Pentagon Informs Congress of 800k Civilian Furloughs if Sequestration Takes Effect on March 1st

“The Pentagon notified Congress on Wednesday it will be furloughing its civilian workforce of 800,000 employees if sequestration goes into effect March 1.

Defense officials have warned lawmakers that sequestration will devastate the military and lead to a hollow force, but the civilian furloughs will be one of the first major impacts felt by the across-the-board cuts.

The Pentagon furloughs will affect civilians across the country. Pentagon officials have said that civilians could face up to 22 days of furloughs, one per week, through the end of the fiscal year in September. The employees would receive 30 days’ notice before being furloughed.

“We are doing everything possible to limit the worst effects on DOD personnel — but I regret that our flexibility within the law is extremely limited,” Defense Secretary Leon Panetta wrote in a message to the department. “The president has used his legal authority to exempt military personnel funding from sequestration, but we have no legal authority to exempt civilian personnel funding from reductions.”

The Joint Chiefs also testified before both the House and Senate last week to lay out the dangers of sequestration, as the Pentagon has taken a much more proactive approach to the cuts than when they were set to hit in January.

Pentagon Comptroller Robert Hale told reporters Wednesday that the furloughs would save between $4 bill and $5 billion in 2013. The Pentagon would have to cut $46 billion under sequestration.

Hale said that most of the Defense Department’s near-800,000 civilian workforce would face furloughs, but there would be exceptions, including foreign workers on overseas bases and those working in combat zones….”

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“It’s a grim day for investors in mobile advertising play Millennial Media, as the stock swoons following adisappointing Q4 financial report. Adding to the pressure, Morgan Stanley analyst Jordan Monahan cut his rating on the stock today to Equal Weight from Overweight, asserting that competition in the mobile ad space has emerged sooner than previously expected. Note that Morgan Stanley was the lead underwriter on the Millennial IPO last March. The company launched at $13 a share, and closed the first day of trading at $25; today the stock has dropped to an all-time low.

As noted yesterday, Millennial posted Q4 revenue of $58 million, up 67.8% from a year ago, and up 22% sequentially, but below the Street consensus at $62.9 million. Profits of three cents a share matched the Street consensus. For Q1, the company sees revenue of $48 million to $50 million, below the Street consensus at $56.4 million. The company sees an adjusted EBITDA loss of $1 million to $1.5 million in the quarter; Street consensus had been for an adjusted EBITDA profit of $1.7 million. The company noted on a conference call with the Street that some large brand deals expected in the quarter did not materialize…”

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“Several Federal Reserve policy makers said the central bank should be ready to vary the pace of their $85 billion in monthly bond purchases amid a debate over the risks and benefits of further quantitative easing.

The officials “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved,” according to the minutes of the Federal Open Market Committee’s Jan. 29-30 meeting released today in Washington.

The minutes showed policy makers were divided about the strategy behind Chairman Ben S. Bernanke’s program of buying bonds until there is “substantial” improvement in a U.S. labor market burdened with 7.9 percent unemployment, with some saying an earlier end to purchases might be needed, and others warning against a premature withdrawal of stimulus.

The FOMC at its January meeting decided to continue buying $45 billion a month of Treasuries and $40 billion in mortgage- debt without setting a limit on the duration or total size of the purchases. Policy makers also affirmed their pledge to keep the target interest rate near zero “at least as long” as unemployment remains above 6.5 percent and inflation is projected to be no more than 2.5 percent.

A number of officials said that their evaluation of costs and benefits of the policy “might well lead the Committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred,” according to the minutes.

‘Substantial Improvement’..”

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IMO this is due to asset impairment still not seen on the balance sheet. Off balance sheet losses are still present and the free money off the tax payers back is slowing patching up the losses. You should be outraged over this!

“Interest rates have been kept at historically low levels by the Federal Reserve since the Great Recession began in 2008. The intent behind this was to spur loan activity and borrowing to grow the economy.

However, a combination of factors has led some of the largest banks in the United States, with cash flooding in at unprecedented levels, to cut their lending to the lowest level in five years. The average loan-to-deposit ratio for the top eight commercial banks fell to 84% in the fourth quarter from 87% a year earlier and 101% in 2007, according to data compiled by Credit Suisse Group A.G. (NYSE: CS). Lending as a proportion of deposits dropped at five of the banks and was unchanged at two, the data shows.

J.P. Morgan Chase & Co. (NYSE: JPM), which is the largest U.S. bank by assets, had the lowest year-end ratio in the group at 61%, down from 66% in 2011. Citigroup Inc. (NYSE: C) saw its ratio fall to 70% from 76% last year. North Carolina-based Bank of America Corp. (NYSE: BAC) dropped to 84% from 92%. Those lending ratios are the lowest at both banks in the past five years. Even southeastern regional bank leader, Sun Trust Banks Inc. (NYSE: STI) decreased to 94% from 96%.

Not all U.S. banks have seen declines. The loan-to-deposit ratios at Wells Fargo & Co. (NYSE: WFC) and U.S. Bancorp (NYSE: USB) remained virtually unchanged, while loans at PNC Financial Services Group Inc. (NYSE: PNC) actually grew.

With interest rates at lows and the economy at least somewhat better than in the dark days of 2008 and 2009, why has lending stalled? The first blush is to blame the banks, but the fact is they are drowning in liquidity and are desperately trying to make loans. Regulations and the memory of the collapse five years ago has tempered their ability to find retail or small business borrowers who can meet very stringent current credit standards. Simultaneously, many of the major U.S. banks have seen commercial and corporate clients hold on to cash and boost deposits while waiting for a meaningful improvement in the economy….”

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“Jamie Dimon of J.P. Morgan Chase & Co. (NYSE: JPM) used to be a Teflon CEO. Now we have a shareholder action looking to split the role of chairman and chief executive for the bank. You just could not speak poorly of him as he was the one American CEO of all the banking giants during the meltdown and Great Recession that could keep claiming that his bank and his depositors were safe. That was all before the London Whale trade scandal of 2012.

While that London Whale trading issue was a serious flaw and a serious mistake, the reality is that it was nowhere close to being anything more than a charge against earnings. It caused trading losses but did not cause the bank to get into counter-party trouble, nor did it trigger any “real” regulatory bank financial ratio concerns. That being said, this was a media fiasco that Dimon effectively lost a lot of his credibility.

J.P. Morgan Chase is the largest of the money center banks by market cap, barely over Wells Fargo & Co. (NYSE: WFC), but it dwarfs Wells Fargo on a total asset basis. We have received email communications from a group with $820 million in combined J.P. Morgan shares calling for stronger and more independent governance and oversight of the largest bank in America. This will be a proxy fight. Here is the report….”

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“A new survey of top economists shows the majority believe the Federal Reserve will continue its bond-buying spree through the end of 2013 in its lengthening effort to spur economic growth.

USA Today polled 46 economists to get their take on the Fed’s pump-priming program.

Sixty percent forecasted the Fed will keep buying long-term Treasury bonds until after Jan. 1, 2014, and 58 percent said the Fed will likewise keep buying mortgage-backed securities (MBS) past that date…”

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“U.S. banks have improved their finances to the point that their capital positions are better than at any time in more than 40 years, former FDIC Chairman William Isaac tells Newsmax TV in an exclusive interview. However, he adds that the Federal Reserve’s ultra-low interest rate policy poses problems for the industry.

“Banks have done really well over the past year, and that’s because they have rebuilt their balance sheets,” says Isaac, now senior managing director of FTI Consulting. “Their capital is stronger than it’s been in my career [more than 40 years]. They’re doing really well.”

The KBW Bank (stock) Index has soared 21.8 percent during the past year.

But that doesn’t mean banks are on easy street, Isaac says. First, the near-record-low level of interest rates makes it hard for them to make money, he says.

In addition, much of their recent income has stemmed from the release of the plentiful loan-loss reserves they built up during the 2008-09 financial crisis and its aftermath….”

Full article and video interview

“Illustrating how very, very hard it is to have a breakout hit in today’s mobile app stores, a report from app store analytics firm Distimo released today finds that only 2 percent of the top 250 publishers in the iPhone App Store are “newcomers,” versus just 3 percent in the Android store, Google Play.

In smaller countries, the share of new publishers tends to be slightly higher – 6 percent for both Google Play and the App Store for iPhone, Distimo found.

Also indicating how tight the current market is, only 0.25 percent of the total revenue from the top 250 applications goes to new iPhone app publishers, while 1.2 percent reaches new Android app publishers on Google Play.

And if you’re a newcomer, it seems you have a better chance at making money – at least initially – on Google Play. Again, that speaks to the possibility that we’re starting to run at full capacity here. The iOS Store is a bit older, and is home to more apps than Google’s Android-focused counterpart.

To reach these conclusions, the company examined the trends in the iOS App Stores and Google Play from October 2012 through January 2013. Unfortunately, having a time frame that occurred over the holidays slightly skews the data, as it means that some Christmas-related apps were doing well, too, and that’s certainly a temporary situation. For example, Find the Elves from The Elf on the Shelf and ElfYourself from OfficeMax did well – something which also indicates the effect of the holidays on app sales.

Above are the top 10 new publishers by app store (iPad, iPhone and Google Play). As expected, adoption reflects the prevalence and popularity of games. The handful of non-game apps tend to be photo or video-related, with the exception of Snapchat, which took the top spot in Google Play….”

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“Think the Walmart “disastrous” sales memo was a one-off event, which net of Walmart’s damage should be completely ignored (something the market has been perfectly happy to oblige with)? Then listen to a separate perspective on the US consumer, this time from a very different angle: that of Town Sports International which operates such gyms as New York Sports Club, and specifically its CEO David Gallagher, who in last night’s conference call just confirmed what everyone knows: “As we moved into January membership trends were tracking to expectations in the first half of the month, but fell off track and did not meet our expectations in the second half of the month. We believe the driver of this was the rapid decline in consumer sentiment that has been reported and is connected to the reduction in net pay consumers earn given the changes in tax rates that went into effect in January.”

It goes on….”

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“The college degree is becoming the new high school diploma: the new minimum requirement, albeit an expensive one, for getting even the lowest-level job.

Consider the 45-person law firm of Busch, Slipakoff & Schuh here in Atlanta, a place that has seen tremendous growth in the college-educated population. Like other employers across the country, the firm hires only people with a bachelor’s degree, even for jobs that do not require college-level skills.

This prerequisite applies to everyone, including the receptionist, paralegals, administrative assistants and file clerks. Even the office “runner” — the in-house courier who, for $10 an hour, ferries documents back and forth between the courthouse and the office — went to a four-year school….”

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“Evidence of an unrelenting campaign of cyberstealing linked to the Chinese government is prompting the Obama administration to develop more aggressive responses to the theft of U.S. government data and corporate trade secrets.

A report being released Wednesday considers fines and other trade actions against China or any other country guilty of cyber-espionage. Officials familiar with the administration’s plans spoke on condition of anonymity because they were not authorized to speak publicly about the threatened action.

The Chinese government denies being involved in the cyberattacks cited in a cybersecurity firm’s analysis of breaches that compromised more than 140 companies. On Wednesday, China’s Defense Ministry called the report deeply flawed….”

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Meanwhile China says we have no proof

“After the financial collapse in 2008, it suddenly became very in vogue to talk about whether the US was going to become “Japan,” a country synonymous with horrible growth and horrible economic policy for years.

The advantage that the US had was that it got to see the Japanese tragedy play out, and learn from Japan’s mistakes.

Fortunately, Federal Reserve chairman Ben Bernanke followed Japan closely and was determined not to make the same errors.

One of Japan’s biggest mistakes? It wasn’t nearly as aggressive as it needed to be, early on, in terms of monetary easing. It also engaged in premature fiscal austerity….”

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WTI is down over $2 while gold is down $22+ falling through the death cross.

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Google has released some pics and reviews of their computer glasses….

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“Thank heavens for low expectations.

Chinese social-media company Sina(SINA)–that country’s answer to Twitter–has jumped 7.8% to $57.67 this morning, after reporting better than expected earnings, despite sluggish revenue growth and tumbling profits.

Sina reported a profit of $2.4 million yesterday after the close, above analyst forecasts for a $900,000 loss, according to Bloomberg. While the number beat expectations, profits fell 75% from a year ago. Revenues rose just 4.3% to $139.1 million, while profits fell 75%.

Numbers like that were enough to send Chinese search giant Baidu (BIDU) plummeting 10% after its earnings announcement earlier this month, while Sohu.com (SOHU) dropped more than 7%.

So why is the stock surging? Chalk it up to Weibo, the company’s Twitter-like platform.Oppenheimer’s Andy Yeung and Gloria Yu note that Weibo ad revenues grew by 10% during the quarter, which helped to alleviate the damage done by falling revenues in legacy businesses.

They also point out that that gross margins expanded by about 2.6 percentage points during 2012 to 57%, and while operating margins fell 0.45 percentage points last year, they improved by 1.5 percentage points during the fourth quarter. And if the company figures out new ways to boost revenues from Weibo, margins could head higher….”

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“SodaStream International Ltd. (NASDAQ:SODA) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 3.79%.

SodaStream International Ltd. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 40.63% to $0.45 in the quarter versus EPS of $0.32 in the year-earlier quarter.

Revenue: Rose 75.14% to $132.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: SodaStream International Ltd. reported adjusted EPS income of $0.45 per share. By that measure, the company beat the mean analyst estimate of $0.39. It beat the average revenue estimate of $121.54 million….”

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“Borrowers are discovering that their foreclosed homes are coming back to haunt them — long after they have moved out.

In these so-called zombie foreclosures, borrowers move out of their homes after their bank schedules a foreclosure auction only to find out months or years later that the auction never took place or the bank never transferred the deed to the house. That means the borrower still technically owns the home, leaving them on the hook for property taxes, fees and for homeowners’ association dues.

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“While CAT’s CEO puts on a brave face, the results from his company are clearly indicative of the slowing global growth that everyone (apart from nominal equity indices) knows is occurring. For months, talking heads have used CAT’s results as a proxy for growth and as they are rising confirming their inherent BTFD biases; however, this month’s terrible results – with Asia/Pac down 12% on a 3-month rolling basis and North America down 11% – appears to confirm what has been evident in the lagging global GDP data for over a year – things are not picking up….”

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