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Monthly Archives: July 2012

Muni Defaults Shift Into Second Gear

“The can has been kicked. The austerity has been implemented. The revenues have fallen. And as we see in the chart below, the pace of local government distress is accelerating. As has been made so clear in the past, defaults cluster; and sure enough it is starting, as tensions between unions and city managers become irreconcilable.”

Full article and chart porn

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$GS To Create a In House Bank Lending Facility

$GS was not a bank, then became a bank for bailout funds, then stopped being a bank for fear of Dodd Frank regulation, and is now building an in house bank to loan to wealthy clients.

I’ll take this as a sign that interest rates will move higher soon and that lending will become immensely profitable shortly.

Full article 

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Industrial Production Rises in June

“Industrial production in the U.S. increased in June, led by gains among automobile and machinery makers that signal manufacturing is boosting economic growth.

Output at factories, mines and utilities rose 0.4 percent last month after a revised 0.2 percent drop in May that was larger than previously reported, Federal Reserve data showed today in Washington. Economists forecast a 0.3 percent gain, according to the Bloomberg News survey median. Manufacturing, which makes up about 75 percent of total production, rose 0.7 percent last month, reversing the prior month’s decline.”

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Gapping Up and Down This Morning

Gapping up 

DGIT +27%, ALTH +18.2%, CDXS +13.7%, JOEZ +12%, PATH +9%, PPHM +7.5%,

YHOO +2.9%, PKG +2.9%, SAN +2.6%, BCS +2.1%, VMW +1.5%,  S +4.6%,  LVS +1.8% ,

CMG +1.4%, DIS +1.1% ,  LTM +0.8%,  SIG +1% ,  VVUS +2.1% , OREX +2.7%,

BTU +1.4%, RIG +1.3%, SLB +1.2%, SDRL +1.2%, BP +0.6%, SD +0.6%,

SAN +2.6%,  BAC +1.2%, MS +1.2%, C +0.7%, MAT +5.0%, CMA +3.9%,

PKG +2.9%, MOS +2.4%, GS +1.4%

Gapping down

MFRM -12.7%, MILL -12.6%, ALU -12.4%, SFG -4.6%, JBHT -4%, LNG -3.6%,

RIMM -2.7%, ICUI -2.4%, FLIR -1.8%, RIO -1.3%, CTAS -1%, DNKN -3.2% ,

NOK -1.7%, LOW -0.8% ,  RIO -1.3%, SPLK -1.5%,  RIMM -2.7%, LNG -3.6%,

BRO -2.4%,  MMR -1.6%, JNJ -1.4%, NBR -4.9%, SFG -4.6%, JBHT -4% ,  ALU -14.6%

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Reports Claim HSBC Handled Drug Money From Iran

“WASHINGTON (Reuters) – A “pervasively polluted” culture atHSBC Holdings Plc allowed the bank to act as financier to clients seeking to route shadowy funds from the world’s most dangerous and secretive corners, including Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.”

Full article

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Yahoo Grabs Google’s Mayer as CEO

“SAN FRANCISCO (Reuters) – Google Inc’s Marissa Mayer will become Yahoo Inc’s new chief executive from Tuesday, a surprise pick for its third CEO in a year.

Mayer’s hiring, which edged out front-runner and acting CEO Ross Levinsohn, signaled the Internet company is likely to renew its focus on Web technology and products rather than beefing up online content.”

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J&J Sales Lag, Profit View Cut on Foreign Exchange Factors

“(Reuters) – Johnson & Johnson (JNJ) reported lower-than-expected quarterly sales on Tuesday and cut its full-year 2012 profit forecast, citing negative foreign-exchange factors, but quarterly earnings narrowly beat Wall Street estimates.

The diversified healthcare company said on Tuesday it earned $1.41 billion, or 50 cents per share, in the second quarter. That compared with $2.78 billion, or $1.00 per share, in the year-earlier period, when the company took a big charge for restructuring its Cordis heart-device unit.

Quarterly sales totaled $16.48 billion, falling short of Wall Street expectations of $16.69 billion.”

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Coca-Cola 2Q Profit Slips as Commodity Costs Rise

“NEW YORK (AP) — The Coca-Cola Co. says its net income slipped in the second quarter from a year ago, as rising commodity costs offset its expansion overseas.

The world’s biggest beverage maker — which makes Minute Maid, Powerade and Dasani — says its revenue growth was powered by emerging markets such as India. But that growth was offset by higher costs for ingredients and slower growth at home.

For the three months ended June 29, the company said it earned $2.79 billion, or $1.21 per share. That’s down from $2.8 billion, or $1.20 per share, in the year-ago period.”

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State Street To Buy Goldman Sachs Fund Administration Unit

State Street Corp. (STT), the third largest custody bank, has purchased Goldman Sachs Group Inc. (GS)’s hedge fund administration unit for $550 million in cash.

The deal makes State Street the largest servicer of hedge funds in the world with $877 billion under administration as of June 30, the Boston-based company said today in a statement.”

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Austrian Two Year Yields Fall Below Zero as German Confidence Falls

Austria’s bonds rose, with two-year yields falling below zero for the first time, and French borrowing costs also dropped to the least on record as investors sought safer assets offering higher returns than German debt.

Spanish bonds fell as the nation sold 364- and 511-day securities. German two-year note yieldsdropped to a record as a government report showed investor confidence in Europe’s largest economy declined to a six-month low in July.

“It’s a story of the semi-core countries such as Austria, France and Belgium,” said Piet Lammens, head of research at KBC Bank NV in Brussels. “German yields below zero are a sign for many investors to give up some safety for the higher yields they can find in the semi core. The safety of these bonds is good enough in comparison to Spain and Italy.”


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