http://www.marketwatch.com/news/story/one-...dist=TNMostRead
PETER BRIMELOW
Not all bulls are breathing better
By Peter Brimelow, MarketWatch
Last Update: 12:01 AM ET Nov 28,
NEW YORK (MarketWatch) -- The bulls are breathing better
after Tuesday's bounceback -- but not all of them.
Cabot Market Letter is the fifth-ranked investment
letter over the last 12 months, according to the Hulbert
Financial Digest, up 57.5% through the end of October
vs. 15.06% for the dividend-reinvested Dow Jones
Wilshire 5000. Over the past 10 years, it's up 8.72%
annualized vs. 7.4% for the DJ Wilshire, a difference
that adds up.
I used to count Cabot as one of the "geezers", my name
for letters who were around at the 1974 low. But editor
Carlton Lutts has now been succeeded by his son and
long-time co-editor Timothy, who is continuing the
tradition of active trading based on a combination of
fundamental and technical analysis. I'm unsure how to
classify the letter now -- maybe a young fogey? But,
regardless, Cabot was one of the first geezers to
recognize the bull market.
The current correction has seen some bulls dig in their
hoofs. This is especially true among the better-performing
letters. But not Cabot. Its most recent issue, dated November 20,
is bluntly bearish. It reports that all three of its
proprietary indicators have given sell signals. It
summarizes starkly:
"In recent months, we've been warning you about the
growing divergence in the market that began in June and
continued into November. The first public sign of
trouble came when the mortgage industry began to implode
in July. The selling from that led to a major market
bottom on August 16, and from there the market's major
indexes rallied impressively. But the divergence
remained in effect, as the broad market languished while
a few dozen stocks soared.
"Then, in early October, as the Dow was hitting new
all-time highs, the number of stocks hitting new lows
began to expand to greater than 40, turning our
Two-Second Indicator negative. These then were the early
signs of trouble, and key factors that led us to raise
cash in October, even as the indexes performed well.
And now the trends have turned officially down. Our
intermediate-term Cabot Tides turned negative on
November 8, and our long-term Cabot Trend Lines turned
negative on November 16.
"Bottom line, the sellers are now in control, which
means preservation of cash is your number one priority."
This could be significant, because the Hulbert Financial
Digest calculates that Cabot's market timing is actually
more powerful that its stock selection. The letter is
one of just a handful that have beaten the market over
the last 15 years, whereas its actual portfolios
slightly lagged.
And beating one of the great bull markets in history is
quite a trick.
Cabot said in a recent email that subscribers should be
"heavily in cash." One of the few stocks it recommended
recently: Chipotle Mexican Grill Inc. (CMG:chipotle
mexican grill inc cl a
News, chart, profile, more
Last: 127.19+1.20+0.95%
CMG 127.19, +1.20, +1.0%)
But Cabot emphasizes that the bear market, although it
will be punctuated by deceptive rallies, will not last
forever. It writes: "Market corrections for investors
are like winter for a gardener; you don't get to grow
anything, but you can still do some very useful work."
Accordingly it is building what it calls a "watch list"
of stocks for when the market turns around. The
heartless Hulbert Financial Digest won't credit them to
Cabot's performance until it actually issues specific
buy recommendations. But they're still interesting.
Recent ideas:
Eaton Vance Corp. (EV:Eaton Vance Corp
News, chart, profile, more
Last: 41.45+0.49+1.20%
EV 41.45, +0.49, +1.2%)
Janus Cap Group Inc. (JNS:janus cap group inc com
News, chart, profile, more
Last: 30.54+1.09+3.70%
JNS 30.54, +1.09, +3.7%)
Lg Philip Lcd Co Ltd. (LPL:lg philip lcd co ltd spons
News, chart, profile, more
Last: 29.16+1.74+6.35%
----------------------------------------------
As you know I'm not an analyst, but all this makes very good sense
to me. I've often had a "feel" for things looming (got me out of a few
tough scrapes...oops other stories) and this stuff sounds about right. IMHO.
Full Version: Market Talk
Common Ground Common Sense > Issues that Affect Our Lives > Job Market, Fiscal, and Economic Policies > Fiscal Policy
Add mine?
1. It is far easier to predict the past than to predict the future.
2. Every hot stock tip you read about was written by a "guru" who has already acted upon that information.
3. The one common characteristic that the individual investor possesses is a lack in the current information that the insiders have.
4. Unless you like the "thrill" of seeing your holdings wiped out when you open the paper in the morning, it is better to buy a mutual fund. At least your money will be managed by pros whose livelihood depends on doing well with your money.
1. It is far easier to predict the past than to predict the future.
2. Every hot stock tip you read about was written by a "guru" who has already acted upon that information.
3. The one common characteristic that the individual investor possesses is a lack in the current information that the insiders have.
4. Unless you like the "thrill" of seeing your holdings wiped out when you open the paper in the morning, it is better to buy a mutual fund. At least your money will be managed by pros whose livelihood depends on doing well with your money.
I mainly agree...
For instance...today the market is off and running with the best
result in productivity in four years (products made per hour worked),
and a runaway Russian Food Company (dairy mainly).
And, maybe this stuff (Russia, China, India etc.) will keep the market
running up...I'm just waiting for debt to overtake the American grass-roots,
the housing market and lending...if foreign investments are to be
the forte of American markets...I'm not as sure they are a measure
of the economy as they used to be. The egg-shell (or bubble if you
prefer) structure just doesn't give me a good feel for it.
For instance...today the market is off and running with the best
result in productivity in four years (products made per hour worked),
and a runaway Russian Food Company (dairy mainly).
And, maybe this stuff (Russia, China, India etc.) will keep the market
running up...I'm just waiting for debt to overtake the American grass-roots,
the housing market and lending...if foreign investments are to be
the forte of American markets...I'm not as sure they are a measure
of the economy as they used to be. The egg-shell (or bubble if you
prefer) structure just doesn't give me a good feel for it.
DJIA up a coupla hundred points today...and who was leading the way?
BIGGEST GAINER (ABOUT 13 POINTS)
Wimm-Bill-Dann Foods OJSC was founded in 1992 and is the largest manufacturer of dairy products and a leading producer of juices and beverages in Russia and the CIS.
SECOND BIGGEST (ABOUT 6.12 POINTS)
Commscope Inc N.C. based cable mfg. (An American Co.!!!!!)
THIRD BIGGEST GAINER (about 6 points)
Companhia Siderurgica Nacional is a Brazilian corporation incorporated in 1941 a decree of Brazilian President Getulio Vargas. Three major expansions were undertaken at the Presidente Vargas Steelworks during the 1970s and 1980s.
FOURTH (ABOUT 5 POINTS)
Desarrolladora Homex, S.A.B. de C.V. is a corporation registered under the Mexican Companies Law on March 30, 1998 with an indefinite corporate existence. The company traces its origins to 1989 and established its current structure in 1998.
on the Nasdaq: tops are Chinese firms
-----------------
Why can't I get excited about this?
BIGGEST GAINER (ABOUT 13 POINTS)
Wimm-Bill-Dann Foods OJSC was founded in 1992 and is the largest manufacturer of dairy products and a leading producer of juices and beverages in Russia and the CIS.
SECOND BIGGEST (ABOUT 6.12 POINTS)
Commscope Inc N.C. based cable mfg. (An American Co.!!!!!)
THIRD BIGGEST GAINER (about 6 points)
Companhia Siderurgica Nacional is a Brazilian corporation incorporated in 1941 a decree of Brazilian President Getulio Vargas. Three major expansions were undertaken at the Presidente Vargas Steelworks during the 1970s and 1980s.
FOURTH (ABOUT 5 POINTS)
Desarrolladora Homex, S.A.B. de C.V. is a corporation registered under the Mexican Companies Law on March 30, 1998 with an indefinite corporate existence. The company traces its origins to 1989 and established its current structure in 1998.
on the Nasdaq: tops are Chinese firms
-----------------
Why can't I get excited about this?
http://www.marketwatch.com/news/story/fed-...6DE255203531%7D
Fed may take action on liquidity within days: reports
By Steve Goldstein, MarketWatch
Last update: 4:27 a.m. EST Dec. 12, 2007
LONDON (MarketWatch) -- After stock markets reacted with dismay to the Federal Reserve's rate cuts, the central bank is now working on steps, which could be announced in days, to help banks lend more easily to each other, according to two separate reports.
The Wall Street Journal reported, without attribution, that Fed officials continue to consider ways of using various tools -- including the discount rate -- to combat banks' unwillingness to lend even to each other, which they view as a threat to economic growth.
The central bank could take action within days, the Journal reported. See story at WSJ.com (subscription required).
A variety of steps, widely discussed in the markets, are likely to be on the table. These include: another cut in the discount rate; longer-term loans to money-market dealers; easier collateral rules for loans from the Fed; and other steps last taken in 1999 to alleviate funding pressures ahead of the year 2000, when many feared a "Y2K" computer bug would disrupt markets and create economic havoc, the Journal reported.
Changes in the discount rate can be made by the Fed board in Washington without the approval of the entire 17-member policy-making Federal Open Market Committee, which sets the federal-funds rate target, the report added.
The Financial Times, also without attribution, said a new liquidity facility could be announced as soon as Wednesday, with a facility that will auction loans to banks. See story at FT.com.
This would allow the Fed to provide liquidity directly to a large number of financial institutions against a wide range of collateral without the stigma of its existing discount window loans, the FT reported.
The reports gave a lift to U.S. stock futures on Wednesday. Futures on the Dow Jones Industrial Average rose 87 points. The main blue-chip index lost 294 points on Tuesday.
Stocks in Europe moved off lows as traders considered the reports.
Steve Goldstein is MarketWatch's London bureau chief.
The Fed is proving it is The Market's stooge.
Can you say inflation? Recession? Dollar slides?
Fed may take action on liquidity within days: reports
By Steve Goldstein, MarketWatch
Last update: 4:27 a.m. EST Dec. 12, 2007
LONDON (MarketWatch) -- After stock markets reacted with dismay to the Federal Reserve's rate cuts, the central bank is now working on steps, which could be announced in days, to help banks lend more easily to each other, according to two separate reports.
The Wall Street Journal reported, without attribution, that Fed officials continue to consider ways of using various tools -- including the discount rate -- to combat banks' unwillingness to lend even to each other, which they view as a threat to economic growth.
The central bank could take action within days, the Journal reported. See story at WSJ.com (subscription required).
A variety of steps, widely discussed in the markets, are likely to be on the table. These include: another cut in the discount rate; longer-term loans to money-market dealers; easier collateral rules for loans from the Fed; and other steps last taken in 1999 to alleviate funding pressures ahead of the year 2000, when many feared a "Y2K" computer bug would disrupt markets and create economic havoc, the Journal reported.
Changes in the discount rate can be made by the Fed board in Washington without the approval of the entire 17-member policy-making Federal Open Market Committee, which sets the federal-funds rate target, the report added.
The Financial Times, also without attribution, said a new liquidity facility could be announced as soon as Wednesday, with a facility that will auction loans to banks. See story at FT.com.
This would allow the Fed to provide liquidity directly to a large number of financial institutions against a wide range of collateral without the stigma of its existing discount window loans, the FT reported.
The reports gave a lift to U.S. stock futures on Wednesday. Futures on the Dow Jones Industrial Average rose 87 points. The main blue-chip index lost 294 points on Tuesday.
Stocks in Europe moved off lows as traders considered the reports.
Steve Goldstein is MarketWatch's London bureau chief.
The Fed is proving it is The Market's stooge.
Can you say inflation? Recession? Dollar slides?
http://www.nytimes.com/2007/12/21/business...ml?ref=business
Stocks Soar on Merrill Report and Economic Data
By MICHAEL M. GRYNBAUM
Published: December 21, 2007
Stock markets surged on Friday as reports of talks on an investment in Merrill Lynch and a strong report on consumer spending lifted investors’ spirits heading into the holiday weekend.
The Dow Jones industrials closed up more than 200 points on strong earnings reports in the technology sector and a bounce in financial stocks, which were buoyed after The Wall Street Journal reported that Merrill was in talks with Singapore’s state investment company, Temasek Holdings, that might result in a $5 billion capital infusion.
Investors also got welcome news from the Federal Reserve, which said it would continue its new auction program “as long as necessary” to help ease the flow of credit between banks, consumers, and businesses. The Fed has seen strong demand from banks at its first two auctions, which offer short-term loans at lower-than-usual interest rates.
The good news managed to overshadow a Commerce Department report that showed inflation ticked up in November, above the Fed’s so-called comfort zone. Investors lowered their expectations of an interest rate cut in January, but analysts said it was unlikely that prices of “core” products — consumer goods other than food and energy — would rise next year.
The broader Standard & Poor’s 500-stock index gained 1.7 percent to 1,484.46, sending the index into positive territory for the week. The Dow was up 205.01 points, or 1.6 percent, to 13,450.06, and the Nasdaq composite index rose almost 2 percent.
Markets may also have been reacting to another element of the Commerce Department report: the largest monthly increase in consumer spending in three years, defying the expectations of analysts who had predicted a substantial drop-off in Americans’ willingness to spend.
Adjusted for inflation, purchases rose by 0.5 percent in November, the Commerce Department said. The news led many analysts to raise their estimates for fourth quarter growth.
But economists warned that the rise in spending was unlikely to be sustained, and Friday’s report offered worrisome signs that the purchasing power of average Americans is starting to erode.
Take-home pay failed to keep up with inflation for the second straight month. And the savings rate fell in November to its lowest level in half a century, except for the month of Hurricane Katrina in 2005.
“Real incomes are falling,” said Mark Zandi, chief economist at Moody’s Economy.com. “Purchasing power is eroding. That’s going to weaken growth even more.”
To be sure, there is a long American tradition of spending beyond one’s means. But in the past, soaring home values, solid job growth, and rising wages kept Americans afloat, making it easy for consumers to take out loans and tap alternative sources of income.
Those channels of credit have since dried up. What’s left? Savings accounts, economists say, and now those are beginning to contract. With the S.&P. 500 only up 4.4 percent for the year, Americans are also receiving less return on equity investments and fixed income funds.
“I think this is the last gasp,” said Jared Bernstein of the Economic Policy Institute.
Still, Mr. Bernstein acknowledged that American consumers are well-known for their resilience. “You bet against the American consumer and it’s like Charlie Brown and the football,” he said. “You’re going to fall on your backside all the time.”
An erosion in consumer spending should lower the threat of inflation, analysts said, since businesses would have trouble raising prices for consumers who cannot afford to pay. Consumer confidence in December fell to its lowest level in two years, according to a survey by the University of Michigan and Reuters, as workers confront a softening job market and inflation-adjusted hourly wages that have gained only a penny in the last four years.
While the gloomy outlook may be bad news for the economy as a whole, it may provide some comfort to inflation hawks, especially after the Fed’s preferred inflation gauge ticked up to a 2.2 percent annual rate in November. Central bankers are said to prefer that the index, known as the P.C.E. deflator, remain below 2 percent.
Over all, inflation has totaled 3.6 percent over the last 12 months, reflecting a sharp rise in prices since the summer, according to this morning’s Commerce Department report.
The inflation bubble throws a curveball to the Fed, which has lowered interest rates three times this year as it seeks to avert a recession. There is little doubt the economy is gradually slowing, but lower interest rates can cause a flare-up in prices. The Fed now faces a situation where its two goals — price stability and economic growth — may stand at odds with each other.
-----------------------------------
As Jeff' recently said: a parallel universe, running alongside reality.
Stocks Soar on Merrill Report and Economic Data
By MICHAEL M. GRYNBAUM
Published: December 21, 2007
Stock markets surged on Friday as reports of talks on an investment in Merrill Lynch and a strong report on consumer spending lifted investors’ spirits heading into the holiday weekend.
The Dow Jones industrials closed up more than 200 points on strong earnings reports in the technology sector and a bounce in financial stocks, which were buoyed after The Wall Street Journal reported that Merrill was in talks with Singapore’s state investment company, Temasek Holdings, that might result in a $5 billion capital infusion.
Investors also got welcome news from the Federal Reserve, which said it would continue its new auction program “as long as necessary” to help ease the flow of credit between banks, consumers, and businesses. The Fed has seen strong demand from banks at its first two auctions, which offer short-term loans at lower-than-usual interest rates.
The good news managed to overshadow a Commerce Department report that showed inflation ticked up in November, above the Fed’s so-called comfort zone. Investors lowered their expectations of an interest rate cut in January, but analysts said it was unlikely that prices of “core” products — consumer goods other than food and energy — would rise next year.
The broader Standard & Poor’s 500-stock index gained 1.7 percent to 1,484.46, sending the index into positive territory for the week. The Dow was up 205.01 points, or 1.6 percent, to 13,450.06, and the Nasdaq composite index rose almost 2 percent.
Markets may also have been reacting to another element of the Commerce Department report: the largest monthly increase in consumer spending in three years, defying the expectations of analysts who had predicted a substantial drop-off in Americans’ willingness to spend.
Adjusted for inflation, purchases rose by 0.5 percent in November, the Commerce Department said. The news led many analysts to raise their estimates for fourth quarter growth.
But economists warned that the rise in spending was unlikely to be sustained, and Friday’s report offered worrisome signs that the purchasing power of average Americans is starting to erode.
Take-home pay failed to keep up with inflation for the second straight month. And the savings rate fell in November to its lowest level in half a century, except for the month of Hurricane Katrina in 2005.
“Real incomes are falling,” said Mark Zandi, chief economist at Moody’s Economy.com. “Purchasing power is eroding. That’s going to weaken growth even more.”
To be sure, there is a long American tradition of spending beyond one’s means. But in the past, soaring home values, solid job growth, and rising wages kept Americans afloat, making it easy for consumers to take out loans and tap alternative sources of income.
Those channels of credit have since dried up. What’s left? Savings accounts, economists say, and now those are beginning to contract. With the S.&P. 500 only up 4.4 percent for the year, Americans are also receiving less return on equity investments and fixed income funds.
“I think this is the last gasp,” said Jared Bernstein of the Economic Policy Institute.
Still, Mr. Bernstein acknowledged that American consumers are well-known for their resilience. “You bet against the American consumer and it’s like Charlie Brown and the football,” he said. “You’re going to fall on your backside all the time.”
An erosion in consumer spending should lower the threat of inflation, analysts said, since businesses would have trouble raising prices for consumers who cannot afford to pay. Consumer confidence in December fell to its lowest level in two years, according to a survey by the University of Michigan and Reuters, as workers confront a softening job market and inflation-adjusted hourly wages that have gained only a penny in the last four years.
While the gloomy outlook may be bad news for the economy as a whole, it may provide some comfort to inflation hawks, especially after the Fed’s preferred inflation gauge ticked up to a 2.2 percent annual rate in November. Central bankers are said to prefer that the index, known as the P.C.E. deflator, remain below 2 percent.
Over all, inflation has totaled 3.6 percent over the last 12 months, reflecting a sharp rise in prices since the summer, according to this morning’s Commerce Department report.
The inflation bubble throws a curveball to the Fed, which has lowered interest rates three times this year as it seeks to avert a recession. There is little doubt the economy is gradually slowing, but lower interest rates can cause a flare-up in prices. The Fed now faces a situation where its two goals — price stability and economic growth — may stand at odds with each other.
-----------------------------------
As Jeff' recently said: a parallel universe, running alongside reality.
http://www.reuters.com/article/etfNews/idU...lBrandChannel=0
Citi,Merrill,JPMorgan face larger writeoffs-Goldman
Thu Dec 27, 2007 10:32am EST
By Jonathan Stempel
NEW YORK, Dec 27 (Reuters) - Citigroup Inc may need to slash its dividend 40 percent to preserve capital, and with Merrill Lynch & Co and JPMorgan Chase & Co may write off more than $33 billion of debt this quarter as the credit crunch deepens, a Goldman Sachs & Co analyst said.
"It will be a couple of quarters before the current credit crisis is fully digested by the markets," the analyst, William Tanona, wrote in a report released on Thursday. "Fourth-quarter trading results are likely to be among the weakest we have seen in some time."
Tanona nearly doubled his forecast for projected write-downs, after rising mortgage losses led investors to shun debt they once thought safe but now deem risky.
Financial companies including Bank of America Corp and Switzerland's UBS AG have already announced more than $70 billion of write-offs tied to the credit crisis. Debt losses led to Citigroup replacing Chief Executive Charles Prince with Vikram Pandit, and Merrill replacing Chief Executive Stanley O'Neal with John Thain.
In morning trading, Citigroup shares fell 52 cents to $29.93, Merrill fell 73 cents to $53.81, and JPMorgan fell 49 cents to $44.45. The companies did not immediately return calls seeking comment.
Tanona, who rates Citigroup "sell," said the largest U.S. bank may have to write off $18.7 billion this quarter for collateralized debt obligations. His prior forecast was $11 billion, while Citigroup's own forecast is $8 billion to $11 billion. Tanona boosted his forecast for the bank's fourth-quarter loss to $1.33 per share from 52 cents.
The analyst also said Citigroup may in 2008 cut its quarterly dividend of 54 cents a share, equal to a 7.1 percent yield, to help raise or preserve $5 billion to $10 billion of capital. In November, Citigroup shored up capital by selling a $7.5 billion stake to Abu Dhabi's government.
Tanona said Merrill, rated "neutral," may write off $11.5 billion for CDOs this quarter, up from his prior forecast of $6 billion, as Thain tries to clean up problems now rather than let them fester in 2008. The analyst expects a fourth-quarter loss of $7.00 per share, up from his prior forecast of $1.50.
Brad Hintz, a Sanford C. Bernstein & Co analyst, separately on Thursday predicted a $10 billion fourth-quarter write-off at Merrill, leading to a quarterly loss of $5.10 per share.
Merrill on Monday announced a $6.2 billion capital infusion from Singapore's government and money manager Davis Selected Advisers.
Tanona doubled his forecast for fourth-quarter CDO losses at JPMorgan to $3.4 billion from $1.7 billion. He cut his forecast for fourth-quarter profit to 65 cents per share from $1.04. The analyst rates JPMorgan "neutral."
Analysts on average expect a loss of 61 cents per share at Citigroup, a loss of $4.00 per share at Merrill, and a profit of $1.01 per share at JPMorgan in the fourth quarter, according to Reuters Estimates.
Through Wednesday, shares of Citigroup, Merrill and JPMorgan were down 45 percent, 41 percent and 7 percent, respectively, this year.
(Additional reporting by Avishek Mishra in Bangalore; Editing by Dave Zimmerman and John Wallace)
Citi,Merrill,JPMorgan face larger writeoffs-Goldman
Thu Dec 27, 2007 10:32am EST
By Jonathan Stempel
NEW YORK, Dec 27 (Reuters) - Citigroup Inc may need to slash its dividend 40 percent to preserve capital, and with Merrill Lynch & Co and JPMorgan Chase & Co may write off more than $33 billion of debt this quarter as the credit crunch deepens, a Goldman Sachs & Co analyst said.
"It will be a couple of quarters before the current credit crisis is fully digested by the markets," the analyst, William Tanona, wrote in a report released on Thursday. "Fourth-quarter trading results are likely to be among the weakest we have seen in some time."
Tanona nearly doubled his forecast for projected write-downs, after rising mortgage losses led investors to shun debt they once thought safe but now deem risky.
Financial companies including Bank of America Corp and Switzerland's UBS AG have already announced more than $70 billion of write-offs tied to the credit crisis. Debt losses led to Citigroup replacing Chief Executive Charles Prince with Vikram Pandit, and Merrill replacing Chief Executive Stanley O'Neal with John Thain.
In morning trading, Citigroup shares fell 52 cents to $29.93, Merrill fell 73 cents to $53.81, and JPMorgan fell 49 cents to $44.45. The companies did not immediately return calls seeking comment.
Tanona, who rates Citigroup "sell," said the largest U.S. bank may have to write off $18.7 billion this quarter for collateralized debt obligations. His prior forecast was $11 billion, while Citigroup's own forecast is $8 billion to $11 billion. Tanona boosted his forecast for the bank's fourth-quarter loss to $1.33 per share from 52 cents.
The analyst also said Citigroup may in 2008 cut its quarterly dividend of 54 cents a share, equal to a 7.1 percent yield, to help raise or preserve $5 billion to $10 billion of capital. In November, Citigroup shored up capital by selling a $7.5 billion stake to Abu Dhabi's government.
Tanona said Merrill, rated "neutral," may write off $11.5 billion for CDOs this quarter, up from his prior forecast of $6 billion, as Thain tries to clean up problems now rather than let them fester in 2008. The analyst expects a fourth-quarter loss of $7.00 per share, up from his prior forecast of $1.50.
Brad Hintz, a Sanford C. Bernstein & Co analyst, separately on Thursday predicted a $10 billion fourth-quarter write-off at Merrill, leading to a quarterly loss of $5.10 per share.
Merrill on Monday announced a $6.2 billion capital infusion from Singapore's government and money manager Davis Selected Advisers.
Tanona doubled his forecast for fourth-quarter CDO losses at JPMorgan to $3.4 billion from $1.7 billion. He cut his forecast for fourth-quarter profit to 65 cents per share from $1.04. The analyst rates JPMorgan "neutral."
Analysts on average expect a loss of 61 cents per share at Citigroup, a loss of $4.00 per share at Merrill, and a profit of $1.01 per share at JPMorgan in the fourth quarter, according to Reuters Estimates.
Through Wednesday, shares of Citigroup, Merrill and JPMorgan were down 45 percent, 41 percent and 7 percent, respectively, this year.
(Additional reporting by Avishek Mishra in Bangalore; Editing by Dave Zimmerman and John Wallace)
Dow Jones Industrial Average
13,359.61 -192.08 / -1.42%
Dec 27 4:03pm ET †
13,359.61 -192.08 / -1.42%
Dec 27 4:03pm ET †
The DJIA made up 6.5 points yesterday in a rollercoaster ride...
and if you have big bucks you can still play:
http://www.nytimes.com/2007/12/29/business...&ei=5087%0A
A Deal Maker With a Hot Hand Opens His Wallet
By VIKAS BAJAJ
Published: December 29, 2007
Warren E. Buffett is in no mood to quit.
...
On Friday, Mr. Buffett stunned Wall Street by announcing that he would enter the troubled bond insurance business. He also spent about $440 million for a unit of ING Groep, the Dutch financial giant.
Three days earlier, on Christmas, he agreed to buy a $4.5 billion stake in the industrial conglomerate owned by the Pritzker family. And a few weeks before that, he waded into the junk bond market, buying $2.1 billion of debt issued by the TXU Corporation, the electric utility.
As the fortunes of big Wall Street firms sink, Berkshire Hathaway, the holding company that Mr. Buffett runs out of Omaha, is on a tear. Its Class A shares have jumped 27 percent this year, their best showing since 1998, when they soared 52 percent. The Standard & Poor’s 500-stock index, by comparison, has gained a mere 4.24 percent this year.
In a telephone interview on Friday, Mr. Buffett said the timing of his recent investments was a coincidence. Since the credit crisis erupted this summer, he has repeatedly tried to blunt speculation that he might ride to the rescue of an ailing bank or Wall Street firm.
“We had no compulsion at the start of the year to do anything,” Mr. Buffett said. “On the other hand, there was no limit to what we could do.”
Thousands of investors on and off Wall Street study what Mr. Buffett does. It’s no wonder: Over the past four decades he has built Berkshire Hathaway into a $216 billion company with businesses ranging from insurance and corporate jets to ice cream, underwear and Coca-Cola. During that time, his company’s book value has soared by more than 360,000 percent.
Amid the turmoil in the financial markets this year, Mr. Buffett quietly tinkered with his company’s vast stock portfolio, which totaled $78 billion as of Sept. 30.
He has increased his stakes in two major banks, U.S. Bancorp and Wells Fargo, and cast new bets on Burlington Northern, the country’s second-largest railroad, and CarMax, the biggest used-car dealership. On Friday, in addition to announcing his intention to enter bond insurance, Mr. Buffett agreed to buy NRG, a reinsurance unit of ING.
With about $47 billion in cash on hand, Berkshire still has plenty of money for acquisitions. At the company’s annual meeting in May, Mr. Buffett said he would consider a deal as large as $60 billion.
But Mr. Buffett warned on Friday that the crisis that began in the market for housing debt shows few signs of abating. He added that he had decided to establish his own bond insurance company, rather than purchase one, to avoid “buying into anybody else’s trouble.”
Berkshire, which has an AAA credit rating, will enter the business as bond insurers like MBIA and Ambac are struggling to raise capital and protect their gilt-edged ratings. Mr. Buffett said he believes that most of the investments that are available to him in the financial industry “don’t make sense.”
----------------------
Buffet (The Oracle of Omaha) is brillant. As the huge bond insurance companies are fighting to keep from going bankrupt because they hold piles of liability for insuring sub prime mortgages and credit card debt...Buffet strides in to start a new bond insurance firm (named after his firm BTW) with his AAA rating.
The others should lose theirs this coming year and Buffet will be the biggest show in town for utility and government bonds...which he plans to back...mainly in New Tork City, Texas and California...the largest and therefore most lucritive grounds in the country...without having all the pending problems the exisiting firms have. And, when he bought into banks he did so knowing which had exposed their subprime problems, which were the smallest of the big banks, to buy at rock bottom prices. He also apparently realizes folks will be buying used cars are they trim back their consumer spending. The buy of the bond insurance unit of ING,
the huge Dutch investment group, tells me Europe is less exposed to bad debt and he wants to play there too.
Man would I like to have funds with Berkshire Hathaway (aka Warren Buffet), but somehow I don't think I can scrape together the $141,100 price of a share of his stock. Maybe I could keep up with government and utility bonds, which Buffet apparently believes will be the refuge of investors in the coming years.
and if you have big bucks you can still play:
http://www.nytimes.com/2007/12/29/business...&ei=5087%0A
A Deal Maker With a Hot Hand Opens His Wallet
By VIKAS BAJAJ
Published: December 29, 2007
Warren E. Buffett is in no mood to quit.
...
On Friday, Mr. Buffett stunned Wall Street by announcing that he would enter the troubled bond insurance business. He also spent about $440 million for a unit of ING Groep, the Dutch financial giant.
Three days earlier, on Christmas, he agreed to buy a $4.5 billion stake in the industrial conglomerate owned by the Pritzker family. And a few weeks before that, he waded into the junk bond market, buying $2.1 billion of debt issued by the TXU Corporation, the electric utility.
As the fortunes of big Wall Street firms sink, Berkshire Hathaway, the holding company that Mr. Buffett runs out of Omaha, is on a tear. Its Class A shares have jumped 27 percent this year, their best showing since 1998, when they soared 52 percent. The Standard & Poor’s 500-stock index, by comparison, has gained a mere 4.24 percent this year.
In a telephone interview on Friday, Mr. Buffett said the timing of his recent investments was a coincidence. Since the credit crisis erupted this summer, he has repeatedly tried to blunt speculation that he might ride to the rescue of an ailing bank or Wall Street firm.
“We had no compulsion at the start of the year to do anything,” Mr. Buffett said. “On the other hand, there was no limit to what we could do.”
Thousands of investors on and off Wall Street study what Mr. Buffett does. It’s no wonder: Over the past four decades he has built Berkshire Hathaway into a $216 billion company with businesses ranging from insurance and corporate jets to ice cream, underwear and Coca-Cola. During that time, his company’s book value has soared by more than 360,000 percent.
Amid the turmoil in the financial markets this year, Mr. Buffett quietly tinkered with his company’s vast stock portfolio, which totaled $78 billion as of Sept. 30.
He has increased his stakes in two major banks, U.S. Bancorp and Wells Fargo, and cast new bets on Burlington Northern, the country’s second-largest railroad, and CarMax, the biggest used-car dealership. On Friday, in addition to announcing his intention to enter bond insurance, Mr. Buffett agreed to buy NRG, a reinsurance unit of ING.
With about $47 billion in cash on hand, Berkshire still has plenty of money for acquisitions. At the company’s annual meeting in May, Mr. Buffett said he would consider a deal as large as $60 billion.
But Mr. Buffett warned on Friday that the crisis that began in the market for housing debt shows few signs of abating. He added that he had decided to establish his own bond insurance company, rather than purchase one, to avoid “buying into anybody else’s trouble.”
Berkshire, which has an AAA credit rating, will enter the business as bond insurers like MBIA and Ambac are struggling to raise capital and protect their gilt-edged ratings. Mr. Buffett said he believes that most of the investments that are available to him in the financial industry “don’t make sense.”
----------------------
Buffet (The Oracle of Omaha) is brillant. As the huge bond insurance companies are fighting to keep from going bankrupt because they hold piles of liability for insuring sub prime mortgages and credit card debt...Buffet strides in to start a new bond insurance firm (named after his firm BTW) with his AAA rating.
The others should lose theirs this coming year and Buffet will be the biggest show in town for utility and government bonds...which he plans to back...mainly in New Tork City, Texas and California...the largest and therefore most lucritive grounds in the country...without having all the pending problems the exisiting firms have. And, when he bought into banks he did so knowing which had exposed their subprime problems, which were the smallest of the big banks, to buy at rock bottom prices. He also apparently realizes folks will be buying used cars are they trim back their consumer spending. The buy of the bond insurance unit of ING,
the huge Dutch investment group, tells me Europe is less exposed to bad debt and he wants to play there too.
Man would I like to have funds with Berkshire Hathaway (aka Warren Buffet), but somehow I don't think I can scrape together the $141,100 price of a share of his stock. Maybe I could keep up with government and utility bonds, which Buffet apparently believes will be the refuge of investors in the coming years.
Stocks tank on recession fears
Wall Street starts 2008 on a down note after weak manufacturing report and surging oil prices spark recession fears.
By Alexandra Twin, CNNMoney.com senior writer
January 2 2008
NEW YORK (CNNMoney.com) -- Oil and gold prices at all-time highs and a report showing contraction in the manufacturing sector were among the factors sending stocks tumbling Wednesday, the first trading day of 2008.
The Dow Jones industrial average (INDU) lost 220.86 points in the session to close at 13,043.96.
Worries about how the fallout in the credit and housing markets will impact the economy dragged on stocks in the second half of last year and remained in focus at the start of 2008.
Adding to such worries: a December survey showing the first contraction in manufacturing activity since January 2007 and the weakest reading since April 2003.
The Institute for Supply Management's manufacturing index fell to 47.7 from 50.8 in November, versus forecasts for a drop to 50.5. A reading below 50 signals contraction.
Meanwhile, oil and gold prices spiked to new records.
U.S. light crude oil for February delivery briefly topped $100 a barrel for the first time ever, before pulling back a bit.
COMEX gold for February delivery surged $23.20 to $861.20 an ounce, an all-time high, rising in tune with other dollar-traded commodities.
"You take the ISM number showing lower growth and top it off with oil higher on the geopolitical unrest and you have a nice little stew there," said Joseph Saluzzi, co-head of equity trading at Themis Trading.
Worries about the pairing of weaker growth and higher inflation raise the threat of recession, but also of so-called "stagflation," Saluzzi said, all of which adds to the anticipation for Friday's December labor market report.
"If the payrolls number is worse than expected, watch out below," he said.
Employers are currently expected to have added 70,000 jobs last month, after adding 94,000 in the previous month. Ahead of that, the ADP private sector employment report is due. The ADP report is generally seen as a harbinger of the broader monthly report.
Stocks managed to post gains in an extremely volatile 2007, with the Dow rising 6.4 percent, the S&P 500 adding 3.5 percent and the Nasdaq climbing 9.8 percent.
2008 is expected to be just as volatile, as investors continue to try to assess the economic outlook in the wake of the housing and credit market fallout.
...
Market breadth was negative. On the New York Stock Exchange, losers beat winners three to two on volume of 720 million shares. On the Nasdaq, decliners topped advancers two to one on volume of 1.14 billion shares.
Among stock movers, 29 out of 30 Dow components slid. Declines were led by Intel (INTC, Fortune 500), which fell on a Banc of America Securities downgrade, according to Briefing.com.
Banc of America also downgraded other stocks in the semiconductor sector, including Texas Instruments (TXN, Fortune 500) and National Semiconductor (NSM).
One of the few bright spots was Amazon.com (AMZN, Fortune 500), which rose 4 percent after Citi Investment Research upgraded it to "buy" from "hold."
Treasury prices rallied, as investors sought safety in the comparatively safer haven of government debt, lowering the yield on the 10-year note to 3.94 percent from 4.03 percent late Monday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar slipped versus the euro and the yen.
-----------------------------
Several more indicators will be addressed in reports this week...
Wall Street starts 2008 on a down note after weak manufacturing report and surging oil prices spark recession fears.
By Alexandra Twin, CNNMoney.com senior writer
January 2 2008
NEW YORK (CNNMoney.com) -- Oil and gold prices at all-time highs and a report showing contraction in the manufacturing sector were among the factors sending stocks tumbling Wednesday, the first trading day of 2008.
The Dow Jones industrial average (INDU) lost 220.86 points in the session to close at 13,043.96.
Worries about how the fallout in the credit and housing markets will impact the economy dragged on stocks in the second half of last year and remained in focus at the start of 2008.
Adding to such worries: a December survey showing the first contraction in manufacturing activity since January 2007 and the weakest reading since April 2003.
The Institute for Supply Management's manufacturing index fell to 47.7 from 50.8 in November, versus forecasts for a drop to 50.5. A reading below 50 signals contraction.
Meanwhile, oil and gold prices spiked to new records.
U.S. light crude oil for February delivery briefly topped $100 a barrel for the first time ever, before pulling back a bit.
COMEX gold for February delivery surged $23.20 to $861.20 an ounce, an all-time high, rising in tune with other dollar-traded commodities.
"You take the ISM number showing lower growth and top it off with oil higher on the geopolitical unrest and you have a nice little stew there," said Joseph Saluzzi, co-head of equity trading at Themis Trading.
Worries about the pairing of weaker growth and higher inflation raise the threat of recession, but also of so-called "stagflation," Saluzzi said, all of which adds to the anticipation for Friday's December labor market report.
"If the payrolls number is worse than expected, watch out below," he said.
Employers are currently expected to have added 70,000 jobs last month, after adding 94,000 in the previous month. Ahead of that, the ADP private sector employment report is due. The ADP report is generally seen as a harbinger of the broader monthly report.
Stocks managed to post gains in an extremely volatile 2007, with the Dow rising 6.4 percent, the S&P 500 adding 3.5 percent and the Nasdaq climbing 9.8 percent.
2008 is expected to be just as volatile, as investors continue to try to assess the economic outlook in the wake of the housing and credit market fallout.
...
Market breadth was negative. On the New York Stock Exchange, losers beat winners three to two on volume of 720 million shares. On the Nasdaq, decliners topped advancers two to one on volume of 1.14 billion shares.
Among stock movers, 29 out of 30 Dow components slid. Declines were led by Intel (INTC, Fortune 500), which fell on a Banc of America Securities downgrade, according to Briefing.com.
Banc of America also downgraded other stocks in the semiconductor sector, including Texas Instruments (TXN, Fortune 500) and National Semiconductor (NSM).
One of the few bright spots was Amazon.com (AMZN, Fortune 500), which rose 4 percent after Citi Investment Research upgraded it to "buy" from "hold."
Treasury prices rallied, as investors sought safety in the comparatively safer haven of government debt, lowering the yield on the 10-year note to 3.94 percent from 4.03 percent late Monday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar slipped versus the euro and the yen.
-----------------------------
Several more indicators will be addressed in reports this week...
I may be wrong...having predicted 12,000 by Jan. 31.
It looks more like 11,500...but what do I know...we'll see tomorrow.
It looks more like 11,500...but what do I know...we'll see tomorrow.
QUOTE(Indianhead @ Jan 21 2008, 04:45 PM) 
I may be wrong...having predicted 12,000 by Jan. 31.
It looks more like 11,500...but what do I know...we'll see tomorrow.
It looks more like 11,500...but what do I know...we'll see tomorrow.
If you really knew for sure, you'd have sold short on Friday.
http://money.cnn.com/2008/01/21/news/inter...sion=2008012111
Lachlan Murdoch bids $2.9B for media firm
If approved, the deal between Rupert Murdoch's son
and Consolidated Media would unite Australia's two
most powerful media dynasties.
January 21 2008: 11:21 AM EST
SYDNEY, Australia (Dow Jones/AP) -- Lachlan Murdoch, son of News Corp. Chairman Rupert Murdoch, announced a bid Monday to buy Australian media operation Consolidated Media Holdings for $2.9 billion.
The deal is being driven by Lachlan Murdoch's private investment vehicle Illyria Pty., unnamed equity partners and Consolidated Media's major shareholder Consolidated Press Holdings, the target's board said in a statement to the Australian Securities Exchange.
Illyria and its partners plan to set up a 50/50 joint venture with Consolidated Press to run Consolidated Media as a private company, the statement said. Consolidated Media, among other things, holds stakes in pay television business Foxtel and Australia's Nine television network.
The deal would bring together Australia's two most powerful media dynasties. Australia's richest man James Packer, a friend and contemporary of Lachlan Murdoch, is executive chairman of Consolidated Press and executive deputy chairman of Consolidated Media.
Lachlan Murdoch's move is independent of News Corp (NWS, Fortune 500). He left his father's Australia-born global media business in 2005 but remains a News Corp. director. He now runs private investment fund Illyria.
Consolidated Press has given its support to the proposal but is still to reach final agreement with Lachlan Murdoch's fund as to the terms of the consortium, the statement said.
Shakeup at News Corp.
Trading in Consolidated Media's shares was halted before the Australian market opened Monday.
The statement, issued after the market closed, described the proposal as nonbinding and indicative.
Completion of the deal is subject to a number of conditions including discussions with Australia's securities regulator, finalization of funding and a joint venture agreement between Consolidated Press and Illyria, Illyria said in a statement.
-------------------
So, the Murdoch's will control the USA (Wall St. Journal) and Austrailan market media...
with strong influence on the UK press...two papers there...all hail the Murdochs...shizen...
publicists of The New World Order.
Lachlan Murdoch bids $2.9B for media firm
If approved, the deal between Rupert Murdoch's son
and Consolidated Media would unite Australia's two
most powerful media dynasties.
January 21 2008: 11:21 AM EST
SYDNEY, Australia (Dow Jones/AP) -- Lachlan Murdoch, son of News Corp. Chairman Rupert Murdoch, announced a bid Monday to buy Australian media operation Consolidated Media Holdings for $2.9 billion.
The deal is being driven by Lachlan Murdoch's private investment vehicle Illyria Pty., unnamed equity partners and Consolidated Media's major shareholder Consolidated Press Holdings, the target's board said in a statement to the Australian Securities Exchange.
Illyria and its partners plan to set up a 50/50 joint venture with Consolidated Press to run Consolidated Media as a private company, the statement said. Consolidated Media, among other things, holds stakes in pay television business Foxtel and Australia's Nine television network.
The deal would bring together Australia's two most powerful media dynasties. Australia's richest man James Packer, a friend and contemporary of Lachlan Murdoch, is executive chairman of Consolidated Press and executive deputy chairman of Consolidated Media.
Lachlan Murdoch's move is independent of News Corp (NWS, Fortune 500). He left his father's Australia-born global media business in 2005 but remains a News Corp. director. He now runs private investment fund Illyria.
Consolidated Press has given its support to the proposal but is still to reach final agreement with Lachlan Murdoch's fund as to the terms of the consortium, the statement said.
Shakeup at News Corp.
Trading in Consolidated Media's shares was halted before the Australian market opened Monday.
The statement, issued after the market closed, described the proposal as nonbinding and indicative.
Completion of the deal is subject to a number of conditions including discussions with Australia's securities regulator, finalization of funding and a joint venture agreement between Consolidated Press and Illyria, Illyria said in a statement.
-------------------
So, the Murdoch's will control the USA (Wall St. Journal) and Austrailan market media...
with strong influence on the UK press...two papers there...all hail the Murdochs...shizen...
publicists of The New World Order.
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