Wall Street Breakfast: Must-Know News [View article]
Obama vetoes foreclosure bill. In the first effective veto of his presidency, Obama blocked a bill that would have required state and federal courts to accept the validity of out-of-state document notarizations; the bill would have made it harder to challenge the authenticity of foreclosures and other legal documents. ______________________...
I have mixed feelings about this whole mess but the Community Organizer in Chief's veto of this foreclosure bill was entirely too predictable. Whatever the shortcomings in title transfers, we know money is owed and the people living in the house owe it.
Wall Street Breakfast: Must-Know News [View article]
Whitney warns on state budget crisis. Look for states to suffer a collapse similar to the banking industry implosion of 2008 as crippling deficits come back to haunt them, outspoken analyst Meredith Whitney said Tuesday (video). "The similarities between the states and the banks are extreme to the extent that states have been spending dramatically and are leveraged dramatically," she said. Whitney, famous for calling the financial sector crisis, warned banks aren't out of the woods yet, predicting a sharp drop in housing prices and shrinking trading revenues will decimate Q4 earnings. ______________________...
Rather than correct the structural issues of fiscal imbalances and insolvency, we will proceed in some fashion to "fix" the problem with additional liquidity in the form of new debt which will only "paper over" the underlying problem and kick the can down the road.
Along with reducing the power of unions, we need reductions in services, compensation and retirement benefits. Additionally, the private sector can reduce its footprint by outsourcing routine activities to the private sector who can perform them at a lower cost.
We must recognize we, at every level, are living beyond our means and must embrace difficult decisions and pain as part of the solution.
Stocks Give Up Gains, Finish Broadly Lower [View article]
I believe the S&P 500 got up to 1130 and then sank to 1113, passing through 1120 (Fib 50% retracement from March 09 lows) but remaining above the 200 day SMA of 1110.
Wall Street Breakfast: Must-Know News [View article]
Trader you are spot on. This guy and his rogue band from Chicago know how to fight dirty, party, talk smack and engineer elections but they are way out of their DEPTH (pun) when it comes to solving complex problems that require initiative, judgment, decisive thinking and keen intellect. As George Wills recently noted, Obama delivers beautiful speeches but usually is no relationship between the rhetoric and the topic being discussed. It's simply lyrical language. Nobody is home.
Wall Street Breakfast: Must-Know News [View article]
U.S. bankruptcies near five-year high. The pace of U.S. bankruptcies in May reached the second-highest daily level since 2005, as an improving economy failed to significantly help Americans struggling with debt payments. May saw 133,459 bankruptcy petitions, a 10% rise from the year before. If there's any silver lining to be found, bankruptcies usually peak in an economic cycle between six and eighteen months after an economy bottoms out, so the high May figure could potentially signal the road to recovery. ______________________...
That would be true unless June is higher but I hope you are right.
It's still early in the game but it comes as no surprise that revenue misses (7) are outpacing earnings misses (5). Notwithstanding the global inventory correction, I do not think final demand is firmly in place and revenues are harder to "manage" than other P&L line items.
Before we launch a trade war or further irritate our banker, we should consider the facts:
"Between July 2005 and July 2008, the renminbi appreciated by 21 percent against the dollar. The bilateral trade deficit increased from $202 billion in 2005 to $268 billion in 2008. U.S. exports to China did increase, as expected — and by a healthy $28.4 billion, or 69.3 percent. But the proportion of that increase ascribable to renminbi appreciation is very much debatable."
With stronger yuan, China can buy raw materials more cost effectively and can afford to pass these savings along to US consumer through price cuts matched to the effects of currency revaluation. The other problem inherent in a stronger yuan is that it will place pressure on US prices.
Closing Update for Thursday, August 20: Three in a Row [View article]
In a state of schizophrenia, the market alternated between bouts of depression, owing to jobless claims, rising foreclosures and continued concerns over China, and euphoria over leading economic indicators and improvement in the Fed Philly index. As it is wont to do, the market overlooked the more consequential jobless claims report only to warmly embrace the notion that the recession has ended and we are about to embark upon a jobless recovery that can only be patched together by upper income spending and expanded exports. Failing to see the implications for a jobless recovery, it may take one or more quarters before the market realizes it is discounting something that does not exist.
Wall Street Breakfast: Must-Know News [View article]
______________________...
I have mixed feelings about this whole mess but the Community Organizer in Chief's veto of this foreclosure bill was entirely too predictable. Whatever the shortcomings in title transfers, we know money is owed and the people living in the house owe it.
Wall Street Breakfast: Must-Know News [View article]
______________________...
Rather than correct the structural issues of fiscal imbalances and insolvency, we will proceed in some fashion to "fix" the problem with additional liquidity in the form of new debt which will only "paper over" the underlying problem and kick the can down the road.
Along with reducing the power of unions, we need reductions in services, compensation and retirement benefits. Additionally, the private sector can reduce its footprint by outsourcing routine activities to the private sector who can perform them at a lower cost.
We must recognize we, at every level, are living beyond our means and must embrace difficult decisions and pain as part of the solution.
Stocks Give Up Gains, Finish Broadly Lower [View article]
Wall Street Breakfast: Must-Know News [View article]
Wall Street Breakfast: Must-Know News [View article]
______________________...
That would be true unless June is higher but I hope you are right.
Earnings Season So Far [View article]
The Looming Trade War With China [View article]
"Between July 2005 and July 2008, the renminbi appreciated by 21 percent against the dollar. The bilateral trade deficit increased from $202 billion in 2005 to $268 billion in 2008. U.S. exports to China did increase, as expected — and by a healthy $28.4 billion, or 69.3 percent. But the proportion of that increase ascribable to renminbi appreciation is very much debatable."
With stronger yuan, China can buy raw materials more cost effectively and can afford to pass these savings along to US consumer through price cuts matched to the effects of currency revaluation. The other problem inherent in a stronger yuan is that it will place pressure on US prices.
Closing Update for Thursday, August 20: Three in a Row [View article]