A Podcast With Ferguson On China As A Net Seller of Treasuries… Plus Earnings From LEN
MIAMI (AP) — Lennar Corp. reported a wider loss in its fiscal third quarter as the homebuilder continued to write down the value of its land and unsold homes.
While customer orders were down 8 percent from the prior-year period, the number of new orders increased each month during the quarter and the Lennar ended August with the highest backlog in a year.
“The overall housing market continued its road back to recovery as more confident homebuyers took advantage of increased affordability,” Stuart Miller, Lennar’s president and CEO, said in a statement.
While the company didn’t provide future financial guidance, it said if the economy continues to improve Lennar will return to profitability in fiscal 2010.
The company sold 2,691 homes, down 29 percent from year-ago levels. The average sales price was $239,000, down 11 percent, but stronger demand allowed Lennar to reduce the incentives it offered homebuyers to $42,200 per home, down from $45,900 a year ago, and markedly better than the $52,600 in offered during the second fiscal quarter.
The company reported Monday that it lost $171.6 million, or 97 cents per share, in the three months ended in August. That includes 76 cents per share in write-downs and tax adjustments, and compares with a loss of $89 million, or 56 cents per share, a year earlier.
Revenue fell 35 percent to $720.7 million from $1.11 billion.
Analysts were expecting a loss of 46 cents a share on revenue of $774.4 million.
The Miami-based builder raised $99 million through a stock offering in the period and ended the quarter with a cash cushion of $1.34 billion and no outstanding borrowings under its credit facility
Business Headlines For September 21, 2009
Semiconductor Industry Faces Challenges Despite Recovery
Taiwan’s chip makers, powerful drivers of growth in the nation, may have survived their worst crisis ever, but lackluster sales and new rivals still make these risky times. The local semiconductor industry, the fourth-largest in the world, saw sales soar by a steep margin in the second quarter, but is set to become markedly less feverish in the third quarter, analysts said.
“The slowing pace of growth shows the global recovery may not be as fast as previously anticipated,” said Mars Hsu, a Taipei-based technology analyst with Grand Cathay Securities (大華證券).
In the three months to June, combined revenues of the nation’s chip makers soared 69.2 percent from the previous quarter to NT$136.2 billion (US$4.18 billion), the Taiwan Semiconductor Industry Association (TSIA, 台灣半導體協會) said.
This followed a record 33.7 percent quarter-on-quarter drop in the three months to March for an industry that, more than any other, helped give Taiwan its reputation as a high-tech nation.
The pickup in sales in the second quarter was largely due to unique factors, such as a need among clients to rebuild inventories after the immediate shocks of the worst crisis in decades.
“Clients found their inventories were low as a result of the uncertainty that gripped the market after the crisis last year,” said Peng Mao-jung (彭茂榮), an analyst of the quasi-official Industrial Technology Research Institute (ITRI, 工研院).
Contributing to the fast pace of growth in the second quarter was also another one-off factor — a rush of orders from China after the Chinese government adopted massive stimulus spending to lift its flagging economy.
One-offs do not last long, and analysts suspect that the industry may be losing momentum with Peng forecasting growth of just 17 percent in the third quarter from the second.
The 17 percent growth forecast is shared by United Microelectronics Corp (UMC, 聯電), the world’s No. 2 contract microchip maker.
The price of a 20-inch LCD monitor could drop by about 3.4 percent in the second half of the month, however, TV panel prices are expected to hold steady
By Lisa Wang
Monday, Sep 21, 2009, Page 12
Prices for liquid-crystal-display (LCD) panels used in monitors may begin to fall by as much as 3.4 percent in the second half of this month, ending a six-month uptrend as supply and demand reach parity, market researcher DisplaySearch said in its latest report.
Pricing pressure is expected come into play through next month, the Austin, Texas-based research house said in a biweekly report released on Saturday.
The price weakness could be an early sign of a new slowdown, which was originally expected in the final month of next quarter, HSBC Securities projections showed.
Prices for monitor panels are expected to drop the fastest as “monitor panels with 16:9 aspect ratio are reversing to oversupply,” DisplaySearch said. “Monitor brands and original electronics manufacturers are becoming cautious about inventories on concerns about price erosion next quarter.”
A 20-inch LCD monitor with 16:9 aspect ratio may drop US$3, or 3.4 percent, to US$85 per unit in the second half of this month, from US$88 in the first half, DisplaySearch’s statistics showed.
The “slow season for the LCD sector [is] kicking in one to two months earlier, driven by continued negative newsflow on a hard landing for the LCD sector in the fourth quarter,” HSBC Securities analyst Frank Su (蘇�? said in a report issued last week.
The speculation may push panel buyers to trim orders before visibility of sell-though improves, Su said. He originally expected the slow season to begin in December.
The report said panel makers are managing to hold their price quotes for TV screens steady for the next two weeks as they “are seeing increasing demand from Europe,” the world’s biggest LCD TV market, the report said.
Some Chinese TV makers have wrapped up their inventory for the upcoming shopping season, the researcher said.
“Panel price negotiations are expected to be tough for some panel makers,” it said…..
Deloitte Forecasts Flat Holiday Spending For U.S.
U.S. holiday spending is expected to be flat versus a year ago, as consumers remain cautious and the national unemployment rate hovers at nearly 10 percent, Deloitte said in a forecast released late on Sunday.
Deloitte’s retail group expects total holiday sales to be $810 billion, excluding motor vehicles and gasoline, for the November-through-January period.
A flat result would be an improvement from a year ago when holiday sales fell 2.4 percent, but is hardly the encouraging sign some retailers and investors would hope for.
“Although there are signs that suggest the economy is nearing the end of its darkest days, many consumers remain burdened by restricted credit availability, high unemployment and foreclosures,” said Carl Steidtmann, chief economist with Deloitte Research, a subsidiary of Deloitte Services LP.
“Americans continue to save at historically high rates while also paying down debt, and these factors combined suggest another chilly holiday season for retailers,” Steidtmann said.
He added that stable gas prices, strengthening home values and stock market gains would help support consumer spending during the all-important winter holiday season that starts on the Friday after the U.S. Thanksgiving holiday.
While some data is pointing to an early economic recovery, many experts agree that consumers are not yet out of the woods.
One of the only measures of stock market valuation that shows a strong tendency toward long-term mean-reversion–the cyclically adjusted PE ratio–suggests stocks are now about 15%-20% overvalued.
This, of course, is nothing new: Stocks were overvalued on this measure for most of the two decades from 1990 to 2007. (They dropped below fair value for a few minutes in 2003, before blasting off to the moon again).
Now, thanks to the S&P’s 58% rise off the bottom, stocks are now trading at 19X Robert Shiller’s cyclically adjusted PE ratio.* This compares to an average of about 16X for the past 130 years.
Keep in mind that this level of over-valuation alone does not herald a near-term reversion to the mean: Last time this PE ratio soared past 20X, for example (in 1992), it stayed above 20X for 16 years. It is also possible that the “average” PE ratio has shifted upwards over the past century and that the “new normal” is something closer to 20X.
Unless we really have hit a new normal, however, the cyclically adjusted PE ratio does suggest that the long-term return on stocks from this level will be less than the long-term average. Specifically, it suggests that stocks will return about 4% real (after adjusting for inflation) over the next decade, versus the 7% average).
* The cyclically adjusted PE ratio (CAPE) averages the past 10 years-worth of earnings to smooth out the impact of the business cycle. Profit margins are mean-reverting, which means that high profit margins tend to fall and low profit margins tend to rise. As a result, a straight one-year PE ratio can give a misleading impression of value. At the peak of the business cycle, when profit margins are high, the PE ratio looks artificially low–and vice versa. Robert Shiller’s cyclically adjusted PE provides a much more stable denominator.
By Colleen McElroy
Sept. 21 (Bloomberg) — Dell Inc. said it agreed to acquire Perot Systems Corp. in a transaction valued at approximately $3.9 billion. Terms of the agreement were approved yesterday by the boards of directors of both companies.
Dell will commence a tender offer to acquire all of the outstanding Class A common stock of Perot Systems for $30 per share in cash. The transaction is not subject to a financing condition. The transaction, which is subject to customary government approvals and the satisfaction of other customary conditions, is expected to close in Dell’s November-January quarter.
By Jon Menon and Ben Martin
Sept. 21 (Bloomberg) — Royal Bank of Scotland Group Plc, Britain’s biggest government-controlled bank, is in talks with shareholders to gauge the appetite for a potential rights offering, two people familiar with the talks said.
The bank held the discussions last week, said the people, who declined to be identified because the negotiations are still at an early stage. RBS may raise between 3 billion pounds and 5 billion pounds ($8.1 billion), one of the people said.
“I’d be surprised if they can achieve it. It’s ambitious,” said Julian Chillingworth, chief investment officer at London-based Rathbone Brothers Plc which manages $21 billion, including RBS stock. “There is concern that investors may be faced with quite a lot of cash calls in the sector. I’m not sure RBS shareholders will be that keen to subscribe.”
The government’s stake in the Edinburgh-based lender is set to increase to more than 80 percent under the terms of the Asset Protection Scheme, the U.K.’s toxic asset insurance program. RBS Chief Executive Officer Stephen Hester is seeking to limit that increase by raising cash from investors, one of the people said.
RBS raised 12.3 billion pounds in a rights offer in June 2008 following its purchase of ABN Amro Holding NV by former CEO Fred Goodwin. That acquisition led the bank to report a 24.1 billion-pound loss for 2008, the biggest by a U.K. company, after writedowns surged. Goodwin was ousted last year as the government provided a 20 billion-pound bailout for RBS.
Europe Trades Lower On Concerns Stocks Have Outpaced Earnings
By Adria Cimino
Sept. 21 (Bloomberg) — European and Asian stocks dropped on speculation a six-month rally in global equities has outpaced the prospects for earnings and economic growth. U.S. index futures declined.
BHP Billiton Ltd., the world’s largest mining company, retreated 2 percent in London. K+S AG, Europe’s biggest potash producer, slid 4.7 percent after Potash Corp. of Saskatchewan Inc. cut its profit forecast. Royal Bank of Scotland Group Plc slipped 2.1 percent after two people familiar with the talks said Britain’s largest government-controlled bank is in discussions to gauge the appetite for a potential rights offer.
The MCSI World Index slipped 0.5 percent at 9:34 a.m. in London. The gauge has gained 65 percent since March 9 as results at companies from Roche Holding AG to Goldman Sachs Group Inc. surpassed projections and the German and French economies unexpectedly exited recessions. The index is valued at more than 27 times reported profit, the most expensive level since June 2003, according to weekly data compiled by Bloomberg.
“We’ve had a massive rally,” said Lothar Mentel, chief investment officer at Octopus Investments Ltd. in London, which oversees about $1.8 billion. “Things might start to look expensive. That’s why the market is taking a pause and waiting to see October earnings.”
Europe’s Dow Jones Stoxx 600 Index lost 0.7 percent today as all 19 industry groups declined. The MSCI Asia Pacific excluding Japan Index fell 0.4 percent, led by financial and mining companies. Markets in Japan, Singapore, Malaysia, Indonesia, the Philippines and India are shut for holidays.
Asian Markets Move Lower on Evaluation Concerns
By Shani Raja
Sept. 21 (Bloomberg) — Most Asian stocks fell, led by finance and mining companies, amid concern a six-month rally has made shares expensive relative to earnings prospects.
BHP Billiton Ltd., the world’s largest mining company, declined 1.2 percent after metal prices slumped in London and New York. Shanghai Pudong Development Bank Co. fell 4.8 percent after winning regulatory approval for a share sale. STX Pan Ocean Co., South Korea’s biggest bulk carrier, climbed 8.2 percent after saying it’s in talks with Vale SA on a contract to transport iron ore.
About five stocks declined for every three that rose on the MSCI Asia Pacific excluding Japan Index, which lost 0.2 percent to 390.77 as of 12:28 p.m. in Hong Kong. The measure swung between gains and losses at least seven times. The gauge that includes Japan has rallied 67 percent from a five-year low on March 9, driving the average price of stocks in the index to 1.6 times book value, the highest level since this year’s trough.
“The path of least resistance for the market right now is up, but it won’t be a straight line up,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors, which manages about $75 billion. “You eventually get to a point where the market superficially looks expensive. We’re at that point now.”
Markets in Japan, Singapore, Malaysia, Indonesia, the Philippines and India are shut for holidays. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, dropped 1.5 percent on concern new share sales will draw funds away from existing equities.
Australia’s S&P/ASX 200 Index lost 0.4 percent. Harvey Norman Holdings Ltd., the country’s biggest electronics retailer, declined 2.3 percent after it was downgraded at Credit Suisse Group AG. Hong Kong’s Hang Seng Index added 0.2 percent.
Metallurgical Corporation of China Ltd., the construction company that helped build Beijing’s Olympic stadium, rose 28 percent on its debut. Hynix Semiconductor Inc., the world’s second-largest maker of computer-memory chips, added 4.4 percent in Seoul after Morgan Stanley upgraded the stock.
Futures on the U.S. Standard & Poor’s 500 Index lost 0.2 percent. The gauge added 0.3 percent on Sept. 18, amid analyst upgrades of companies from Procter & Gamble Co. to SanDisk Corp. and Chevron Corp.
BANGKOK (AP) – Oil prices fell below $72 a barrel Monday in Asia as high crude stockpiles and weak demand tempered enthusiasm about recent signs of improvement in the world’s largest economy.
Benchmark crude for October delivery was down 40 cents at $71.64 a barrel by midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gave up 43 cents Friday to settle at $72.04 a barrel.
The recession has sapped American fuel consumption, and U.S. oil stockpiles are 14 percent larger than last year even as recent data suggests the economy is clawing out of recession.
The Energy Information Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.
“Most of the macro data from the U.S. over the last month has been supportive of oil prices,” said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. “But inventories remain high and demand is weak, so that’s capping prices.”
Moore said crude will likely average $64 a barrel in the fourth quarter before rising to average $80 in the October to December period of 2010.
In other Nymex trading, gasoline for October delivery slipped 0.84 cent to $1.8240 a gallon, and heating oil fell 0.86 cent to $1.8193 a gallon. Natural gas fell 4.5 cents to $3.733 per 1,000 cubic feet.
In London, Brent crude fell 41 cents to $70.91 on the ICE Futures exchange.
Associated Press Writer Alex Kennedy contributed to this report from Jakarta.
All Eyes on The Fed This Week For Direction on Economy & Markets
WASHINGTON (AP) – With the economy starting to rebound but still fragile, Federal Reserve policymakers this week are expected to keep emergency programs to encourage spending and borrowing intact. But to avoid unleashing inflation later on, they are likely to consider ways to rein in programs designed to keep mortgage rates down and get banks to lend more freely.
As the economy improves, the Fed will face more pressure to wind down some of its programs. For now, Fed Chairman Ben Bernanke and his colleagues probably will stay the course while striking a more optimistic tone at a two-day meeting that ends Wednesday.
“I think they are feeling more confident about the recovery,” said Christopher Rupkey, economist at Bank of Tokyo-Mitsubishi.
Fed policymakers are all but sure to keep interest rates at a record low near zero to nurture a tentative recovery. And they will probably stick with their goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae and Freddie Mac by year’s end. The program is intended to lower rates on home mortgages and support the housing market.
The real estate industry, which led the country into its worst recession since the 1930s, is starting to heal. Sales are firming. And prices in some markets are edging up after a dizzying plunge.
Still, the housing market is being propped up by the Fed’s programs, and its health remains precarious. Foreclosures are expected to keep climbing. Soured loans will still weigh on banks. More homeowners are expected to go under water, meaning they owe their lender more than their home is worth.
The Fed’s efforts have helped lower mortgage rates. Rates on 30-year loans dipped to 5.04 percent, Freddie Mac reported last week. That was down from 5.07 percent the previous week and 5.78 percent a year earlier.
Given the delicate state of the housing market, Fed policymakers will be loath to make any major changes, economists said.
“Why upset the apple cart and spook the market?” said Mark Zandi, chief economist at Moody’s Economy.com. “The economy and the housing market can still use the help.”……
The Dollar Hovers Over All Time Lows
The dollar finished another dreadful week on a relatively upbeat note Friday, holding its ground versus the surging euro.
Wall Street took a breather following another bull run, and without much economic news to fuel renewed optimism, the dollar put an end to a streak of yearly lows against the euro.
Next week is a pivotal one for the dollar, as further gains in equities could accelerate the pace of its declines against higher-yielding currencies.
The dollar bounced back and forth near the 1.4700 versus the euro. Steady losses over the course of the summer drove the dollar to yesterday’s yearly low of 1.4766.
Similarly, but for different reasons, the dollar has weakened significantly versus the yen. While risk appetite has hurt the buck against the euro, traders still in search of a safe haven amid economic uncertainty have favored the yen of late.
Dollar Bounces Against The Euro & Yen
By Ron Harui
Sept. 21 (Bloomberg) — The dollar advanced against the euro and the yen on speculation U.S. policy makers will this week signal they may withdraw economic stimulus measures, boosting the appeal of the nation’s assets.
The dollar reached a two-week high against the pound and rose versus 13 of the 16 major currencies before a U.S. report economists said will show an index of leading indicators gained a fifth month, backing the case for the Federal Reserve to wean the economy off support. The yen was near a three-week low versus the euro after Finance Minister Hirohisa Fujii edged away from comments last week that were interpreted to mean he would let the yen rise.
“There’s a risk the FOMC will indicate at some point they will start withdrawing their stimulus to the economy,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia, the nation’s largest lender by assets. “The catalyst for the dollar strengthening on a sustained basis is likely to come from the FOMC.”
While The Dollar is Low Treasury Purchase Stay Strong
By Cordell Eddings and Lukanyo Mnyanda
Sept. 21 (Bloomberg) — International investors are increasing purchases of Treasuries on a bet U.S. inflation will remain subdued, even as the dollar falls to the lowest levels of the year and the budget deficit tops $1 trillion.
Investors outside the U.S. bought 43.1 percent of the $1.41 trillion of notes and bonds sold by the Treasury Department this year, compared with 27.1 percent of the $527 billion issued at this point in 2008, government figures show. The Merrill Lynch & Co. Treasury Master Index of U.S. securities returned 1.18 percent in the third quarter after the worst first half on record as demand from the investor group that includes central banks climbed to record levels at Treasury auctions.
The trade-weighted U.S. Dollar Index’s 15 percent decline from its high this year on March 4 has proved no obstacle in Treasury auctions, aiding President Barack Obama’s efforts to sell an unprecedented amount of debt. Fund managers say their money is safe in the U.S. with expectations for inflation as measured by indexed bonds below the five-year average.
Treasuries are “starting to look like even a better value with a weaker dollar,” said Dave Chappell, who manages $90 billion in London at Threadneedle Asset Management Ltd., and has been buying longer maturity U.S. government debt.
The 10-year note yield rose 12 basis points last week, or 0.12 percentage point, to 3.46 percent, according to BGCantor Market Data. That’s the most since gaining 37 basis points in the five days ended Aug. 7. The 3.625 percent security due August 2019 fell 1, or $10 per $1,000 face amount, to 101 11/32.
Treasuries were unchanged today as of 10:01 a.m. in Hong Kong, with trading closed in Japan and Singapore for holidays.
This week the U.S. will sell $112 billion of 2-, 5- and 7- year notes. The amount will be a record for that combination of maturities, exceeding the $109 billion sold the week of Aug. 24. Treasuries rallied that week, with the yield on the 10-year note falling 12 basis points to 3.45 percent.
Federal Reserve holdings of Treasuries on behalf of foreign accounts rose 16 percent to $2.07 trillion since the March high in the Dollar Index.
China, the biggest foreign owner of Treasuries, added $24.1 billion in July after net sales of $25.1 billion in June, raising its stake in U.S. government debt 3.1 percent to $800.5 billion, Treasury data showed on Sept. 16. The country’s holdings have risen 10 percent this year, after a 52 percent gain in 2008 amid the surge in demand for the safety of U.S. government debt as global credit markets froze.
Foreign governments have little choice than to buy Treasuries because they hold so many dollars. The U.S. dollar accounts for 65 percent for world currency reserves, up from 62.8 percent in mid-2008, according to the International Monetary Fund in Washington…..
SBA Relieves Goodwill Backing Limits on Loans
By EMILY MALTBY
The Small Business Administration, after enduring a backlash from lenders and business appraisers, plans Oct. 1 to modify a restriction it had placed on loans used to finance acquisitions of small companies.
In March, the SBA, capped the guarantee it was willing to extend on “goodwill” financing, which is the amount of a loan used to purchase an existing business’s intangible assets, such as an established name, brand or customer base. The market price of a small business is based partly on its tangible assets, such as property, equipment and inventory, but often primarily on its goodwill. For some firms for sale, such as professional practices, Internet companies and service firms, the value of intangible assets can range between 55% and 95%.
For years, lenders were free to administer SBA-guaranteed loans with any amount of goodwill financing. But in March, the SBA changed its rules so that guarantees for goodwill financing would be capped at $250,000, or 50% of the loan amount, whichever was lower. The rules were designed in part to prevent sellers from inflating companies’ intangible assets.
SBA-guaranteed loans are a small proportion of small-business loans. But the move didn’t help in a market already taking a beating, business-acquisition specialists said. In March, closed business sales were 33% below the levels seen a year earlier, according to BizBuySell.com, an online marketplace for business acquisitions based in San Francisco.
“It was the antistimulus,” said Ronald Feldman, chief executive of Siegel Financial Group, a consultancy firm for small-to-midsize business acquisitions in Bala Cynwyd, Pa.
Starting in October, the SBA is raising the cap on its guarantee of goodwill financing to $500,000. If the goodwill financing exceeds that amount, the SBA will recommend that lenders consider requiring more equity from the borrower or seller. SBA spokeswoman Hayley Matz said the agency adjusted the cap after collecting data on goodwill financing, and found that the average goodwill amount was close to $400,000. “We want to make sure they have continued access to capital,” Ms. Matz said…..
Congress Will Not Allow Attorney Client Privilege on BAC & MER Deal
WASHINGTON (Reuters) – A House of Representatives panel has told Bank of America Corp that it cannot use attorney-client privilege to withhold from Congress details on its purchase of Merrill Lynch, The New York Times reported on Monday.
The chairman of the House Committee on Oversight and Government Reform, Representative Edolphus Towns, has given the bank a deadline of noon EDT on Monday to provide answers and relevant legal documents about the merger, the Times said.
The bank late on Saturday asked Towns for a delay until after Tuesday. But a spokesman for Towns said on Sunday that he was sticking to the deadline, the newspaper reported.
Compliance with the panel’s request would force Bank of America to reveal information that would affect a range of other investigations into the merger, according to the paper.
In a sternly worded letter on Friday, Towns, a Democrat, said the bank must divulge when it became aware of the enormous losses at Merrill last year, when it received a commitment from the federal government for a second round of bailout money and what legal advice its management received about whether it had to disclose those developments to the bank’s shareholders, the Times reported.
Bank of America has been subject to a wave of civil litigation since it purchased Merrill Lynch on January 1.
The Securities and Exchange Commission and the attorneys general of New York and North Carolina are investigating whether Bank of America failed to disclose to shareholders Merrill Lynch’s operating losses and bonus payments before the merger was approved.
G20 Set To Meet in PA. With Obama Urging A Rethink of the Global Economy
By Jeff Mason and Dave Graham
WASHINGTON/BERLIN (Reuters) – U.S. President Barack Obama said on Sunday he would push world leaders this week for a reshaping of the global economy in response to the deepest financial crisis in decades.
In Europe, officials kept up pressure for a deal to curb bankers’ pay and bonuses at a two-day summit of leaders from the Group of 20 countries, which begins on Thursday.
The summit will be held in the former steelmaking center of Pittsburgh, Pennsylvania, marking the third time in less than a year that leaders of countries accounting for about 85 percent of the world economy will have met to coordinate their responses to the crisis.
The United States is proposing a broad new economic framework that it hopes the G20 will adopt, according to a letter by a top White House adviser.
Obama said the U.S. economy was recovering, even if unemployment remained high, and now was the time to rebalance the global economy after decades of U.S. over-consumption.
“We can’t go back to the era where the Chinese or the Germans or other countries just are selling everything to us, we’re taking out a bunch of credit card debt or home equity loans, but we’re not selling anything to them,” Obama said in an interview with CNN television.
For years before the financial crisis erupted in 2007, economists had warned of the dangers of imbalances in the global economy — namely huge trade surpluses and currency reserves built up by exporters like China, and similarly big deficits in the United States and other economies.
With U.S. consumers now holding back on spending after house prices plunged and as unemployment climbs, Washington wants other countries to become engines of growth.
“That’s part of what the G20 meeting in Pittsburgh is going to be about, making sure that there’s a more balanced economy,” Obama told CNN…..
Some Argue A V Shaped Recovery is Not Happening
Well, well.It’s suddenly become very hip to believe in a V-shaped recovery, and to slam the pessimists for not knowing their history. As Jim Grant argued yesterday in the Wall Street Journal, the severity of the slump predicts the severity of the recovery — it’s just like physics!
But economics isn’t physics. And don’t worry about not knowing your history, because economics isn’t history either.
Here’s why we’re not in for a v-shaped recovery.
First, the pax economica that preceded the current slump was artificial. Large swaths of the economy had stopped doing anything productive, while the rest of the economy was buoyed by rising home values that allowed for spending on a level that was disconnected from what people were actually bringing in via income. Of course, you know this part of the story, but the key is that this is meaningfully different than the situation heading into previous economic slumps.
The other reason why we’re not in for a “V” is that the economy, even without the credit-collapse, is still in the midst of violent changes in the economy. New technology and new business models are uprooting old businesses (whether it’s media, manufacturing, or commercial real estate), throwing labor and capital into disarray. Ultimately the transition will be good, but in the meantime, displaced workers will face an unusual amount of lag in finding new work, if only because the industries that were they yesterday have gone and disappeared, requiring extensive levels of retraining.
There are other aspects too, such as the size of government and demographics that look increasingly unfavorable.
Curiously, Jim Grant’s admonition to remember history only mentions past slumps in the US. We don’t see the word “Japan” mentioned once in the whole article? But unless the laws of economics are different there than they are here, then we can certainly point to examples of bad busts that weren’t followed by a quick snap back.Comments »
Weekend Edition: Affluenza
A Podcast With Peter Schiff on Armageddon
Business Headlines For September 18, 2009
Intel announced the ‘Jasper Forest’ line of processors earlier this year. The new processors, named for a petrified forest in Arizona, have gone from concept to prototype and Intel is giving customers a peak now at what the 45-nanometer Jasper Forest CPUs have to offer.
Jasper Forest is based on Intel’s robust Nehalem chip architecture. However, the Jasper Forest processors deliver unique functionality to benefit dense server environments such as storage and communications environments and it does so while reducing power consumption by 27 watts.
Seems like another week, another headline-making processor announcement. First AMD revealed the new 40-watt Istanbul chips, then Intel rolled out the Lynnfield processors and the P55 chipset. Now, Intel is making news again by announcing it is ready to start shipping the Jasper Forest processors.
Intel derived increased functionality and reduced power consumption by integrating some I/O functionality into the processor itself. The result is that those functions are managed more efficiently and they do not require a separate controller which lowers the overall power consumption of the system.
The processors are capable of configuring RAID 5 or RAID 6 data protection natively without an additional RAID controller. Jasper Forest processors also integrate PCIe hub functions which allows for even thriftier use of power and space.
Jasper Forest processors also help prevent data loss in the event of a power failure using a Asynchronous Dynamic Random Access Memory Self-Refresh Memory. If ever a technology was in need of a catchy acronym- I think this might be it. We’ll go with ADRAMSRM. The ‘ADRAMSRM’ feature detects power failure as it is happening and allows the memory controller to complete its functions before shutting down so no data is lost.
The Jasper Forest processors will be available in single and quad-core versions operating between 23 and 85 watts using the same CPU socket. Intel is backing the processors up with 7-year lifecycle support so customers can purchase with confidence that next week’s CPU headlines won’t render the Jasper Forest purchase obsolete prematurely.
Asian Markets Fall on Commodity Stockpiles
y Patrick Rial and Jonathan Burgos
Sept. 18 (Bloomberg) — Asian stocks fell, dragging the MSCI Asia Pacific Index from a one-year high, as Aiful Corp. sought to reschedule debt payments and Hong Kong’s central bank said competition on mortgages may hurt the city’s lenders.
Aiful Corp., Japan’s third-largest consumer lender by revenue, plunged 27 percent. Takefuji Corp., the country’s No. 4 consumer lender by revenue, lost 9.5 percent. Hang Lung Properties Ltd. sank 3.9 percent in Hong Kong on speculation lending for housing purchases will be curtailed. BHP Billiton Ltd., the world’s No. 1 mining company, slipped 2.3 percent after metal prices declined yesterday.
The MSCI Asia Pacific slipped 0.4 percent to 118.39 as of 7:30 p.m. in Tokyo, falling from its highest close since Sept. 8, 2008. The index climbed 68 percent from a five-year low on March 9 through yesterday as stimulus measures around the world pulled economies out of recession. Stocks in the gauge are priced at an average 1.6 times book value, the highest since September 2008.
“We are not completely out of the woods yet,” said Marco Wong, Singapore-based chief investment officer for Asia excluding Japan at SG Asset Management, which has $351.6 billion in assets globally. “Much of the recovery has been due to stimulus measures. We have to see how things pan out once the measures are withdrawn.”
The Nikkei 225 Stock Average dropped 0.7 percent in Japan, where markets will be shut for holidays until Sept. 24. Sumitomo Osaka Cement Co. tumbled 9.6 percent after cutting its profit forecast. Share-sale plans dragged Shandong Huatai Paper Co. down by 6.2 percent in China, where the Shanghai Composite Index fell 3.2 percent. BOC Hong Kong (Holdings) Ltd. sank 7.1 percent after its chief executive officer sold shares in the company.
Futures on the U.S. Standard & Poor’s 500 Index were little changed. The benchmark fell 0.3 percent yesterday as companies including FedEx Corp. and Oracle Corp. reported sales that missed analysts’ estimates….
Europe Follows Asia into a Slump
By Sarah Jones
Sept. 18 (Bloomberg) — European and Asian shares declined, ending a three-day rally for the MSCI World Index, on concern a six-month rally in global equity markets has outpaced the prospects for earnings and economic growth.
Lonmin Plc and Antofagasta Plc led mining shares lower as metal prices fell. Lloyds Banking Group Plc slipped 1.1 percent after the lender said it’s considering alternatives to a government asset protection program. Super de Boer surged 19 percent after receiving a takeover offer from rival Dutch retailer Jumbo Groep Holding BV that values the company at about 482 million euros ($708 million).
The MSCI World slid 0.3 percent at 11:33 a.m. in London, trimming this week’s advance to 1.8 percent. The gauge of stocks in 23 developed nations has surged 65 percent since March 9, driving its valuation to more than 27 times reported earnings, the highest level since June 2003.
“I still think the market is showing all the characteristics of a bear-market rally,” said Philippe Gijsels, a senior structured-equity strategist at Fortis Global Markets in Brussels. “People have become too optimistic about the economic outlook and sentiment has been fairly bullish. I still think we are in for a rough ride from here.”
Europe’s Dow Jones Stoxx 600 Index fell 0.3 percent. The MSCI Asia Pacific Index lost 0.4 percent as China’s Shanghai Composite Index slumped 3.2 percent. Aiful Corp., Japan’s third- largest consumer lender by revenue, was untraded, with shares offered lower by 27 percent, after the company sought to reschedule debt payments…..
Oil Trades Down Just Under $72pb
KUALA LUMPUR, Malaysia (AP) – Oil prices weakened Friday in Asia, dampened by concerns that a recovery in the U.S. economy may be slower than expected.
Benchmark crude for October delivery fell 29 cents to $72.18 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 3 cents to settle at $72.47 on Thursday.
Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore, said oil prices pulled back in tandem with a slide in regional stock markets and a stronger U.S. dollar.
The moves followed new U.S. government data indicating a slow economic recovery, which may mean less demand for energy by the world’s largest crude user in the near term.
“There is a supply overhang in both crude oil and products. Oil pricing at a $70 plus level is quite vulnerable given the weak fundamentals,” Shum said.
The recession has sapped American fuel consumption, and U.S. oil stockpiles are 14 percent larger than last year. The Energy Information Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.
The government reported Thursday that natural gas stockpiles continue to grow as well and are now at 16.4 percent above the five-year average for this time of year.
There are some bright spots.
The Labor Department said new claims for unemployment benefits fell to the lowest level since July. And the Commerce Department said housing construction in August surged to the highest level in nine months with a flurry of new apartment building projects.
While on the surface that would suggest energy consumption may rebound, the jobless numbers however, are far below levels that would indicate a healthy economy.
Shum said oil has traded within the $65-$75 a barrel since July and likely to stay within this range in the coming months.
In other Nymex trading, gasoline for October delivery slipped 0.47 cent to $1.8465 a gallon, and heating oil dipped 0.61 cent to $1.8348 a gallon. Natural gas rose 6.2 cents to $3.52 per 1,000 cubic feet.
In London, Brent crude fell 16 cents to $71.39.
U.S. Dollar & Yen Strengthen as Markets Slip
During early deals on Friday, the US dollar and the Japanese yen edged higher against their major counterparts as a fall in most Asian and European stock prices boosted demand for currencies perceived as safe havens.
The dollar and the yen are viewed as safe-haven currencies and both currencies gain, when investors turn risk averse and fall when risk appetite improves.
The dollar climbed to a 2-week high against the British pound and a 2-day high versus the European currency.
Blackrock To Buy 50% of London’s Broadgate Complex
y Chris Bourke
Sept. 18 (Bloomberg) — Blackstone Group LP agreed to buy 50 percent of Broadgate, the largest office complex in London’s main financial district, from British Land Co. in a transaction that values the properties at 2.1 billion pounds ($3.4 billion).
The sale of Broadgate, built next to Liverpool Street station in the City of London in the mid-1980s, is the biggest in the U.K. capital since the commercial-property slump began two years ago. British Land said the deal will reduce its debt and make acquisitions easier, according to a statement today.
Blackstone, the world’s biggest private equity firm, will pay 77 million pounds for the stake and assume 987 million pounds of debt, British Land said. The London-based real estate investment trust sought a Broadgate partner after raising more than 1 billion pounds this year to bolster its balance sheet. Broadgate is the company’s largest asset and about 2 billion pounds of the complex’s value is in securitized debt…..
UBS Has Created A Flood of Truth Telling With Their Tax Settlement To the U.S.
By Carlyn Kolker and David Voreacos
Sept. 18 (Bloomberg) — UBS AG’s $780 million settlement with U.S. authorities to avoid prosecution for helping Americans cheat on their taxes has opened a Pandora’s box for banks worldwide.
A U.S. tax program encouraging UBS clients to avoid criminal inquiries by declaring offshore accounts before Sept. 23 is prompting a flood of disclosures by customers of Zurich-based Credit Suisse Group AG and Julius Baer Holding AG, LGT Group in Liechtenstein, London-based HSBC Holding Plc, and Bank Leumi Le-Israel Ltd., tax attorneys said.
That may give the Internal Revenue Service ammunition to target other overseas wealth managers as it seeks to crack down on tax evasion. UBS, the largest Swiss bank, avoided prosecution on Feb. 18 when it admitted helping Americans dodge taxes, paid a $780 million penalty, and disclosed secret data on 250 clients. In August, UBS agreed to reveal another 4,450 clients to settle a U.S. lawsuit seeking more data….
Foreign Currencies Get Bot in a Flurry In Anticipation of G-20 Raising Rates
By Laura Cochrane and Anil Varma
Sept. 18 (Bloomberg) — Investors are buying Indian rupees, South Korean won and Brazilian reais, betting developing nations will raise interest rates even after the Group of 20 said it’s too early to end central bank support for the global economy.
Swap contracts, in which traders exchange a fixed rate for a floating one, indicate the market is pricing in the fastest increases in borrowing costs in the G-20 in India and South Korea. The cost of a one-year agreement in India has risen to 1.55 percentage points over the central bank’s benchmark, up from 0.95 point on June 30. Spreads in Indonesia and Brazil have also grown and are wider than the U.S., Germany and Japan.
Threadneedle Asset Management Ltd., Schroders Plc and Ashmore Investment Management Ltd. say they are buying emerging- market currencies as policy makers in New Delhi, Seoul and Brasilia become more focused on avoiding inflation and stock- market bubbles than on supporting the global recovery. The won and the rupee will be the world’s best-performing currencies in the year ahead, each gaining about 7 percent, median estimates in Bloomberg strategist surveys show.
“It’s going to be the emerging-market world that sees rate hikes first, and that should support currencies,” said Richard House, who manages $2 billion in developing-nation fixed income at Threadneedle in London and started buying the rupee and the real in the past month. “India will be among countries that will be first.”
The International Monetary Fund forecasts developing nations will expand 4.7 percent next year, almost eight times faster than the 0.6 percent growth in advanced economies. Consumer prices will rise 4.6 percent, dwarfing developed countries’ 0.9 percent inflation rate, the IMF predicts.
Lending is Stingy & For Good Credit Score Only
NEW YORK (AP) – It’s a good time to borrow money for a home, car or small business.
A year after a global freeze in the credit markets prompted massive government intervention to prevent the financial system from collapsing, interest rates remain at historic lows. But banks are demanding more collateral, bigger down payments and detailed financial histories from borrowers.
And that’s for people with good credit. Everyone else need not apply.
The stingy lending is likely to last.
“Banks are going to be in a defensive posture for several years. Most borrowers can’t meet their criteria,” says Christopher Whalen, managing director at research firm Institutional Risk Analytics.
No segment of borrowers has been spared:
– Nearly seven of 10 mortgage applications were approved and financed during the housing boom five years ago. At the end of 2008, the number was down to five.
– Revolving credit, which is primarily made up of credit card debt, declined by $6.1 billion, or 8 percent on an annualized basis, in July. That’s a sign consumers are having difficulty obtaining credit and are cutting back on spending.
To be sure, it is cheaper for businesses and consumers to take out a loan today than it was at the height of the crisis last fall.
The average 30-year mortgage rate stands at 5.04 percent, after falling to a record low of 4.78 percent in April. The overnight rate that banks charge each other to borrow money – a key indicator of the credit markets’ overall health – has plummeted. The London Interbank Offered Rate, or LIBOR, stands at 0.29 percent today. It soared above 6 percent last September when fear threatened to choke off lending throughout the financial system.
But those improvements are somewhat misleading. Lending – especially for homes – is being greased by trillions of dollars the federal government has made available to banks.
The Federal Reserve has provided nearly $340 billion in low-cost loans for banks. It has purchased $625 billion worth of mortgage-backed securities to drive down interest rates on home loans. The Federal Deposit Insurance Corp. is guaranteeing about $300 billion in bank debt, which enables banks to borrow at lower rates.
No one wants to see a return to the easy credit that led to the financial crisis. The question is when will credit return to normal – not too loose, not too tight and not propped up by the government?
Not soon, financial analysts and government officials say.
“We will not make the mistake of prematurely declaring victory or prematurely withdrawing public support for the flow of credit,” says Lawrence Summers, the White House’s top economic adviser.
Some analysts think it could take four or five years for the Fed to withdraw the money entirely and shrink a balance sheet that is now about $2 trillion, more than double what it was when the financial crisis struck……
SEC Decides on More Regulatory Rules
WASHINGTON (AP) – Regulators on Thursday proposed rules designed to stem conflicts of interest and provide more transparency for credit rating companies. They also proposed banning “flash orders,” which give some traders a split-second edge in buying or selling stocks.
The changes, which were opened to public comment for 60 days, could eventually be adopted by the agency, possibly with revisions.
The credit rating industry was widely faulted for its role in the subprime mortgage debacle and the financial crisis. The five members of the Securities and Exchange Commission voted at a public meeting to propose rules that could reshape an industry dominated by three firms: Standard & Poor’s, Moody’s Investors Service and Fitch Ratings. Their practices would be opened wider to public view and subject to some restraints.
Regulators say they also hope to spur more competition in the rating industry, with possibly new entrants – as well as the other seven existing agencies – challenging the dominant firms. One of the SEC’s proposals is intended to bar companies from “shopping” for favorable ratings of their securities, by requiring companies to disclose whether they had received preliminary ratings from other agencies.
Meanwhile, flash orders have become a hot-button issue in recent weeks amid questions about transparency and fairness on Wall Street. A flash order refers to certain members of exchanges – often large institutions – buying and selling information about ongoing stock trades milliseconds before that information is made public.
Nasdaq OMX Group Inc., which operates the Nasdaq Stock Market, and the BATS exchange have voluntarily stopped using flash orders, which made up an estimated 3 percent of stock trading. The New York Stock Exchange has never used them…..
C & IBM Remain Top Brands of All Time
Consumers lost trust in brands this year as the recession deepened, according to an industry report released Thursday, although longtime staples Coca-Cola and IBM retained their spots as the world’s two most valuable brands.
This is the first time the combined value of the world’s top 100 brands as ranked by Interbrand, a branding agency, has fallen in the 10 years Interbrand has assessed them.
The list’s total value, including brands like Google Inc., Nintendo and Sony, fell 4.6 percent to $1.15 trillion, Interbrand estimates.
“That says something about the environment that we’re in, especially when you consider that brands are by nature less volatile than business valuations,” said Interbrand CEO Jez Frampton, who called a company’s brand its most valuable asset.
The environment – a recession the likes of which the world hasn’t seen for decades – has eaten away at people’s trust in specific brands, starting with financial companies, he said. Consumers even started to question retail brands as stores slashed prices to get sales, leading consumers to wonder about pricing, and why they had to pay so much before.
“All of these things lead you to re-evaluate the nature of the relationships that we have with brands and indeed how confident we feel in brands to live up to the promises they make,” he said. “Brands are promises which we value and are prepared to pay for and if we feel those promises have been broken we’re less likely to trust.”….
GOOG Unveils A New Add Display
By JESSICA E. VASCELLARO
Google Inc. Friday announced a highly anticipated service that will make it a middleman for selling graphical ads over the Internet.
The technology, called the DoubleClick Ad Exchange, resembles a stock exchange for display ads, ads with images and text that appear alongside content on a Web page. It allows companies that buy ads to bid for ad space across lots of different Web sites, from blogs to major entertainment properties, in real-time based on what publishers want to sell that second. Today display ads are often purchased ahead of time through negotiations with individual Web sites or networks of sites, a process which leaves publishers with lots of unsold space.
Google believes that the new technology will help publishers earn more revenue from display ads by creating a competitive auction for their space — an approach Google used to crack the search-advertising market. It argues that the service will compel advertisers to buy more display ads by aggregating more Web pages for them to buy across.
“With a multitude of display-ad formats and thousands of Web sites, it often takes thousands of hours for advertisers to plan and manage their display-ad campaigns. With this complexity, lots of advertisers today just don’t bother, or don’t invest as much as they would like,” wrote Neal Mohan, a Google vice president, in a blog post. “We believe that a better system built on better technology can help grow the display-advertising pie and benefit everyone.”….
Citadel Offers An Exchange of Stock For Debt
(Reuters) – Citadel Broadcasting Corp (CTDB.OB) offered a deal to exchange a major part of its debt for equity to senior lenders owed $2 billion, including JPMorgan Chase & Co (JPM.N), GE Capital and ING Groep NV (ING.AS), the Wall Street Journal said, citing people familiar with the negotiations.
On Wednesday, Citadel faced a deadline to make a $2 million interest payment, but the status remained unclear, the paper added.
Discussions have slowed in recent days in part as some lenders have been caught off-guard by Federal Communications Commission rules intended to limit concentrated holdings of media firms, the people told the paper.
Citadel could not be immediately reached for a comment by Reuters.
In June, Citadel, which operates the ABC Radio Network, hired Lazard Freres as an advisor to evaluate options, including a possible refinancing and restructuring of its capital structure.
C May Spin off Oil Trading Unit
Citibank is looking to spin off a controversial oil trading unit where the star trader could collect $100m in pay this year, according to Vikram Pandit, the chief executive.
Mr Pandit indicated that Citi wanted to reduce its ownership in the unit, called Phibro, and get it to manage money from outside investors.
At present Phibro, which is run by Andrew Hall, trades with Citi’s capital.
“We have been looking at the possibility of transforming [Phibro] from what it was, a proprietary trading [unit] to an asset manager,” Mr Pandit told a New York audience.
He did not provide additional details. But when asked whether a $100m compensation package was excessive for anyone on Wall Street, he replied “Yes”.
Citi has been looking for options for Phibro for months following revelations that Mr Hall had a contract that could guarantee him a bonus worth that amount this year…..
By JOHN F. COGAN, JOHN B. TAYLOR AND VOLKER WIELAND
Is the American Recovery and Reinvestment Act of 2009 working? At the time of the act’s passage last February, this question was hotly debated. Administration economists cited Keynesian models that predicted that the $787 billion stimulus package would increase GDP by enough to create 3.6 million jobs. Our own research showed that more modern macroeconomic models predicted only one-sixth of that GDP impact. Estimates by economist Robert Barro of Harvard predicted the impact would not be significantly different from zero.
Now, six months after the act’s passage, we no longer have to rely solely on the predictions of models. We can look and see what actually happened.
Consider first the part of the package that consists of government transfers and rebates. These include one-time payments of $250 to eligible individuals receiving Social Security, Supplemental Security Income, veterans benefits or railroad retirement benefits–and temporary reductions in income-tax withholding for a refundable tax credit of up to $400 for individuals and $800 for families with incomes below certain thresholds. These payments, which began in March of this year, were intended to increase consumption that would help jump-start the economy. Now that a good fraction of these actions have taken place, we can assess their impact.
The nearby chart reviews income and consumption through July, the latest month this data is available for the U.S. economy as a whole.
Consider first the part of the chart pertaining to the spring of this year and observe that disposable personal income (DPI)–the total amount of income people have left to spend after they pay taxes and receive transfers from the government–jumped. The increase is due to the transfer and rebate payments in the 2009 stimulus package. However, as the chart also shows, there was no noticeable impact on personal consumption expenditures. Because the boost to income is temporary, at best only a very small fraction was consumed.
This is exactly what one would expect from “permanent income” or “life-cycle” theories of consumption, which argue that temporary changes in income have little effect on consumption. These theories were developed by Milton Friedman and Franco Modigliani 50 years ago, and have been empirically tested many times. They are much more accurate than simple Keynesian theories of consumption, so the lack of an impact should not be surprising……
From Rebel Traders We Find “What’s on the Wires”
The very first thing that hit the wires early this morning was a statement made by Ivan Seidenberg, CEO of Verizon Communications (VZ). What did he say?
“US economy is still contracting, sees no new job creation; manufacturers of 4G (LTE) are on target- Small business volumes are not being seen at levels that were hoped for.
– Addressable market volumes are seen down y/y
You understand that the only place his statements showed up (that I could locate) was on the wire service (the same one that I know for a fact that CNBC also pays money to have, it is one of my feeds as well. But of course CNBC failed to ever mention this news as this kind of news is no longer part of CNBC’s business model.
The Iowa Attorney General; Tom Miller, had a meeting with President Obama today where he told the President that “Payment option ARMs are about to explode“. Tom Miller went on to say “It’s the other shoe,” he said. “I can’t say it’s waiting to drop. It’s dropping now.”
Option ARMs are unique in that they offer an option to pay only the interest each month or a low minimum payment that leads to a rising balance in the loan’s principal.
When the balance of the loan reaches a certain level or the mortgage hits a specific date, the borrower must begin making full payments to cover the new amount. The loan’s interest rate also may have been fixed at a low level for the first few years with a so-called teaser rate, but then reset to a higher level.
Because the new monthly payments can be five or 10 times what borrowers are accustomed to paying, they “threaten a much greater hit to the consumer than the subprimes,” Goddard (Attorney General of Arizona) said, referring to the mortgages often extended to less credit-worthy borrowers that fed the first wave of the financial crisis.
Then we have Standard & Poors about to make major downgrade of CDO’s.
S&P to adjust ratings methodologies on CDO tranches within the next few months– notes changes could result in multilevel downgrades
– Value of CDOs affected at approx $580B; 4,790 tranches
– may also cut 1625 European CDO
Week 36, 2009 saw a 22.7% decline in railroad carloads.
This is worse than last week’s decline of 5.2% and the prior 4-week average decline of 14.0%.
Recall that Labor Day fell one week later in 2009 versus 2008, thus the y/y comparisons for Week 36 are very difficult.
If we consolidate absolute carloads for Weeks 35 and 36, the y/y decline versus the same 2-week period in 2008 was 14.4%.
National Bureau of Economic Research’s (NBER) Hall: May wait until economy moves past prior high before deeming recession over; could take 18 months before that occurs.– Comments that the upturn could in fact be part of a larger decline RT note: Uh, that is why it is a secular bear market Mr. Hall)
New Orders: 3.3 v 4.2 prior
Employment: -14.3 v -12.9 prior
Inventories: -18.1 v 0.3 prior
6-month business conditions outlook: 47.8 v 56.8 prior