Monthly Archives: March 2012
The markets got off to a rocky start. Worries about Spain mounted by the European close and we hit the lows of the day. Tech and banks took us down, but by the end of the day the the Teflon Don market came back and went GREEN. If you had a samich you might not have noticed the intraday head fake to the downside.
One good note is that oil took it hard on the chin as the IEA said they will act to combat higher crude, worries over China, and the idea that France will join others in tapping oil reserves is taking hold…..
If you did not have a samich today,
then you should have been drinking with Bob….
DOW UP 17
NASDAQ DOWN 9
S&P DOWN 2.4
OIL DOWN $2.19[youtube://http://www.youtube.com/watch?v=Um1lA9m4wL0 450 300] Comments »
[youtube://http://www.youtube.com/watch?v=221mohEolWc&feature=related 450 300]Comments »
“The executive director of International Energy Agency has released a statement this morning that is pushing crude prices down further today:
The oil market has been tightening in recent months; crude oil prices are very high again, and petrol prices have reached a record high level in some member countries. The International Energy Agency, like many others, is concerned by the impact of these high prices while the global economic recovery remains fragile.
The IEA is closely monitoring market developments and will remain in close contact with member countries to exchange views about the oil-market situation. As we have mentioned many times, the IEA was created to respond to serious physical supply disruptions, and we remain ready to act if market conditions so warrant.
This is a clear indication that the group’s members have reached at least some accord on another release from members’ strategic reserves. With elections on tap in France and later this year in the US and next year in Germany, rising pump prices threaten the re-election hopes of the current governments and nothing would soothe voters more than a drop, even if it’s temporary, in gasoline prices.
Crude prices have sinking again today, with WTI crude down about -2% at $103.28/barrel and Brent crude down about -1% at $122.81/barrel. US pump prices are $0.035 higher today than a week ago according to gasbuddy.com.”Comments »
In a lecture given to George Washington University students today, Federal Reserve Chairman Ben Bernanke presented a simple explanation of how long-term asset purchases actually work to stimulate the economy.
His explanation is key to understanding whether or not this was the best course of action for the U.S. at the time.
Bernanke noted that the Federal Reserve traditionally owns a significant quantity of long-term asset purchases, and owned about $800 billion before the crisis.
According to his explanation, here’s how the process worked:
- The Fed began purchasing Treasuries and government-sponsored enterprise (GSE) securities, making them more difficult for commercial banks to obtain.
- In doing so, the Fed drastically increased the demand for Treasuries, so bondholders could raise the price they charged for the securities in comparison to the return.
- This had the effect of reducing interest rates without direct monetary policy, since interest rates are closely related to the rate of return on Treasuries.
- Low availability drove investors to put money in corporate bonds, thus stimulating the economy.
To keep in mind, this chart demonstrates the massive scale of this program.
Click for larger image.
Further, Bernanke rebuffed analyst descriptions of how the Fed “printed money” in order to finance these asset purchases. Instead, the Fed credits “the accounts that commercial banks hold with the Fed [which are] part of what’s called the monetary base,” but not part of the cash supply.
In order to offset asset purchases and normalize its balance sheet, the Fed simply ticked up the number of assets that commercial banks held with the Fed. Therefore, the Fed did not add to the cash supply, but it did some behind-the-scenes balance sheet manipulations that had the effect of expanding the money in the system.
This chart breaks down the liabilities side of the Fed’s balance sheet:
Click for larger image.
These were inflationary measures, but at the time the Fed was far more worried about deflation than inflation, so on the whole did not consider this a concern.Comments »
Some parents are so averse to public schools that they’re taking out hefty “pre-college” loans to cover the costs of their child’s full tuition from kindergarten through 12th grade.
SmartMoney’s Annamaria Andriotis describes the risks of this trend:
“Parents could be on the hook to repay K-12 and college loans simultaneously. Already, about one in six parents of college graduates have loans, and they’re projected to owe nearly $34,000 on average this year, according to FinAid.org. Taking on loans before college leaves parents at risk of owing larger sums of debt, experts say.”
Let’s not forget that college students’ loan debt passed the trillion dollar mark months ago, creating some real-live horror stories for millennials. One student, Nick Keith, took on the college debt burden when his father refused to pay, and he has yet to pursue a career.
Also troubling is that the surge in pre-college loan’s popularity coincides with a rise in the cost of private school’s tuition, Andriotis says. The average cost is up nearly $20,000 per year. “Comments »
“In the current state of the US economy it’s getting tougher and tougher to find a job. With an unemployment rate of 8.3 percent, according to the latest job numbers, saying yes to a job is a no brainer.
Now imagine in order to get the job you must disclose your Facebook password.
On Tuesday night, House Republicans stopped a measure that would have allowed the Federal Communications Commission to prevent employers from forcing potential employees to disclose their Facebook passwords.
Republicans who are against “big government,” have delivered a huge blow to the legislation that was presented by Democrats.
The purpose of the legislation was part of a bill to implement new restrictions on the FCC rules after a series of cases where employers have requested access to social media accounts.
“What this amendment does is it says you cannot demand as a condition of employment that somebody reveal a confidential password to their Facebook, to their Flickr, to their Twitter, whatever their account may be,” said Rep. Ed Perlmutter (D- Colo.).
According to a post by Facebook, the company has “seen a distressing increase in reports of employers or others seeking to gain inappropriate access to people’s Facebook profiles or private information.”
The social media giant added that the practice “undermines the privacy expectations and the security of both the user and users’ friends.”
According to WANE.com, Anthony Juliano has been keeping a close watch on the growing trend. Juliano, a social media expert said, “it’s really not new, but it’s getting people’s attention because it is controversial,” he said….”Comments »
“Signs of an improving U.S. economy and a liquidity boost from the European Central Bank have lifted expectations for the main U.S. share market indexes, but most of the year’s gains may be in the rear view mirror after a sizable rally, a Reuters poll of market analysts found.
Forecasts for end-2012 levels have increased over 6 percent compared with those made late last year before stocks posted their best first quarter in 14 years.
The median forecast for the Standard & Poor’s 500 at the end of 2012 is now 1,427, compared with 1,340 in December. That represents an expected gain of 13 percent this year, according to the median forecast given by the 40 respondents polled over the last week.
But with the market up almost 12 percent already, there may be little left to add. The projected rise of 1.5 percent from now until the end of the year is the weakest of any of the 20 stock indexes around the world covered by the Reuters survey.
Still, that follows a blistering rally that has seen the best first quarter since 1998 and pushed the S&P 500 up over 30 percent from lows hit in October.
Much of the rally has been attributed to signs of a better U.S. jobs market as well as the European Central Bank removing the immediate risk of a banking crisis by advancing cheap loans to the region’s banks.
“This is not a year about economic growth or earnings growth, it’s about fear receding, the crisis premium coming out of risk assets,” said Bob Doll, chief equity strategist at BlackRock, which manages $1.56 trillion in equities.
The ECB funneled over 1 trillion euros into the financial system with twin ultra-cheap funding operations in December and February to head off a credit crunch that risked exacerbating the euro zone crisis and threatening the currency bloc’s future.
Doll’s year-end target this year is 1,350, but he has said the S&P could rise as high as 1,550 if the conditions are right.
“If Europe stays off the front page and things remain acceptable in the Middle East, we could see another 10 percent from here,” he said.
U.S. unemployment has fallen to 8.3 percent from 9 percent in September, which has supported the market. But Federal Reserve Chairman Ben Bernanke said this week that recent data may be presenting too optimistic a picture, suggesting monetary policy will remain accommodative.
“President Barack Obama challenged Congress on Thursday to repeal billions of dollars in tax breaks for the biggest U.S. energy companies, saying they are raking in record profits while Americans struggle with higher gasoline prices.
“Today, members of Congress have a simple choice to make. They can stand with big oil companies, or they can stand with the American people,” he said at an event in the White House Rose Garden highlighting one of the hottest issues in the U.S. presidential campaign.
“Last year, the three biggest U.S. oil companies took home more than $80 billion in profit. Exxon pocketed nearly $4.7 million every hour,” Obama said.
Instead of rewarding oil companies, the United States should “double down” on clean energy, Obama said in his speech.
“Keep in mind, we can’t just drill our way out of this problem,” Obama said before a crowd of about 100 people, including representatives of environmental groups and Americans affected by the rising cost of gasoline.
The U.S. Senate was to vote on Thursday on legislation backed by Democrats that would eliminate more than $24 billion in tax deductions granted to big oil companies over the next decade. The measure would also extend some tax breaks intended to foster clean energy initiatives.”Comments »
Oil is getting smashed below the $104.88 support level…down $1.93
Gold is trading down$9.20 @ $1,648.70
The VIX is up 10.6% to 17.11 (potential double top)
DOW down 70 @ 13,055
S&P down 12 @ 1,393
NASDAQ down 32 @ 3072
“11:30 am : Tech stocks had made an attempt to turn higher earlier this morning, but the move lost momentum as it approached the neutral line. Subsequent selling pressure has left the sector to descend to a session low so that it trades with a 0.7% loss.
Among Tech issues, heavyweights like Google (GOOG 649.45, -6.31),Microsoft (MSFT 31.88, -0.31), and Apple (AAPL 611.20, -6.42) are having the most adverse impact on the sector. Intel (INTC 27.81, +0.01) is holding steady at the flat line, however. DJ30 -74.17 NASDAQ -27.21 SP500 -11.84 NASDAQ Adv/Vol/Dec 510/570 mln/1835 NYSE Adv/Vol/Dec 550/230 mln/2280
11:00 am : Stocks recently chopped their way down to a new session low, taking the S&P 500 even farther below the 1400 line. There isn’t a single sector in positive territory.
Financials, now down 1.6%, continue to weigh heavy on trade. Their weakness today contrasts with the relative strength they displayed in the prior session, when the sector staged a late rally that helped the broad market halve its loss. Banks led the prior session’s upswing, but they’re leading losses in the latest round of action. DJ30 -65.61 NASDAQ -22.12 SP500 -10.78 NASDAQ Adv/Vol/Dec 465/445 mln/1825 NYSE Adv/Vol/Dec 495/185 mln/2300
10:35 am : Natural gas prices have been in the red all morning and were recently down about 1.8% ahead of weekly inventory numbers. Weekly inventories experienced a build of 57 bcf, which contrasts with the consensus call for a build of 50 bcf. On the back of that report natural gas prices have tumbled to $2.18 per MMBtu for a 4.6% loss.
In Play ®
- UK’s FTSE: -1.1%
- Germany’s DAX: -1.7%
- France’s CAC: -1.4%
- Spain’s IBEX: -0.7%
- Portugal’s PSI: -1.4%
- Italy’s MIB Index: -3.1%
- Irish Ovrl Index: -1.6%
- Greece ATHEX Composite: -2.4%
11:15AM Alexion Pharma reports data from Phase 2 study of asfotase alfa in adolescents and adults with hypophosphatasia: significantly decreased TNSALP substrates and improved 6 minute walk test results (ALXN) 90.04 -0.18 : Co announced data from a Phase 2 study of asfotase alfa in adolescents and adults with hypophosphatasia (HPP), a severe and ultra-rare metabolic disorder. In the study, all patients who were treated with asfotase alfa had an objective response to therapy as indicated by a reduction in tissue non-specific alkaline phosphatase (TNSALP) substrates. In addition, treated patients demonstrated improvement in the six-minute walk test.”
Eddie Lampert is cleaning out the closet at Sears, and he’s not feeling sentimental about Lands’ End.
The number-crunching hedge-fund tycoon — who, as chairman of Sears Holdings, has lately been scrambling to raise cash amid heavy losses at the Sears and Kmart retail chains — has quietly been shopping the Dodgeville Wis. mail-order catalog to potential buyers, The Post has learned.
Lampert, who inherited Lands’ End when he took control of Sears in 2005 by merging it with Kmart, has approached a handful of private-equity firms as he looks to raise as much as $2 billion in cash, sources said.
While it’s early in the process, sources said that Lampert is likely to tap Goldman Sachs to run the sale.
Last month, Sears said it had moved to raise upwards of $750 million by selling 11 stores and spinning off some smaller-format stores as it disclosed it lost $3.1 billion last year.
Sears has since cut a deal to sell three prize stores in Canada for $170 million.
“Everybody is talking to Sears about buying back stores,” according to a real-estate source. “It stinks of desperation.”
A Sears spokeswoman yesterday said the retailer doesn’t “comment on rumor or speculation.”
Lampert is looking to find a buyer who will license Lands’ End to Sears while pursuing growth elsewhere, possibly in Europe, according to a source.
“The idea is that Lands’ End would become something like Tommy Hilfiger,” according to the source, noting that the global brand’s clothing is licensed exclusively to Macy’s in the US.
Nevertheless, many insiders question whether the hard-bargaining billionaire could fully recover the $1.86 billion shelled out in 2002 by former Sears CEO Alan Lacy — a price tag that was widely viewed as inflated at the time.
That’s because Lands’ End — which had seen torrid growth in the 1990s as a family destination for khakis, cardigans and sensible swimsuits — hasn’t grown much under the Sears umbrella.
Sears has mostly kept mum about the brand’s financial performance in recent years, but sources said its profitability hasn’t changed much either, generating between $150 million and $200 million annually in earnings before interest, taxes, depreciation and amortization, or Ebitda.
While Sears had paid more than 10 times Ebitda for Lands’ End, today’s rocky retail environment makes a deal more likely in the $1.2 billion to $1.6 billion range, bankers said.
Lands’ End’s upscale image was an awkward fit from the beginning for Sears, whose stores have become increasingly shabby as Lampert has slashed capital spending.
While it’s rare for a brand to rebound, Martha Stewart has been successful at Macy’s despite a previous stint at Kmart, notes Michael Stone of the Beanstalk Group, a branding consultant.
“A lot of people remember Lands’ End before it went to Sears,” Stone said. “It can certainly be brought back to its former glory by the right company.”
Read more: http://www.nypost.com/p/news/business/lands_end_game_5p3ePLWUD0sqSpTPERJGeM#ixzz1qWI6UmuU
New Highs 18 COMPANY SYMBOL HIGH VOLUME ------- ------ ---- ------ AVG Technologies AVG 15.49 20,280 Aetna AET 49.12 2,707,070 Amer Vanguard AVD 21.42 54,946 Annie's Inc. BNNY 40.00 654,509 Bluegreen Corp BXG 4.30 11,096 Corrections Corp Of Amer CXW 27.11 61,745 Demandware Inc DWRE 31.84 78,229 Exelis Inc. XLS 12.88 57,134 Fedl Ag Mtge Corp Cl A AGM/A 18.18 300 HBFuller FUL 33.40 165,835 Hels High Income Fund HIH 8.82 6,711 Kilroy Realty Corp Pfd G KRCpG 25.10 20,200 LeapFrog Cl A LF 8.49 128,968 Markel Corp MKL 451.90 10,399 Movado Group MOV 24.78 127,167 Red Hat Inc RHT 57.17 2,648,476 UnitedHealth Group UNH 57.05 2,401,565 Xinyuan Real Estate XIN 3.15 153,271 New Lows 16 COMPANY SYMBOL LOW VOLUME ------- ------ ---- ------ Alliant Techsys ATK 49.81 20,371 Alpha Natural Res ANR 14.54 2,404,350 AngloGold Ashanti AU 36.07 374,519 Baker Hughes BHI 40.41 1,308,122 Banco Bradesco ADS BBDO 15.00 7,200 Bill Barrett BBG 25.43 95,726 Gold Field ADS GFI 13.42 424,131 Harmony Gold Mining HMY 10.58 259,849 KT Crp ADS KT 13.72 300,983 Kinross Gold KGC 9.57 997,155 NRG Energy NRG 15.87 240,330 Newmont Mining NEM 50.62 1,531,885 RadioShack RSH 6.22 1,139,711 Taro Pharmaceutical Indus TARO 38.95 3,950 Transalta Corp TAC 18.61 23,540 Vocera Communications VCRA 20.20 93,206
New Highs 20 COMPANY SYMBOL HIGH VOLUME ------- ------ ---- ------ Acorn Energy ACFN 9.96 47,853 Angie's List ANGI 19.82 11,382 Bassett Furniture Inds BSET 9.25 3,125 BBC Capital Trust II 8.5% BBXT 32.15 7,100 Cisco Systems CSCO 21.24 7,825,033 Dynavax Techs DVAX 4.93 100,569 EXACT Sciences EXAS 11.02 103,127 Fossil FOSL 135.98 322,353 Hooker Furniture HOFT 13.90 5,217 Loral Space & Comm LORL 82.48 23,978 Macatawa Bank MCBC 3.50 11,400 Monster Beverage MNST 62.32 123,435 Nautilus Marine Acqn NMAR 10.00 200 ORBCOMM ORBC 3.90 6,265 OptimumBank Hldgs OPHC 5.43 232,494 Pacific Mercantile Bncp PMBC 5.48 2,400 Repligen RGEN 5.80 63,512 Threshold Pharmaceuticals THLD 8.74 1,966,575 US Ecology ECOL 21.76 10,341 Wayne Savings Bncshrs WAYN 9.48 200 New Lows 13 COMPANY SYMBOL LOW VOLUME ------- ------ ---- ------ A123 Sys Inc AONE 1.16 812,024 Cardiome Pharma CRME 0.72 34,556 China Yida Hldg Co CNYD 1.43 21,023 CommTouch Software CTCH 2.83 8,633 Ctripcom Intl CTRP 21.54 352,644 G Willi Food Intl Ltd WILC 3.91 8,717 iGo IGOI 0.55 64,105 MDC Partners (Cl A) MDCA 11.32 4,561 Mission NewEnergy MNEL 0.47 19,120 Peregrine Pharma PPHM 0.48 425,142 Stereotaxis STXS 0.66 67,745 Swisher Hygiene SWSH 2.57 290,074 Ultrapetrol (Bahamas) ULTR 2.05 6,298Comments »