Monthly Archives: November 2012
How We Take Care of Our Heroes
The Similarities Between 1892 and 2012
Medicaid Expansion To Poorest Southerners Denied By Republicans
“If you’re poor and you live in the South, there’s a good chance health care reform won’t reach you. Intransigent Republican governors from Florida to Texas remain steadfastly resistant to President Barack Obama’s plan to expand Medicaid to their neediest constituents.
The health care reform law Obama enacted in 2010 depends heavily on Medicaid, a joint federal-state health benefits program, to reach the goal of near-universal health care. If every state participated, 17 million uninsured people would gain coveragethrough Medicaid and the Children’s Health Insurance Program between 2014 and 2022, according to the Congressional Budget Office. The law extends Medicaid to anyone who earns up to 133 percent of the federal poverty level, which is $14,856 this year.
But at least a half-dozen governors say they simply won’t go along with the law. When the Supreme Court upheld Obamacare in June, justices ruled states could opt out of the Medicaid expansion. The decision threatens to leave 3 million of the poorest Americans without health coverage, the Congressional Budget Office predicts.”
Comments »The Growing Gap in White Collar Bank Crime Prosecution
“The banks run by executives now in prison for crimes related to the financial crisis had a combined $30 billion in assets. That is just one-tenth the size of the largest bank failure in U.S. history, the 2008 seizure of Washington Mutual Inc.’s WMIH 0.00% banking operations.
The gap is a sign of prosecutorial ineffectiveness to critics such as William Black, a regulator during the savings-and-loan crisis who now teaches economics and law at the University of Missouri-Kansas City.”
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Rail Traffic Takes a Major Detour to the Downside
“Rail traffic turned down sharply this week as intermodal traffic dipped -6.2%. That brings the 3 month moving average to 2.7%, down sharply from last week’s reading of 3.5%. One week doesn’t make a trend, but rail trends haven’t been negative since 2009 so this is one to keep a close eye on if things continue to deteriorate. Here’s more from the AAR:”
Comments »Short Interest Falls in Weak Stocks
$JCP, $AAPL, $CVS, $SVU< $XRX, $CLWR, $ZNGA, $ATVI, $TXN, $INTC, $MSFT, $DELL, $CSCO, $FB
Comments »Zillow: Prices Between Foreclosed and Non-Distressed Homes Leveling Out
“The days of buying discounted foreclosed homes throughout the United States seem to be coming to an end, according to a report by Zillow.
The foreclosure discount rate, for which Zillow compared the actual sale price of foreclosed homes nationwide with the estimated price of the same home if it were to sell in a non-distressed transaction, dropped from 9.1 percent in September 2011 to 7.7 percent in September 2012, meaning traditionally purchased home and ones owned by banks in foreclosures have almost evened out.
At the peak of the housing crisis in August 2009, prices of foreclosed homes were discounted at a national rate of 23.7 percent, on average, relative to the prices of non-distressed home. ”
Comments »Morici: Big Banks Are ‘Too Big to Effectively Regulate’
“President Barack Obama needs to rein in big banks, lower healthcare costs, take on the enormous trade deficit and compromise on domestic energy if he wants to have a successful second term and not be stuck in the morass that marked the past four years, Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland, told Fox Business Network.
Regarding the fast-approaching fiscal cliff, Morici believes a compromise will be made, but “the question is do we have a bad deal,” he said in response to New York Times columnist Paul Krugman, who wrote that the country should go over the fiscal cliff.
“Let’s not make a deal,” Krugman wrote. Obama must stick to his guns and demand tax increases on the wealthy, which Republicans, who control the House, adamantly oppose, argued Krugman, a Nobel Prize winning economist. ”
Comments »U.S. to Outproduce Saudi Arabia and Russia by 2017
“(Reuters) – The United States will overtake Saudi Arabia and Russia as the world’s top oil producer by 2017, the West’s energy agency said on Monday, predicting Washington will come very close to achieving a previously unthinkable energy self-sufficiency.
The forecasts by the International Energy Agency (IEA), which advises large industrialized nations on energy policy, were in sharp contrast to previous IEA reports, which saw Saudi Arabia remaining the top producer until 2035.
“Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector,” the IEA said in its annual long-term report, giving one of the most optimistic forecasts for U.S. energy production growth to date.”
Comments »Gapping Up and Down This Morning
Gapping up
SQNM +8.3%, DNDN +5.2%, ACI +2.6%, DIS +1%, AIG +0.4%, ABT +0.25%, GILD + 10%,
CEL +3.9%, VVUS +3.3%, IDIX +4.3%, TSRO +7.8%, CELG +8.7%, DVAX +10.3%, STV +17.1%,
CXS +12.6%, TIE +42.60%, DHI +2.9%, MDVN +2.4%, CLSN +2.2%,
Gapping down
SD -0.5%, JCP -2.9%, GRMN -2.7%, CAT-0.6%, SDRL -0.6%, CYNO -2.5%, OSG -6.3%, NKTR -3.1%,
CLVS -44.2%, STSI -18.4%, HUSA -17.5%, XIDE -6%, TSL -1.1%, GWW -1%
Comments »Upgrades and Downgrades This Morning
ALU, ARMH, BBT, CHKP, CHK, C, CMA, DNDN, DEO, ETP, GRMN, GRPN, HIW, JCP, JNJ, NNI, PBR, RYAAY, SQNM, SIRI, SLG, TRIP, USM, VRTX, VNO, DIS,
Comments »In Play and On the Wires
$JPM Executives Avoid Admitting Wrongdoing and Being Charged for Fraudulent Sales of MBS
Did you really think anyone would be charged this far down the road? “Do the crime then pay a fine” is a great motto for our children…..
Comments »U.K. Lawmakers Try to Discern How $GOOG, $AMZN, & $SBUX Paid So Little Taxes in the U.K.
“LONDON (Reuters) – UK lawmakers will quiz executives of Starbucks , Google and Amazon on Monday about how they have managed to pay only small amounts of tax in Britain while racking up billions of dollars worth of sales here.
The Public Accounts Committee (PAC), which is charged with monitoring government financial affairs, has invited the companies to give evidence amid mounting public and political concern about tax avoidance by big international companies.
“It is hard for the ordinary person to believe it’s fair,” said Margaret Hodge, a member of parliament for the opposition Labour party and chairman of PAC.
“It makes people incredibly angry in the current fiscal climate,” she added, in reference to the austerity measures which large budget deficits have forced on the UK, and other countries.
Britain and Germany last week announced plans to push the Group of 20 economic powers to make multinational companies pay their “fair share” of taxes following reports of large firms exploiting loopholes to avoid taxes.”
Comments »Obama Drums Up Outside Support to Raise Taxes for Fiscal Cliff Resolution
“President Barack Obama is working to enlist outside support for his position that high-income people pay more taxes as he heads into negotiations with House Speaker John Boehner on how to avoid the so-called fiscal cliff.
Obama will hold separate meetings with labor and business leaders at the White House this week ahead of his Nov. 16 meeting with Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell. Obama will host labor leaders tomorrow and business leaders on Nov. 14, according to a White House official who asked for anonymity.”
Comments »$BBY Acquires $WSM CFO McCollam
“Best Buy Co. (BBY) is hiring Sharon McCollam, the former chief financial officer of Williams-Sonoma Inc. (WSM), as its CFO, according to a person with knowledge of the matter.
The appointment of McCollam will be disclosed publicly today, the person, who asked not to be named as the announcement isn’t public, said yesterday. McCollam retired from home-goods retailer Williams-Sonoma in March. The Wall Street Journal reported the appointment yesterday.
The electronics chain is revamping operations under new Chief Executive Officer Hubert Joly, who is accelerating the introduction of smaller stores and closing big-box locations. Joly plans to discuss his strategy with analysts at a meeting in New York on Nov. 13.”
Comments »Money Managers Like PIMCO to DWS Say Investor Fears are Overblown Regarding Fiscal Cliff and its Consequences
“The world’s biggest investors say the rout that erased $1 trillion from the value of global equities after President Barack Obama was re-elected overlooks the fact that the world economy is improving while U.S. leaders start discussions that may avoid the so-called fiscal cliff.
Money managers at firms overseeing more than $8 trillion said investor concern that the U.S. economy will slow as Obama and Congress fail to avert $607 billion in tax increases and spending cuts next year are overblown. U.S. stocks had the biggest weekly decline since June while yields on Treasuries fell to two-month lows and gold advanced the most since September.”
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$LUK Buys $JEF for $2.76 Billion
“Leucadia National Corp. (LUK) agreed to buy the the portion of Jefferies Group Inc. (JEF) it doesn’t already own for about $2.76 billion.
Investors will receive 0.81 Leucadia share for each Jefferies share they own, the companies said today in a statement. The deal values the entire company at about $3.59 billion, based on data from the company’s most recent 10-Q regulatory filing. Jefferies management will run the firm, according to the report.”
Comments »$GS Warns of Fast Rising Stocks in Peripheral EU Countries
“European companies most dependent on revenue from Spain, Italy, Greece and Portugal are rising in the stock market at the fastest pace in five years, providing chances for short sellers after two earlier rallies fizzled.
Firms with sales from those countries surged 21 percent in the 15 weeks to Nov. 2 as European Central Bank President Mario Draghi pledged to preserve the euro, compared with an average 5.3 percent gain for exporters to the U.S., China and Europe’s strongest economies, Goldman Sachs Group Inc. indexes show. Similar rallies for companies serving so-called peripheral countries heralded losses of as much as 44 percent through November 2010 and July 2012, data compiled by Bloomberg show.”
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