Revs were 1.80 billion with $0.24 in EPS…guidance is slightly higher than expected.
Comments »Monthly Archives: April 2012
Intel, $INTC, Beats on the Bottom Line; Investors Take Profits in A.H.
The Bulls Draw Blood Upon the Bears
The bulls had a great day that started with Spain getting off a bond auction despite higher yields.
A slew of earnings came in better than expected and then there was Apple Inc. jumping back over $600.
DOW UP 193
NASDAQ UP 54
S&P UP 21
OIL UP $1.29
Will Natty Gas Executive Order Raise Energy Prices in America ?
A lot of hate for this executive order on the blogosphere. Some saying it is support for agenda 21 to converting America into a Communist country…lol
One interesting note is that it may result in the closing of refineries on the east coast causing eventual prices hikes. Any thoughts ?
Comments »John Paulson is Betting Against Europe
“John Paulson, the hedge fund manager who famously bet against the sub-prime crisis, is now betting on the European sovereign debt crisis. According to Bloomberg he is increasingly concerned about the Euro collapsing as the crisis spreads to larger countries like Spain (via Bloomberg TV):
Comments »“John Paulson, the billionaire hedge-fund manager seeking to reverse record losses in 2011, told investors he is shorting European sovereign bonds, according to a person familiar with the matter.
Paulson, 56, said during a call with investors that he is also buying credit-default swaps on European debt, or protection against the chance of default, said the person, who asked not to be identified because the information is private. Spanish banks are of particular concern as their holdings of the country’s debt and client withdrawals make them overly dependent on European Central Bank financing, Paulson told investors.
Paulson, who manages about $24 billion in his New York-based firm Paulson & Co., lost 51 percent in one of his largesthedge funds last year after making an ill-timed bet on a U.S. economic recovery. In February, he said that the euro is “structurally flawed,” and will eventually fall apart, according to a letter sent to investors.”
Fright Night in Toms River
A Sad Day for the Interwebs
Chris Martenson: “The Trouble With Money”
“Recently I was asked by a high school teacher if I had any ideas about why students today seem so apathetic when it comes to engaging with the world around them. I waggishly responded, “Probably because they’re smart.”
In my opinion, we’re asking our young adults to step into a story that doesn’t make any sense.
Sure, we can grow the earth’s population to 9 billion (and probably will), and sure, we can extract our natural gas and oil resources as fast as possible, and sure, we can continue to pile on official debts at a staggering pace — but why are we doing all this? Even more troubling, what do we say to our youth when they ask what role they should play in this story — a story with a plot line they didn’t get to write?
So far, the narrative we’re asking them to step into sounds a lot like this: Study hard, go to college, maybe graduate school. And when you get out, not only will you be indebted to your education loans and your mortgage, but you’ll be asked to help pay back trillions and trillions of debt to cover the decisions of those who came before you. All while operating within a crumbling, substandard infrastructure. Oh, and by the way, the government and corporate sector appear to have no real interest in your long-term future; you’re on your own there.
Yeah, I happen to think apathy is a perfectly sane response to that story. Thanks, but no thanks.
To understand how our national narrative evolved (or, more accurately, devolved) to become so unappealing, we have to take an honest look at money.
Money is Not Wealth
Money is just a marker for real things. As long as you can exchange your money for real things, your money represents value. Because we tend to conduct all of our most meaningful transactions using money, our perspective can become warped to the point that we think it is the money itself that has value.
The economy is measured in these units, these markers, which we call “money.” But money is not the same thing as the economy. Far from it. And money has no value on its own, but only in relation to the things we can exchange it for.
The economy consists of real needs and wants being fulfilled. On one end of the spectrum, we have the basics like food, water, shelter, medical care, and other necessities. On the other end of the spectrum, we have 15-minute neck massages at the airport. Everything else lies in between
Money, on the other hand, is simply a facilitator of exchanges.
When we reduce the economy to its simplest form, it really consists of a growing number of people trying to meet their needs and wants. More people (~80 million more each year) simply translate into increasingly greater demand for the earth’s limited and ever-limiting resources.
Since our human desire to consume is virtually limitless, a key role of money is to provide the scarcity necessary to divvy up a limited amount of goods and services among the population. There has to be a balance between money and the things that humans can produce and distribute, or else prices get out of whack.
So now let’s imagine a world where real things are in limited (and limiting) supply, and then compare this idea to our money supply in order to get a sense of where things are headed.
This is a chart of Money of Zero Maturity (MZM), which is the largest and most comprehensive accounting of money in the Federal Reserve system and has been ever since M3 was abandoned.
If that looks like an exponential chart to you, you are correct. Sure, there are a few wiggles and jiggles along the way, but the system of money we’ve been living under and setting our expectations around is an exponential money system. For it to remain in balance with resources that come from the earth, we need those to expand exponentially, too. If they don’t — and they can’t forever — things will get out of whack. And it’s probably no surprise to hear my view that money is what is increasingly out of whack in this story, not the earth’s resources.
One feature of exponential systems is that the amount of accumulation of whatever it is that is being measured increases over time. If we draw a few arrows on the above chart, we can see that money is accumulating in our system at a faster and faster pace:
“Stage 3” in this chart shows what has been happening since 2008. Aside from the little hump there in 2008, MZM is accumulating at the fastest pace in history. Isn’t that interesting? Even as employment is historically very weak, income growth is stagnant, the economy is limping along, and inflation is (allegedly) quite low, the US is manufacturing money at the briskest nominal pace in the series.
The reason that we’ve not experienced massive inflation (yet) is that the money that is being injected into the system is basically just piling up and not really doing anything. It’s just sitting there. One measure of this is the so-called ‘velocity’ of money, which is not actually a measured value but an inferred one, derived by dividing the stock of money into GDP. The higher the resulting number, the faster each unit of money is racing around in the economy trying to do something (which usually means to spend itself before inflation steals its value).
In fact, the velocity of money is at an all-time low and seems to be headed lower. When this money all finally decides to go out and spend itself while it still has some value, it will be quite a process to observe. Just think of stored-up money like potential energy, the same as a massive snow cornice hanging precariously over a steep gully. It’s not a question of if, but when it will finally release and cause the value of money to plunge.
And the point I am trying to make is that there are two sources adding to the pressure here. One is the amount of money being piled up, and the other is the dwindling quality of oil. Adding more and more snow to the situation (as the Fed and other central banks are busily doing) is not really helping anything, and neither is a decrease in the net energy returns of new oil discoveries.
Just for kicks, here’s a chart of money in circulation (including cold, hard cash and coin) stretching back through time to around the creation of the Fed.
Is that a picture-perfect exponential chart or what?
Now the other side of the money situation is, of course, debt. Here we see something quite remarkable, which is that somehow the Fed has managed to achieve a new all-time high in total credit market debt.
I say “remarkable” because what really should be happening here is de-leveraging, not re-leveraging. We should be seeking to decrease the total amount of debt, not increase it. But of course, that is not the business of the Fed. Its business is strictly to keep the exponential money and credit systems growing exponentially.
Well, that and assuring that the big banks never have to have an unprofitable quarter. But that’s another story for another day.
Yet even with the heroic efforts of the Fed to push, badger, cajole, and horse-whip the aggregate amount of debt higher, its efforts are falling short. Note that we are still many, many trillions away from the trend line, which is what we’d need to get back to in order for things to return to ‘normal,’ as abnormal as those times really were.
Recall my other main point about debt, which is that it must double slightly faster than once every decade if we want the future to mirror the past four decades. This means that from 2008 to 2018, credit market debt will need to expand from $52 trillion to $104 trillion, or a bit more than $5 trillion per year, to keep us on the same “normal” trajectory.
Part of my skepticism about the odds of things returning to “normal” rests with the difficulty I have conceiving of what exactly it is that the US might find to suddenly go another $50 trillion into debt for.
If the US cannot find a way to go that much further into debt, then all of the many fine and subtle, overt and gross ways that we’ve come to expect the economy and financial markets to work will no longer apply. Many things will change and will simply operate very differently if no other reason than credit growth has slowed to a relative crawl.
As we are now four years past the 2008 crisis and we’ve only just managed to eke out a nominal new high in total credit market debt, this means that we are roughly $20 trillion behind the curve. You could do worse than this for an explanation as to why the national budget is such a wreck, why incomes are not keeping pace, and why the nation’s infrastructure and capital investment are in such poor shape.
The bottom line is that, as expected and predicted here many times over the years, money creation with an eye towards keeping the credit markets expanding is the name of the game.
And the problem is that money is not wealth. It’s only a marker for wealth. Simply increasing the money supply without understanding where we are in the energy story is an incredibly risky, if not foolish, thing to do.
That’s the trouble with money.
Change Is Coming”
Comments »Shareholders Reject Citibank’s, $C, Pay Proposal
GOP to cut food stamps in deficit-reduction drive
Gutting Budgets are in Favor Over Tax Increases for Reducing the Deficit
“(Reuters) – Cutting government programs is favored as the way to reduce the budget deficit by more than twice as many Americans as those who favor raising taxes, said a Reuters/Ipsos poll.
In a result that has held fairly steady over the past five months, the poll, released on Monday, found that 22 percent of those surveyed said that spending cuts alone were the solution, while 36 percent favored a mix of more cuts than tax increases.
In contrast, only 7 percent favored raising taxes alone, with 17 percent saying a mix with more tax increases than cuts would work best to lower the government’s $1.2 trillion deficit.
Thirteen percent said they were unsure and 5 percent said they did not know or were unsure about what should be done.
These results were nearly unchanged from February, although since January, support for budget cutsas the main way to attack the deficit problem had declined slightly.
With the Congress deeply divided on fiscal issues, the November 6 presidential and congressional election campaigns are increasingly dominated by debate over taxes and spending…”
Comments »Market Update
Fireworks on Wall st today: DOW UP 200, NASDAQ UP 60 , S&P UP 22, $AAPL UP $25
“2:00 pm : The dollar index has seen a relatively quiet session, holding small losses for most of U.S. trade. The index briefly climbed into positive territory following this morning’s housing data, but quickly slipped back below the flat line where it holds a loss of 0.1% near 79.50. The dollar is seeing noticeable weakness against the Canadian dollar after the Bank of Canada held its benchmark interest rate steady at 1.00%, but noted a “reduced slack in the economy.” That headline had traders dumping dollars in favor of the loonie with the dollar now down 1.2% to .9880. Another commodity currency, the Australian dollar, is seeing a 0.5% advance against the greenback as traders flock back into risk assets. The hard currency is seeing a bid despite the Reserve Bank of Australia monetary policy meeting minutes suggesting a rate cut may be forthcoming if inflationary pressures are contained. Trade remains quiet across the rest of the complex with the euro flat at 1.3135, and the pound up 0.3% near 1.5940.DJ30 +199.32 NASDAQ +58.18 SP500 +21.61 NASDAQ Adv/Vol/Dec 1976/919.0 mln/526 NYSE Adv/Vol/Dec 2440/362.1 mln/602
1:30 pm : Equities are holding strong gains as we progress into the afternoon, with the S&P 500 up 1.5%.
The Technology sector, which was a notable laggard yesterday, is one of the strongest sectors today with a 2.0% gain. This move comes ahead of some big tech-sector earnings reports, with IBM (IBM 206.43, +3.71), Intel (INTC 28.62, +0.21), Seagate (STX 28.31, -0.19) and Yahoo! (YHOO 15.10, +0.32) all due out with earnings after the close.
In addition to technology, the energy and materials sectors are also leaders in today’s rally, both up 2%.
The utilities sector is a laggard, with a gain of just 0.4% today. DJ30 +199.58 NASDAQ +55.78 SP500 +21.17 NASDAQ Adv/Vol/Dec 1969/849.9 mln/516 NYSE Adv/Vol/Dec 2419/336.3 mln/603
1:00 pm : Equities hold strong gains in afternoon trade as this morning’s Spanish bill auctions and mostly better than expected earnings have more than offset the mixed economic data. The Spanish bill auctions saw solid demand as the maturities were inside the European Central Bank’s three-year Long-Term Refinancing Operations; and earnings from Coca-Cola, Goldman Sachs, and Johnson & Johnson all topped estimates. That has helped offset this morning’s disappointing housing starts and industrial production data which both fell short of analyst expectations.
Coca-Cola (KO 74.40, +1.96) is up 2.8% after the company announced better than expected earnings of $0.89 per share on revenues of $11.14 billion. The company had robust volume growth in emerging markets as India (+20%), China (+9%), and Brazil lead the way. However, the company warned the European financial crisis and slowdown in China may impact sales in those economies in the coming quarters.
Shares of Goldman Sachs (GS 118.49, +0.76) are off their best levels, but higher, after seeing a gain of 1.7% at the open. Today’s weakness comes after the company announced beat on both its top and bottom lines, announcing earnings per share of $3.92 on revenues of $9.95 billion. Annualized return on average common shareholders’ equity was 12.2% for the first quarter. Today’s selling comes after the stock ran into resistance at its 50-day moving average.
Johnson & Johnson (JNJ 63.92, -0.06) has pared the majority of its losses, currently trading down % after this morning’s earnings. The company announced earnings per share of $1.37 which was $0.03 better than the Capital IQ Consensus Estimate, and said revenues fell 0.2% year over year to an in-line $16.14 billion. Domestic sales for the company fell 2.2% while international sales declined 2.5% on an operational increase of 0.4% and a negative currency impact of 2.9%. Today’s selling has the stock trading at the lower bound of its range that has been in place since mid-December.
Apple (AAPL 604.10, +23.97) is trading up 4.3% and at its best levels of the session after some early selling dropped the stock to a low of $571.91. Buyers have emerged following five days of losses in which the stock dropped more than 9%. The company is scheduled to report its quarterly earnings on April 24.
Treasuries continue to see light selling pressure with yields across the complex up close to two basis points. Selling of the 10-yr note has made for a rise of 2.3 basis points to 2.010%. A steeper yield curve has developed over the course of the session with the 2-10-yr spread wider at 174.5 basis points. DJ30 +199.54 NASDAQ +55.78 SP500 +21.08 NASDAQ Adv/Vol/Dec 1972/774.9 mln/503 NYSE Adv/Vol/Dec 2464/309.0 mln/552
12:30 pm : The major averages hold at session highs as all three are seeing gains of at least 1.5%. The Nasdaq continues to lead the way, trading up 1.8%.
Johnson & Johnson (JNJ 63.90, -0.08) has pared the majority of its losses, currently trading down 0.1% after this morning’s earnings. The company announced earnings per share of $1.37 which was $0.03 better than the Capital IQ Consensus Estimate, and said revenues fell 0.2% year over year to an in-line $16.14 billion. Domestic sales for the company fell 2.2% while international sales declined 2.5% on an operational increase of 0.4% and a negative currency impact of 2.9%. Today’s selling has the stock trading at the lower bound of its range that has been in place since mid-December. DJ30 +192.32 NASDAQ +52.41 SP500 +20.53 NASDAQ Adv/Vol/Dec 1971/705.4 mln/486 NYSE Adv/Vol/Dec 2453/286.8 mln/546
12:00 pm : Treasuries hold small losses in late morning trade as sellers entered the market to the extent one might have suspected given the strong bid in risk assets. This morning’s mixed data saw little reaction as trade holds near pre-data levels. Light selling across the complex has yields up as much as two basis points as the benchmark 10-yr yield holds near 2.00%. Slight steepening continues to take place along the yield curve as the 2-10-yr spread trades wider at 173.5 basis points.DJ30 +170.82 NASDAQ +47.74 SP500 +18.05 NASDAQ Adv/Vol/Dec 1947/614.9 mln/481 NYSE Adv/Vol/Dec 2432/254.5 mln/557
11:30 am : Equities continue to push higher with all three of the major averages seeing gains of at least 1.3%. The Nasdaq remains the top performing of the major averages, trading up 1.6%.
Apple (AAPL 597.80, +17.67) is trading up 3.1% and at its best levels of the session after some early selling dropped the stock to a low of $571.91. Buyers have emerged following five days of losses in which the stock dropped more than 9%. The company is scheduled to report its quarterly earnings on April 24. DJ30 +168.40 NASDAQ +45.46 SP500 +17.43 NASDAQ Adv/Vol/Dec 1945/538.8 mln/459 NYSE Adv/Vol/Dec 2446/225.0 mln/515
11:00 am : The major market averages trade at session highs with all three seeing gains in excess of 1.0%. A 1.4% advance has the Nasdaq leading the charge while the Dow and S&P are both seeing 1.2% gains.
Coca-Cola (KO 74.43, +1.99) is up 2.8% after the company announced better than expected earnings of $0.89 per share on revenues of $11.14 billion. The company had robust volume growth in emerging markets as India (+20%), China (+9%), and Brazil led the way. However, on its coference call, the company warned the European financial crisis and economic slowdown in China may impact sales in those economies over the coming quarters. DJ30 +152.13 NASDAQ +41.77 SP500 +15.48 NASDAQ Adv/Vol/Dec 1899/429.0 mln/452 NYSE Adv/Vol/Dec 2433/183.8 mln/482
10:35 am : The dollar index gained some momentum, which caused precious metals to sell off sharply. In more recent trade, the index is giving back those gains and is now back in negative territory at 79.50, down 0.1%.
In the energy space, May crude oil has been in positive territory all morning and recently hit a new session high of $105.07. Crude has pulled back just slightly, but remains just modestly under that new high, now at $104.70, up 1.7%.
May natural gas, on the other hand, has been in the red all morning and just fell to a new session low of $1.96. Currently, the energy component is at that session low, down 3.0%.
In metals, Apr gold and May silver sold off right around the time U.S. equity markets opened as the dollar index gained steam. Gold dropped about $18 in about 30, pulling it into negative territory and to a new session low of $1635.30. Silver lost almost 50 cents and momentarily dipped into the red. Currently, gold is -0.3% at $1644.20/oz, while silver is +0.5% at $31.54/oz.DJ30 +132.68 NASDAQ +36.99 SP500 +13.39 NASDAQ Adv/Vol/Dec 1859/327 mln/443 NYSE Adv/Vol/Dec 2316/146 mln/501
10:00 am : The major averafes have eased off their best levels, but hold a solid bid in early action. A 1.0% gain has the Nasdaq leading the way while the Dow and S&P 500 trail with advances of 0.8% and 0.7% respectively.
Shares of Goldman Sachs (GS 117.09, -0.64) have slipped into negative territory after seeing a gain of 1.7% at the open. Today’s weakness comes after the company announced beat on both its top and bottom lines, announcing earnings per share of $3.92 on revenues of $9.95 billion. Annualized return on average common shareholders’ equity was 12.2% for the first quarter. Today’s selling comes after the stock ran into resistance at its 50-day moving average. DJ30 +94.31 NASDAQ +28.29 SP500 +8.97 NASDAQ Vol 174.7 mln NYSE Vol 93.3 mln
09:45 am : Equities are holding strong gains in the opening minutes as earnings from Coca-Cola (KO 73.78, +1.34), Goldman Sachs (GS 117.91, +0.18), and Johnson & Johnson (JNJ 63.73, -0.25) have put a bid into equities. All three of the major averages are up at least 0.7% as the Dow leads the way with a 0.9% advance. Energy, financials, and industrials are the best performing sectors in the broad-based S&P 500. DJ30 +109.97 NASDAQ +25.91 SP500 +9.82 NASDAQ Vol 106.8 mln NYSE Vol 80.6 mln”
Comments »Will Natural Gas Crowd Out Wind and Solar?
Comments »FORTUNE — Daniel Yergin, author of the new bestseller The Quest: Energy, Security, and the Remaking of the Modern World, is one of the planet’s foremost thinkers about energy and its implications. He received a Pulitzer Prize for his previous book, The Prize: The Epic Quest for Oil, Money, and Power. Yergin is chairman and founder of IHS Cambridge Energy Research Associates, is on the U.S. Secretary of Energy advisory board, and chaired the U.S. Department of Energy’s Task Force on Strategic Energy Research and Development. He talked recently with Brian Dumaine about the role natural gas will play in America’s energy future.
Fracking technology has given the U.S. a 100-year supply of cheap natural gas. What’s its impact on coal, nuclear, wind, and solar power?
Inexpensive natural gas is transforming the competitive economics of electric power generation in the U.S. Coal plants today generate more than 40% of our electricity. Yet coal plant construction is grinding to a halt: first, because of environmental reasons and second, because the economics of natural gas are so compelling. It is being championed by many environmentalists as a good substitute for coal because it is cleaner and emits about 50% less carbon dioxide.
Nuclear power now generates 20% of our electricity, but the plants are getting old and will need to be replaced. What will replace them?
Only a few nuclear plants are being built in the U.S. right now. The economics of building nuclear are challenging — it’s much more expensive than natural gas.
Isn’t the worry now that cheap natural gas might also crowd out wind and solar?
Yes. The debate is over whether natural gas is a bridge fuel to buy time while renewables develop or whether it will itself be a permanent, major source of electricity.
What do you think?
Over the past year the debate has moved beyond the idea of gas as a bridge fuel to what gas means to U.S. manufacturing and job creation and how it will make the U.S. more globally competitive as an energy exporter. The President’s State of the Union speech was remarkable in the way it wrapped the shale gas boom into his economic policies and job creation.
I believe natural gas in the years ahead is going to be the default fuel for new electrical generation. Power demand is going to go up 15% to 20% in the U.S. over this decade because of the increasing electrification of our society — everything from iPads to electric Nissan Leafs. Utilities will need a predictable source of fuel in volume to meet that demand, and natural gas best fits that description.
And that won’t make the environmental community happy?
Well, natural gas may be a relatively clean hydrocarbon, but it’s still a hydrocarbon.
So wind and solar will have a hard time competing?
Remember that wind and solar account for only 3% of our electric power, whereas natural gas is 23%, and its share will go up fast. Most of that 3% is wind. Natural gas has a new role as the partner of renewables, providing power when the wind is not blowing and the sun is not shining.
Disgraced Secret Service Agents Were Caught With 21 Women
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Comments »Secret Service agents and members of the U.S. military brought as many as 21 women back to their hotel during their assignment to Colombia last week, a top senator briefed on the prostitution scandal said Tuesday.
Sen. Susan Collins, R-Maine, the top Republican on the Senate homeland security committee, said she was briefed for a half-hour Monday night by Secret Service Director Mark Sullivan. Collins said she learned that U.S. Marines, as well as the 11 Secret Service agents now on administrative leave, were allegedly involved — which could account for why so many women were brought back to the hotel.
“There are 11 agents involved. Twenty or 21 women foreign nationals were brought to the hotel, but allegedly Marines were involved with the rest,” Collins said in a statement.
It was previously unclear how many women might have been involved in the incident that has brought international embarrassment upon the agencies tied up in the scandal. President Obama had traveled to Colombia for a series of meetings that were supposed to focus on trade and other pressing issues between the U.S. and its Latin American ally, but the scandal overshadowed those issues.
Collins said Sullivan is “rightly appalled by the agents’ actions and is pursuing a vigorous internal investigation.”
The senator also questioned whether the incident indicates “a problem with the culture of the Secret Service” and whether the men could have been compromised by their alleged behavior.
“Who were these women? Could they have been members of groups hostile to the United States? Could they have planted bugs, disabled weapons, or in any others jeopardized security of the president or our country?” she said, referring to questions she raised with Sullivan.
The Secret Service has already revoked the security clearances for the 11 agents accused of misconduct.
Billing Taxpayers for Food A Running GSA ‘Joke’
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Comments »The practice of gaming the system in order to bill taxpayers for food at lavish conferences was so widespread within the General Services Administration that it became a “running joke” among certain employees, the GSA inspector general testified Tuesday.
Inspector General Brian Miller, who blew the whistle on agency spending with a report on its $820,000 conference in Las Vegas, explained how leaders with the western region of GSA got around the administration’s rule of not having food at conferences. The work-around was simple — just hold an awards ceremony, and food would be provided at taxpayer expense.
“Many times in Region 9, witnesses told us that it became a running joke with the Region 9 regional commissioner that even at staff meetings he would say, ‘We’re going to have a meeting in another location and we’re going to have food so we have to do what?’ And his senior staff is said to have said, ‘Give out awards,'” Miller said.
Fox News earlier reported that the GSA was creating questionable awards so employees could have free food. They even created something called a “Jackass” award.
The Region 9 commissioner Miller referred to in his testimony Tuesday before a House transportation subcommittee is Jeffrey Neely. That official did not attend Tuesday’s hearing, after having invoked his right not to answer questions at a congressional hearing a day earlier.
NAHB: Housing Will Recover This Time In 2013
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Comments »The National Association of Home Builders today reported its first decline in homebuilders’ confidence in seven months, but that may be just a blip in the fledgling housing recovery.
“The housing crash is now over…and by this time next year, housing will no longer be a drag for the economy but a tailwind,” Mark Zandi, chief economist of Moody’s Analytics tells The Daily Ticker.
Zandi says this year’s spring selling season is off to a pretty good start, although by historic standards prices are still low. But that may not be all bad: Low prices means homes are more affordable to buy.
“House prices are now low enough relative to incomes that single family housing is about as affordable as its ever been in the data we have going back to World War II,” Zandi says.
Low prices also attract investor interest, which is helping to stabilize the housing market. “Investors can come in, buy homes, rent them, cover costs and look for a capital gain down the road,” he says.
Rising rents have been attracting those investors, but at some point they may compel consumers to buy homes.
“Another year from now if prices stay flat and rents rise another 4, 5 or 6%, then the decision to rent or buy will be firmly in favor of buying rather than renting,” Zandi says, adding that’s already the case in some parts of the country.
Demand to buy homes will also increase when potential buyers get a whiff of rising interest rates.
“At that point …. they will want to jump in and buy that home before they lose those very advantageous mortgage rates,” says Zandi. The rate on a 30-year fixed mortgage is currently 3.88%, according to Freddie Mac.
Until there is a substantive recovery, Zandi says housing will continue to be divided between a distressed market — filled with homes in foreclosure or on the verge of it — and a non-distressed market, which is holding up well. He also expects multifamily housing will continue to outpace the single-family market.
Zandi says the government could help accelerate the housing recovery by making it easier for homeowners to refinance and to reduce principal owed.
Here’s a Look at Strand East, Ikea’s 27-Acre London Suburb
Rendering via Architizer
In October Ikea announced its plans to build a 27-acre suburb near Olympic Park in London, and recently renderings of Strand East, as it’s called, have been released. The community, which is designed to hold 6,000 people, will open post-Olympics—2013 is the projected date—and contain stores, a variety of housing options (including freestanding houses and apartments), and office space. According to Architizer,Strand East will be both car- and Ikea-free: the Swedish furnishings chain will not, in fact, build a mothership here. Which implies a mission that’s more thoughtful than just plain brand expansion: “the village will test the repeatability of the company’s urban schemes in countries suffering from housing shortages.” Find another rendering below, as well as a diagram depicting the various components of the community.
Rendering via Architizer
52 Week Highs and Lows
NYSE
New Highs 36 COMPANY SYMBOL HIGH VOLUME ------- ------ ---- ------ AegonNVNon Cum Sub Nts AEK 26.34 10,565 Arch Cap Gp 6.75% Pfd C ARHpC 25.60 3,084 BlackRockStrategicBond BHD 14.57 3,840 Bluegreen Corp BXG 5.45 7,442 Carters CRI 50.82 10,846 Diageo PLC DEO 100.03 126,100 Ecopetrol EC 64.50 51,833 Fidelity Ntl Financial FNF 18.68 83,657 First American Financial FAF 17.57 34,332 Gazit-Globe GZT 10.92 1,100 Graco Inc GGG 55.44 21,551 Grupo Aero Sureste ads ASR 74.58 4,212 Hlth Care REIT 6.50 Pfd J HCNpJ 25.54 5,383 Home Depot HD 51.96 663,105 Independence Hldg IHC 10.79 637 KKR Finl 7.5% Notes 2042 KFI 25.57 6,574 Macerich MAC 59.21 18,173 Myers Industries MYE 16.90 9,659 NextEra Engy Deb. G 2072 NEEpG 25.57 9,036 NextEra Energy NEE 63.12 82,227 PS Business Parks PSB 67.40 975 PS Bus Parks Pfd S PSBpS 25.59 6,389 PennyMac Mortgage Inv Tr PMT 19.27 22,170 Penske Automotive PAG 26.52 23,617 STAG Industrial STAG 14.22 6,797 Schiff Nutrition Intl WNI 13.50 707 Sempra Energy SRE 64.22 240,981 Sherwin-Williams SHW 118.09 74,538 Simon Property Group SPG 149.63 161,668 Stewart Info Svcs STC 16.00 3,991 Tata Motors ADS TTM 29.15 369,906 Taubman Ctrs TCO 75.29 21,539 3D Sys DDD 28.37 219,357 Wabtec WAB 79.23 76,459 White Mountains Insur WTM 522.00 657 Wisconsin Energy WEC 35.56 190,338 New Lows 6 COMPANY SYMBOL LOW VOLUME ------- ------ ---- ------ Equal Energy EQU 3.17 15,620 Nortel Inversora ADS NTL 18.87 6,836 Oaktree Capital Group OAK 39.75 15,800 Telecom Argentina TEO 14.96 197,949 Transalta Corp TAC 16.50 20,152 Ultra Petroleum UPL 18.41 223,137
NASDAQ
New Highs 30 COMPANY SYMBOL HIGH VOLUME ------- ------ ---- ------ Access National ANCX 12.18 4,797 Anika Therapeutics ANIK 16.36 19,407 Bassett Furniture Inds BSET 10.77 25,046 Bridgeline Digital BLIN 1.37 4,770 CalAmp CAMP 5.54 15,649 Delta Natural Gas Co DGAS 39.66 300 Discovery Comm A DISCA 52.27 52,264 Dollar Tree DLTR 97.19 110,484 Fisher Comm FSCI 32.84 3,680 Fonar Corp FONR 4.38 158,288 Hackett Group HCKT 6.50 10,856 HealthStream HSTM 26.33 35,517 Hibbett Sports HIBB 57.00 14,147 JB Hunt Transport JBHT 57.40 25,683 Intel INTC 28.64 3,612,012 Liquidity Services LQDT 52.65 26,178 Macatawa Bank MCBC 3.55 11,600 Mediware Info Sys MEDW 15.50 1,250 Mellanox Techs MLNX 43.92 69,494 Merrimack Pharmaceuticals MACK 7.88 28,297 Monolithic Power Systems MPWR 20.08 58,845 O'Reilly Automotive ORLY 95.75 42,238 Peapack Gladstone PGC 14.58 550 Pool POOL 38.69 92,565 Pozen POZN 7.84 68,215 RADVision RVSN 11.76 2,136 Regeneron Pharmaceuticals REGN 124.66 35,242 SXC Health Solutions SXCI 80.49 44,122 Select Comfort SCSS 35.17 60,589 Tetra Tech TTEK 26.97 8,152 New Lows 8 COMPANY SYMBOL LOW VOLUME ------- ------ ---- ------ AEterna Zentaris AEZS 0.64 173,445 Alaska Comm Sys Grp ALSK 2.44 58,337 DARA Biosciences Inc DARA 0.85 24,825 Groupon Inc GRPN 12.25 245,430 Hoku HOKU 0.36 45,163 Life Partners Hldgs LPHI 3.00 7,881 Pan American Silver PAAS 19.50 180,660 SMF Energy FUEL 0.26 72,764Comments »
Today’s Heat Map and A/D Lines
Most Active Options Trades
-CALLS- OPTION EXP.DATE STRIKE PRC. VOLUME LAST S/PRC. NET CHANGE GS 4/21/12 120.0000 440 0.9000 dn 0.6000 AAPL 5/19/12 700.0000 138 3.3500 up 0.3000 INTC 4/21/12 29.0000 132 0.3400 up 0.0600 GS 4/21/12 125.0000 115 0.0700 dn 0.3700 AAPL 4/21/12 595.0000 110 6.0500 up 1.4000 MOS 4/21/12 52.5000 106 0.2400 up 0.1000 EP 4/21/12 30.0000 100 0.0900 dn 0.1100 ESRX 4/21/12 57.5000 100 0.6000 up 0.0000 MS 4/21/12 18.0000 97 0.3700 up 0.0800 AAPL 4/21/12 590.0000 94 8.6000 up 1.7000 -PUTS- OPTION EXP.DATE STRIKE PRC. VOLUME LAST S/PRC. NET CHANGE AAPL 4/21/12 550.0000 232 1.0100 dn 1.4600 AAPL 4/21/12 570.0000 160 4.2000 dn 2.6500 GLD 4/21/12 158.0000 148 0.5800 up 0.1100 GS 5/19/12 110.0000 96 1.8000 dn 0.2900 GS 4/21/12 115.0000 93 0.6900 dn 0.5800 AAPL 4/21/12 575.0000 80 4.9700 dn 3.7600 AAPL 4/21/12 545.0000 80 0.7300 dn 1.2000 ARNA 4/21/12 3.5000 80 0.7900 up 0.1000 AAPL 4/21/12 590.0000 75 11.4600 dn 5.3400 AAPL 4/21/12 580.0000 75 6.8500 dn 4.0000 -VOLUME- CALLS PUTS TOTAL 11862 19896 31758
-CALLS- OPTION EXP.DATE STRIKE PRC. VOLUME LAST S/PRC. NET CHANGE AAPL 4/21/12 600.0000 2596 4.5300 up 0.5300 AAPL 4/21/12 590.0000 2460 8.6500 up 1.7500 BG 5/19/12 70.0000 2415 0.9000 dn 0.1500 LNG 4/21/12 18.0000 2069 0.3000 dn 0.1000 TEVA 4/21/12 45.0000 2011 0.7000 up 0.2100 LNG 5/19/12 16.0000 2007 2.5000 up 0.2000 AAPL 4/21/12 585.0000 1714 11.4500 up 2.7500 AAPL 4/21/12 595.0000 1615 6.1500 up 1.0000 AAPL 4/21/12 580.0000 1428 14.4000 up 3.2000 GS 4/21/12 120.0000 1398 0.8600 dn 0.6000 -PUTS- OPTION EXP.DATE STRIKE PRC. VOLUME LAST S/PRC. NET CHANGE AAPL 4/21/12 580.0000 3081 6.6000 dn 4.2500 AAPL 4/21/12 575.0000 2681 4.9000 dn 3.7000 AAPL 4/21/12 570.0000 2668 3.7500 dn 3.1500 AAPL 4/21/12 560.0000 2184 1.9700 dn 2.1300 KMI 6/16/12 27.5000 1876 0.5000 up 0.0000 AAPL 4/21/12 585.0000 1539 8.5000 dn 5.0000 AAPL 4/21/12 545.0000 1423 0.8400 dn 1.0500 S 4/21/12 3.0000 1216 0.4300 dn 0.0300 AAPL 4/21/12 590.0000 1177 10.7200 dn 5.7800 BAC 4/21/12 9.0000 1123 0.2700 dn 0.0900 -VOLUME- CALLS PUTS TOTAL 307434 282881 590315Comments »
