Cronkite

Joined Feb 3, 2009

1,759 Blog Posts

Rogers on Russia Podcast + Factory Order Data

Thu Feb 5, 2009 10:02am EST Comments Off on Rogers on Russia Podcast + Factory Order Data

Rogers talks of Russia breaking up

Breaking News:

Factory orders down 3.9% in December vs. 6.5% in November

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Market Movers

Thu Feb 5, 2009 8:41am EST 1

So what will move markets today ?

International News

BHP Billiton sees profits down significantly

The world’s largest miner, BHP Billiton, reported a 56.5 percent slump in first-half profit Wednesday, warning the financial crisis left the outlook for commodities weak and uncertain.

Australian pension plans fried on the “barbi”

Having forced Australians over the past two decades to trust in markets to provide for their old age — and tempted other nations to go down the same path — it is watching horrified as a big chunk of its retirement savings go up in smoke.

Finally in Australia, their largest investment bank feels the pain

Macquarie Group Ltd., Australia’s largest investment bank, said full-year profit will plunge 50 percent, snapping 16 years of rising earnings as investments slump and trading losses mount.

New Zealand certainly is not escaping the global recession

New Zealand’s jobless rate rose to a five-year high in the fourth quarter as a prolonged recession prompted companies to cut production and fire workers.

Russia plans on injecting $40 billion into their banking system

Russia is preparing to inject around $40 billion in Tier 1 and Tier 2 capital into domestic banks, with the condition that banks will lend some of the funds to businesses, Finance Minister Alexei Kudrin said on Wednesday.

Speaking in London, Kudrin also said Russia has no intention of introducing capital controls to stop the ruble from depreciating further, adding that this year’s inflation could overshoot the target of 13 percent due to the falling currency.

Kudrin said he would welcome the participation of Russia’s No. 2 bank VTB in the banking support program, although VTB Chief Executive Andrei Kostin said no decision on injecting capital into the bank has been finalized yet.

Tier 1 capital is the core measure of a bank’s financial strength from a regulatory point of view, such as equity and cash, and Tier 2 capital is regarded as the next most reliable.

Asian Stocks fall in opening trade

Asian stocks fell for the first time in three days as reduced earnings forecasts in Japan and share sales in Australia fueled concerns that the global recession is deepening.

China will try to stimulate manufacturing and textiles to stem over 20 million unemployed migrant workers with rebate tax

In a national plan to invigorate China’s textile industry adopted by the State Council Wednesday, the government would allocate funds for companies that produce textiles or fibers, or operate in the textile printing and dyeing sector, to upgrade technology and develop domestic brands.

Japan’s Liberal Democratic Party will try to allow the largest depositor based company, Japan Post, to loan money to business and consumers

Japan Post, with 179.1 trillion yen ($2 trillion) in deposits at the end of December, is currently unable to make corporate or consumer loans on its own. Regional banks oppose letting the former state-run postal system into the lending business, saying it would overwhelm them.

The ECB leaves rates unchanged @ 2% while the BOE cut rates the their lowest level by .05% to 1%

W. Buffet’s Bershire Hathaway invests $2.6 billion into Swiss Re a reinsurance company

3 month dollar LIBOR rates remain at their highest level over the past few weeks

Domestic News

The U.S. is planning one of it largest debt sales on record

The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come.

The announcement came amid growing fears about US government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 per cent, up from just over 2 per cent at the end of December.

The rise in Treasury yields has been pushing mortgage rates higher, complicating efforts to revive the economy. The US Federal Reserve said last week it was “prepared to” buy Treasuries if that would be a “particularly effective” way of reducing private borrowing costs.

Indecision still remains over a bad bank policy or a backstop policy similar to what C had received. Analyst believe it will be a combination of both on a case by case bases.

Obama faces frustrations over elected cabinet members resigning

US productivity is expected to rise

U.S. companies, struggling to contain escalating losses in the deepening recession, squeezed more output from their remaining workers last quarter, economists said before a government report today.

Productivity, a measure of employee output per hour, rose at a 1.5 percent annual rate in the fourth quarter following a 1.3 percent gain the previous three months, according to the median estimate of 60 economists in a Bloomberg News survey.

Efficiency rose even as the economy shrank at the fastest pace in 26 years as companies slashed millions of workers from payrolls and cut hours for those still on staff. The job market is likely to keep deteriorating as the slump in consumer spending forces companies such as Macy’s Inc. and Pier 1 Imports Inc. to trim costs further.

Jobless Claims come in @ 626k up 41000 from 591k

US productivity did rise to 4.3%

Stocks on the move due to earnings click here

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As a final note due to tech issues I was unable to link to all of the headlines. My sources included Bloomberg, Yahoo News, The Independent, CCTV, WSJ, and the Financial Times

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JAPAN 2.0 ?

Wed Feb 4, 2009 5:39pm EST 3

Recently there has been hot debate over the topic of America having a lost decade similar to Japan.

Most news and media outlets will steer you away from that premise, but the Market Oracle has presented a writer who makes a very compelling case.

This is a very important article for your long term outlook.

Here are a few excerpts:

“The definition of insanity is doing the same thing over and over, expecting a different result. Are the politicians running this country insane, unintelligent, or just so corrupt that special interests outweigh the interests of the American people? The current pork laden stimulus package will lead to a rerun of Japan’s lost decade, with one vast difference. Our lost decade will terminate in a hyperinflationary collapse.”

“The events and actions by government that led to Japan’s lost decades are eerily similar to what is happening in the U.S. today.”

“The scary part of the Japanese experience is that their government did not sit by idly. They used all the tools at their disposal and made the conditions much worse. Government actions caused the crisis and then exasperated the situation. Are you getting the picture?”

” * The Japanese government has prolonged their downturn for an additional decade by not allowing bankrupt banks and corporations to liquidate. Zombie banks and corporations existed for decades without writing off the billions of bad debts. They hoarded all of the money provided by the government. Sound familiar?
* The Japanese tried every trick in the Keynesian playbook. Zero interest rates, public works projects tax rebates and tax decreases. The government built thousands of bridges and roads, driving up government debt to enormous levels. Between 1990 and 2000, the Japanese government instituted 10 fiscal stimulus programs totaling $1 trillion. None of these programs worked. Sound familiar?”

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Volcker Speaks to Senate Banking Committee

Wed Feb 4, 2009 3:31pm EST 8

Volcker Live

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Head Fake or True Reversal ?

Wed Feb 4, 2009 2:38pm EST Comments Off on Head Fake or True Reversal ?

Despite BAC cracking $5 some bank stocks seem to be holding positive ground.

Sources on the fundamental side tell me this is a head fake to trap shorts.

Bloomberg is Reporting the market is down on earnings.

U.S. stocks retreated as disappointing earnings at Kraft Foods Inc. and Walt Disney Co. triggered a sell-off in consumer shares, overshadowing unexpected improvement in service industries.

Disney, the second-largest U.S. media company, slumped 8.5 percent after earnings decreased by almost a third. Kraft Foods, the world’s second-largest foodmaker, slid 8.8 percent after saying profit will be less than it previously forecast as the stronger dollar hurt overseas results. Benchmark indexes rose in early trading after the Institute for Supply Management said non-manufacturing businesses shrank less than economists forecast.

Most notably the market did fall immediately following a Fitch report on Credit Card Default.

Delinquencies on U.S. credit cards rose to record highs in January as the economic recession weakened consumers’ finances, Fitch Ratings said on Wednesday.

Payments at least 60 days late measured by a Fitch index rose 0.47 percentage point to 3.75 percent last month, after accelerating in the fourth quarter, Fitch said in a statement. The previous record was 3.73 percent in February 1997.

“U.S. consumers continue to struggle in the face of mounting pressures on multiple fronts, from employment to housing to net worth,” Michael Dean, a managing director at Fitch, said in the statement.

Concerns that the U.S. recession will deepen as foreclosures rise and businesses lay off thousands have sparked a flurry of unconventional moves to spur growth, including credit-easing measures that have already doubled the size of the Federal Reserve balance sheet to more than $2 trillion.

Also the dollar reversed course after a few days sell off which has been linked to the recent rally according to Pasani on CNBC

Bulls are looking for a reversal with a rally attached and bears are looking for a close below 831 S&P according to my technical sources.

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Quality Dragging Down the DOW

Wed Feb 4, 2009 1:02pm EST Comments Off on Quality Dragging Down the DOW

The market had a nice move this morning, but is failing to hold onto its gains.

The broad market still remains in positive territory, but “quality” seems to be dragging down the DOW JONES.

Laggards include: AIG, BAC, DIS, GM, HD, JNJ, KO, MCD, PG, UTX, VZ, WMT, and XOM.

1:30

Pelosi and Geitner are meeting:

Geitner: “Passing a plan that addresses the scale of the problems”
“We must get credit flowing”
and “We must address foreclosures.”

2:05 pm Unusual Volume as market slides

NASDAQ Stocks Up on Unusual Volume

As of 2/4/2009 1:40:00 PM
Symbol Last Sale Price Change Net / % Share
Volume Volume % Change

APA