S&P 500 down -9.90, and the Nasdaq 100 down -11.50
as of 19:02 hours Nov. 30th, 2008.
Biggest rally since 1933, but was the Weekend shopping strong enough to support such a big rally where the S&P 500 rose 19.1% since Nov. 21.
By Nicole Maestri
First Posted 10:12:00 11/30/2008
COLUMBIA, Md.--The US holiday shopping season got off to a slow start as consumers, squeezed by the economic crisis, bought carefully and said they would wait for better deals closer to Christmas. [more]
That is gonna drop the price of oil Monday bigtime. Oil rose last week in anticipation of production cuts in oil by OPEC this weekend. But OPEC shocks me and probably the world by not cutting oil production. This is gonna send shock waves to oil future traders worldwide. [more]
On a triple digit DJIA gain day we had weakness showing up in REIT's, which points to signs that the sector is setting up for its next big leg down. This is not a good sign for the sector for next week's trading. Here is a list of REIT's which I track and their performance on Friday:
Poll 61% of people say they will Spend $0 on Black Friday
What's next on economic data? Next week we find out how bad the economy is and if the 15% gain in the Markets in 5 days is well deserved or just a dead cat bounce.
1. auto sales for November on Tuesday
2. Fed's beige book on the economy Wednesday
3. jobs report Friday
CompUSA's Black Friday Deals Include $5,999 Sony Vaio TT for $999, Tons of Giveaways
By Jesus Diaz, 3:54 PM on Wed Nov 26 2008
But the biggest question is will people spend on items not on discount.
Remember these big discounted items are all money losers for the stores and just a gimmick to get you into the stores to buy other items where they actually can make a profit on. [more]
I am afraid we will get bad reports on Monday about the Weekend sales data. So I sold all long positions, because I anticipate the selling will resume next week. Consumers on average expecting to buy 1/2 as much as they bought last year. That spells a nightmare scenerio for some retailers.
Black Friday: Long lines, tight budgets
By PATTY POIST
Evening Sun Reporter
Posted: 11/28/2008 09:10:25 AM EST
After waiting hours in line, shoppers make their way into Kohl's this morning in search of Black Friday shopping bargains.
Talk about dedication.
Amber Richmond of Westminster, Md., pulled an all-nighter to buy a battery-operated Barbie Jeep that was to go on sale at 5 a.m. today at Wal-Mart on Eisenhower Drive. Her Black Friday pay-off: the little Jeep for her little girls, 1 and 4, was marked down from $230 to $88, which was to be her biggest purchase of the season.
"I haven't been to bed," the 22-year-old Richmond said. Since 1 a.m., the somewhat bleary-eyed Richmond had been staking out a skid stacked with boxes of the plastic-wrapped boxes of the little pink and white mini-vehicles.
Richmond joined the estimated 128 million people across the country who either stayed up or not or left their warm beds in the middle of the night to brave the crowds to take advantage of the sales on Black Friday, so-called because retailers balance sheets are said to go from being in the deficit red to a profitable black.
Given the gloomy economy, Richmond, echoing fellow shoppers, said she is working extra hard this year to cut back on her holiday budget. She said she typically spend about $600 a year, but decided to half that this year to help preserve the family coffers in tough times. The Washington, D.C.-based National Retail Federation on Tuesday said that surveys indicate there would be about 16 million fewer Black Friday shoppers this year compared to last, but said that deep discounts will attract budget-minded shoppers to the day-after-Thanksgiving sales.
realize that low prices will get consumers into stores this holiday season and this could be the most heavily promotional Black Friday in history," said Tracy Mullin, NRF president and CEO in a statement Tuesday. "Shoppers who held off buying a DVD player or winter coat over the last few months will find that prices may literally be too good to pass up."
To be sure, the hunt was on as Hanover area shoppers armed with convenience store coffee, sales circulars, cell phones to keep track of
Shoppers wait in line in the pre-dawn hours this morning in an Eisenhower Drive parking lot. (Evening Sun Photo by James Robinson)
Purchase reprints of Evening Sun Photos at EveningSunPhotos.Com.
strategically placed shopping partners and even outdoor chairs to make the wait more comfortable.
About 4:30 a.m. Brian Topper, 45, of Hanover and daughter Jade, 12 were awaiting for employees at Sears' North Hanover Mall store to open their doors at 5 a.m. Topper said he was up early to buy a big-screen TV for $899, a $500 dollar discount. They said the wait wasn't all that bad as Sears employees treated the waiting customers to doughnuts. Topper, who was recently laid off from an office job, said he was cutting back this year, but that apparently didn't take the joy out of the shopping season for Jade.
"This is my first year, it's fun," said Jade, who was anxiously awaiting a big breakfast afterward.
Behind him stood Donna Sneeringer, 61, of Edge Grove and her granddaughter Jess Raber, 19, of New Oxford, who were up at 3:20 a.m. to stand in line to buy a Roomba robotic vacuum and other marked-down electronics at Sears. Meanwhile, Sneeringer's daughter, Beth Sneeringer, was staked out at Wal-Mart nearby looking for good buys there, keeping in touch via cell phone.
By 3:30 a.m. Friday, the two lines at Kohl's Department store had nearly spanned the parking lot to Eisenhower Drive. Toward the front of the line were roommates from Littlestown Jodi Shriber, Mandy Stultz and Melissa Klosterman, early-20-somethings looking for discounts on flannel sheets for themselves and friends.
They had their mission all planned out.
Shriber and Stultz planned to go grab the $20 sheets while Melissa's job was to immediately get in line at the cashier to speed the process. The young women had to be at work at a nursing home in Maryland by 7 a.m. and they still needed to hit Wal-Mart for a nice Christmas tree, replete with lights, at the low price of $25.
Midway in one of two lines that stretched across the parking lot to Eisenhower Drive, Art Woods, a 61-year-old pastor at Hanover Evangelical Free Church, and his wife Laurie, 58, were taking it easy in their portable camping chairs. Woods said he was buying his wife a Roomba vacuum as she has a bad back. The Woods, who also planned to buy a DVD player, a Global Positioning System for their kids and grandkids, said they don't plan to cut back this year, largely because they said they have never been big spenders anyway.
Other shoppers said they decided this year to spread their shopping over several months beginning in early fall to cushion themselves from the shock of all-at-once expenditures. Others said they were sticking to their guns and not using credit cards.
Mary Angell, 61, of New Oxford, said she, too, planned on paying cash.
Angell and daughter, a sleepy-looking Missy Noel, 36, of Hanover, were waiting in line at Kohl's to buy discounted pajamas for Angell's sister.
"We're crazy I guess,'' laughed Noel, who was clutching a cappuccino from Turkey Hill in her hands.
Across Eisenhower Drive at Wal-Mart, a weary looking Connie Hill, 47, of Taneytown, Md., truly thought some people were truly nutty after hearing that some were waiting as long as 7 p.m. Wednesday night for Wal-Mart early more sales to begin.
"What's that about?" she said. "I don't need anything that bad."
Hill, who was leaning over her shopping cart while waiting in a long line in the electronics department, said she was there to buy an Xbox 360 for her son, said she and her husband are definitely cutting back this year by buying just the one gift for their son. On a typical, year, she said, they usually buys eight gifts.
Still, despite the bad-news economy, many people interviewed this morning said the annual Black Friday onslaught is a good way for them to get into the Christmas spirit.
As Kohl's doors opened at 4 a.m., Eileen Heldibridle of Gettysburg, college student daughter Kellie Coleman and 5th-grade daughter, Ashley Heldibridle, joined the surprisingly brisk march into the department store where mom intended to buy Ashley some gifts, which, for now, are top secret. More than anything, shopping on Black Friday is just plain fun for them and they would top it off with a good hearty breakfast followed by a nap.
According to NRF's 2008 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S and released earlier this fall, consumers plan to spend an average of $832.36 on holiday-related shopping, up a paltry 1.9 percent over last year's $816.69. The NRF said that represents the lowest increase in consumer spending since the survey was first taken six years ago.
On Tuesday, the NRF said lower gas prices is "leaving shoppers with a little extra padding in their wallets."
Contact Patty Poist at firstname.lastname@example.org.
OPEC meeting this weekend to discuss Production Cuts
with oil demand only down a mere 20,000 barrels per day, OPEC members would need to cut production less than 4,000 barrels each for OPEC to force a tight Demand vs. Supply ratio.
Link to demand report:
Benchmark Brent oil futures traded in London on Friday were down 25 cents at $52.88 a barrel and WTI crude futures in New York fell $1.06 to $53.38 in very thin trading due to the Thanksgiving holiday being celebrated in the US.
Today would be a good day to be able to take advantage of light trading to the downside because any buying at all could send both oil futures and stock futures up very quickly. There won't be much resistance to the upside because majority of professional traders are on a holiday break today. [more]
I am Enjoying this cheap Gasoline as much as I can, because I know it won't last. The Chinese & Indians are not gonna keep riding bicycles forever. Think about this, the worst economic downturn since the 1930's has only cut demand by a mere 20,000 barrels per day worldwide. Investors have been so used to an increase in demand every year since 1980 that they Oversold Oil & Gas stocks to the very extreme of the spectrum much like they overbought them last summer. But just like I took advantage of the overbought prices I am taking advantage of the Oversold Prices. [more]
Gasoline demand up for second week: SpendingPulse
Tue Nov 25, 2008 2:04pm EST
TORONTO (Reuters) - U.S. retail gasoline demand rose for the second week in a row as falling retail price spurred consumer demand, according to the SpendingPulse report issued Tuesday.
Demand still trailed year-ago levels, but was down only 1.2 percent, the smallest drop since April, according to the report from MasterCard.
American motorists pumped an average of 9.203 million barrels per day in the week ended November 21, up 1.9 percent from the previous week.
"We have seen consumer driving habits return to somewhat normal levels over the past six weeks," said Michael McNamara, vice president of research and analysis at MasterCard Advisors.
McNamara said the Thanksgiving holiday skews the demand numbers as demand drops in the beginning of the week and then picks up dramatically on Thursday, the day of the holiday.
"You have to take the next two weeks together," he said.
The 1.2 percent drop against year-ago levels was the lowest decline in seven months. The four-week moving average for gasoline demand was also lower, down 3 percent from a year ago.
National average prices slid 15 cents or about 7 percent to $2.01 per gallon, near levels seen in March 2005.
McNamara said prices are down about 35 percent year-on-year, adding that the national price threshold is nearing $2 a gallon for the first time in about three and a half years.
Meanwhile, a Reuters poll showed energy analysts forecasting the Energy Information Administration would report that gasoline stocks rose 400,000 barrels in the week to November 21. The analytical arm of the Department of Energy will release its weekly report on Wednesday.
Obama says he'll have economic plan on his 1st day
By SARA KUGLER, Associated Press Writer Sara Kugler, Associated Press Writer – 10 mins ago
CHICAGO – President-elect Barack Obama pledged on Wednesday to have an economic plan ready for action on the nation's financial crisis on his first day in office. "Help is on the way," he declared.
He also said his Cabinet would "combine experience with fresh thinking" and pushed back against criticism that he was recycling former Clinton administration officials as he builds his new economic team.
In his third news conference on the economy in as many days, Obama announced he had chosen former Federal Reserve Chairman Paul Volcker to head a new White House panel to help create jobs and bring stability to the ailing financial system.
Volcker, 81, will head the President's Economic Recovery Advisory Board. The board's top staff official will be Austan Goolsbee, a University of Chicago economist.
Volcker is a legendary central banker who raised interest rates and restricted the money supply to tame raging inflation in the 1980s. It was a painful prescription that helped send the economy into one of the nation's worst recessions.
"He pulls no punches," Obama said of Volcker. "He seems to be fairly opinionated."
Fifty-five days before his inauguration, Obama defended his selection of former Clinton officials to help run his administration.
"The American people would be troubled if I selected a treasury secretary or a chairman of the National Economic Council at one of the most critical economic times in our history who had no experience in government whatsoever," Obama said.
"What we are going to do is combine experience with fresh thinking," he said. "But understand where the vision for change comes from. First and foremost, it comes from me. That's my job, is to provide a vision in terms of where we are going and to make sure then that my team is implementing."
As he spoke, there was unrelenting bad news on the economy's current state.
The government reported that jobless claims remained at recessionary levels, consumers had cut back on their spending by the largest amount since the 2001 terrorist attacks, orders to U.S. factories had plunged anew and home sales had fallen to the lowest level in nearly 18 years.
Obama said he will announce the remaining members of his new economic panel in the coming weeks. He already has named Congressional Budget Office Director Peter Orszag as his candidate to run the White House Office of Management and Budget and New York Federal Reserve President Tim Geithner as his treasury secretary.
Geithner was a Treasury Department official during the Clinton administration, and Lawrence Summers, who will head Obama's National Economic Council, was Clinton's treasury secretary. Other Clinton administration names include Eric Holder, who will be Obama's attorney general, and Rahm Emanuel, the president-elect's chief of staff.
Obama said he wants the new economic panel to provide outside voices for his administration.
"The walls of the echo chamber can sometimes keep out fresh voices and new ways of thinking," Obama said. "You start engaging in group-think."
His economic team largely complete, Obama is expected to introduce national security officials next week, including Hillary Rodham Clinton as his secretary of state. He is expected to announce he has asked Defense Secretary Robert Gates to remain at the Pentagon for a year. James Jones, a former Marine Corps commandant and NATO commander, is Obama's pick to be national security adviser.
Obama said his new economic panel will include people from business, labor and academia, "who will bring to bear their wisdom and expertise on the formulation, implementation and evaluation of my administration's economic recovery plan."
"I hope that everybody understands that we are going to be able to get through these difficult times, but we're just going to have to make some good choices," Obama said. "I was elected with the charge of getting this economy back in shape but also making sure that it's working on behalf of middle-class families." [more]
The sector up strongly today even in the face of inventories report showing buildup in Crude. [more]
Its one that would never be trading at $10 during normal market conditions, has a forward PE 2
LNC Balance Sheet
Total Cash (mrq): 4.55B
Total Cash Per Share (mrq): 17.796
Total Debt (mrq): 5.20B
Total Debt/Equity (mrq): 0.548
Current Ratio (mrq): 12.297
Book Value Per Share (mrq): 37.132 [more]
because even today's durable news is having a hard time keeping stocks down, Nasdaq just turned green and many financials are rallying today. One of the telling signs is that yesterday we had a major unfreeze of the mortgage rates. They dropped to 5 1/2% from 6.40% the day earlier.
Better to get in a little late then to miss the rally.
including credit collections. We all know credit collection business must be booming right now.
that just came out even worse than I expected by more than twice the consensus.
October Durable Goods Orders -6.2% vs -3.0%
By Matt Richtel
Published: November 19, 2008
LONG BEACH, California: Gleaming new Mercedes cars roll one by one out
of a huge container ship here and onto a pier. Ordinarily the cars
would be loaded on trucks within hours, destined for dealerships
around the United States. But these are not ordinary times.
For now, the port itself is the destination. Unwelcome by dealers and
buyers, thousands of cars worth tens of millions of dollars are being
warehoused on increasingly crowded port property.
And for the first time, Mercedes-Benz, Toyota, and Nissan have each
asked to lease space from the port for these orphan vehicles. They are
turning dozens of acres of the nation's second-largest container port
into a parking lot, creating a vivid picture of a paralyzed auto
business and an economy in peril.
"This is one way to look at the economy," Art Wong, a spokesman for
the port, said of the cars. "And it scares you to death."
The backlog at the port is just part of a broader rise in the nation's
inventories, which were up 5.5 percent in September from a year
earlier, according to the Commerce Department. The car industry has
been hurt particularly, with sales down nearly 15 percent this year.
General Motors has said it would run out of operating cash by the end
of the year if it does not receive a government bailout.
Photos: Pileup at the port
Foreign car company supplies
Today in Business with Reuters
Fed announces $800 billion effort to unfreeze credit
BHP drops hostile bid for Rio Tinto
OECD predicts protracted recession in developed world
But the inventory glut in Long Beach is not limited to imported cars.
There has also been a sharp drop in demand for the port's single
largest export: recycled cardboard and paper products.
This material typically goes to China, where it is used to make boxes
for new electronics and other products that are sent back to the
United States. But Chinese factories reacting to sharply falling
demand are slowing production, so they need less cardboard. Tons of
paper are piling up recycling businesses around the port, the detritus
of economies on hold.
Long Beach is an important port, particularly for the West. It is
where imported products arrive and filter through the tributary of
trucks, trains and retailers into the hands of consumers. But now,
products are just sitting.
"We're supposed to move things, not store them," Wong said.
Roughly 20 percent of the nation's container imports last year came
through Long Beach, putting it close behind the largest container
port, Los Angeles. This year, shipping volume at Long Beach is down 10
percent from 2007, and nearly all major ports around the country have
seen similar declines. Veteran port workers say the slowdown since
mid-October is like nothing they have ever seen. And it is having a
cascading impact on other businesses and workers.
In the 150-acre terminal where Toyotas are unloaded, there is a sea of
Corollas, Camrys and RAV4s. The mere presence of so many cars is not
unusual, given that Toyota brings in 250,000 cars a year in biweekly
shipments. But in a sign that something is amiss, dozens of
tractor-trailers that transport new cars to dealers sat empty last
week amid the rows of Toyotas.
Kurt Golledge, 48, was one of just two truckers loading his green,
75-foot-long hauler with cars last week. Golledge said eight of his
colleagues were laid off this month because Toyota dealers did not
want more deliveries.
"I was dropping cars in Henderson, Nevada, about a month ago and the
dealer told me: 'Take 'em somewhere else and dump 'em,' " said
Golledge, who works for a company called Allied Systems. "All the
dealers are telling us the same thing."
Auto dealers typically place orders with manufacturers months in
advance, but they can modify their orders to receive fewer vehicles.
"The ships keep coming, but there's nowhere for the cars to go,"
Golledge said. He said he believed the vehicles he was loading would
be his last before he was laid off, and he was already considering
where he might find a new job.
While shipments for some items have slowed, the cars have kept coming
in at their regular pace partly because the auto factories can take
months to adjust to changes in demand. Toyota is wrapping up a deal to
use six acres to park cars at the port, and is seeking more space.
"Toyota wants as much as we can give them," said Gail Wasil, assistant
director of the port's real estate division.
For its part, Toyota says the higher-than-usual inventories at the
Long Beach port are a result of shrinking demand, particularly in
Southern California, which is one of its biggest markets. The company
declined to say how many cars were at the port or how long they would
Toyota has adjusted its output to reflect falling demand, said Sona
Iliffe-Moon, a Toyota spokeswoman.
Wasil said Nissan, whose cars arrive through the port of Los Angeles,
sought a deal with Long Beach to park its overflow vehicles there.
Mercedes struck a deal to use more acres just a few weeks ago, she said.
Officials from Mercedes and Nissan did not return calls seeking comment.
The mothballing of cars is nothing new for Detroit, where thousands of
unwanted American-made cars have been parked over the last two years
at Michigan's state fairground and in lots at its airports.
It is more unusual to see a lot at the California port filled with
thousands of unsold Mercedeses, most of them gathering dirt on the
plastic white film that protects their hoods and trunks. Some appeared
to have been stashed at the port for several months.
Last week, Mercedes delivered around 1,000 more cars to Long Beach on
the Grus, a 580-foot container ship.
"A year ago, I was looking into buying one of these for my wife," said
Kurt Garland, the terminal manager overseeing the unloading of the
white, silver and black sports cars, sport utility vehicles and
sedans. "Now I'm not. I'm saving money, paying bills, hunkering down."
Not far away, metal, cardboard, paper and plastic are piling up in the
lot of Corridor Recycling. The company takes in refuse from around the
country, then bales it for shipment to China. The cardboard is used to
make new boxes while used shrink wrap is turned into shoe soles and
insulation for sleeping bags and coats.
For much of this year, the company shipped about 25 containers a day,
each filled with 23 tons of refuse to be recycled. But after the
Olympics, demand slowed for recycled metal. In October, demand for
everything else took a sharp downturn, and for the last two weeks the
company has not shipped a single container.
"It just came to a complete stop. Absolutely a stop," said Gilbert
Dodson, the recycling company's co-owner. "I've seen it slow over the
last 25 years, but this is the worst," he said of the current downturn.
Like his counterparts in the auto industry, Dodson is looking for
extra space to accommodate the growing number of bales on his
three-acre property. The recycled goods keep arriving in big trucks,
even though he now pays only $21 a ton for refuse he paid $120 a ton
for earlier this year, but there is nowhere for him to export.
"It keeps coming in," he says. "But no one is buying." [more]
So I guess the Market thinks the Durable Numbers will be Great
come Wed. morning, I wouldn't place too much confidence in this case.
Investors will realise in the morning the big mistake they have made by thinking we are out of the woods. It will be a hard lesson to learn.
This clue below is why I urge caution holding long ahead of Wed.'s durable goods numbers:
A sea of unwanted auto imports
By Matt Richtel
Published: November 19, 2008
LONG BEACH, California: Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the United States. But these are not ordinary times.
For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.
And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation's second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.
"This is one way to look at the economy," Art Wong, a spokesman for the port, said of the cars. "And it scares you to death."
The backlog at the port is just part of a broader rise in the nation's inventories, which were up 5.5 percent in September from a year earlier, according to the Commerce Department. The car industry has been hurt particularly, with sales down nearly 15 percent this year. General Motors has said it would run out of operating cash by the end of the year if it does not receive a government bailout.
Photos: Pileup at the port
Foreign car company supplies
Today in Business with Reuters
Fed announces $800 billion effort to unfreeze credit
BHP drops hostile bid for Rio Tinto
OECD predicts protracted recession in developed world
But the inventory glut in Long Beach is not limited to imported cars. There has also been a sharp drop in demand for the port's single largest export: recycled cardboard and paper products.
This material typically goes to China, where it is used to make boxes for new electronics and other products that are sent back to the United States. But Chinese factories reacting to sharply falling demand are slowing production, so they need less cardboard. Tons of paper are piling up recycling businesses around the port, the detritus of economies on hold.
Long Beach is an important port, particularly for the West. It is where imported products arrive and filter through the tributary of trucks, trains and retailers into the hands of consumers. But now, products are just sitting.
"We're supposed to move things, not store them," Wong said.
Roughly 20 percent of the nation's container imports last year came through Long Beach, putting it close behind the largest container port, Los Angeles. This year, shipping volume at Long Beach is down 10 percent from 2007, and nearly all major ports around the country have seen similar declines. Veteran port workers say the slowdown since mid-October is like nothing they have ever seen. And it is having a cascading impact on other businesses and workers.
In the 150-acre terminal where Toyotas are unloaded, there is a sea of Corollas, Camrys and RAV4s. The mere presence of so many cars is not unusual, given that Toyota brings in 250,000 cars a year in biweekly shipments. But in a sign that something is amiss, dozens of tractor-trailers that transport new cars to dealers sat empty last week amid the rows of Toyotas.
Kurt Golledge, 48, was one of just two truckers loading his green, 75-foot-long hauler with cars last week. Golledge said eight of his colleagues were laid off this month because Toyota dealers did not want more deliveries.
"I was dropping cars in Henderson, Nevada, about a month ago and the dealer told me: 'Take 'em somewhere else and dump 'em,' " said Golledge, who works for a company called Allied Systems. "All the dealers are telling us the same thing."
Auto dealers typically place orders with manufacturers months in advance, but they can modify their orders to receive fewer vehicles.
"The ships keep coming, but there's nowhere for the cars to go," Golledge said. He said he believed the vehicles he was loading would be his last before he was laid off, and he was already considering where he might find a new job.
While shipments for some items have slowed, the cars have kept coming in at their regular pace partly because the auto factories can take months to adjust to changes in demand. Toyota is wrapping up a deal to use six acres to park cars at the port, and is seeking more space.
"Toyota wants as much as we can give them," said Gail Wasil, assistant director of the port's real estate division.
For its part, Toyota says the higher-than-usual inventories at the Long Beach port are a result of shrinking demand, particularly in Southern California, which is one of its biggest markets. The company declined to say how many cars were at the port or how long they would be warehoused.
Toyota has adjusted its output to reflect falling demand, said Sona Iliffe-Moon, a Toyota spokeswoman.
Wasil said Nissan, whose cars arrive through the port of Los Angeles, sought a deal with Long Beach to park its overflow vehicles there. Mercedes struck a deal to use more acres just a few weeks ago, she said.
Officials from Mercedes and Nissan did not return calls seeking comment.
The mothballing of cars is nothing new for Detroit, where thousands of unwanted American-made cars have been parked over the last two years at Michigan's state fairground and in lots at its airports.
It is more unusual to see a lot at the California port filled with thousands of unsold Mercedeses, most of them gathering dirt on the plastic white film that protects their hoods and trunks. Some appeared to have been stashed at the port for several months.
Last week, Mercedes delivered around 1,000 more cars to Long Beach on the Grus, a 580-foot container ship.
"A year ago, I was looking into buying one of these for my wife," said Kurt Garland, the terminal manager overseeing the unloading of the white, silver and black sports cars, sport utility vehicles and sedans. "Now I'm not. I'm saving money, paying bills, hunkering down."
Not far away, metal, cardboard, paper and plastic are piling up in the lot of Corridor Recycling. The company takes in refuse from around the country, then bales it for shipment to China. The cardboard is used to make new boxes while used shrink wrap is turned into shoe soles and insulation for sleeping bags and coats.
For much of this year, the company shipped about 25 containers a day, each filled with 23 tons of refuse to be recycled. But after the Olympics, demand slowed for recycled metal. In October, demand for everything else took a sharp downturn, and for the last two weeks the company has not shipped a single container.
"It just came to a complete stop. Absolutely a stop," said Gilbert Dodson, the recycling company's co-owner. "I've seen it slow over the last 25 years, but this is the worst," he said of the current downturn.
Like his counterparts in the auto industry, Dodson is looking for extra space to accommodate the growing number of bales on his three-acre property. The recycled goods keep arriving in big trucks, even though he now pays only $21 a ton for refuse he paid $120 a ton for earlier this year, but there is nowhere for him to export.
"It keeps coming in," he says. "But no one is buying." [more]
Holding today ahead of WED.'s Bad Economic DATA?
That could turn out to be a Disaster:
Whats due for WED ? All Data due for Wed. have a very dire scenario unfolding for Wed. trading. This data is not going to be pretty starting at 8:30AM:
Durable Goods Orders
Personal Income and Outlays
New Home Sales
EIA Petroleum Status Report
3-Month Bill Announcement
6-Month Bill Announcement
EIA Natural Gas Report
12:00 ET [more]
Oil inventory report due out Wed. causing oil and Oil & Gas stocks to
drop big today after an Over Exuberance rally yesterday. Everyone
knows oil demand is going down and wont pick up anytime soon.
Yesterday's dramatic 9% Rally was Extremely over done, expect the Oil & gas sector to decline sharply before the close today..
will now take CenterStage after Citi. If GM is allowed to go BK as
many in Congress are suggesting instead of bailing out then the stock
market will re-test 7500 DJIA in a very quick but painful downturn to
all those that just entered the market thinking they just caught the
bottom. Thats what a Bear market is known for, trapping new investors
on every dip only to make new lows. I have adjusted my CAPS picks by selling almost all long positions and buying the 3x Bear stocks BGZ, TZA,FAZ,ERY
GM ends 9-year endorsement relationship with Tiger Woods
Tiger Woods carries his golf bag across the third tee during a
practice round for the 2002 Masters Golf tournament at Augusta
National Golf Club.
Enlarge image Enlarge By Timothy A. Clary, AFP
Tiger Woods carries his golf bag across the third tee during a
practice round for the 2002 Masters Golf tournament at Augusta
National Golf Club.
TROUBLED AUTO INDUSTRY
Tiger's financial bite: Ailing GM ends 9-year endorsement
relationship with golfing great
Backing out: Nissan won't bother to exhibit cars at big shows in
Bailout debate: Auto execs must be specific on plans, leaders say |
Obama: Low key but active in talks
Car loans: More are late paying their bills
Overview: Automakers say if they go, millions of jobs will vanish
Financial woes: GM, Ford report huge losses | GM may run out of cash
soon | $129M quarterly loss for cash-strapped Ford | Sales plunge for
all all major automakers
Poll: Lukewarm support for federal bailout
o Yahoo! Buzz
o What's this?
By Laura Petrecca, USA TODAY
DETROIT — As cash-strapped General Motors (GM) looks for ways to slice
expenses, it's parting ways with long-time pitchman Tiger Woods.
The ailing auto giant said Monday that it will end its nine-year
relationship with the world's No. 1 golfer Dec. 31. Woods' contract
with GM was set to expire Dec. 31, 2009.
SPONSORSHIPS DWINDLING?: Tiger-GM breakup could be sign of things to come
Woods has carried the Buick brand on his golf bag since 2000, and his
most recent promotion was to caddie for a contest winner for nine
holes at Torrey Pines, where Woods won the U.S. Open this summer for
his 14th career major win.
In a statement, GM said the separation was "mutual and amicable" and
that Woods had a "desire for more personal time."
The golf great, who still does endorsements for other brands, such as
Gillette and Gatorade, had knee surgery earlier this year. And he and
his wife are expecting a second child.
The latest five-year deal with GM was believed to be worth at least $7
million a year. Woods' agent at IMG, Mark Steinberg, said the decision
to end the endorsement a year early was "absolutely mutual."
Woods has mainly touted GM's Buick brand. But even with the
endorsement of the top-ranked golfer, Buick has hit some bumps. Sales
are down 23.6% through the end of October compared with the period
last year, according to industry tracking firm AutoData. The entire
auto industry is down 14.6%.
The parting comes as GM tries to reverse its woeful financial
performance. Earlier this month, it reported a $2.54 billion third
quarter loss, and so far this year has lost $21.26 billion. CEO Rick
Wagoner plans to cut $15 billion in structural costs, such as payroll
Separate from that, GM has said its marketing department would cut 20%
from its spending. The break with Woods falls under those cutbacks,
says GM spokesman Pete Ternes.
GM will maintain its other golf-related tie-ins such as sponsorship of
the Buick Open and the Buick Invitational. But it will cut spending
during those events, says Ternes. For instance, it will reduce
catering costs and limit the number of courtesy cars it provides for
The marketing department is looking at "anything (it) can do to help
cash flow," Ternes says.
GM has also slashed spending on other big-name sports and
entertainment events. After years of advertising on both the Super
Bowl and Academy Awards, it will opt out of both next year.
GM's vice president for North American sales, Mark LaNeve, says the
separation is the result of discussions earlier in the year and is not
related to the company's campaign for $25 billion in loans from the
Woods has carried only two logos on his bag since he turned pro in
August 1996. He was with Titleist through 1999 until Buick won a
bidding war for its brand on a bag that gets more television time at
tournaments than any other.
Woods has not played since season-ending knee surgery after winning
the U.S. Open, and he is not expected to return until at least early
Steinberg said he would "expect there to be some exposure on the bag"
when Woods next plays.
"I've got a few ideas, and we're in the process of working through
that," he said.
Contributing: USA TODAY reporter Sharon Carty in Detroit; Associated
Even though it improved slightly in Nov. over Oct. which was expected.
Afterall, Oct. was a complete bloodbath. Another bad OMEN is that Mr. Paulson is speaking live on Bloomberg and he always spooks the market. But whats worse is the GDP report, after seeing that the downturn actually was worse than expected in the summer. We can only imagine how much worse than expected its going to be in the last qtr that we are in right now.
Economy's tumble even worse than expected in 3Q
Tuesday November 25, 8:43 am ET
By Jeannine Aversa, AP Economics Writer
Economy's tumble in the summer worse than first thought as consumers slash spending
WASHINGTON (AP) -- The economy took a tumble in the summer that was worse than first thought as American consumers throttled back their spending by the most in 28 years, further proof the country is almost certainly in the throes of a painful recession.
The updated reading on the economy's performance, released Tuesday by the Commerce Department, showed gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter.
That was weaker than the 0.3 percent rate of decline first estimated a month ago, and marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.
GDP measures the value of all goods and services produced within the U.S. and is considered the best barometer of the country's economic fitness.
The new reading on GDP underscores just how quickly the economy deteriorated as housing, credit and financial crises intensified. The economy logged growth of 2.8 percent in the second quarter.
The new, lower third-quarter reading matched economists' forecasts. The downgrade from the initial estimate mostly reflected an even sharper cut back in spending by consumers and less brisk sales growth of U.S. exports.
American consumers -- the lifeblood of the economy -- slashed spending in the third quarter at a 3.7 percent pace. That was deeper than the 3.1 percent cut initially reported and marked the biggest reduction since the second quarter of 1980, when the country was in the grip of recession.
Consumers are hunkering down amid job losses, tanking investment portfolios and sinking home values, which are making them nervous about spending.
Underscoring the strain faced by consumers, the report showed that Americans' disposable income fell at an annual rate of 9.2 percent in the third quarter, the largest quarterly drop on records dating back to 1947. The government's initial estimate had showed a record 8.7 percent decline in disposable income for the quarter.
Sales of U.S. exports grew at a 3.4 percent pace in the third quarter. That was lower than a 5.9 percent growth rate intially estimated and marked a sharp slowdown from the second quarter's blistering 12.3 percent growth rate. The deceleration reflects less demand from overseas buyers coping with their own economic problems.
Home builders slashed spending at a 17.6 percent pace, marking the 11th straight quarterly cut and fresh evidence of the depth of the housing slump.
To help revive the economy, the Federal Reserve is expected to lower interest rates when its meets on Dec. 16, its last session of the year. Last month, the Fed dropped its key rate to 1 percent, a level seen only once before in the last half-century.
So far, though, the Fed's rate reductions, a $700 billion financial bailout package and a flurry of other radical actions have been unable to break though a dangerous credit clog, restore stability to financial markets and help the sinking economy.
Banks are failing and storied Wall Street firms have been crippled by the crises. Home foreclosures have soared and jobs are vanishing.
President-elect Barack Obama sees as a top priority getting Congress to enact a massive economic stimulus package that he says will generate millions of new jobs.
The nation's unemployment rate is at 6.5 percent, a 14-year high, and will climb higher. Employers have cut payrolls every month so far this year and more losses are expected in the months ahead.
Given all the stresses, consumers are expected to burrow further, making it likely the economy will continue to shrink through the rest of this year and into 2009, more than fulfilling a classic definition of a recession. That is, two straight quarters of contracting GDP.
This rebound will give many a reason to Sell before more Selling occurs.
The selling will restart, now is the time to be wary after the market goes up nearly 10% in just 2 days and then on top of that you have a gap up this morning. Oil up 9% yesterday alone. Remember this Christmas is a make or break for many retailers. Many will see the break portion and go under. The market will see this before it happens in December of the upcoming BK of retailers in January. [more]
The selling will restart, now is the time to be wary after the market goes up nearly 10% in just 2 days. Oil up 9% today alone. Mr. Kessler, a former hedge-fund manager tells it like it is: [more]
I fear that if 7500 does not hold that we will be on a fast drop to 6000's and that could happen next week because like I said Congress has put the market in a state of Uncertainty with respect to the Big 3 in Detroit. How bad is this uncertainty? Well this article puts it in plain words.
No Option is good for the markets or the economy as told by economist on both sides of the fence on Auto Bailout or allow to go BK.
What impact would proposed bailout have on Alabama?
By Cosby Woodruff • email@example.com • November 19, 2008
Alabama, home to three foreign automakers, wouldn't get one red cent of a $25 billion handout that Detroit's Big Three is begging the federal government for -- that's the one thing that economists and industry experts know for sure.
What they're far less certain of is how a bankrupt Big Three would affect the economy or car manufacturing in the state.
GM, Ford and Chrysler went to Capitol Hill on Tuesday to make their case for the cash, pointedly warning that the economy would collapse if their companies are allowed to fail. All three could be looking at Chapter 11 bankruptcy within weeks if help doesn't come.
But the new rescue plan appeared stalled in Congress, opposed by the Bush administration and Republican legislators who don't want to dip into the Treasury Department's $700 billion Wall Street bailout program to come up with the loans.
Rank-and-file members of both parties from Michigan and other Iron Belt states that rely heavily on the auto industry worked behind the scenes trying to hammer out a compromise that could speed aid to the automakers before year's end. But it was an uphill fight.
While Washington plays political football, Alabama sweats out the impact.
The three automakers in the state -- Hyundai, Mercedes-Benz and Honda, plus the new Kia, which is being built in Georgia one mile outside Alabama -- and their suppliers have almost 49,000 employees, according to the Alabama Automobile Manufacturers Association, an industry trade group.
Of that total, 37,000 or so work for suppliers and more than 12,000 are assembling cars. Most of the 12,000 have had their hours cut this fall because of plummeting auto sales.
Hyundai announced in late October that it would stop production for 11 days this year at its Montgomery plant, which employs about 4,000.
A plant official here declined to comment about either the proposed bailout or the impact it might have locally. Instead, spokesman Robert Burns issued a statement from the Association of International Automobile Manufacturers.
"We support vigorous competition in the automotive marketplace and recognize there may be extraordinary situations when such a vital sector of the American economy may require unprecedented actions to assure its long-term viability," the statement reads.
All automakers, according to the statement, have been hurt by the downturn and would be helped by a rebound.
Economists, on the other hand, come down on either side of the bailout.
A University of Alabama management professor who works closely with the Mercedes plant in Tuscaloosa thinks the bailout is a bad idea. Jim Cashman is convinced the industry's downturn would reverse itself -- and quickly -- if market forces are allowed to work.
Passing the bailout would only prolong the inevitable failure of the American manufacturers and make everything worse, he said.
"It would cause a deeper recession," Cashman said. "I don't see how that helps anybody."
An economist at Auburn Montgomery supports the loan package. Keivan Deravi believes a bankrupt domestic auto industry would only deepen what looks to be a long recession.
Failure of the car companies could panic consumers, who would then stop spending on anything.
"A lot of people will delay expenditures for a while," he predicted. "It would be a tremendous shock on the U.S. economy."
Officials of the Big Three essentially argued Deravi's points in their testimony Tuesday before the Senate Banking Committee.
General Motors Corp. CEO Rick Wagoner blamed the industry's predicament on the deepening global financial crisis, not on management failures. And Robert Nardelli, CEO of Chrysler LLC, told the panel the bailout would be "the least costly alternative" when compared with damage from bankruptcy.
Sympathy for the industry was sparse, however, with bailout fatigue dominating Capitol Hill. Lawmakers bristled with pent-up criticism of the auto industry, and questioned whether a stopgap loan would really cure what ails the companies.
At the start of a more than four-hour grilling before his committee, Sen. Christopher Dodd, D-Conn., told the auto leaders that the industry was "seeking treatments for wounds that I believe to a large extent were self-inflicted."
Like Dodd, ranking member Sen. Richard Shelby, R-Tuscaloosa, holds the industry responsible for its own problems.
"The Big Three's financial straits are not the product of our current economic downturn, but instead are the legacy of the uncompetitive structure of their manufacturing and labor force," Shelby said in a statement.
"The financial situation facing the Big Three is not a national problem, but their problem. I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers in such a way that allows them to continue and compound their ongoing mistakes."
Before the committee, GM's Wagoner refuted criticism that his company was not keeping pace with the times, saying it had been on the brink of a turnaround before the financial meltdown hit, reducing sales to the lowest per-capita level since World War II.
Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year.
Joining the Big Three CEOs was Ron Gettelfinger, president of the United Auto Workers union. He called the loans vital for the survival of the industry and union jobs. The UAW, he said, recognized that "in order for these companies to be competitive, we had to make tough calls" in labor concessions.
Cashman, the Alabama professor, linked union contracts with the company's troubles.
Union contracts mean car companies have much less flexibility in shifting production from one plant to another, or often from one model to another.
Production slowdowns, such as the ones at Alabama's major producers, are ways for the companies to save money, but union contracts often call for workers to be paid a portion of their wages during a shutdown. That reduces savings and makes it more difficult for a unionized plant to survive a sales slowdown.
Cashman also lashed out at corporate management, specifically at GM. Congress, as part of any bailout, should insist on management changes, he said.
Some observers worried a failure of one manufacturer would damage the network of suppliers, which provide more than 75 percent of Alabama's auto jobs. They also are key assembly plants keeping the line moving.
Cashman discounted those worries.
"My opinion is the system will work like all other systems," he said. He insisted if there is a demand for auto supplies, companies would find a way to fill that demand.
A Senate vote on the bailout, which would also extend jobless benefits, could come as early as Thursday but currently lacks the support to advance.
"I'd like to tell that you in the next couple of days this is going to happen," Dodd told the automakers at the end of the committee session. "I don't think it is."
The Associated Press contributed to this report
Remember when a WB & MS partnership was announced? Both stocks rose 100% on the news. So look for C partnership with any of the 3 listed to make its stock rise 25%-50% in my opinion.
STT, GS, or MS
Hearing rumors that partnership of "C" with these three is very possible: A Citigroup spokesman had no comment, but investment banking sources say possible partners could include Morgan Stanley [MS] Goldman Sachs [GS] or State Street Bank [STT]. Both Goldman and Morgan have recently switched over to banking holding companies so they could collect deposits.
and is not holding up 3x inverse so far this morning.
But if the big caps are up 2-3% today, BGU will be up 6%-9% on the day.
JRCC up 14% 52 wk high $62.83, after hours at $5.84 closed at $5.09
TKTM up 17% 52 wk high $27, after hours at $5.15 closed at $4.39
FCSX up 16% 52 wk high $53.25, after hours at $2.30 closed at $1.98
HSNI up 13% 52 wk high $16.54 , after hours at $4.78 closed at $4.21
FDML up 13% 52 wk high $27 , after hours at $4.26 closed $3.77
DELL up 6% 52 wk high $28.40, after hours at $10.44 closed at $9.81
HLX up 6% 52 wk high $42.83, after hours at $4.24 closed at $4.00 [more]
in select Oversold stocks ahead of Options expirations. Those large put owners will buy shares to protect their put profits.
Neil is looking pretty smart now with his post in Sept. on Market Forum.
* I'll say this again..DJIA 6500-7500
Neil Giuntoli - Mon Sep 15 2008 at 7:55 AM
I been saying this for a few years now, while the Dow's been bouncing btween 14,000 and 11,000, now we go down to DJIA 6500-7500, with a hyperspike to 3200.
Think I'm nuts?, take a look at two sets of DJIA charts, 1972 to 1974, then take a look at the charts from Jan 1929 to Dec 1932, pay attention to June of 1932.
You all think its bad NOW? You aint seen nothing, and if anyone thinks I'm happy, or exulting in my call, think again, my business is based on discretionary non essential income, but being raised by a woman who lived as a woman thru the Great Depression, I keep my eyes open, and I'll tell you, if we have a day where the Dow is trading crazy low, and everything looks like the end of twe world, I'm going to buy as much quality brand American stock as I can carry.
and today aint the END of the world, its just the beggining. I hope you all are alright, safe, and have cash on hand. I mean that.
* Re: I'll say this again..DJIA 6500-7500
JulieH - Mon Sep 15 2008 at 8:23 AM
Looks like my grains much lower call was right on. People will want cash so it matters not what is happening with the crops.
* Re: I'll say this again..DJIA 6500-7500
Neil Giuntoli - Mon Sep 15 2008 at 8:50 AM
that what usually happens when you have a wild sell-offmeltdown in equities, same same in 87.
Good call...advice Jules?, go to your bank and get about $500 to a Gee in cash, just to have around the house.
* Re: I'll say this again..DJIA 6500-7500
JulieH - Mon Sep 15 2008 at 9:02 AM
I used to keep $4,000 in the house. Imagine if everyone wanted cash today? Just imagine that for a minute.
Neil Giuntoli - Mon Sep 15 2008 at 9:13 AM
I've imagined that for years, my people fled Europe with gold and cash hidden in their belongings, my grandma told me stories of the Depression where she spent weeks without a pennie in her pocket, thank God the men of the family had jobs, everybody putting their money into a pot.
believe me, I listened.
* Re: Julie
JulieH - Mon Sep 15 2008 at 9:15 AM
This is scary stuff and the public will get spooked but we have to kep cool and know that we csan make money even now.
* Re: I'll say this again..DJIA 6500-7500
Friar Tuck - Mon Sep 15 2008 at 9:24 AM
The "Depression Generation".. mostly now gone, including my grandparents, were deeply affected by the
Depression. My grandparents were "pack rats".. they
kept nearly every doodad they ever accumulated.. bolts,
nuts, old & rusting washing machines, etc.. as my
grandpa once said "ya never know when you'll need one
and you don't have any money". He was a notorious cheap
skate.. reataurants were nearly never visited. He
worked all his life in a furniture store, eventually
coming to own the joint. Always bought used trucks.
He saved his money in the local county bank, interest
and return rates be d@mned, because he knew the bank's
I always thought that something awful must've caused
them to be so intensely thrifty.
May it be that I never have to learn those lessons.
* Friar NTR
Neil Giuntoli - Mon Sep 15 2008 at 9:57 AM
I'll bet they were good people, God rest their souls. My grandmother was such a woman, I thank God she raised me.
I say we go back to the simple ways, I am.
Reply to 'I'll say this again..DJIA 6500-7500' [more]
Puts off hard decision on Auto bailout to Decemeber.
Like I said before the market hates uncertainty and this bailout uncertainty just gives more fuel to the stock selloff. The worst possible nearterm outcome for stocks has just occurred. [more]
The congress vote may take too long, by the time they vote GM will already be bankrupt. Its stock price is a telling tale of where the sentiment is.
GM -16.1%, JPM -5.5%, BAC -5.0%, AA -4.2%, C -3.7%, T -1.4%
hate to say it but this is not going to be good for stocks. The worst thing in the world for stocks is deflation. [more]
Remember when I said stay away from SHLD at $55+, well if you did you will have saved almost 40% loss. Its down to $30 in just a couple of weeks and this may not even be bottom. [more]
That would be the worst case scenerio for stocks because the market hates uncertainty. Someone tell Congress that they need this passed this week. Get off your butts and do some work for a change. [more]
Consensus is for 780k starts , prior reading was 817k starts [more]
\52-wk low (60.81, -1.69)
Maybe the analysts that predicted it will post a loss this qtr were right.
Worst of all my rating dropped to 10 on CAPS for going long this week.
List requested of down Insurance sector stocks:
because the small caps are crashing again.
Big caps S&P 500 Index
Small caps Russell 2000 index:
The market was up 192 on DJIA but when I glanced the streamer I was noticing really weak performance on Insurance sector. Being weak on such a strong DJIA day for Insurance companies means there is bad news about to be dropped on us from this sector. Plus the overhang of big 3 auto bailout decision on Wed. by the Senate vote. A vote of no could send this market into a shock of disbelief like it did the first time the vote was no for bailout. DJIA dropped over 900 points.
No wonder so many Chinese stocks with great looking earnings are trading at cheap prices? Cause who can believe these unaudited numbers? CTRP says it made .22 trading at $18+ while NCTY says it made .52 trading at $13+
Ctrip Reports Third Quarter 2008 Financial Results
Monday November 17, 5:00 pm ET [more]
Heavyweight HPQ raises 2009 guidance up +$2.94
HPQ is the type of heavyweight that can move a market [more]
The market wanted to rally so badly today but the initial almost -250 point drop was too much for it to overcome. But that only leaves more upside for Tuesday.
Firm believes :
GEF has 25-30% upside
KDN 45-50% upside
KMT 45-50% upside
If this is the case then BGU and Big caps will dominate the upside in the coming days and weeks.
BGU LONG etf volume is up more than twice as high as that of the short etf BGZ. This shows that on a more than 3-1 ratio investors believe BGU is a better value with more upside potential going long the market at this point in the bear market.
Sideline Cash will pounce on Oversold Market. Deflation Hoax
-- Posted Friday, 14 November 2008 | Digg This Article | Source: GoldSeek.com
Sure is shaping up like it is with same exact type trading action.
The thing is today is actually a better day to achieve a 500 point gain than Thursday was. Today we don't have the forced selloff by Hedge Funds on our minds like we did on Thursday ahead of the Nov. 15th deadline.
The deadline for clients of Hedge funds to inform them of their
intention for a redemption in 2008 expired on Sat. Nov. 15th.
I am looking to enter on the longside at first sign of a rebounding
I am looking for BGU to gain 15%-20%+ on 3x leverage just like the BEAR 3x ETF's did last week (TZA, FAZ,ERY,BGZ).
The longside 3x ETF's are (BGU,ERX,TNA,FAS)
where sellers are exhausted and the low volume points to that, then
you have massive sideline cash waiting to pounce on a moments notice
that a rebound is taking place.
Energy futures pointing to general market as being a buy at todays
fall of DJIA below 8300. Support held well as stocks snapped back up
at this level. Look for technical buyers to start looking for stocks
to buy on the cheap today.
Crude ETF : USO +2.9%,
Commodities : GSG +2.2%
Heating Oil : UHN +2.2%,
Gas Futures : UGA +1.8% [more]
Hedge Funds forced selling over for 2008
The deadline for clients of Hedge funds to inform them of their intention for a redemption in 2008 expired on Sat. Nov. 15th.
I am looking to enter on the longside on first sign of a rebound starting today.
It means I must have done some things right to stay afloat of the masses. I will have to pay Capital Gains Taxes in 2008 due to stock profts realised in first 6 months of 2008 which were big enough to overcome the losses of Sept & early Oct. [more]
KUWAIT CITY (AFP) – Stock markets in the Gulf states plunged on the week's opener Sunday as panic from the fallout of the global economic crisis continued to dampen investor sentiment. [more]
Not only is Detroit suffering the most out of any city in the USA, but it could get alot more worse if the big 3 go bankrupt (FORD, GM, Chrysler) causing millions to go out of work in a chain reaction to suppliers of the big 3. Making matters worse is that even on Sundays
the Detroit population is not spared. The Detroit Lions are facing
their worst season ever going 0-10 so far and the only NFL team yet to win a game this season. [more]
this year. GM is the biggest overhang right now to a short-term market rally. The Center for Automotive Research, which receives funding from the auto industry, has warned that the collapse of the Big Three -- or even just GM -- could set off a catastrophic chain reaction in the economy, eliminating up to 3 million jobs and depriving governments of more than $150 billion in tax revenue over the next three years. [more]
Bottom could be near? Nasdaq down over -42% yoy, history has shown that stocks have rebounded at least +15% to +25% from lows of over -40% during previous bear markets.
Wells Fargo economist: No good news for retailers
11/12/2008 8:05:01 AM
By Jeff Kiger
Post-Bulletin, Rochester MN
In the past few months, speakers talking about the economy have usually followed a pattern -- roll out the bad numbers, followed by "but here's the good news."
If that's what the more than 200 business people who showed up to listen to Wells Fargo Bank Senior Economist Eugenio J. Aleman, Ph.D., expected, they left the breakfast meeting disappointed.
"The U.S. consumer is my biggest concern this year ... and next year," he told the crowd after rolling through dramatically low housing, manufacturing and other economic numbers. "This is not the time to start saving. We need to spend, but we will not. Why? In order to spend, you have to have a job."
He said the national numbers show "almost a million jobs have been lost" in the past 10 months.
Aleman compared the economy to Humpty Dumpty and said "all of the king's Treasury men and all the king's federal Reserve men" can't put it back together again.
What about the boost of holiday sales?
"This is going to be one of the worst retail seasons in the probably last 20, 30 years," he said. "I don't have good news for retailers."
He does think the slump can be turned around, with time and work.
"We have issues, but they are all issues we can work our way out of," Aleman said.
Part of that recovery will be the government "flooding the market with money." That will boost things, but it will also bring about another problem -- inflation.
Aleman realizes most people are just concerned with the current crisis, but he is looking ahead to the next one. When inflation comes back, the Federal Reserve will have to raise interest rates to combat it.
That will pull the economy back down.
Back to today's situation, he showed the dropping numbers for home construction and sales and said that sales of existing home sales "are probably at the bottom."
New single-family home sales and housing starts are both "very, very close to the bottom."
Overall, his take on the housing market was "it will continue to lie low for the next year, year and a half."
Dave Nelson, Wells Fargo's president in Rochester, describes Aleman as "a pretty straight talker" who would "rather be talking optimistically."
After hearing Aleman give three talks Tuesday, Nelson said the core issue is restoring consumer confidence and replacing all of the lost jobs seen in the 6.5 percent national unemployment rate.
How does Rochester fit into this fairly bleak picture?
"We are still very fortunate to be in Rochester," Nelson said. "There is a big difference between struggling to grow and struggling to survive, like many places."
When Aleman opened his talk in the morning, he started with some "very good news."
"We are today closer to a recovery than we were yesterday," he quipped. "Don't tell anyone. I have been telling people that for a year and a half." [more]
ahead of job numbers last week. This week today major decline ahead of Friday's Retail numbers
which many analysts are out saying could be some very Eye Popping bad numbers.
US stock market bailout cost Average American tax payers Trillions.
Bailout Price Tag: $3.5T So Far, But 'Real' Cost May Be Much Higher
Posted Nov 12, 2008 10:16am EST by Aaron Task in Newsmakers, Recession, Banking
Related: AIG, FNM, FRE, XLF, ^DJI, ^GSPC, C
While the government is clearly spending a lot of taxpayers' money to bail out financial firms, the tally is even bigger than most Americans (economists and pundits included) are probably aware or willing to admit.
The bailout bonanza has gotten so big and happened so fast it's the true cost often gets lost in the discussion. Maybe Hank Paulson and Ben Bernanke prefer it that way because the tally so far is nearly $3.5 trillion, and that's before a likely handout for the auto industry.
Yes, $3.45 trillion has already been spent, as Bailoutsleuth.com details:
* $2T Emergency Fed Loans (the ones the Fed won't discuss, as detailed here)
* $700B TARP (designed to buy bad debt, the fund is rapidly transforming as we'll discuss in an upcoming segment)
* $300B Hope Now (the government's year-old attempt at mortgage workouts)
* $200B Fannie/Freddie
* $140B Tax Breaks for Banks (WaPo has the details)
* $110B: AIG (with it's new deal this week, the big insurer got $40B of TARP money, plus $110B in other relief)
Tallying up the "true" cost of the bailout is difficult, and won't be known for months if not years. But considering $3.5 trillion is about 25% of the U.S. economy ($13.8 trillion in 2007) and the U.S. deficit may hit $1 trillion in fiscal 2009, hyperinflation and/or sharply higher interest rates seem likely outcomes down the road.
At the very least, the possibility of the U.S. losing its vaunted Aaa credit rating -- which determines the Treasury's borrowing costs -- cannot be discounted.
Moody's has already said it's not in jeopardy of being lowered. But we really can't put much stock in what Moody's -- or S&P or Fitch -- say after the subprime debacle, can we? More importantly, the price of credit default swaps on U.S. government debt has been on the rise since the bailout train got rolling, as Barron's reports.
In other words: Money talks and B.S. walks, to quote Spinal Tap. [more]
BBY is the bellweather for the Tech sector and when BBY warns you know many tech stocks will now also warn. [more]
I hope we are not trying to re-test October Lows ahead of Nov. 15th.
That date is the deadline for clients to inform hedge funds of their intentions for a redemption for this calendar year.
Today's report for an Average of $50 oil in 2009 is not going to help clients from redemptions in the energy sector.
Kudrin Sees Russian Oil Price Averaging $50 a Barrel in 2009 (Update1)
By Alex Nicholson and Stephen Bierman
Nov. 12 (Bloomberg) -- Russian Finance Minister Alexei Kudrin said oil prices next year will probably average $50 a barrel as the global economic decline curbs demand for the nation's biggest export product.
``This is significantly less than what is included in the budget,'' Kudrin told lawmakers in comments shown by state broadcaster Veesti-24. ``This will in no way affect the execution of the budget -- it will be implemented,''
Kudrin said that the $135 billion Reserve Fund, earmarked for protecting the budget when oil prices drop, would be tapped to cover the possible shortfall in revenue. Next year's budget is based on a forecast of $95 per barrel.
The threat to revenue comes after Prime Minister Vladimir Putin's government pledged to spend more than $200 billion to stem the worst financial crisis since 1998.
The central bank sold about 20 percent of its currency reserves, the world's third largest, since the start of August to stem a 17 percent slide in the ruble as investors pulled cash from the country in a flight to safety.
The budget surplus amounted to 8.1 percent of gross domestic product, or 2.53 trillion rubles ($100 billion) in the first nine months and Kudrin said the budget will stay out of deficit at $70 per barrel.
The average price for Russia's Urals blend of crude oil will probably rise to $55 a barrel in 2010 and $60 a barrel in 2011, Kudrin told lawmakers in the upper house of parliament today. For the years beyond 2011, the government is keeping its forecast of a $65-70 per barrel average through 2023.
To contact the reporter on this story: Stephen Bierman in Moscow firstname.lastname@example.org.
Last Updated: November 12, 2008 04:44 EST [more]
Stock to watch is JFE Holdings Inc (5411.T): after its core steel company, JFE Steel Corp, the world's third-biggest steelmaker, said on Tuesday it may cancel or suspend two projects worth a combined $10-12 billion to build integrated steel mills in Brazil and Vietnam if demand remains weak.
Mexico, which is not a member of OPEC, hedged almost all of next year's oil exports at prices ranging from $70 to $100 at a cost of about $1.5 billion through derivatives contracts, the Financial Times reported on its front page Tuesday, citing bankers familiar with the deal.
In contrast, Mexico hedged only between 20% and 30% of its exports last year, the Financial Times reported.
Mexico is the sixth-largest oil producer in the world and a huge chunk of government revenues depend on oil profits. [more]
Some forecasts had called for China's gross domestic product to grow 10 percent next year. More recent forecasts have it closer to 6 percent, the firm Cameron Hanover said in a report Tuesday.
Gasoline continues plunge; crude tumbles below $60
Tuesday November 11, 2:35 pm ET
By John Porretto, AP Energy Writer
Oil falls below $60 as gasoline prices continue march toward $1.50 per gallon
HOUSTON (AP) -- Retail gasoline prices dipped for a 17th week since July 4, falling below $2 a gallon in a number of states and approaching $1.50 at some service stations.
While consumers, worried about a weak job market and slumping investments, are grateful for the price relief, economic reports increasingly suggest they're hanging onto whatever savings they see at the pump.
Oil prices hit a 20-month low Tuesday as Wall Street offered yet more evidence that consumers have gone into hiding.
Retail gasoline prices fell overnight to a national average of $2.22 a gallon, dragged down by the falling price of crude, which now costs 60 percent less per barrel than it did in mid-July. The average price for regular unleaded gasoline has fallen nearly 32 percent in the last month.
Light, sweet crude for December delivery fell $3.01 to $59.40 a barrel on the New York Mercantile Exchange. In earlier electronic trading, crude fell to $58.32, its lowest point since March 2007.
The latest decline in crude prices comes two days ahead of a report from the International Energy Agency, which some analysts expect will cut its 2009 oil demand forecast for the third consecutive month.
Sharp swings in crude prices are taking place almost daily on the New York trading floor.
While the Nymex contract is now trading near first-half 2007 prices, the difference then between daily highs and lows was around $1.50 a barrel. Now, the average daily range is around $5.50 a barrel, with recent daily peaks at $9.50, said analyst Olivier Jakob of Petromatrix in Switzerland.
The overall trend for oil and gasoline prices, at least for now, is down.
Investors have grown increasingly leery about the swooning U.S. economy, which faces its worst recession in decades.
Industry analysts had expected China and India to continue buying crude if the U.S. and other western nations went into recession, but the booming economies of Asia have begun to show signs of fatigue.
Some forecasts had called for China's gross domestic product to grow 10 percent next year. More recent forecasts have it closer to 6 percent, the firm Cameron Hanover said in a report Tuesday.
A $586 billion stimulus package in China boosted markets globally early Monday, but those gains fizzled quickly and a sell-off that began in the U.S. continued in Asia and Europe.
On Tuesday, the Dow sank more than 250 points after homebuilder Toll Brothers Inc. and Starbucks Corp. gave investors more evidence the housing market and consumer spending are getting weaker.
Toll Brothers said fourth-quarter revenue fell 41 percent from the year-ago period, while Starbucks reported lower sales across the coffee chain, leading to profits that fell below analysts' expectations.
Gasoline fell again overnight, dipping 2 cents to a national average of $2.22 for a gallon of regular unleaded, according to auto club AAA, the Oil Price Information Service and Wright Express. The average price could be headed to $2 a gallon nationally by year's end, AAA has said.
The price already has fallen well below $2 in some places. In Missouri, the Web site GasBuddy.com, where consumers post prices they spot, said a few stations in the Kansas City area were charging $1.61 for regular. Drivers were paying only slightly higher in parts of Oklahoma, Iowa, Ohio and Texas.
Oil prices fell despite signs that OPEC members are going ahead with production cuts agreed to at an emergency meeting in Vienna, Austria, last month.
Many analysts are expecting another cut by the Organization of Petroleum Exporting Countries, which will meet on Dec. 17 in Oran, Algeria.
The prime minister of Qatar said Tuesday that "fair" oil prices of between $70 to $90 per barrel would ensure that expensive oil exploration could continue, avoiding rapid price surges in the future.
Sheikh Hamad Bin Jassim Bin Jabr Al-Thani said that while oil prices below $70 a barrel may seem like a gift to consumers, it could trigger price spikes in the near future when demand picks up.
But for now it is waning energy demand, not the supply controlled by OPEC, that is dominating crude prices.
Events that earlier this year threatened to cut off supply in oil producing nations no longer appear to have the power to send prices upward.
Prices this week fell even as militants in Nigeria resumed attacks on the country's oil installations. The military said it killed eight people while guarding a facility in the oil-rich south of the country.
Militants frequently attack oil facilities, seeking to hobble Africa's biggest petroleum industry and force Nigeria's federal government to send more oil funds to the southern states where the crude is pumped.
In other Nymex trading, heating oil futures fell 7.56 cents to $1.93 a gallon, while gasoline prices dropped 5.89 cents to $1.309 a gallon. Natural gas for December delivery tumbled 53.4 cents to $6.71 per 1,000 cubic feet.
In London, December Brent crude tumbled more than percent, or $3.30 to $55.78 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report. [more]
Newcastle Port Power-Station Coal Price Gains for Second Week
By Jesse Riseborough
Nov. 10 (Bloomberg) -- Power station coal prices at Australia's Newcastle port, a benchmark for Asia, rose for a second week, gaining 3.2 percent amid rising demand from utilities.
The weekly index for power-station coal prices at the New South Wales port increased $3.19 to $104.02 a metric ton in the week ended Nov. 7, according to the globalCOAL NEWC Index.
Shipments from the port, the world's biggest coal-export harbor, increased 35 percent last week to the most in 15 months as demand rebounded. The price has slumped 47 percent from a July 4 record as the worst financial crisis since the Great Depression curbs demand for raw materials.
``We continue to view the thermal coal market as remaining tight, with utilities viewing security of supply as key and unlikely to renege on volumes,'' UBS AG analysts said in a Nov. 7 report.
Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle. Thermal coal producers won a 125 percent increase in annual contract prices in the year that started April 1 to $125 a ton.
The price fell to a nine-month low of $96 in the week ended Oct. 24. The monthly index fell 26 percent to $106.92 a ton in October, from $144.82 the previous month.
UBS cut its 2009 contract price forecast by 20 percent last month to $100 a ton.
To contact the reporter on this story: Jesse Riseborough in Melbourne at email@example.com
Last Updated: November 9, 2008 18:42 EST [more]
Libor Dollar Rate Falls on China Stimulus Plan; G-20 Urges Cuts
By Anchalee Worrachate
Nov. 10 (Bloomberg) -- The cost of borrowing dollars for three months in London fell after China announced a $586 billion stimulus package and the Group of 20 nations urged central banks to counter the global credit freeze by cutting interest rates.
The London interbank offered rate, or Libor, that banks say they charge each other for such loans declined 5 basis points to 2.24 percent today, the lowest level since November 2004, the British Bankers' Association said. The overnight rate rose 2 basis points to 0.35 percent, still 65 basis points below the Federal Reserve's target rate. The Libor-OIS spread, a measure of banks' willingness to lend, narrowed.
``We are on the right path,'' said Jan Misch, a trader at Landesbank Baden-Wuerttemberg, Germany's biggest state-owned lender. ``A lot has been done to deal with the problem, and we haven't got more bad news on the banking front lately. We're watching how long it will take for full confidence to return to the money market and for banks to resume lending as normal.''
Money-market rates declined as central banks provided unlimited dollar funding and governments offered bailouts and guarantees to financial institutions. Policy makers in Australia, China, Japan, India, the U.S., the euro region and the U.K. cut borrowing costs within the past three weeks.
In a sign that central bank attempts to loosen credit are starting to work, interest rates on U.S. commercial paper, or CP, fell to the lowest in at least 12 years today. Rates on the highest-ranked 30-year CP dropped 16 basis points to 0.88 percent, or 12 basis points less than the Fed's target's rate. Average rates soared to a record 278 basis points more than the target rate on Oct. 9, according to yields offered by companies and compiled by Bloomberg since January 1996.
China's cabinet pledged ``fast and heavy-handed investment'' in housing and infrastructure through 2010 and a ``relatively loose'' monetary policy, according to a State Council statement yesterday. The stimulus package is equivalent to almost 20 percent of the country's gross domestic output.
The G-20 said yesterday it's prepared to act ``urgently'' to bolster growth and called on governments to cut borrowing costs and raise spending as the world's leading industrialized economies battle a looming recession. The International Monetary Fund forecasts the U.S., Japan, the euro region and the U.K. economies will all contract next year in their first simultaneous recession since World War II.
HSBC Holdings Plc, Europe's biggest bank, said today it set aside $4.3 billion in the third quarter for bad loans in the U.S. and forecast ``further deterioration.'' American International Group Inc., the insurer rescued by the U.S., booked $7.05 billion in writedowns during the third quarter on the value of credit-default swaps and marked down other holdings by $18.3 billion before taxes.
Financial institutions lodged 225.5 billion euros ($288 billion) in the European Central Bank's overnight deposit facility Nov. 7, down from 297.4 billion euros the previous day, the ECB said, indicating many banks are still reluctant to lend to each other. The daily average in the first eight months of the year was 427 million euros.
In Asia, three-month Hibor, the benchmark for Hong Kong interbank loans, dropped 10 basis points to 2.14 percent as the city's monetary authority added funds to the system. Australian banks lowered the rate they charge each other for three-month loans by 3.7 basis points to 4.95 percent as the Reserve Bank of Australia signaled more rate cuts. A basis point is 0.01 percentage point.
Libor, the benchmark for $360 trillion of financial products worldwide, is set by a panel of banks in a daily survey by the British Bankers' Association before noon in London. Members provide estimates on how much it would cost to borrow in 10 currencies for terms ranging from one day to a year.
The Libor-OIS spread, which former Fed Chairman Alan Greenspan said in June should serve as a measure for determining when markets have returned to normal, narrowed 6 basis points to 170 basis points today. The spread measures the difference between the rate banks charge for three-month dollar loans relative to the overnight indexed swap rate.
That compares with 87 basis points on the last trading day before Lehman Brothers Holdings Inc. went bankrupt on Sept. 15, and an average of 11 basis points in the five years before the crisis started.
To contact the reporter on this story: Anchalee Worrachate in London at firstname.lastname@example.org
Last Updated: November 10, 2008 11:39 EST [more]
after today's modest decline, stocks are down today on basically old news, all the bad news we have today is of companies everyone already knew were going to either go bk or post bad earnings. There are no new surprises today in the market except the Chinese stimulus package $586B. Therefore I expect a modest rebound come Tuesday after this lame day of Monday trading.
Wall Street falls, unable to shake economic woes - AP - 24 minutes ago
Wall Street erased an early rally Monday as enthusiasm fizzled about a $586 billion Chinese stimulus package and gave way to anxiety about how U.S. companies will survive a severe pullback in spending.
Government provides record aid package to AIG - AP - 1 hour, 20 minutes ago
In a record bailout of a private company, the government on Monday provided a new $150 billion financial-rescue package to troubled insurance giant American International Group, including $40 billion for partial ownership.
Circuit City files for bankruptcy protection - AP - 2 hours, 42 minutes ago
Circuit City Stores Inc. filed for bankruptcy protection on Monday heading into the busy holiday season as analysts question whether the nation's second-biggest electronics retailer will be able to survive.
Fannie Mae posts $29B loss, may tap gov't funding - AP - 2 hours, 58 minutes ago
Fannie Mae on Monday posted a $29 billion loss in the third quarter as it took a massive tax-related charge, and said it may have to tap the government's $100 billion lifeline as early as next year.
GM says GMAC mortgage unit may not survive - AP - 11 minutes ago
General Motors says the troubled mortgage industry and frozen credit markets have raised doubts that the mortgage business of its GMAC financial arm can survive. [more]
Sometimes you get lucky other times it pays off to do hard digging and finding GEMS like ANR before they rocket.
The adoption of the merger agreement would entitle stockholders to receive .95 of a common share of Cliffs Natural Resources Inc. and $22.23 in cash for each share of Alpha Natural Resources common stock at the consummation of the merger. As of the close of trading yesterday, Nov. 6, this entitlement represents a premium of 90% over the trading price of Alpha Natural Resources.
Alpha's board of directors continues to recommend that stockholders vote "FOR" the adoption of the agreement and plan of merger at the upcoming special meeting, to be held on Friday, November 21, 2008.
Holders in need of assistance voting their shares can call Alpha Natural Resources' proxy solicitor, D.F. King & Co., Inc., toll-free at (888) 887-0082. [more]
Everytime we make a comeback we fall back to the 40% fall level.
AES falling into Obama's Alternative energy play:
Time to look at AES because it just came off its 52wk low set yesterday.
The AES Corporation, through its subsidiaries, operates as a power company worldwide. The company�s generation business owns and/or operates power plants to generate and sell power to wholesale customers, such as utilities and other intermediaries. As of July 3, 2008, it owned and operated 123 generation facilities, with generation capacity totaling approximately 43,000 megawatts, in 29 countries on 5 continents. The company�s portfolio of power generation facilities employs a range of technologies and fuel sources, including coal, gas, and fuel oil, as well as renewable sources, including hydroelectric power, wind, and biomass. The AES Corporation�s utilities business owns and/or operates utilities to distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors. In addition, the company is developing an alternative energy business, which includes initiatives, such as wind and solar generation, and climate solutions, such as the production of emissions credits. The AES Corporation was founded in 1981 and is headquartered in Arlington, Virginia. [more]
GM shares halted, says liquidity down to minimum to continue operating. [more]
GM shares just got Halted.
means things can change on a dime, yes stocks are up 225 pts but by the end of the day it could just as easily turn down 225 pts. Bear markets are known for higher open to be followed by afternoon selling.
Staying away from high debt leveraged steel companies. I remember the days when every steel company almost went bankrupt due to their high debt leverage.
No one expected Sept revisions to be up nearly 100% from prior numbers. Now if Sept revisions can go up by that much , how are we to believe Oct. numbers they put out? Can't they also be revised by much higher amount when we get Nov. numbers in Dec.? [more]
I heard the deadline for redemptions is Nov 15th for Hedge fund clients for tax loss selling this year. So its not looking pretty till this selling pressure ends sometime in the 3rd week of November. Also I am getting nervous about the Jobs numbers for October coming out Friday morning.
U.S. Initial Jobless Claims Rose Higher Than Forecast (Update1)
By Timothy R. Homan
Nov. 6 (Bloomberg) -- More Americans than anticipated filed first-time claims for unemployment benefits last week and total jobless rolls climbed to the highest level in 25 years, indicating further deterioration of the labor market.
Some 481,000 workers filed initial claims in the week ended Nov. 1, the Labor Department said today in Washington, exceeding the 477,000 projected by economists surveyed by Bloomberg News. The number of people staying on benefit rolls was the most since February 1983.
Companies are facing reduced access to credit alongside the biggest slowdown in consumer spending in 28 years. The government may report tomorrow that the economy lost 200,000 jobs in October, the most in five years and bringing the total drop so far this year to almost 1 million.
``The underlying trend in claims is rising, and we'll see confirmation tomorrow that the job market is deteriorating rapidly,'' said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. ``Consumer spending will continue to fall sharply. This recession will be substantially deeper than the last two.''
The economists' forecast was based on the median of 39 projections in the Bloomberg survey. Estimates ranged from 460,000 to 491,000. The prior week's claims were revised up to 485,000 from an initially estimated 479,000.
Standard & Poor's 500 Index futures declined 1.9 percent while the MSCI World Index lost 2.4 percent to 959.52 at 1:33 p.m. in London, extending this year's decline to 40 percent. More than $27 trillion has been erased from the value of global equity markets as credit losses and writedowns exceeded $690 billion in the worst financial crisis in seven decades.
The hurricanes that hit the Gulf Coast earlier this year are no longer having a ``significant'' influence on claims, a Labor spokesman said.
Separately, the Labor Department reported that worker efficiency rose in the third quarter at a slower pace than in the previous three months as the economy slumped, a sign employment may take a bigger hit.
Productivity, a measure of employee output per hour, rose at a 1.1 percent annual rate, more than forecast. Labor costs climbed at a 3.6 percent pace, also more than anticipated.
The four-week moving average of initial claims, a less volatile measure, was unchanged at 477,000. So far this year, weekly claims have averaged 398,000, compared with an average 321,000 for all of 2007.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, increased to 2.9 percent, the highest level since 2003. These data are reported with a one- week lag.
Forty states and territories reported an increase in new claims, while 13 reported a decrease.
Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows.
The economy probably lost 200,000 jobs in October, the most this year, according to economists surveyed by Bloomberg before the Labor Department report set for Nov. 7. The unemployment rate may jump to its highest level in more than five years, the survey showed.
Companies are trimming staff to offset a slowdown in consumer spending. GlaxoSmithKline Plc, Europe's largest drugmaker, said yesterday it will eliminate 1,000 sales positions in the U.S. to cut costs.
The company said revenue in the U.S. last quarter dropped 13 percent.
Consumer spending declined at a 3.1 percent annual pace during the third quarter, the first decrease since 1991 and the biggest since 1980, the Commerce Department said Oct. 30.
To contact the reporter on this story: Timothy R. Homan in Washington at email@example.com
Last Updated: November 6, 2008 09:01 EST [more]
their forecast will keep falling
Oil & gas have no support in the $60's
After the Panic selling of Sept.-Oct. Bank of England reacts with 1 1/2 point rate cut. Don't let anyone fool you, this rate cut was not priced in. None of the 60 economists forecast it that were surveyed by Bloomberg radio. Expect a snap back up for US stocks after yesterday's 5%+ beating.
BoE cuts rate, ECB tipped to follow
Thursday November 6, 7:27 am ET
BoE slashes rate to 3 percent, ECB set to follow amid ebbing inflation, looming recession
FRANKFURT, Germany (AP) -- Expectations grew for a bigger than expected rate cut by the European Central Bank to confront the looming recession in the wake of a decision Thursday by the Bank of England to cut its benchmark rate by a startling 1.5 percentage points to 3 percent.
The Bank of England's cut was more than than the full percentage point that most analysts had predicted.
Economists had previously believed the ECB was likely to follow the U.S. Federal Reserve's lead from its Oct. 29 meeting and cut by a half-point, taking its benchmark rate to 3.25 from 3.75 percent.
But in the wake of the outsized Bank of England cut, analysts leaned toward a bigger ECB cut.
"The amazing decision by the BoE to slash rates by 150 basis points leads us to believe that the ECB will be cutting by 100 basis points today," said Jacques Cailloux, European economist at the Royal Bank of Scotland.
Both central banks, which followed the Fed and other banks in a coordinated cut on Oct. 8, have been criticized in some quarters for being slow to respond to the sharp economic slowdown this year given their prevailing fears about inflation. The European Central Bank actually raised rates a quarter-point in July as inflation spiked sharply higher.
Those inflation concerns, though, have eased, not least because oil prices have fallen by more than half from their July highs of around $147 a barrel -- and growth prospects have diminished sharply.
The European Commission forecast Monday that the economy in the 15 countries that use the euro will barely grow next year, expanding just 0.1 percent, with Germany, France and Italy stagnant. And it said Britain's economy will slump by 1 percent next year.
Many analysts suspected the Bank of England might go for a bold move, given that British interest rates had been at a relatively higher level and mortgage lenders have been slow to pass on previous rate cuts in full to hard-pressed homeowners and consumers. [more]
CSCO beats by .03
RAX beats by .04
OKS beats by .74
EGLE beats by .05
PVA beats by .28
EXM beats by 1.23
volc beats by .10
AEL beats by .08
CUZ beats by .16
PAA beats by .06
Cisco Reports First Quarter Earnings
Wednesday November 5, 4:05 pm ET
SAN JOSE, CA--(MARKET WIRE)--Nov 5, 2008 -- Cisco (NasdaqGS:CSCO - News)
-- Q1 Net Sales: $10.3 billion (increase of 8% year over year)
-- Q1 Net Income: $2.2 billion GAAP; $2.5 billion non-GAAP
-- Q1 Earnings per Share: $0.37 GAAP (increase of 6% year over year);
$0.42 non-GAAP (increase of 5% year over year)
-- Total Cash, Cash Equivalents and Investments: $26.8 billion
Cisco (NasdaqGS:CSCO - News), the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its first quarter results for the period ended October 25, 2008. Cisco reported first quarter net sales of $10.3 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion or $0.37 per share, and non-GAAP net income of $2.5 billion or $0.42 per share.
"Cisco delivered solid revenue and earnings growth in what is clearly a very challenging global economy," said John Chambers, chairman and CEO, Cisco. "Our strategy and focus for managing the business through this market transition is clear -- we will manage and prioritize our resources, invest in innovation, and build even stronger relationships with our customers to help enable their success."
Chambers continued, "The essential role that the network plays in driving business productivity and competitive advantage is more relevant than ever in this current macro-economic environment. Just as we helped our customers tap the productivity and competitive advantages afforded by the first wave of the Internet, once again we are leading the transition in this second wave to create new business models built for speed, scale, flexibility and productivity, enabled by the network."
Q1 2009 Q1 2008 Vs. Q1 2008
------------- ------------ -----------
Net Sales $10.3 billion $9.6 billion +8.1%
Net Income $2.2 billion $2.2 billion -0.2%
Earnings per Share $0.37 $0.35 +5.7%
Q1 2009 Q1 2008 Vs. Q1 2008
------------- ------------ -----------
Net Income $2.5 billion $2.5 billion -0.2%
Earnings per Share $0.42 $0.40 +5.0%
As previously disclosed, a tax benefit of $162 million or approximately $0.03 per share relating to a settlement of certain U.S. income tax matters was included in both the GAAP and non-GAAP results for the first quarter of the prior fiscal year. A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 6.
Cisco will discuss first quarter results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com. [more]
Rate cuts Thursday in Europe [more]
I doubt Shorts today having staying power today
ahead of Rate cuts Thursday in Europe which could spark another round of short covering.
Rate cuts expected by ECB and Bank of England
By Kirsten Donovan Reuters
Published: November 4, 2008
LONDON: The sharply slowing European economy has persuaded financial markets that the European Central Bank and the Bank of England could cut interest rates by as much as three-quarters of a percentage point Thursday to contain the fallout from the global financial crisis.
Figures derived from the euro overnight index average, or Eonia, show interest rate traders almost fully pricing in a three-quarters of a percentage point cut, to 3.0 percent, by the ECB while British interest rate futures show the Bank of England cutting rates by the same amount, to 3.75 percent.
If realized, those expectations would still come as a surprise, as all 81 economists polled by Reuters last week, along with a majority of analysts, reckoned the ECB would cut its base rate by a more modest half-point from its current 3.75 percent. A cut of three-quarters of a point would be the biggest move in the history of the ECB.
The Bank of England's Monetary Policy Committee has never cut interest rates by more than a half point since it was given policy independence in 1997. It cut its main rate by a half-pont on Oct. 8, to 4.50 percent, as part of a global coordinated easing. All 62 economists polled by Reuters this week forecast at least a half point cut, though almost one-third predicted a larger cut.
"The market is salivating over what the ECB and Bank of England will do on Thursday," strategists at Calyon said in a note. "We expect 50 basis points of cuts from each central bank, but the market pricing has increased to a 75 basis point move. We are in no doubt the accompanying messages will signal more easing to come." One basis point is one-hundredth of a percentage point.
The ECB president, Jean-Claude Trichet, has convinced markets that another ECB rate cut is a done deal, having already lowered its benchmark rate by 50 basis points last month in the coordinated move by major central banks.
Trichet said last week that there was a possibility, although not a certainly, that rates would be cut at the Governing Council's meeting Thursday.
David Keeble, a Calyon strategist, said that the ECB had no need to surprise the market on Thursday as the recent sense of panic was fading. After the euro had its biggest one-month loss ever in October, Euribor interbank lending rates are easing and stock markets are basing out. "They have not signaled at all that they are going to move 75 basis points and if they do it will really unhinge expectations of futures moves," Keeble said.
Eonia futures suggest further easing by the ECB, with rates eventually seen falling to a three-year low of 2.5 percent by April.
That is in marked contrast to a few months ago when even in the face of the global credit crunch, the ECB raised rates to 4.25 percent in July, emphasizing its inflation-fighting mandate.
But the European Commission said Monday that the euro zone appeared to be in a recession and that economic growth would come to a virtual standstill next year.
With price pressures also receding - oil for example has more than halved in price to less than $70 a barrel - the central banks have some much needed wiggle room.
Charles Diebel, a strategist at Nomura International, said the ECB was not expected to have the stomach for a 75 basis point cut on Thursday, but rates could ultimately test the lows seen from 2003 to 2005. "Our longer-term view remains one where prior cycle lows will be tested, as they have in the U.S. As such we would expect a move to 2 percent from the ECB into next year and for the BoE would suggest the prior cycle low of 3.5 percent will be exceeded," Diebel said. [more]
When you see stocks like RDN posting profits instead of losses its proof that the Eye of the Storm of the credit crunch has now passed us.
Other proof we have is the Dollar Libor rate which has fallen for 18 straight trading days and now sits at 2004 levels of 2.51%
* Q3 profit of $0.46/shr Vs estimates of $-2.16/shr [more]
President Elect Obama's Promise, Turn America to Alternative Energy
Solar stocks down this morning, should be good pick ups as this sector should go up in the next 2 months leading to President Elect Obama entering the White House
By Gavin Finch
Nov. 5 (Bloomberg) -- The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars fell to the lowest level since December 2004.
The rate declined 20 basis points to 2.51 percent today, according to British Bankers' Association data. It was the 18th consecutive decline in the rate.
The overnight rate slid about 6 basis points to 0.32 percent, a record low for a fifth day and 68 basis points below the Federal Reserve's target rate for overnight loans, BBA data showed.
The Libor-OIS spread, a gauge of cash scarcity among banks, narrowed 21 basis points to 192 basis points, the first time it has dropped below 200 since Sept. 25.
To contact the reporter on this story: Justin Carrigan in London at firstname.lastname@example.org
Last Updated: November 5, 2008 06:45 EST
This news is very positive for ABR it shows Credit Squeeze has been Lifted.
For some that don't know, the fall in the dollar Libor rate greatly affects ABR to the positive. ABR fell off a Cliff due to the Libor rate soaring Sept-Oct. Now that the Libor is back to levels last seen in 2004 makes ABR very attractive at these prices. [more]
time to take profits in VIP. I am placing a personal short-term target on ABR of $6,
A dream come true for Micro & Small cap fundmanagers
Micro-cap & Small cap fundmanagers must think they are back in time.
Stocks they sold in the past because the stocks rose to levels where they got to big for them to hold because of market cap restrictions.
Now the fundmanagers find themselves in a position to dump stocks they currently hold for much better stocks they held in the past.
ABR among hundreds of other stocks is such a case.
ABR was a $471M mkt cap stock now its barely over $100M
Whats bad news for some is good news for others.
A dream come true for Micro & Small cap fundmanagers is what today's markets are, full of great stocks selling at market caps where they can buy them.
Micro & Small cap fundmanagers are restricted from buying stocks that are above the funds market cap limits, they are also required to sell the stocks once the stock goes above or below the market cap limits set by the fund. [more]
Three-Month Dollar Libor Falls to Lowest Since June 9, BBA Says
By Justin Carrigan
Nov. 4 (Bloomberg) -- The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars dropped to the lowest level in almost five months.
The rate declined 15 basis points to 2.71 percent, the lowest level since June 9, according to British Bankers' Association data. It was its 17th consecutive decline.
The overnight rate slid 1 basis point to 0.38 percent, a record low for a fourth day and 62 basis points below the Federal Reserve's target rate, BBA data showed today.
The Libor-OIS spread, a gauge of cash scarcity among banks, narrowed 12 basis points to 211 basis points.
To contact the reporter on this story: Justin Carrigan in London at email@example.com
Last Updated: November 4, 2008 06:47 EST [more]
TAN an ETF that moves positive on an OBAMA victory
ABR & CVI earnings are coming both stocks are so completely beaten down to the extreme that whatever they post will be considered as not as bad as expected. But what if they post better than expected? Look out above then, they will soar. Another point on ABR is that holders as of Nov. 15th will receive a divy of .24/shr and that will cause shorts to cover ahead of that date. Shorts don't like holding thru divy dates. [more]
Republicans went Short USA stocks Aug-Oct fearing an election loss to OBAMA. Now you add in a recession + mutual fund redemptions + tax loss selling to the mix and thats how you get to -44%+ loss in the stock market. Cover on the News day is finally here.
Just like longs buy ahead of good news and sell once the good news hits the wires. The same is true for shorts, they go short ahead of bad news and cover once that bad news hits the wires. The Republicans went short USA stocks months ahead fearing today's Obama election victory.
COVER on the News Day for Republican Shorts [more]
Clamour grows for radical base rate cut by the Bank of England
MARK WILLIAMSON November 03 2008
The Bank of England is under intense pressure to cut interest rates this week, with one prominent economist adding his voice to calls for borrowing costs to be lowered by a full percentage point.
Warning that the UK faced the prospect of an extended and deep recession, Howard Archer of Global Insight urged policymakers to forget increasingly misplaced fears of inflation and tackle the real risk facing the economy.
Archer, who is chief European and UK economist at the consultancy, believes monetary policymakers will settle for cutting interest rates by 0.5% for a second month running when they meet this Wednesday and Thursday.
However, he threw his weight behind a growing body of expert opinion that says more dramatic action is needed.
"There is a compelling case for the Bank of England to get on with the job' and deliver a full one percentage point cut from 4.50% to 3.50%," he said.
Other business heavyweights have concluded that it is essential to try to boost demand in the economy and that the time to tread carefully has passed.
Steve Radley, chief economist at the Engineering Employer's Federation, said unusual times called for unusual measures and that a full point cut was needed.
Citing growing risks of a worsening UK recession, the British Chambers of Commerce said the Bank should cut rates by 0.5% on Thursday but follow that up with another half-point cut before Christmas.
With most economists expecting that the Bank will make a cut of some sort, Prime Minister Gordon Brown appeared to believe action was likely.
"We have seen two cuts in interest rates," Brown said, referring to recent Bank of England decisions.
"I can't speculate about what the Bank of England will do because they are independent, but I believe that the trend around the world is to respond to falling oil prices and falling food prices. That is what we seeing at the moment," he said in Riyadh, Saudi Arabia.
The prospect of reduced borrowing costs may provide some support to share prices in advance of this week's meeting.
The decision of the US Federal Reserve cut its interest rate by 0.5% to just 1% last week provided a huge boost to global stock markets.
The blue-chip FTSE-100 index enjoyed its best week yet, closing up by 12.7%. However, that left the index down by nearly 11% in October and 32% this year.
Market-watchers noted there have been several false dawns for markets, in which rallies have been followed by falls.
The Bank of England meeting will take place amid continuing efforts by leaders to address a crisis that has affected the whole world.
Finance chiefs from the Group of 20 key economies will meet in Brazil at the end of the week to lay the groundwork for a summit on November 15 in Washington, where world leaders will discuss how best to tackle the financial crisis.
Investors are hoping for further details from Belarus, Turkey, Pakistan and Serbia, Hungary and Ukraine, which are in talks with the International Monetary Fund for emergency funding.
Over the weekend, it became increasingly clear that the downturn is having a profound impact on hotspots in Asia. Some had thought the booming economies of countries such as China had become "delinked" from the economies of the West and effectively immune from their problems.
However, China's Premier Win Jiabao said it feared a downturn in its export markets could hurt the economy.
"We must be crystal-clear that without a certain pace of economic growth, there will be difficulties with employment, fiscal revenues and social development ... and factors damaging social stability will grow," he wrote in the Communist Party's ideological journal.
China cut interest rates last Wednesday for the third time in six weeks.
In India, the central bank cut its main lending rate on Saturday for the second time in as many weeks to ease a cash squeeze and spur economic growth.
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ELECTIONS & Markets What has happened in past?
Bloomberg radio said earlier this week that on average when a Democrat
is elected President the markets have gained 10% after the election
while when a Republican is elected the markets lose on average 2 1/2%
after the election.
So with Obama in the lead if history holds true to its form then we
are in for another 10% upside move on Obama getting elected.
Info above was obtained during a live conversation bloomberg radio
anchors were having earlier last week. [more]
for first time to levels prior to the panic selling on Wall Street. Credit Squeeze being lifted, FED. moves appear to be working better than expected.
Related stocks : NSANY, F, GM, GT, TM,
When bad news makes a stock rise that proves its the bottom for that stock and its industry. Today NSANY had bad news and the stock is up .03 not much but it isn't down which is amazing and shows how far down we have come. Even bad news now can't make stocks go down.
DETROIT, Nov 3 (Reuters) - Nissan Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) on Monday said its sales in the U.S. market for October, dropped 33 percent as the industry was hit by a steep downturn tied to consumer uncertainty and tighter credit.
"I think we were pretty much where the market was," Al Castignetti, vice president and general manager of Nissan division sales told Reuters.
Nissan sold 56,948 vehicles, down 33 percent from the same month a year earlier it said. Nissan-brand sales were down 36 percent, whiles sales for the Japanese automaker's luxury Infiniti brand were down 29 percent.
The change was based on sales figures that were not adjusted for the number of selling days. October had 27 sales days compared with 26 percent a year earlier meaning results on the adjusted basis tracked by analysts would have been lower. (Editing by Maureen Bavdek) [more]