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Monthly Archives: December 2012

The Guy Who Killed Two Firemen Was Also Using A Bushmaster .223 Rifle

“Police are now reporting that the man who ambushed first responders in Webster, New York, armed himself with a Bushmaster AR-15 “assault style” rifle, according to Russell Goldman of ABC News.

William Spengler, 62, was already convicted of murder in 1981 for the beating death of his 92 year-old grandmother, and so was ineligible to own deadly weapons. Nonetheless, local police report that he also had a pump shotgun and a .38 caliber pistol.

The man left a note which stated that he wanted to “do what I like doing best, killing people” and that he wanted to see how much of the neighborhood he could burn down. Police say he died of a self-inflicted gunshot wound to the head.

Investigators also say they intend to find out how Spengler came to possess these weapons illegally.

The Bushmaster .223 has been involved in a number of high-profile shootings in the U.S. this year — 12 killed in Aurora, Colo. 2 in Portland, Ore. 27 in Newton, Conn. Now 2 firefighters in Webster….”

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$MS’s Top 10 for 2013

“Morgan Stanley’s global cross-asset strategy team, led by Greg Peters, is out with its Top 10 Asset Allocation Trades for 2013.

The trades sum up investment bank’s macro views and are fairly straightforward: all of the trades consist of stocks, bonds, and currencies.

One interesting aspect of the team’s recommendations: they are mostly skewed away from investing in U.S. assets, as Morgan Stanley sees other areas they think represent bigger opportunities.

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Top Ammo Supplier Sells 3 1/2 Years Worth Of Assault Rifle Magazines In 72 Hours

“Firearm accessories supplier Brownells says that it’s experiencing “unprecedented” sales of magazines.

Brownells has sold 3 1/2 years worth of PMAG magazines in just 72 hours, according to a statement posted from the company’s official account on gun owner forum AR-15.com.

It also says that it has sold “an even greater amount” of its own Brownells magazines.

PMAGs, manufactured by Magpul, are used with AR-15/M4/M16 compatible weapons.

“Its rugged design has made it as one of the top performers in the small-arms accessory arena, according to combat veterans who credit the PMAG with drastically improving the reliability of the M4,…”

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Some Predictions for 2013

“LONDON (MarketWatch) — “I think there is a world market for maybe five computers,” IBM Chairman Thomas Watson is reputed to have remarked in 1943. That should be enough to warn anyone off making a prediction about anything.

Still, since we are stuck in the quiet space between Christmas and New Year, and the Mayan prediction of the world ending last week turned to be about as accurate as Watson’s, here are seven surprises to watch out for in the year ahead….”

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Household Spending Drops to its Lowest Level Since 1983

“U.S. households have been saving more and spending less since the financial crisis over four years ago, and family finances are starting to reflect the new trend.

U.S. households spent 10.6 percent of their after-tax income on debt payments in the third quarter of this year, the lowest level since 1983, according to Federal Reserve data cited by The Wall Street Journal.

Tack in other payments not classified as debt, such as rent and car leases, and the figure comes to 15.7 percent, also a roughly 30-year low….”

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Luxury Brands Find Lumpy Consumption

“A strange thing has happened in the world of luxury products. There now appear to be separate realities in the world of luxury brands.

Instead of bundling luxury retailers together and making a one-size-fits-all sector call as they have in the past, investors must reach brand-by-brand decisions, according to the Financial Times.

For instance, Tiffany reported a 30 percent drop in third-quarter earnings, Louis Vuitton reported the softest growth in 12 years, and Burberry issues a profit warning in September, the Times reports. Yet Hermes raised its sales and profitability targets and Prada Group’s earnings through September of this year were up 50 percent over last year…”

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Richmond Fed Index

Prior: 9

Market Expects 5-15

Actual 5

Growth in manufacturing activity in the Richmond Fed’s district for December eased a bit but remained positive. The composite index of manufacturing activity lost four points, settling at 5 from November’s reading of 9. Among the index’s components, shipments fell five points to 6, the gauge for new orders was almost unchanged at 10, and the jobs index turned negative, losing six points to minus 3.

Survey assessments of current prices indicated that raw materials prices grew on par with November, while finished goods prices grew at a slightly slower rate.

Looking forward, assessments of business prospects for the next six months were less optimistic in December as the index of expected shipments lost eight points, ending at a reading of 20, and the new orders index dropped thirteen points to finish at 12.”

Full report

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Case Shiller Reports a 0.7% Increase in Home Prices


“U.S. single-family home prices rose in October, reinforcing the view the domestic real estate market is improving and should bolster the economy in 2013, a closely watched survey showed on Wednesday.

The S&P/Case Shillercomposite index of 20 metropolitan areas gained 0.7 percent in October on a seasonally adjusted basis, stronger than the 0.5 percent rise forecast by economists polled by Reuters.

“Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement. (Read MoreUS May Expand Mortgage Refinance Program: Report)

Prices in the 20 cities rose 4.3 percent year over year, beating expectations for a rise of 4.0 percent.

The recovery was somewhat uneven, with 12 of 20 cities showing declines for the month…”

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The Pillar of Prosperity is About to Fall Again

This analysis is some serious chart chomping stuff. You will need time to absorb it. Essentially the paper argues that in order for society and economies to grow you need five stable pillars; prosperity, knowledge, food, health, food, and security.

The paper argues that prosperity is deteriorating fast and it often leads to economic instability followed by revolution.


Present Crisis Pattern, End of the Third Industrial Revolution

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Gapping Up and Down This Morning



Symb Last Change Chg %
DKL.N 23.02 +0.78 +3.51
RH.N 32.35 +0.86 +2.73
HCI.N 21.33 +0.27 +1.28
CYN_pc.N 24.28 +0.28 +1.17
SXE.N 23.33 +0.14 +0.60


Symb Last Change Chg %
ABT_w.N 30.12 -0.81 -2.62
WWAV.N 15.51 -0.30 -1.90
INFY.N 41.94 -0.73 -1.71
BHLB.N 23.82 -0.41 -1.69
SCM.N 15.99 -0.26 -1.60



Symb Last Change Chg %
DSKX.OQ 3.65 +0.74 +25.43
XPLR.OQ 4.57 +0.57 +14.25
CLSN.OQ 8.46 +0.96 +12.80
AVEO.OQ 7.32 +0.83 +12.79
ACFC.OQ 2.27 +0.25 +12.38


Symb Last Change Chg %
ALXA.OQ 4.99 -0.80 -13.82
FFKY.OQ 2.01 -0.26 -11.45
SVA.OQ 2.92 -0.36 -10.98
USMD.OQ 8.00 -0.80 -9.09
IGLD.OQ 3.67 -0.34 -8.48



Symb Last Change Chg %
SVLC.A 2.44 +0.04 +1.67
BXE.A 4.22 +0.04 +0.96
MHR_pe.A 22.80 +0.20 +0.88
FU.A 3.30 +0.01 +0.30
WVT.A 10.83 +0.03 +0.28


Symb Last Change Chg %
SAND.A 11.65 -0.24 -2.02
EOX.A 5.12 -0.07 -1.35

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Blinder: US Policymakers Look ‘Clownish’

“The wheels could come off the U.S. economy even before it has shifted out of second gear unless politicians reach a last-minute deal to avoid $600 billion in tax rises and spending cuts that kick in next month.

The rest of the world would be unable to avoid the pile-up if America does fly off the so-called fiscal cliff.

That is why, even in a holiday-shortened week, eyes will be peeled for signs that Democratic President Barack Obama and his divided Republican opponents can bury the hatchet.

The White House on Friday tried to rescue the stalled talks, but there was little headway to resolve what Alan Blinder, an economics professor at Princeton University, called the biggest near-term risk facing the global economy.

Seen from abroad, U.S. policymakers were looking “clownish,” the former vice-chairman of the Federal Reserve said: “This will do us a tremendous amount of damage.”

Until last Thursday, markets had assumed a compromise would be struck, averting the risk of a relapse into recession. The slow-motion car crash had been so well signaled that surely the drivers would swerve in time? …”
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NJ Pension Fund Sues NYSE-Euronext on ICE Deal

“…..The sale was “designed to ensure the sale of NYSE-Euronext to ICE on terms preferential to ICE and designed to benefit NYSE Euronext’s insiders,” the pension fund said…..”

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U.S. Holiday Retail Sales Were the Weakest Since 2008

“U.S. holiday retail sales this year were the weakest since 2008, when the nation was in a deep recession. In 2012, the shopping season was disrupted by bad weather and consumers’ rising uncertainty about the economy.

A report that tracks spending on popular holiday goods, the MasterCard Advisors SpendingPulse, said Tuesday that sales in the two months before Christmasincreased 0.7 percent, compared with last year. Many analysts had expected holiday sales to grow 3 to 4 percent.

In 2008, sales declined by between 2 percent and 4 percent as the financial crisis that crested that fall dragged the economy into recession. Last year, by contrast, retail sales in November and December rose between 4 percent and 5 percent, according to ShopperTrak, a separate market research firm. A 4 percent increase is considered a healthy season.

Shoppers were buffeted this year by a string of events that made them less likely to spend: Superstorm Sandy and other bad weather, the distraction of the presidential election and grief about the massacre of schoolchildren in Newtown, Connecticut.

The numbers also show how Washington’s current budget impasse is trickling down to Main Street and unsettling consumers. If Americans remain reluctant to spend, analysts say, economic growth could falter next year….”

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A Paper Titled Ending the Era of Ponzi Finance is Making the Rounds in the Corporate World

“Over an early-morning coffee with the chief executive of an FTSE 100 business last week, talk turned to the outlook for 2013. Where I had expected some guarded optimism, instead I heard a chilling analysis.

The CEO said he had been reading a new paper from Boston Consulting Group headed “ Ending the era of Ponzi finance ”. The lessons he had taken from it were miserable.

The West was not going to find its way to the right economic path with a little tweaking at the edges, the CEO said. What is needed is a wholesale overhaul of the economic system to tackle record levels of public and private debt. Was anyone brave enough to do it, he wondered aloud.

I asked him to send me the report. He did.

The BCG study by Daniel Stelter which is doing the rounds of corporate C-suites does not pull its punches. In fact, its punches are really just a softening-up exercise for a barrage of kicks and painful blows aimed at anyone who thinks that kicking the can down the road is a suitable substitute for radical action.

At the heart of the analysis is the issue of debt. A report by the Bank of International Settlements, the study notes, found that the combined debts of the public and private sector in the 18 core members of the OECD rose from 160pc of GDP in 1980 to 321pc in 2010.

That debt was not used to fund growth – perfectly reasonable – but was used for consumption, speculation and, increasingly, to pay interest on the previous debt as liabilities were rolled over.

As soon as asset price rises – fuelled by high levels of leverage – levelled off, the model imploded.

The issue is brought into sharp focus by one salient fact. In the 1960s, for every additional dollar of debt taken on in America there was 59c of new GDP produced. By 2000-10, this figure had fallen to 18c. Even in America, that’s about a fifth of what you’ll need to buy a McDonald’s burger.

Coupled with the huge debt burden are oversized public sectors and shrinking workforces. The larger the part the Government plays in the economy, the lower the levels of growth….”

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Despite Corporate Debt Ratings Getting Cut At The Fastest Rate Since ’09, Investors Still Put Money on the Table

“Dec. 26 (Bloomberg) — Standard & Poor’s and Moody’s Investors Service are cutting corporate debt ratings at the fastest pace since 2009 as a global economic slowdown and record borrowing erode credit quality.

The ratio of ratings downgrades to upgrades worldwide climbed to 1.85 this year from 1.23 in 2011, according to S&P data. PSA Peugeot Citroen, Europe’s second-largest carmaker, was cut three times by Moody’s since March to speculative grade. Fort Worth, Texas-based RadioShack Corp. was lowered four steps this year by S&P to seven levels below investment grade. Defaults rose to 80 issuers from 52 in 2011, according to S&P.

Europe’s second recession in four years and slowing global economic growth are helping to push a measure of corporate debt to earnings to a three-year high, Barclays Plc data show. Companies from the neediest to the most creditworthy sold unprecedented amounts of debt at record-low yields in 2012 as the Federal Reserve held interest rates at almost zero for a fourth year in an effort to boost the U.S. economy.

“We’re going to have an elevated level of negative outlooks,” Diane Vazza, head of S&P’s global fixed-income research, said in a telephone interview. “The companies that we’re seeing with downgrade pressure are speculative-grade companies….”


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Bernie Madoff Sent A Letter To CNBC On Christmas Eve, Talks About Outsized Risk and Insider Trading

“….In a Christmas Eve letter from the medium security federal prison in North Carolina where he is serving a 150-year sentence for running a massive Ponzi scheme, Madoff tells CNBC that insider trading has been around “forever.”

He also rails against what he calls a lack of transparency in the financial markets, and says the growth of hedge funds is forcing market players to take outsized risks in order to earn decent returns.

Madoff has granted only a handful of interviews since he went to prison in 2009. More recently, he has declined to speak on the record about his case. But he was willing to share some views about the financial markets in the e-mail, which he sent to CNBC and a handful of attorneys and academics he has been communicating with.

Before confessing four years ago this month to the largest investment scam in U.S. history, Madoff was prominent in the financial community. He served as a non-executive chairman of the NASDAQ, and his firm was once among the largest market makers on Wall Street.

“(O)ne would be led to believe that with the recent spate of insider trading prosecution that insider trading is a new development,” Madoff writes. “This is false. It has been present in the market forever, but rarely prosecuted. The same can be said of front running of orders….”

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Nasty Storm Kills 3 Dumping Snow & 34 Tornadoes in the South, Now Headed North East

“MOBILE, Ala. (AP) — An enormous storm system that dumped snow and sleet on the nation’s midsection and unleashed damaging tornadoes around the Deep South began punching its way toward the Northeast on Wednesday, slowing holiday travel.

Post-Christmas travelers braced for flight delays and a raft of weather warnings for drivers, a day after rare winter twisters damaged buildings in Louisiana and Alabama.

Snow and ice covered roads in southern Illinois and southern Indiana early Wednesday. Officials urged residents to stay home if they can. State police reported numerous slide-off accidents in the Evansville, Ind., area and white-out conditions on Interstate 64 in Indiana with wind gusts around 30 mph.

The storm system headed from the Gulf Coast to New England has been blamed for three deaths and several injuries, though no one was killed outright in the tornadoes. The storms also left more than 100,000 without power for a time across the South, darkening Christmas celebrations.

Severe thunderstorms were forecast for the Carolinas while a line of blizzard and winter storm warnings stretched from Arkansas up the Ohio River to New York and on to Maine.

Thirty-four tornadoes were reported in Texas, Louisiana, Mississippi and Alabama during the outbreak Tuesday, the National Weather Service said….”

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U.S. May Expand Mortgage Refinance Program: WSJ

“(Reuters) – The U.S. government is considering expanding its mortgage refinancing program to include borrowers whose mortgages are not backed by Fannie Mae and Freddie Mac , the Wall Street Journal reported, citing people familiar with the discussions. (http://link.reuters.com/mej84t)

The refinancing program now being considered also seeks to include “underwater” borrowers who owe more than their homes are worth, the Journal said.

The proposal would also transfer potentially riskier loans held by private investors to the government-sponsored mortgage entities Fannie Mae and Freddie Mac, the paper said.

Such a move would require congressional authorization to temporarily change the charters of Fannie Mae and Freddie Mac, according to the Journal.

About 22 percent of all homes with a mortgage, or around 10.8 million homes, down from 12.1 million last year, were worth less than the outstanding balance at the end of June, the Journal said, citing data from CoreLogic…”

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