vote, but ended up supporting it: Alexander (TN), Cochran (MS), Inhofe (OK), Lemieux (FL), Murkowski (AK) and Wicker (MS). Senators Burr (NC) and Hatch (UT) didn't vote on Monday, but voted yes today.

Matt Taibbi, always informative at http://trueslant.com/matttaibbi/

Dems Get Religion on Health Care Antitrust Exemption

MY health insurer here in California is Anthem Blue Cross. So far, my group policy hasn’t been affected by Anthem’s planned rate increase of as much as 39 percent for its customers with individual policies — but the trend worries me, as it should everyone. Rates are soaring all over the country. Insurers have been seeking to raise premiums 24 percent in Connecticut, 23 percent in Maine, 20 percent in Oregon and a wallet-popping 56 percent in Michigan. How can insurers raise prices as much as they want without fear of losing customers?

Astonishingly, the health insurance industry is exempt from federal antitrust laws, which is why a handful of insurers have become so dominant in their markets that their customers simply have nowhere else to go. But that protection could soon end: President Obama on Tuesday announced his support of a House bill that would repeal health insurers’ antitrust exemption, and Speaker Nancy Pelosi signaled that she would put it toward an immediate vote.

via Op-Ed Contributor – Bust the Health Care Trusts – NYTimes.com. http://www.nytimes.com/2010/02/24/opinion/24reich.html

This is how politics is supposed to work. Well, not really — in reality, you’d like to see your leaders actually lead, i.e. do the right thing first, before being forced into it by circumstance. But we’ll take the latter.

The sequence: Obama and the Dems got whipped in Massachusetts and it suddenly occurred to them that they might want to start doing things that would be popular outside their Rolodex of campaign contributors. A bailout tax was one early idea. They started searching the landscape for outrages they could get on the other side of and found a good one: Anthem Blue Cross in California raising rates by 39 percent.

Suddenly the Obama administration decided to come out against the antitrust exemption for the insurance industry. Like they only just noticed the problem.

The insurance antitrust exemption has been an outrage for over fifty years. The original bill formalizing the industry’s exemption from the Sherman Antitrust Act, the McCarran-Ferguson Act, was dreamed up by two Hollywood villains. Nevada Senator Pat McCarran was the inspiration for the “Senator Pat Geary” character in Godfather Part II (”Senator… my final offer is this: nothing” — that guy), while Homer Ferguson was the inspiration for the Lloyd Bridges character in Tucker who whored himself out for the auto makers to get Tucker’s new car struck from the market. These two gigantic assholes teamed up to help the insurance industry avoid the albatross of competitive pricing.

McCarran-Ferguson was supposed to be temporary. Franklin Roosevelt clearly thought so when he signed it into law in 1944, saying that after “a moratorium period,” the antitrust laws “will be applicable in full force and effect to the business of insurance.” The law was supposed to expire in 1947. It didn’t.

As a result, all the evil shit that made for such high drama in Kurt Eichenwald’s book The Informant – about a bunch of agricultural firms who get together to fix prices for an additive called Lysine — that’s actually legal in the insurance business.

This is why insurers (especially insurers with large market shares in small states) are easily able to gouge customers and deny coverage. There’s really no legal mechanism for preventing the firms from getting together and arranging price-fixing and other outrages. In a normal market customers would be able to get better coverage and cheaper rates from a competitor, but insurance is really more like a series of competition-free fiefdoms where the customers can’t go elsewhere for a better deal. State Farm even denied coverage to Trent freaking Lott after Katrina and got away with it because State Farm has Mississippi by the nads. It’s crazy.

This is, again, another reason Obamacare was such a joke from the start. The White House vision clearly called for “health care reform” without a repeal of McCarran-Ferguson. Which is technically almost impossible, but they tried it.

That didn’t work, naturally, so now they’re finally getting around to doing the obvious. They’ll fail — every attempt to repeal McCarran-Ferguson inevitably does, mysteriously — but at least they’re talking about it. But Jesus, why does this stuff take so long?


23 February 2010


Model Portfolio Value As of 23 February 2010

$ 608,386

Markets were mostly higher while we were away. This morning stocks in the U.S. look to open a bit lower. Overseas markets were lower overnight while Oil is at $80and Gold at $1109 both prices being higher than a week ago.

 The market anticipates. It looks six to nine months out. The fact that the financial system did not collapse was the reason for the rally off the lows. Earnings for this quarter have been good. The earning season is almost over, except for the retailers and so there is not much news on which to hang a hat. The pullback from mid-January to mid-February was exactly 10% which was also the pullback in July 2009. We think there may be a more significant pullback after May but think the odds of moving 10% higher from here are greater than going 10% lower.

Floyd Norris writes at the NY Times: http://norris.blogs.nytimes.com/2010/02/22/horrid

It snowed this month in much of the United States. ... Both the household survey (which produces the unemployment rate) and the employer survey (which produces the job count) ask about workers in the week during which the 12th of the month fell [the week of the blizzards]. ... That means that a lot of people who had jobs may report they did not work during the week, and companies may say they had fewer people on the payroll than they would have cited a week earlier or later. If so, we may get a truly horrid job number.

Nvidia sales were higher but earnings were as expected and the shares sold off last week. We added shares on the selloff. Dell announced lower margins but revenues were higher than and we take that as a good sign. Yesterday we added Huntington Bank shares as a speculative buy in many accounts.

Palm was cut to underperform from buy at Bank of America Merrill Lynch which said the group's superior platform hasn't translated into sufficient carrier support and consumer demand. The broker also slashed Palm's price target to $10 from $20. Separately, Macquarie cut Palm to neutral from outperform -- and with a $10 price target -- citing weak sell-through checks at Verizon and ramping operational spending.

(marketwatch) The first drop in a key German business gauge in 10 months and concerns over disappointing results and outlook from lenders Commerzbank and Raffeisen weighed on Europe stocks. Hong Kong stocks rose while Shanghai's fell during a mixed session in Asia.

(Associated Press) Wall Street bonuses were up 17% to over $20 billion in 2009, the year taxpayers bailed out the financial sector after its meltdown, New York state Comptroller Thomas DiNapoli said Tuesday. Total compensation at the largest securities firms grew beyond that figure while profits could surpass what he calls an unprecedented $55 billion for 2009, Mr. DiNapoli said. That's nearly three times Wall Street's record increase, a rate of growth that is boosted in part by the record losses in 2008 of nearly $43 billion, the Democrat said.

(cnn.com) Stocks swayed on both sides of uneven in the early going, but turned lower after the release of the Consumer Confidence index. The Conference Board said its index fell to 46.0 in February from 56.5 in January. Economists surveyed by Briefing.com thought it would fall to 55.

We added Verizon and AT&T to accounts. The 6% plus yields are hard to ignore. We had sold some of each for cash a few weeks ago but decided to reenter for the April 1 dividend or a 10% move whichever comes first. We sold T-Bills in some accounts to fund the purchases. We also added to Palm, Goodyear and Alcoa in some accounts

European markets slumped after weaker-than-expected economic news from Germany and the U.S. renewed fears about the fragility of the economic recovery. The euro lost ground against the dollar.

Gold ended at $1104 was $79.02 down $1.29.

Feb. 23 (Bloomberg) -- When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.

Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a cover-up. Geithner countered that he had acted properly to avert the collapse of the financial system.

A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

These were the deals that pushed the insurer to the brink of insolvency -- and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.

That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says. “This secrecy is one more example of how the whole bailout has been done in such a slithering manner,” says Cohan, who wrote “House of Cards” (Doubleday, 2009), about the unraveling of Bear Stearns Cos. “There’s been no accountability.”

The document Issa made public cuts to the heart of the controversy over the September 2008 AIG rescue by identifying specific securities, known as collateralized-debt obligations, that had been insured with the company. The banks holding the credit-default swaps, a type of derivative, collected collateral as the insurer was downgraded and the CDOs tumbled in value.

The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place.

The banks should have to explain how they managed to buy protection from AIG primarily on securities that fell so sharply in value, says Daniel Calacci, a former swaps trader and marketer who’s now a structured-finance consultant in Warren, New Jersey. In some cases, banks also owned mortgage lenders, and they should be challenged to explain whether they gained any insider knowledge about the quality of the loans bundled into the CDOs, he says.

 “It’s almost too uncanny,” Calacci says. “If these banks had insight into the underlying loans because they had relationships with banks, originators or servicers, that’s at the least unethical.”

The identification of securities in the document, known as Schedule A, and data compiled by Bloomberg show that Goldman Sachs underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured -- more than any other investment bank. Merrill Lynch & Co., now part of Bank of America Corp., created $13.2 billion of the CDOs, and Deutsche Bank AG underwrote $9.5 billion.

These tallies suggest a possible reason why the New York Fed kept so much under wraps, Professor James Cox of Duke University School of Law says: “They may have been trying to shield Goldman -- for Goldman’s sake or out of macro concerns that another investment bank would be at risk.”

Goldman Sachs spokesman Michael DuVally declined to comment.

Schedule A also makes possible a more complete examination of why AIG collapsed. Joseph Cassano, the former president of the AIG Financial Products unit that sold the swaps, said on a December 2007 conference call that his firm pulled back from selling swaps on U.S. subprime residential CDOs in late 2005. The list shows that the $21.2 billion in CDOs minted after 2005, mostly based on prime and commercial mortgages, performed as badly as or worse than the earlier subprime vintages.

A lawyer for Cassano declined to comment.

As details of the cover-up emerge, so does anger at the perceived conflicts. Philip Angelides, chairman of the Financial Crisis Inquiry Commission, at a hearing held by his panel on Jan. 13, questioned how banks could underwrite poisonous securities and then bet against them. “It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,” he said.

Janet Tavakoli, founder of Tavakoli Structured Finance Inc., a Chicago-based consulting firm, says the New York Fed’s secrecy has helped hide who’s responsible for the worst of the disaster. “The suppression of the details in the list of counterparties was part of the cover-up,” she says.

To read the rest: http://www.bloomberg.com/apps/news?pid=20601109

Major stock measures closed lower with the S&P 500 down 1%. Breadth was 2/1 negative and volume was moderate.


22 February 2010

Portfolio Update

Model Portfolio Value As of 22 February 2010

$ 611,947

19 February 2010

Portfolio Update

Model Portfolio Value As of 19 February 2010

$ 612,005

12 February 2010

Birthday Thoughts

Model Portfolio Value As of 12 February 2010

$ 606,048

(WSJ) Retail sales last month increased 0.5%, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires had forecast a 0.3% increase. The report also showed December retail sales were adjusted upward, to a 0.1% decrease from a previously reported 0.3% decline. Excluding the car sector, which was flat in January, all other retail sales rose 0.6%, in line with expectations. Ex-auto sales in December fell 0.2%. The data were originally scheduled for Thursday release, but there was a rare delay because of a crippling storm that struck an already snowbound Washington.

China's central bank unexpectedly increased the amount of funds banks must set aside as reserves -- the second such move this year. The action follows data released a day earlier showing rapid lending, accelerating property prices and a mixed inflationary outlook. From Feb. 25 banks will be required to set aside an additional 0.5 percent of deposits as reserves, the People's Bank of China said on its Web site. After the hike major banks will be required to set aside 16.5% of deposits. Smaller banks are currently required to set aside 14% of deposits.

European stocks pulled back from early gains and are now mixed as the trading day in the U.S. begins after China's announcement and as data from Europe underlined worries about economic growth. Asian equity markets, which had already closed when China made its statement, ended mostly higher Friday, helped by gains for resource sector stocks.

We are heading down to Northern Kentucky to visit the prince and princess for the week and to watch a couple of basketball games. We will return on Tuesday February 23.


Is anyone surprised?

(Bloomberg) -- Former regulators hired by Toyota Motor Corp. helped end at least four U.S. investigations of unintended acceleration by company vehicles in the last decade, warding off possible recalls, court and government records show.

Christopher Tinto, vice president of regulatory affairs in Toyota’s Washington office, and Christopher Santucci, who works for Tinto, helped persuade the National Highway Traffic Safety Administration to end probes including those of 2002-2003 Toyota Camrys and Solaras, court documents show. Both men joined Toyota directly from NHTSA, Tinto in 1994 and Santucci in 2003.

While all automakers have employees who handle NHTSA issues, Toyota may be alone among the major companies in employing former agency staffers to do so. Spokesmen for General Motors Co., Ford Motor Co., Chrysler Group LLC and Honda Motor Co. all say their companies have no ex-NHTSA people who deal with the agency on defects.

The DJIA is down 100 points out of the gate.

Motorola said late Thursday that it plans to split itself up into two separate companies, which would put its mobile handset and cable set-top-box business into a new publicly-traded company. The split is due to be completed by the first quarter of next year. The company has announced similar plans before, only to call them off given the weakness of the mobile handset business until very recently.

We wonder if Motorola is offering the cell phone business for sale with this announcement. And we also wonder what this announcement says about the future profitability of its cell phone business.

Occam’s razor

In a discussion yesterday we mentioned that the health care bill should have just been re-importation of drugs and expanding Medicare by buy in to folks 55 and over and 20 and under. The Clinton healthcare bill failed in the 1990s because it was too complex. The same goes for this year. Too bad the Obama folks never heard of Occam’s razor

(Wikipedia) Occam's razor (or Ockham's razor), entia non sunt multiplicanda praeter necessitatem, is the principle that "entities must not be multiplied beyond necessity" and the conclusion thereof, that the simplest explanation or strategy tends to be the best one. The principle is attributed to 14th-century English logician, theologian and Franciscan friar, William of Ockham. Occam's razor may be alternatively phrased as pluralitas non est ponenda sine necessitate ("plurality should not be posited without necessity")]. The principle is often expressed in Latin as the lex parsimoniae (translating to the law of parsimony, law of economy or law of succinctness). When competing hypotheses are equal in other respects, the principle recommends selection of the hypothesis that introduces the fewest assumptions and postulates the fewest entities while still sufficiently answering the question. It is in this sense that Occam's razor is usually understood. To quote Isaac Newton, "We are to admit no more causes of natural things than such as are both true and sufficient to explain their appearances. Therefore, to the same natural effects we must, so far as possible, assign the same causes."

All markets are closed on Monday in observance of President’s Day. (Wikipedia) Washington's Birthday is a United States federal holiday celebrated on the third Monday of February. It is also commonly known as Presidents Day (sometimes spelled as Presidents' Day or President's Day). As Washington's Birthday or Presidents Day, it is also the official name of a concurrent state holiday celebrated on the same day in a number of states. Titled Washington's Birthday, the federal holiday was originally implemented by the United States Congress in 1880 for government offices in the District of Columbia (20 Stat. 277) and expanded in 1885 to include all federal offices (23 Stat. 516). As the first federal holiday to honor an American citizen, the holiday was celebrated on Washington's actual birthday, February 22. On January 1, 1971 the federal holiday was shifted to the third Monday in February by the Uniform Monday Holiday Act. A draft of the Uniform Holidays Bill of 1968 would have renamed the holiday to Presidents' Day to honor the birthdays of both Washington and Lincoln, but this proposal failed in committee and the bill as voted on and signed into law on June 28, 1968 kept the name Washington's Birthday.

From http://www.calculatedriskblog.com/ : Euro area and EU27 GDP up by 0.1%

GDP increased by 0.1% in both the euro area1 (EA16) and the EU271 during the fourth quarter of 2009, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union. In the third quarter of 2009, growth rates were +0.4% and +0.3% respectively. Germany's economy stalled (no change), and Latvia saw the biggest decline (-3.2%). And Greece's economy shrunk by 0.8%, possibly exacerbating the Greek debt crisis. Note: Europe numbers are quarter-to-quarter. In the U.S. the GDP is annualized.


Roth Capital Partners upgraded Nvidia to Buy from Hold.

Though we have been concerned about the loss of the Intel (INTC) (rated at Hold) chipset business, we would be remiss if we did not consider the possibility of significantly higher corporate margins as non-personal-computer businesses grow, graphics-processing-unit (GPU) margins recover with the ramp up of Fermi, and the low-margin chipset business disappears. Our new target is $21, based on 19 times fiscal 2012 (calendar 2011) earnings per share of $1.10.

We purchased a few shares in aggressive accounts yesterday but weren’t’ able to get an ax into it before is jumped $1.

Stocks in Europe ended lower, snapping a four-session run of gains, as weak economic data from the euro zone and more signs that China is trying to slow its economy weighed on shares.

High speed rail, it’s time has come—For China- it’s called jobs, jobs, jobs. Of course China isn’t spending hundreds of billions of dollars a year on useless and wasteful wars.


From the NY Times: China’s Project to Build Fast Trains Is Spurring Growth http://www.nytimes.com/2010/02/13/business/global/13rail.html

The Chinese bullet train, which has the world’s fastest average speed, connects Guangzhou, the southern coastal manufacturing center, to Wuhan, deep in the interior. In a little more than three hours, it travels 664 miles ... Even more impressive, the Guangzhou to Wuhan train is just one of 42 high-speed lines recently opened or set to open by 2012 in China.

This is part of the stimulus package: Faced with mass layoffs at export factories [due to the global financial crisis], China ordered that the new rail system be completed by 2012 instead of 2020, throwing more than $100 billion in stimulus at the projects. Administrators mobilized armies of laborers — 110,000 just for the 820-mile route from Beijing to Shanghai, which will cut travel time there to 5 hours from 12 when it opens next year.

Gold was down $2 at $1093 and Oil finished at $74.09 down $1.19.

We added Alcoa and Goodyear back to accounts that own Verizon. Both are about 10% lower than when we sold in January. In a few accounts we sold Verizon to pay for the purchases.

The sellout to the drug companies and Billy Tauzin by Obama:


The major measures were lower all day and after some big boy and girl games towards the close they rallied a bit but still closed down wiping out about half of yesterday’s gains. Breadth was negative and volume moderate.





11 February 2010


Model Portfolio Value As of 11 February 2010

$ 605,975

(NYT) European leaders, facing a crucial test for the credibility of their common currency, said Thursday that they had reached an agreement aimed at persuading jittery bond market investors that Greece would not be allowed to default on its government debt.

Jobless claims for last week were less than expected at 440,000. Markets around the world are mildly higher and Oil has a $75 handle while Gold is at $1090 as the trading day begins. The dollar is firm at $1.37.

Fun essay by one of the best writers about Wall Street, Michael Lewis, the author of Liar’s Poker and many other books:

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

When I sat down to write my account of the experience in 1989—Liar’s Poker, it was called—it was in the spirit of a young man who thought he was getting out while the getting was good. I was merely scribbling down a message on my way out and stuffing it into a bottle for those who would pass through these parts in the far distant future.

Unless some insider got all of this down on paper, I figured, no future human would believe that it happened.

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

I had no great agenda, apart from telling what I took to be a remarkable tale, but if you got a few drinks in me and then asked what effect I thought my book would have on the world, I might have said something like, “I hope that college students trying to figure out what to do with their lives will read it and decide that it’s silly to phony it up and abandon their passions to become financiers.” I hoped that some bright kid at, say, Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Morgan Stanley, and set out to sea.

Somehow that message failed to come across. Six months after Liar’s Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They’d read my book as a how-to manual.

In the two decades since then, I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches, and sell off the pieces?

6 more pages at

European shares ended mostly lower Thursday after European leaders said they stand ready to support Greece's economy but provided few details.


 (thestreet.com) Palm swayed in the warm market breezes Thursday as Citi lifted its sell rating and regulatory monitors offered a sunny forecast that called for the Pre to arrive at AT&T in May.

Palm was higher this morning on the upgrade but sold off later in the afternoon when the following article was published:


Dell is certainly getting its money’s worth out of David Johnson, the mergers-and-acquisitions specialist it hired away from IBM in 2009. Last fall, the PC maker announced plans to buy information technology services outfit Perot Systems (PER) for about $3.9 billion. Now, just a few months later, it’s snapping up another company — and no, it’s not Palm.

Dell is acquiring Kace Networks, a systems management appliances venture with clients in government, education and health care. Terms of the deal were not disclosed.

For Dell, which is pushing harder than ever to expand its tech-services offerings, the deal seems a savvy one. Certainly, it dovetails nicely with the company’s acquisition of Perot and will serve it well peddling services to the small-to-mid-sized business market–something it clearly needs to do with profits in its core personal-computer business dwindling.

Another take on Palm: http://finance.yahoo.com/news/Citi-Cites-Technicals-in-Palm-indie-2419102526.html?x=0&.v=1

Despite "still challenged" fundamentals, Citigroup boosted Palm's rating on Thursday. Palm shares are ahead today after Citigroup analyst Jim Suva boosted the stock's rating to Hold from Sell. While the stock's fundamentals leave something to be desired, and no overtly bullish signals are coming from carriers Sprint and Verizon, Palm has some "potential short-term technical catalysts," which Suva says limit the stock's near-term downside. Among these catalysts are a rising short interest and increasing difficulty or cost to borrow shares, and consolidation of ownership among institutional investors. In the month leading to Wednesday's close, Palm was easily the worst performing component of the Personal Computer and Smartphone Stocks Index, falling by -21%. As a whole, the Index has been painted in red for the period, with the singular exception of Blackberry maker Research In Motion (RIMM).

According to Bespoke Investment Group, newsletter writers haven't been this bearish in ages.


Bespoke: Although the S&P 500 is down less than 7.5% from its January high, bulls are heading for the hills.  According to Investors Intelligence, bullish sentiment among newsletter writers is currently at 34.1%, which is the lowest level since March 2009.  At the same time, bearish sentiment (26.1%) is the highest since November, while the percentage of newsletter writers in the correction camp has sky-rocketed all the way to 39.8%, which is a level that hasn't been seen since 1983.

The euro closed at $1.36. With the Greece bailout the experts expected the dollar to fall.
Maybe tomorrow or when the details are released, or maybe not.


The major stock measures were higher all day and closed on up over 1%. Breadth was 3/1 to the good and volume was moderate. Tonight and tomorrow are Triple Witching days.


10 February 2010


Model Portfolio Value As of 10 February 2010

$ 604,670

Word of the Day for Wednesday, February 10, 2010: tarradiddle \tair-uh-DID-uhl\, noun; also taradiddle:

1.      A petty falsehood; a fib.

2.      2. Pretentious nonsense.


(WSJ) European shares rose strongly, boosted by hopes that a solution will soon be for Greece's financial woes, while steel giant ArcelorMittal declined after disappointing earnings news. Major Asian markets advanced, with resource and shipping stocks posting some of the biggest gains across the region.

Gold is up a few dollars and Oil has a $74 handle as the trading day begins.

Dell was upgraded to buy from neutral by Bank of America Merrill Lynch on the computer maker's underperformance since November, which the broker attributed to skepticism around gross margins.

Dell earnings are coming next week and we are going to buy ahead of them at lower than we sold in January.

Up 100 on the DJIA, down 100 on the DJIA and the big boys and girls are having fun, not so much for the rest of us. The DJIA is down 100 after an hour of trading.

Investors’ Intelligence had 32% bulls, 26% bears and the rest correction.
In January the S&P was 10% higher and the bulls were over 50% with the bears under 20%.



Stock prices rose in Europe and the euro eased against the dollar as policy makers continued to mull
a possible rescue for deficit-plagued Greece. Gold and Oil were lower.

Walgreen is down 10% in the last two weeks and 20% from December after disappointing same store sales and we added shares to accounts.

Stocks sashayed on Wednesday finally closing mildly
higher in moderate trading.
Breadth was positive.



9 February 2010


Model Portfolio Value As of 9 February 2010

$ 604,936



Stocks are going to open 1% higher as last nights late session sell programs are reversed on news that Greece may be saved. And we are all relieved. Asian and European markets were higher overnight and Gold is up a couple of dollars while Oil has a $72 handle as the trading day begins.

(WSJ) Asian and European stocks were stronger, helped as news that European Central Bank President Jean-Claude Trichet was returning early from a meeting in Sydney raised hopes of an imminent rescue of Greece.

Asian markets ended mostly higher, with a rebound in commodity prices and Swiss banking major UBS's return to profit spurring late buying in Hong Kong.

How the Federal Budget is spent:




Palm is back below the price at which we purchased in December and traded for a quick 20% profit and so we reloaded.

$73.89 up $2 $1078 up $12 European stock markets ended a choppy session modestly higher in anticipation that a rescue for Greece was in sight.



The major measures were higher all day closing 1% below their highs
but up 1% and more.
Breadth was 3/1 to the good and volume was moderate.






8 February 2010


Model Portfolio Value As of 8 February 2010

$ 602,101

The new team in the old NFL won the super bowl and so the markets are safe for this year.




Gold bounced $15 higher overnight and Oil has $71 handle as the trading day begins. Asian and European markets were mixed overnight and U.S. futures indicate a slightly lower opening. Greece didn’t go up in flames over the weekend and none of the other PIIGS were slaughtered either. With expiration coming on Friday anything is possible this week.

The major measures bounced on Friday afternoon at down 9% from the January high when the logical action should have been a close on their lows as they had the week before. The only other 9% correction in this current rally from the March lows occurred in July and so the question going forward is whether the swift 9% down form the January high was enough to replenish the bulls’ energy or tease the bears’ resolve. As always, time will tell.

Wall Street Recycles:

John Thain has been chosen to run lender CIT, after a year in which he was ousted from Merrill Lynch and the business lender teetered on the brink.

Thain will start as chairman and chief executive immediately, CIT said late yesterday, replacing interim head Peter Tobin.

Thain, 54, led Merrill for a year, when he was shoved out in January 2009 after the company was bought by Bank of America in a controversial merger. The former president of Goldman Sachs and the New York Stock Exchange has been out of work since. ... Thain will receive $500,000 in salary and $5.5 million worth of restricted CIT shares. He could also earn another $1.5 million in restricted shares. That's a pittance compared to what he was making at Merrill Lynch. When he joined, the bank agreed to a $44 million compensation package.

Read more:

Matt Taibbi comment on this hire:

Man, exactly what do you have to do to become unhirable in this country? Eat Christian babies on CNN?

John Thain is the dope who was buying himself an $87,000 area rug as his company was going bust. He became a symbol for brainless greed on Wall Street just in time to complete a tortured sale of Merrill to Bank of America in which billions in losses were somehow kept hidden from BofA shareholders.

Now he gets another big job, just like every other high-end Wall Street buffoon who wrecks a company in this era. My favorite of course is John Meriwether, the “genius” investor who dreamed up the imploded hedge fund Long Term Capital Management in the late nineties. Meriwether immediately was given another $250 million to play with after LTCM blew up and is now working on his third such venture, a company called JM advisors, which uses LTCM-like investment techniques. Who’s giving guys like this money? http://trueslant.com/matttaibbi/


How to slow down: Plant a carrot seed and lie down and watch it grow.






Lloyd Blankfein, Goldman Sachs CEO took only $9 million in restricted stock as a bonus for 2009. What a guy.

More Goldman revelations:



What the U.S. economy really needs. No money for mortgages but--

Lifting a roadblock to the rollout of 3-D in theaters, investment firm JP Morgan has raised nearly $700 million to finance the digital conversion of thousands of screens around the country, three people familiar with the matter said Friday. The funding, delayed for longer than a year due to the credit crunch, would pay for the installation of digital projectors for about 12,000 screens, easing a bottleneck caused by an abundance of 3-D movies competing for not enough screens. There are currently only about 3,500 digital 3-D screens in the country.

European markets gyrated but ended mostly higher as investors continued to grapple with fiscal and economic problems along the euro zone's periphery. Greece remained an outpost of weakness, with the ASE Composite down 3.9%.

$71.71 up 52 pennies $1063 up $10 European bourses closed up to 1% higher


Study: Drinking soda doubles risk of pancreatic cancer


.... Researchers in Singapore followed 60,542 people over the course of 14 years. They found that of those who drank two or more sodas per week had double the risk of developing pancreatic cancer than those who did not. If you drank fruit juice instead of soda, you showed no sign of elevated risk.

That’s the correlation. The cause? It could be the elevated sugar level in soda.

…the higher levels of sugar found in soft drinks may be resulting in the raised level of insulin in the body, which is believed to contribute to the cell growth in pancreatic cancer.

Getting pancreatic cancer is no walk in the park. Only five percent of those diagnosed with the disease live more than five years.

For years now, we’ve known that drinking lots of soda poses an increased risk for developing diabetes. And we know that soda consumption is directly linked with higher obesity rates. We also know that soda cans are lined with BPA, which acts as an endocrine inhibitor that may help cause both diabetes and higher levels of obesity. High soda consumption for children can lead to a host of problems, including an allergy to penicillin, lower calcium levels that leads to deformed bone growth in the short term, and osteoporosis in the long.  Add a greater risk for developing pancreatic cancer, and, at this point, you’d have to be a little crazy not to wonder whether cracking open that next Coke or Pepsi is really worth it.

If people really start paying attention, it could be that soda will be the cigarettes of the future, and we’ll look back and say, really, we drank that stuff?

The major measures collapsed in the final fifteen minute to close almost 1% lower on the day and down 10% from the January high. Breadth was 2/1 negative and volume was light.


5 February 2010


Model Portfolio Value As of 5 February 2010

$ 603,589

The Japanese do know how to accept responsibility. And they do not have golden parachutes.

Toyota Chief Expresses Regrets

‘We Are in a Crisis’ Over Loss of Trust

Asian and European markets were down 2% and more overnight. The Employment Report for January discovered 20,000 net job losses. U.S. markets are lower but..... The media and market bears are comparing the debt problems of the PIIGS (Portugal, Italy, Ireland, Greece and Spain) to the Lehman/ Bear Stearns etc fiasco of autumn 2008. We don’t agree. After calamitous events those events are in the consciousness for many years and every difficult event then is projected as a repeat of that crisis. The debt crisis are serious yes, but not on a par with the possible collapse of the U.S. financial system.

California, Illinois, New York and other states have financial problems and are running serious deficits. Portugal, Ireland and Greece all have populations similar or less than those states. Spain is on par with California and Italy has been having financial and political problems since the end of the World War I. Serious yes, earth moving, no.

But in the markets, perception is reality and corrections unlike rallies need reasons. In fact after the run the markets have experienced since March 2009 a correction is certainly warranted. We don’t see the total collapse that occurred last year at this time but we are prepared for the worst. Corrections are never orderly and if they are to be effective corrections need to induce fear and a touch of panic to mitigate the greed a rally creates.

Gold is down another $5 after dropping $50 yesterday. Gold dropping in a financial panic is counterintuitive- except that Gold is not longer a storehouse of value. It is merely a trading vehicle. Oil is flat with a $73 handle.

Hain met expectations last night. Unfortunately the company picked the wrong day to report earnings. Fortunately the drop of yesterday allowed us to buy more shares at an attractive price.

Stocks are going to open higher as traders have decided the Employment Repot was OK for the first few minutes of trading at least.

(WSJ) Deutsche Telekom is preparing for a possible initial public offering or spin-off of its U.S. T-Mobile arm, in an effort to assuage shareholders disenchanted with the company's share performance, according to people familiar with the matter.  The German telecommunications giant has recently held discussions with a number of banks including Deutsche Bank and UBS about underwriting an IPO, which could help fund the unit's network build out, or a spin-off, the people said. The company expects to make a final decision in the coming months. A spokesman for Deutsche Telekom declined to comment.

Caveat Emptor leads to easy come easy go.



Wall Street needs an army of arbitrators to clean up the mess left by the headline-grabbing collapse of three mutual funds stuffed with collateralized debt obligations and other subprime-related securities.

About 400 complaints have been filed against the Morgan Keegan & Co. investment-banking unit of Regions Financial Corp. by customers claiming they were burned by the funds, which plunged in value by as much as 82% after the housing meltdown hit.

So many investors have filed arbitration claims that the industry-funded machine for handling such disputes is overloaded. To decide all the disputes, the Financial Industry Regulatory Authority has been forced to call in hundreds of extra arbitrators.

We've never done this on this kind of scale," said Linda Fienberg, Finra's president of dispute resolution.

Finra recently cast a dragnet for arbitrators as far away as Chicago, New York and Florida, imploring them to come to Atlanta, Birmingham, Ala., New Orleans, Orlando, Fla., and four other cities where arbitration hearings on the mutual funds are clustered.

As a result, Finra boosted the size of the pool of available arbitrators in each city to an average of 721 from the previous 87. And it looks like the securities industry overseer will need every body it can get.

According to Regions, based in Birmingham, just 79 arbitration cases have been heard so far, with 39 of them dismissed. Out of the $35 million sought by investors in the mutual funds, arbitrators have awarded $7.6 million. The company said an additional 114 claims seeking $24 million were dropped before any decision was reached.

At the end of 2005, the five-year average annual gain by one of those funds beat all U.S. high-yield funds and the Dow Jones Industrial Average. But the funds were hammered by their investments in mortgage-backed securities, including low-quality mortgages, and complex securities like CDOs. Collateralized debt obligations are pools of bonds tied to mortgages.

Morgan Keegan has said investors were told bluntly in required disclosures that the funds were risky and could lose some or all of their value. And it says the extra arbitrators will help prevent arbitrators from hearing multiple similar cases, reducing the risk they might be influenced by the facts from a previous hearing.

(our emphasis) The firm is fighting hard against the complaints, trying to remove arbitrators who ruled against the firm in previous hearings, challenging awards in court and bringing in costly experts to testify in cases involving relatively small losses, according to lawyers for some investors.

"They've been fighting these hammer and tongs," says Brian Smiley, an Atlanta lawyer who has represented more than 100 investors trying to recover more than $50 million from Morgan Keegan.

Under the agreements signed by most brokerage customers, disputes must be decided by one or three arbitrators. Three-member panels include one arbitrator with ties to the securities industry.

In a dispute over $125,095 in losses, the securities firm called as a witness Sharon Brown-Hruska, a former acting chairman of the Commodity Futures Trading Commission. Regions also pressed the arbitration panel to award the company more than $200,000 if it won.

"They were trying to scare these people into just dropping their claims," said Peter Mougey, a lawyer in Pensacola, Fla., who represented the investors, Robert and Helen Perkins and Billy and Sharon Powell, who live near Birmingham.

A spokesman for Ms. Brown-Hruska's firm declined to comment.

In October, the investors were awarded the full amount of their losses and nearly $97,000 in legal fees and other expenses, Mr. Mougey said. A Regions spokeswoman said it is only fair for the firm to try to recover its costs, since investors may be awarded compensation for their own costs if they win.

The S&P 500 is down over 10% from its January high and we are going to do a bit of buying in favorite trading/holding stocks. We don’t dismiss the Sovereign Debt crisis out of hand but as we mentioned above there are many states in the U.S. with populations and budgets the sizes of the PIIGS that have financial problems and the world is not quaking about them. The countries of Europe are like states in the U.S. and have about as much importance except for the biggies like France, Germany and England.

We added shares of Ann Taylor and repurchased American Eagle. Both are going to announce better than results. We also bought Intel to hold/trade with a 3.2% yield and BankAmerica for a trade. In many accounts to fund the purchases and not increase our exposure we sold Kraft, a less aggressive stock, for a small profit.

$71.12 down $2.01 $1062 unchanged European bourses closed 1% to 3% lower


The big boys and girls had fun in the last hour of trading rallying the major measures from down 1% to back to even in about 10 minutes of trading only to pull back and let the measures drop 0.5% in the next ten minutes. But the buy bulls came back and at the close the major measures were higher. The conspiracy theorists, of which there are many, will see the Fed’s hand in this action. Our thought as mentioned above before the rally began is that down 10% from the high suggested a rally was in the cards. How long? is another matter.

The major measures closed higher. Breadth was flat and volume active.

And tomorrow is another day but the gambling will have to be at the casinos or on the Super Bowl since the markets are closed till Monday.


4 February 2010


Model Portfolio Value As of 4 February 2010

$ 603,344

It’s always something even when it isn’t’. The big boys and girls are having fun trading Spain and Portugal CDS (Credit Default Swaps are bets on debtors not paying their debts) as they try to make hope reality by creating panic in the sovereign debt of those two countries. Greece has been the problem for the last few weeks but the rumor mill has now spread to the Iberian Peninsula.

From the Financial Times: Sovereign debt fears rattle investors

“The latest catalyst was [Wednesday’s] bond auction in Portugal which was scaled back and which has re-ignited fears that the likes of Portugal and Greece will not be able to fund their deficits without a bail out,” said Gavan Nolan, credit analyst at Markit.

From Bloomberg: Portugal, Spain Lead Worldwide Decline in Stocks; Dollar Gains

Stocks and bonds fell in Spain, Portugal and eastern Europe on concern governments will struggle to fund their budget deficits as spending cuts in Greece trigger labor strikes. ... “The focus is shifting toward Spain and Portugal, where the deficit-reduction plans have been far less ambitious than Greece,” said Kornelius Purps, a fixed-income strategist in Munich at UniCredit Markets & Investment Banking.

More on Sovereign Debt Default here: http://www.businessinsider.com/the-15-countries-at-the-greatest-risk-of-default-2010-2

Stock markets around the world are lower as the reflex rally of Monday and Tuesday is now a distant memory and the ADD traders are back on the negative side. Yesterdays markets were mildly lower but today Asia and Europe are down and so will be U.S. market when trading begins. Gold is off $8 but remains above $1100 and Oil has a $76 handle. On the positive side the dollar is at a new several months high against the euro at $1.38.


Toyota said Thursday that it is investigating the computer-regulated braking systems of all other hybrid models, such as the Sai and the Lexus HS250h luxury hybrid sedan, following complaints about its Prius hybrid model

The U.K. central bank voted against extending its bond-buying program and left its key interest rate unchanged. The European Central Bank also kept its rate policy unchanged.

Verizon was downgraded to neutral from outperform at Credit Suisse, which said it no longer believes AT&T (T) will lose its exclusive deal over the iPhone in mid-2010. Credit Suisse said it had previously believed that Verizon could win a substantial number of subscriptions from AT&T once iPhone exclusivity ended.

Cisco reported a jump in fiscal second-quarter profit that beat Wall Street's estimates late Wednesday, with CEO John Chambers saying the company is "entering the second phase of the economic recovery." The networking-gear giant reported a profit of $1.85 billion, or 32 cents a share, compared with a profit of $1.5 billion, or 26 cents a share, for the year-earlier period. Revenue was $9.8 billion, up from $9.1 billion for the same quarter last year. Adjusted income was 40 cents a share, topping the 35 cent consensus forecast.

Productivity of the U.S. nonfarm business sector slowed a bit in the fourth quarter as hours worked increased for the first quarter since the second quarter of 2007, the Labor Department estimated. The productivity of the U.S. nonfarm business sector rose at an annual rate of 6.2% after a 7.2% gain in the third quarter. Economists were expecting productivity in the latest quarter to rise at an annual rate of 7.3%.

First-time claims for state unemployment benefits rose to the highest level since mid-December, the Labor Department reported. The number of initial claims in the week ending Jan. 30 rose 8,000 to 480,000. The consensus forecast of Wall Street economists was for claims to drop to 455,000. Claims in the previous week were revised to a decrease of 7,000 to 472,000 compared with the initial estimate of a decrease of 8,000 to 470,000.

Toyota posted a quarterly profit that beat analysts' estimates and said it'll post a profit for the full fiscal year, despite a massive auto recall in the current quarter. Toyota posted a net profit of 153.2 billion yen ($1.68 billion) in the three months through December. For the same quarter a year ago, it reported a net loss of 164.64 billion yen. Revenue for the third quarter climbed 10.2% to 5.3 trillion yen. Analysts had expected a net profit of 87.67 billion yen.

Two days before a similar report from the U.S. government, ADP said 22,000 private-sector jobs were lost in January -- close to what economists had anticipated. The decline was the smallest since employment began falling in February 2008, ADP said.

Employment Still Elusive

Diane Swonk, Chief Economist at Mesirow Financial

Unemployment claims edged up to 480,000 in the most recent week, a slight deterioration from the previous week. Unemployment claims need to dip into the 350,000 range consistently before we see any major improvement in payroll employment.

This, coupled with the ADP report on employment earlier in the week, suggests that firing continued to outpace hiring in January. Nonetheless, the pace of job losses has clearly abated and we are on the verge of a tipping point. The temporary surge in hiring for the 2010 Census virtually ensures it.

However, any gains in employment that we do see in February and March are likely to be muted and not enough to contain unemployment. Indeed, the ranks of discouraged workers have risen quite substantially over the last year. This suggests that unemployment will continue to rise, as those workers throw their hats back into ring once we do see a pickup in hiring.

It will be a rocky year for those still looking for work, and an even tougher year for incumbents trying to get re-elected. Some unemployment in Washington, D.C. may be warranted given the cowardice they have shown in recent weeks. The attacks on the Fed and its independence are particularly disturbing.

P.S. Fed Chairman Ben Bernanke was quietly sworn back into office yesterday.

 One half hour into the trading day and the major measures are down over 1.5% with 10/1 negative breadth.

Bank of America has agreed to pay $150 million to settle a lawsuit by the Securities and Exchange Commission over its failure to disclose a then-$16 billion loss at Merrill Lynch before shareholders voted on the merger in December 2008, the regulator said in court papers filed Thursday. The settlement still needs approval from Judge Jed S. Rakoff, the federal judge overseeing the case. Judge Rakoff rejected a previous proposed settlement between Bank of America and the S.E.C. last year, deeming it too low.

These settlements confuse. The executives should have to cough up the settlement- or their insurance companies. As it stands the taxpayers are footing the bill and the dollars just go from one pocket to another. We know that BAC has repaid the TARP but they are still making billions from artificially low interest rates and Treasury guarantees.

Cuomo is going after the right targets: New York's attorney general filed civil securities fraud charges against former Bank of America CEO Kenneth Lewis and former Chief Financial Officer Joseph Price, who remains at the bank. Attorney General Andrew Cuomo alleged they decided not to disclose $16 billion in losses at Merrill Lynch before getting shareholder approval to acquire the Wall Street firm. In a statement, Bank of America called the charges "regrettable."

Oil is down $3 with a $73 handle after two hours of trading.

Markets crash, teeth gnash; DJIA down 200 at 11am.

Krugman: Chinese Rumbles:


European stock markets and the euro came under heavy pressure Thursday, as worries about debt in the euro zone's peripheral countries weighed on sentiment. The cost of insuring Greece, Spain and Portugal's debt against default rose, as the European Commission's endorsement Wednesday of Greece's deficit-cutting plan failed to assuage investors' fears. Lisbon stocks closed down 5% while the Greek ASE fell 3.3% amid mounting concerns over big budget deficits. All other major European exchanges lost more than 2.2%. The euro bore the brunt of investors' anxieties, hitting a new eight-month low. At the close of European trading, the euro was at $1.3756 from $1.3905 late Wednesday.

$73.05 down $3.94. $1062 down $50.

Stocks closed on their lows for the day with the DJIA down 270 points at 9999 and the S&P 500 down 35 points. Breadth was 10/1 negative and down volumes swamped up volume. Total volume was moderate. The Employment Report comes in the morning and the bulls are hoping it is super, the bears not so much.


3 February 2010

Portfolio Update

Model Portfolio Value As of 3 February 2010

$ 606,846

2 February 2010


Model Portfolio Value As of 2 February 2010

$ 607,946

Here in the land of milk and honey we shoot groundhogs. Joke. Actually the groundhog didn’t see its shadow and so Spring is on the way, Hooray.

Also called woodchucks, groundhogs are members of the squirrel family. Although, unlike their tree-loving cousins, groundhogs hang out on the ground. People often see them munching grass along roads and highways. Most famous one of them all: Punxsutawney Phil First Groundhog Day: Celebrated in 1886 in Punxsutawney, Penn. Legend: The groundhogs' aptitude for prognostication is based on German folklore that goes back several hundred years. If the groundhog sees its shadow, it gets scared and runs back into home. So there will be at least six weeks of wintry weather. Should the day be cloudy, spring will come early. Prediction success rate: 39 percent. Hibernation: While lacking in meteorological skills, groundhogs are expert hibernators. Groundhogs dig a winter burrow and curl up into a ball on a bed of grasses. During hibernation, their metabolism slows down to conserve energy. They breathe only once every six minutes, and their heart beats only four times a minute. All the while, their body temperature drops to as low as 40 degrees. Groundhogs are expert diggers as well. They use the long claws on their large feet like spades while tunneling through soil. When complete, their burrows may be 12 feet deep and 50 feet long. Groundhogs build chambers for different purposes. There's one for giving birth, one for sleeping, and even a bathroom. Body length: 16 to 32 inches Tail length: 4 to 10 inches. Weight: 4 to 15 pounds. Distribution: From south-central Alaska south through central Canada to the Midwestern and eastern United States Habitat: Pastures, meadows, old fields and woods

Wild diet: Green vegetation, such as grasses, alfalfa and clover.

We are traveling tomorrow and so the next post will be Thursday February 4.



European shares traded higher Tuesday as gains for miners offset losses for oil and gas companies and as worries about Greece's financial woes appeared to recede. Asian markets ended mixed, with Australian shares rising after the country's central bank surprised traders with its decision to keep rates on hold.

BP swung to a profit in the fourth quarter, helped by rising crude-oil prices, improved production and cost cutting. BP said it earned $4.3 billion in the quarter, compared to a loss of $3.34 billion a year earlier. Excluding the impact of price changes on unsold inventory and other one-off effects, profit rose to $4.38 billion from $2.57 billion, but was still below the consensus forecast of $4.66 billion.

United Parcel Service said its fourth-quarter net income was $757 million, or 76 cents a share, up from $254 million, or 25 cents a share, in the year-ago period. Sales edged down to $12.5 billion from $12.7 billion. The shipping giant said strength in its international segment helped drive growth.

Hain’s earnings come tomorrow night and the share price is back under $16. We sold our last trade in the stock at $17.90 and we have begun repurchasing in accounts that owned it before. We are not taking a large position before earnings but our guess is that they won’t disappoint and so we want to own some shares for a flip if the share price pops with room to by more on any disappointment.


From Dina ElBoghdady and Dan Keating at the WaPo: Rising FHA default rate foreshadows a crush of foreclosures

The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year ... About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency's figures show. ... The problems are rooted in FHA mortgages made in 2007 and 2008. Those loans are now maturing into their worst years because failures most often occur two to three years after a mortgage is made. ... the FHA projects that it will pay out claims to lenders on one out of every four loans made in 2007 -- the worst rate in at least three decades. The claim rate should be nearly the same on the vastly larger volume of loans made in 2008.


For the present rally to succeed resistance at 1105 and then 1120 on the upside needs to be tested and pierced.

We added a few shares of Ann Taylor to larger accounts (it is up 10% today and we would buy in more accounts on a pullback) as ANN announced better than sales results for the fourth quarter along with much better margins. We also added Chico’s to accounts and Coldwater to many. We think those two will benefit from Ann’s news and we have had better luck trading them.

Ford said sales in the United States were 25 percent higher last month than a year ago. Ford said passenger car sales rose 43 percent from January 2009, when many consumers were postponing big purchases because of the economy and the industry was clouded by uncertainty. Ford estimated that its market share increased by 2 percentage points, to 16 percent, in January.

General Motors, sales rose 13.6% to 146,825 vehicles due to "continued strong growth of new GM crossovers and passenger cars," the Detroit giant said. GM also boosted its sales outlook in 2010 to 12 million vehicles from 11.5 million units.

Toyota reported a 15.8% drop.

In case you forgot, or never knew: 2nd February is also Candlemas Day

This ancient festival marks the midpoint of winter, halfway between the shortest day and the spring equinox. Candlemas is a traditional Christian festival that commemorates the ritual purification of Mary forty days after the birth of her son Jesus. On this day, Christians remember the presentation of Jesus Christ in the Temple. Forty days after the birth of a Jewish boy, it was the custom to take him to the temple in Jerusalem to be presented to God by his thankful parents. In pre-Christian times, this day was known as the 'Feast of Lights' and celebrated the increase strength of the life-giving sun as winter gave way to spring. How did the 2nd February come to be called Candlemas? It was the day of the year when all the candles, that were used in the church during the coming year, were brought into church and a blessing was said over them - so it was the Festival Day (or 'mass') of the Candles.

European stock markets reversed early losses, as upbeat economic data and gains in the basic-resource sector offset weakness in oil and gas stocks. Paris and London were both up over 1%.


$77.22 up $2.80 $1115 up $10



Many stocks closed on their highs for the day with the Major Measures up over 1%. The S&P closed at initial resistance (1103). Breadth was 3/1 to the good and volume was active.



1 February 2010

Rabbit, Rabbit


Model Portfolio Value As of 1 February 2010

$ 606,022

Asian markets were mixed small overnight and European bourse indexes are the same at midday. Friday’s action of a higher opening and then reversal was not positive for the bullish case. But the negative action of the markets in January when they dropped 3.6% and 7% from their high a few weeks ago suggests that at least a relief rally may occur. Stocks are set to open higher. Gold is flat and Oil has a $73 handle as the trading day begins.

President Barack Obama will propose on Monday a $3.8 trillion budget for fiscal 2011 that projects the deficit will shoot up to a record $1.6 trillion this year, but would push the red ink down to about $700 billion, or 4% of the gross domestic product, by 2013, according to congressional aides.

Why does the deficit projection always drop the year after the President’s term ends?

The WSJ reports that thieves are swiping tractor-trailers filled with goods, triggering a spike in cargo theft on the nation's highways.

(WSJ) Consumer spending was tepid in December, up just 0.2% despite rising income levels, the Commerce Department reported, suggesting consumers remained cautious at year end.

Exxon earnings fell 23% at the world's biggest private oil company. Lower profit margins for refining and fuels and lower natural-gas prices were partly offset by higher prices for crude oil, but the numbers beat and the shares are going to open higher.

Global semiconductor sales fell 1.2% in December from the previous month, but results were up 29% from the prior year's moribund levels, putting 2009 total sales down 9%.

The Medicare drug plan is money in the bank for these folks.

Humana reported a 44% jump in fourth-quarter earnings after driving down costs as it also lifted its outlook for 2010 earnings. Humana said net income was $250.7 million, or $1.48 a share, compared with $174 million, or $1.30 a share, from the year-ago period. Revenue for the health insurer rose 2% to $7.37 billion.

Toyota said it has figured out how to fix a problem with sticky accelerators in millions of its vehicles and will begin making repairs starting this week. The company said the fix involves reinforcing the pedal assembly to eliminate excess friction that has caused the pedals to stick. Toyota has recalled more than 4 million cars in North America and Europe that could be affected by the problem.

We bought Kraft for the 4.2% dividend and the fact it is down 10% in the last few weeks on the Cadbury merger. Our guess is that the analysts will re-examine their ratings with a positive bias after the February 16 earnings report and dog and pony show that Kraft ahs schedule to explain how the merger is going to magically transform the company into an earnings’ powerhouse.

We repurchased Ford for a trade in the rally we see coming the next few days. We will hold if the rally doesn’t pan out

Kraft Foods, together with its subsidiaries, manufactures and markets packaged food products and grocery products worldwide. The company offers snacks, including cookies, crackers, salted snacks, and chocolate confectionary; beverages, including coffee, packaged juice drinks, and powdered beverages; cheese, including natural, process, and cream cheeses; and grocery, including spoonable and pourable dressings, condiments, and desserts. It also offers convenient meals, including primarily frozen pizza, packaged dinners, lunch combinations, and processed meats. Kraft Foods markets its products under various brand names, primarily including Kraft cheeses, dinners and dressings; Oscar Mayer meats; Philadelphia cream cheese; Maxwell House and Jacobs coffee; Nabisco cookies and crackers and its Oreo cookie brand; Milka chocolates; and LU biscuits. It sells its products to supermarket chains, wholesalers, super centers, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores, and other retail food outlets. The company was founded in 2000 and is based in Northfield, Illinois.

Cadbury, together with its subsidiaries, engages in the confectionery business worldwide. It offers chocolate, gum/mints, and candy products under various brand names, including Bubbaloo, Cadbury Creme Egg, Cadbury Dairy Milk, Clorets, Dentyne, Eclairs, Flake, Green & Blacks, Halls, Hollywood, Stimorol, The Natural Confectionery Company, and Trident. The company was founded in 1783 and is based in Uxbridge, the United Kingdom.

European markets recouped earlier losses to end higher, supported by gains on Wall Street.

$74.75 up $1.86 $1106 plus $22

The major measures closed on their highs for the day. Breadth was 3/1 to the good and volume was active.














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