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Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
feel free to write me @ stocklobsta at yahoo com
It's been a long time since I've been on this forum. Let me say straight out to others reading this board that I have zero desire to get dragged into the petty fights, personal attacks, pointless vitriol and arguments which are at times the less pleasant aspects of message board communication.
If you sincerely wish an answer from me, please keep posts pleasant, adult and civil or don't communicate at all. Such posts will be ignored as they serve no purpose.
That said, I am very interested in all useful feedback and suggestions for creating a better mousetrap.
Like you I love trading. Any useful tool which makes trading easier gets my attention. I miss Alphatrade because it provided a unique service in a space where I spend 99% of my trading time. That service, for my sector, has not been replaced by any group other than TOS and at that poorly. I actively miss what Alphatrade provided me, as I believe do others, and I see ways to make the service better than it was before.
The opportunity to re-create such a useful tool is an exciting challenge. I look forward to thoughtful suggestions and critiques from serious traders and former subscribers.
Let me be clear: this is not the old company, I have nothing to do with their management or their debts. What I create may be similar but it will not be the same. Whatever bitterness people harbor against aspects of the old company is best taken up with the old management if you can track them down and find them.
The best to you serfcorp and as we say, green screens to you always!
agree fully
I never used fly on the wall or other add ons from Alphatrade either...
I would love to speak with you if you have the desire to give me your input
Personally, I haven't touched pinks or pennies in years. My interest right now are options, and you can find me on stocktwits with my optiops alert ID
I dislike pennies for all the reasons you write. That is the reason I stopped posting here on Ihub. I got tired of seeing traders and investors getting slammed time and time again by endless paper...
Death spiral financing went into overdrive after 2008, even in the big boards (just look at the PPS of stocks like DRYS EGLE and PAL). It's all the deadly convertibles killing investors, and I won't be a part of it
However, I don't see a reason to turn down those services if people are willing to pay for them. I just want nothing to do with the promotion and other semi criminal aspect of pinksheets which we all know well
I will post my email to you at some point and I would look forward to your input, if you wish to share your thoughts and opinions.
How many traders here do you think would be interesated in subscribing to the new service? Rough guesstimates are fine.
Thanks!
SL
I was just meeting with a group yesterday about this, and I have the detailed proposal from the original group of programers and chief architect
There would be changes, but for the better imho. The new version would be with updated softwre and compatibility in addition to access on mobile platforms, which I find extremely interesting as many of the traders in my chatrooms have day jobs where they work behind firewalls. Streaming l2 data on tablets or smartphones would be a real asset.
I will post here regularly with important updates as I get them.
My main interest is options level 2s, but I have discussed it with potential financiers and they would be open to continuing Pink/OTCBB l2s as well given the loyal following which Alphatrade had in that space
Hey, I'm as sad as you are about the demise of Alphatrade
but here it goes...I may be resurrecting it soon...
write me if you want to know more, I appreciate input
100colestreet@gmail.com
I came back from the ether to share your sadness :)
Interesing: "The military continues its long-standing run as the highest-rated U.S. institution. Small business and the police occupy second and third places, respectively. These three top-tier institutions all earn high confidence from a majority of Americans, something no other institution achieves this year."
Hmmm...at some point do Americans ever decide they prefer the military in charge to a group like Congress? When you see that kind of skewing, you have to wonder.
We hope not, but obviously Congress is disappointing the expectations of a wide range of voters to have such miserable numbers across the board. Either they need to change how they represent us, or at some point, the people may be tempted to replace them with some group they think is preferable.
Of course perception may be quite different than reality. Just ask anyone who has lived under military rule in most countries.
With most people preferring 'e-books', I wonder when certain paragraphs or chapters of offensive books may vanish?
After all, there is precedent of that kind of activity on behalf of governments in the old Soviet Union, and Communist China. Now adulteration and selective censoring of electric media is even easier. Computers and digital media would have been Hitler's and Stalin's dream come true.
I don't even think most libraries are keeping hard copies of much these days. It's impossible to keep piles of old newspapers and magazines, even if you wanted to.
I try to make hard and digital copies of anything I like on the web, and I still keep physical books. I hope I continue to have the luxury of space and time to do so.
FYI: Newsday's Unconventional Subscription Model
JANUARY 29, 2010
When Newsday announced last spring that it was contemplating putting its Web site behind a paywall, I wrote a scathing critique of the idea.
I was wrong.
Newsday, as it happens, is in a unique position, and is taking advantage of it. Owned by Cablevision, the paper is circling the wagons around its core news and cable market on Long Island. Its online subscription plan goes like this: If you're a Cablevision cable-TV or Newsday print subscriber, you get access to Newsday.com site for free. If you're not, Newsday wants non-subscribers to pay $5 a week, or $260 a year.
That's a hefty fee, and not surprisingly, just 35 people have signed up for it since the pay wall went up about three months ago—a paltry number that left many observers a-titter and a-Twitter when it slipped out this week.
Yep, Newsday apparently has successfully alienated its non-Long Island audience. But that turns out to have been the idea.
...What Cablevision and Newsday don't want—just don't care about—is non-Long Island subscribers. Buh-bye. Take a hike. Adios. (Or pay $5 a week/$260 a year for access.) Those distant subscribers can't be monetized through local advertising, the reasoning goes, so why bother with them?
http://recoveringjournalist.typepad.com/recovering_journalist/2010/01/newsdays-unconventional-subscription-model.html
http://jour.nali.st/blog/2010/01/31/thirty-five-is-weird-newsday/
http://www.observer.com/2010/media/after-three-months-only-35-subscriptions-newsdays-web-site
>>We knew this was the future, by the time we were doing "Market Addicts", where we gave only a brief preview - if we included external news stories at all (although apparently for Gibson, including even the first paragraph or two as we used to do, is grounds for a fine)
However, what to do about years of past posts, as here on Ihub? 4-5 years ago there wasn't awareness of these "cut and paste" guidelines on the part of most people. That won't matter. Unfortunately it is quite likely this metric will be applied retroactively.
If the fines are $150,000 per incident, then many discussion boards on Ihub are screwed.
Reuters has been doing this for several years now, as we know, and it's just a matter of time before basically all newspaper chains have someone like Steve Gibson or Reuter's "Attributor" service holding up website owners for cash.
It's a shame, because in quite a few cases on this board, anyway, some of the original sites no longer have some of the stories still on their site. The only copy remaining is on sites like Ihub.
But this is the next, and more insidious version of the internet, I'm afraid. Paywalls to the left and right here we come (which basically means if you can't afford $25-$80/month for 'premium' content, you can't afford access to higher quality impartial financial and economic reporting like FT's, and you're at the mercy of pumpers and others with an agenda to give you biased information).
Y'know, we were better off with a public library system, because I seem to recall being able to read all the major newspapers there, and the back issues of many were available free to us on microfiche. Now, if I need to maintain everything a WSJ, NYT, FT, IBD and other subscriptions, my monthly newspaper bill alone comes out to over $250/month. Even piddly Newsday, from my hometown on Long Island, is now $260 a year.
How many households can afford that pricetag just for access to news?
The full frontal campaign to reduce most people to uninformed peasants seems well underway. Without a doubt that's what recent threats against bloggers and discussion websites is all about.
I hear the drum beat and the subtext: "Bloggers aren't economists, bloggers shouldn't comment on bias cases, bloggers definitely shouldn't be commenting on the BP oil spill."
We must accept the heavily tilted propaganda from the mainstream media, or pay up for information that is slightly less biased and manipulated.
Fck
All in all, this is turning out to be a pretty crappy century so far.
GM! In the case of Ihub, entire boards may be removed. There's no way to go through years of posts to selectively delete or re-write posts. The only solution will be to take down the entire site.
I hope you have backups of your favorite posts, because the end is in sight.
Perhaps a site like this is rich enough to hire an attorney to push back, but it depends whether they want to be bothered.
I don't post much online anymore, and this gives me incentive to limit posts to the bare minimum comment or level2 pic.
$75,000 'cut & paste' fines coming: What the article doesn’t mention that is that Righthaven files suits demanding $75,000 (sometimes for infringements where total damages might be hundreds of dollars, if that) before informing targets that they may have unintentionally exceeded Fair Use.
Since Fair Use is imprecise, and highly dependent on many factors, it is surprisingly easy to quote more than Fair Use–and not realize it.
Righthaven’s filing suits without any attempt at notifying unintentional violators reveal that this is just another lawyer who has figured out how to loot people that aren’t rich to make himself wealthy.
Maybe it’s time to scrap copyright law as to the only way to stop trash like this.
Posted by: claytoncramer | 07/22/10 | 10:43 pm |
Read More http://www.wired.com/threatlevel/2010/07/copyright-trolling-for-dollars/comment-page-1/#comments#ixzz0ub1qdxNv
CNN Host Calls for Legal Crackdown on 'Bloggers' in Wake of Sherrod Incident: 'Something’s Going to Have to be Done Legally'
By Alana Goodman (Bio | Archive)
Fri, 07/23/2010 - 17:48 ET
Should there be a "gatekeeper" regulating internet bloggers? In the aftermath of the Shirley Sherrod incident, that's what CNN promoted on July 23.
Anchors Kyra Phillips and John Roberts discussed the "mixed blessing of the internet," and agreed that there should be a crackdown on anonymous bloggers who disparage others on the internet.
"There are so many great things that the internet does and has to offer, but at the same time, Kyra, as you know, there is this dark side," Roberts said. "Imagine what would have happened if we hadn't taken a look at what happened with Shirley Sherrod and plumbed the depths further and found out that what had been posted on the internet was not in fact reflective of what she said."
"There's going to have be a point in time where these people have to be held accountable," Phillips said. "How about all these bloggers that blog anonymously? They say rotten things about people and they're actually given credibility, which is crazy. They're a bunch of cowards, they're just people seeking attention."
Phillips demanded to know what Andrew Keen thought needed to be done. Keen, author of "The Cult of the Amateur: How Today's Internet is Killing Our Culture," who suggested that there needs to be an internet "gatekeeper," had been interviewed by Roberts and quoted in the segment.
...Phillips wanted to go even further, asking if "there's going to come a point where something's going to have to be done legally" about anonymous bloggers.
Read more: http://newsbusters.org/blogs/alana-goodman/2010/07/23/cnn-host-calls-crackdown-bloggers-wake-sherrod-incident-something-s-g#ixzz0uaxnSxL5
URGENT IF YOU POST ARTICLES you are courting lawsuits/fines
Newspaper Chain’s New Business Plan: Copyright Suits
Wired
2010-07-23
Steve Gibson has a plan to save the media world’s financial crisis — and it’s not the iPad.
Borrowing a page from patent trolls, the CEO of fledgling Las Vegas-based Righthaven has begun buying out the copyrights to newspaper content for the sole purpose of suing blogs and websites that re-post those articles without permission. And he says he’s making money.
“We believe it’s the best solution out there,” Gibson says. “Media companies’ assets are very much their copyrights. These companies need to understand and appreciate that those assets have value more than merely the present advertising revenues.”
Righthaven CEO Steve Gibson is embarking on a copyright trolling litigation campaign
Gibson’s vision is to monetize news content on the backend, by scouring the internet for infringing copies of his client’s articles, then suing and relying on the harsh penalties in the Copyright Act — up to $150,000 for a single infringement — to compel quick settlements. Since Righthaven’s formation in March, the company has filed at least 80 federal lawsuits against website operators and individual bloggers who’ve re-posted articles from the Las Vegas Review-Journal, his first client.
Now he’s talking expansion. The Review-Journal’s publisher, Stephens Media in Las Vegas, runs over 70 other newspapers in nine states, and Gibson says he already has an agreement to expand his practice to cover those properties. (Stephens Media declined comment, and referred inquiries to Gibson.)
Hundreds of lawsuits, he says, are already in the works by year’s end. “We perceive there to be millions, if not billions, of infringements out there,” he says.
Continues...
http://www.wired.com/threatlevel/2010/07/copyright-trolling-for-dollars/
Comments:
...Steve Gibson has become a “douchebag” and a pariah and a bottom feeder and a stain on the profession, but he will also become very wealthy for doing very little. There’s lots of other professions that should be culled because their members take care of themselves and their pocket books at the expense of the greater community. For what it’s worth, I also understand from intellectual property attorneys in Las Vegas that Steve Gibson was a total “douchebag” well before he concocted Righthaven.
So, if you want to stop these “nuisance” law suits (and that is truly what they are), and keep the likes of Steve Gibson from lining their wallets, petition your federal delegation to update the copyright statutes to: 1) mandate a “take down” letter before any lawsuit can be filed, with penalties attached to plaintiffs who file before doing so; and 2) delete the automatic entitlement to attorney’s fees. In the meantime, quit cutting and pasting and you will prevent Steve Gibson from earning additional money to get rid of that second chin.
Posted by: CptObvious | 07/23/10 | 1:04 pm |
Just when you think America can’t sink any lower…
Posted by: CandyMan | 07/23/10 | 1:13 pm |
@bop, you are right. Posting the link isn’t going to get anyone in trouble; as much as the shaggy haired liberals here want Drudge and Breitbart to go away because they expose the left’s hypocrisy (see story today on Drudge about John Kerry parking his yacht in RI to avoid MA taxes – too much fun). There is a ‘public good’ clause in the fair use rule. In addition to news reporting. This guy is in the same league as the RIAA shaking down teens and grandmas for cash.
Posted by: dedhead66 | 07/23/10 | 2:46 pm |
I guess the ambulance chasing boom has died down so now the lawyers will be going after so-called copyright infringement.
Posted by: lukos69 | 07/23/10 | 3:00 pm |
Douchebag spouting douchery and dressed in a douchbag’s uniform. Seriously…all he needs are the off-color French cuffs & collar to look like a bigger douchebag. His self-congratulatory bragging about making money off of lawsuits leads me to believe this bottom-feeder would sue his own mother if he could make a buck. Vegas is the perfect place for him and his goons.
Posted by: mjwanser | 07/23/10 | 3:02 pm |
My wife had an interview with this guy. She said he was the biggest douche she ever met. He had porn all over his office. He kept talking about how famous he was. He was wearing a vest that said “classic couture” on the back. Needless to say she had no desire to work for him. We’d rather starve to death.
Posted by: JAL | 07/23/10 | 4:17 pm |
I looked at one suit (which the owner had not been served with at the time — just saw it through a reporter’s tip).
Gibson wants the website’s domain name plus a ton of $$.
He wants the identity of these people who have worked hard and honestly to establish an online identity.
That makes Gibson, in my eyes, an extortionist.
And you guys who are using him? Kiss your internet presence good-bye. Enjoy your dirty money.
Posted by: TJP | 07/23/10 | 6:09 pm |
If the lawsuits were reasonable and only targeted against people who pasted entire articles or large parts of articles, I’d be in favor of this. And it would be a big boost for newspapers with quality content.
However, if what other posters are saying is true, he’s targeting people who just post a teaser, and he’s going for settlements vastly larger than the “offense” warrants.
As soon as people find out which news sources are selling to him, there will be an immediate backlash in the form of Internet-wide blacklists, and it will be the death knell for the news sources as they are immediately replaced by more reasonable journalists. Let’s face it, suing for ridiculous amounts has not saved the music industry, and it’s not going to cut down on piracy in the gaming industry either. Different business models are needed, not more exaggerated penalties (just like raising taxes while spending like a drunken sailor won’t save the US economy).
Posted by: V01D | 07/22/10 | 5:47 pm |
You think this is bad?
Wait. Just wait until the ACTA kicks in. The end of an open and free information network is looming.
Read More http://www.wired.com/threatlevel/2010/07/copyright-trolling-for-dollars/#ixzz0uavkX1do
USO has been quite active, and with money leaving mutual funds, and bonds looking topped out, I've been suggesting that some of this money is headed back into 'risk'
You can't blame them for wanting better returns.
However, it is unnerving, because the economic backdrop for an equity run isn't exactly strong. I think the only argument we can understand is that the US dollar is weakening, and therefore the price of commodities will be driven higher
>>POT $110 calls +34.62%, recommended last week with POT at $92, as a long term buy and hold
In chat and email, I recommended POT September calls $100 - $120 range for a 4-500% gain
And it goes on. At $85, POT was at 52 week lows. $100 is 50DMA. I think POT, AGU, CF, IPI and MOS all headed higher here with sector rotation
GLTA!
>>AAPL $200 puts +37.50%, alerted last week, and repeatedly emphasized yesterday in Chat
I've been bearish on AAPL into earnings for over 2 weeks, since $280
Nothing against AAPL, I've simply been following the trading, which has been unable to hold most gains even on bullish days.
I will not hold more than a lotto position overnight, but so far, puts on AAPL have been extremely profitable
>>Time to trade, see you in chat! All eyes on AAPL
QEII? Fed eyes looser monetary policy
By Robin Harding in Washington
Published: July 19 2010 19:20 | Last updated: July 19 2010 19:20
A slew of weak economic data means that when Federal Reserve chairman Ben Bernanke gives his semi-annual testimony to Congress Wednesday his job will be to reassure.
That reassurance might come in three forms: first, that the Fed thinks the economic recovery is still on track; second, that the central bank is ready to act if the economy does falter; and third, that the Fed is confident it has the tools to avert both inflation and deflation if it needs to.
In spite of slow growth in jobs – private payrolls rose only 33,000 in May and 83,000 in June – the Fed’s basic outlook is still one of steady recovery.
Most members of its rate-setting open market committee forecast growth of 3-3.5 per cent this year and higher next year. They forecast core inflation of 0.8-1 per cent.
“I’m expecting growth to continue,” says Jeffrey Lacker, president of the Richmond Fed, in an interview with the Financial Times.
“It’s important to remember as well that the economy’s still expanding despite the slightly disappointing data we’ve seen in the last few weeks.”
That outlook means the Fed is still a long way from changing its policy – something Mr Bernanke is likely to make clear in his testimony.
What the bad data do prompt is a reversal in the Fed’s internal debate: in spring it was all about when and how to exit from very loose monetary policy, now it is more about what to do if even looser policy were required.
Fed officials have a range of measures to judge if the outlook has deteriorated far enough to merit more easing. Some are focused on inflation expectations, which remain quite strong. As long as consumers, markets and businesses still expect inflation, these officials are fairly confident that it will come to pass.
Others will need evidence that the recovery is no longer on course to bring down unemployment.
If weak job market data continue, for example, they could prompt concern about downward pressure on wages leading to very low inflation.
The Fed identifies a range of options if it does need to act but all of them come with risks, opponents on the Federal Open Market Committee, and uncertainty about their effects. The two simplest measures will be to stop paying interest on bank reserves, encouraging banks to lend the money out instead, or to start reinvesting capital repayments from the Fed’s portfolio of mortgage-backed securities.
Neither is a drastic move but the Fed will expect quite a strong signalling effect from its first change towards looser policy.
Cutting interest on bank reserves has the advantage of being easy to reverse but could lead to serious distortions in the money markets.
Another possibility is a change of communication. One option that the Fed has begun to study is linking its pledge of low rates to an external condition.
At the moment, the Fed says rates are likely to stay “exceptionally low” for an “extended period”. Instead, it could say that they will stay low until a variable, such as the price level, has reached a certain target.
Academic research suggests this could be effective in preventing deflation because it commits the central bank to keeping rates at zero until the goal is reached. It would not distort markets and is more flexible than a crude promise to keep rates at zero for a fixed period.
Markets already expect the Fed to keep rates on hold until well into next year, however, which limits the potential gains. FOMC hawks such as Thomas Hoenig, the Kansas City Fed president, who already oppose the “extended period” language, will be deeply reluctant to tie their own hands in this way.
The second option – to start expanding the Fed’s balance sheet by buying more Treasuries or asset-backed securities – is the most controversial. Most Fed officials think that asset purchases were quite effective when the threat came from financial market turmoil early in 2009. They are less sure of the effects when markets are calm.
Many FOMC members are also seriously concerned about the side-effects of buying more assets.
“I would want to be convinced that the incremental macroeconomic benefits outweighed any costs owing to erosion of market functioning, perceptions of monetising indebtedness, crowding-out of private buyers, or loss of central bank credibility,” Kevin Warsh, a Fed governor, said in a speech.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
http://www.ft.com/cms/s/0/77c313a8-935d-11df-bb9a-00144feab49a.html?ftcamp=rss
AP:Air show fuels hope of better days for airlines
Optimistic start for Farnborough Airshow fuels hope that worst is past for airlines
Jane Wardell and Emma Vandore, AP Business Writers, On Tuesday July 20, 2010, 8:59 am
FARNBOROUGH, England (AP) -- The stream of plane orders continued at the Farnborough International Airshow on Tuesday, taking the tally past $21 billion and underscoring hopes of a resurgence in the aviation sector after a painful two-year downturn.
The deals at Farnborough, considered a barometer of the aviation and defense industry along with its sister show at Le Bourget in Paris in alternate years, show demand is reviving globally.
"This is a good time to buy aircraft," said Flybe Chief Executive Jim French after unveiling a deal to buy 35 Embraer 175 jets, worth $1.3 billion, from the Brazilian manufacturer. French said the company will use the purchases, which will be delivered between 2011 and 2017 to fund the regional carrier's expansion plans.
In a further sign of the market's health, Ireland-based leasing company Avolon, which was created just two months ago, ordered 12 Boeing 737-8 jetliners in a deal worth $921 million.
Boeing Commercial Airplanes President Jim Albaugh said the deal showed how rapidly demand was rebounding in the wake of the global financial crisis.
"It's amazing how quickly this market is coming back," Albaugh said as he signed the deal with Avolon. "Six months ago people were worried about liquidity."
In other deals announced Tuesday, luxury carrier Vistajet ordered six new aircraft from Canadian manufacturer Bombardier in an agreement worth $277 million. Bombardier said it had also received firm orders for four Global Express XRS jets from undisclosed customers based in Russia, valued at a total of $213 million.
French-Italian regional turboprop manufacturer ATR agreed sales worth $663 million at catalog prices with Brazilian carrier Azul Linhas Aereas and Air Lease Corporation for 30 ATR 72-600 turboprops. ATR also announced a deal for six ATR 72-500s worth $128 million, but did not disclose the buyer.
Airbus did not announce any new firm orders on Tuesday, but said Hong Kong Airlines intends to buy fifteen of its A350s and ten A330-200s with a new net value of $2.8 billion.
More than 1,000 exhibitors from 38 countries have signed up for Farnborough, with delegations from Egypt, Taiwan and Morocco attending for the first time. Organizers also cited stronger interest from major players China and Russia.
Analysts don't expect anything close to the record-breaking $88.7 billion worth of deals announced at Farnborough in 2008, but the gathering has already exceeded the slow orders for commercial planes at Le Bourget last year, at around $7 billion.
The global industry is expected to return to a profit this year after a he huge loss of $9.4 billion in 2009. Asia and North America are expected to lead the recovery, with Europe lagging behind. Strikes at some airlines, the debt crisis and the volcanic ash cloud that caused major disruptions this spring are all hurting Europe's recovery.
Airbus chief salesman John Leahy said his company and U.S. rival Boeing survived the downturn better than in the past because they anticipated a slump in orders and let their backlogs build up without increasing production.
Bombardier Commercial Aircraft President Gary Scott was more cautious about the near-term outlook, saying airlines needed to be sure they could sustain recent post-crisis gains before they had the "balance sheet and the courage to order airplanes in significant quantities again."
Etihad Airways, a buyer in recent years, said it wasn't planning any new orders this year because it has taken care of its fleet needs through at least 2020. But fellow Middle Eastern airlines Emirates and Qatar did place orders, as did European carrier Aeroflot and plane leasing firms GE Capital Aviation, GECAS and Air Lease Corp.
Boeing has notched up a number of sales for its fuel-efficient 787 jetliner, which is making its international debut at Farnborough after a problem-plagued production line delayed the Chicago-based company's delivery schedule. The first 787 is due to be delivered to Japan's ANA later this year, more than two years overdue, and Boeing has said that could slip into the first few weeks of 2011.
But the optimism in the aviation sector wasn't extending to the defense side of the sector, where massive cuts to Western military budgets were the talk of Farnborough.
In the U.S., the world's biggest single defense market, the Pentagon is looking to trim some $100 billion of savings from personnel and procurement over the next five years. In Britain, Europe's largest market, the government is considering cuts of up to 20 percent.
Airbus' long-delayed A400M military transport plane is providing a high profile symbol of the problems facing the defense sector.
Britain has already scaled down its order for the four-engine military transport, which will take part in the daily flying display at Farnborough.
"We demand, and the nation expects, that our armed forces are provided with the equipment and support they require to do the jobs that we ask them to do," U.K. Defence Secretary Liam Fox said at Farnborough. "But in addition we demand, and the nation expects, that we can demonstrate value for money on defense expenditure."
Airbus expects to start delivering A400Ms sometime after December 2012, around four years behind schedule and 50 percent over budget because of technical glitches. The original seven customer nations for the aircraft -- Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey -- agreed with Airbus' parent European Aeronautic Defense & Space Co. in March to spend an additional euro3.5 billion to save the project after months of bickering about who should pay for cost overruns.
Analysts will also be watching for developments in the bitter Boeing-Airbus battle to win a $35 billion contest to provide aerial tankers to the U.S. Air Force -- the World Trade Organization ruled earlier this month that European governments gave Airbus illegal subsidies for the project.
The show runs July 19-25 at an airfield about 30 miles (50 kilometers) west of central London.
AP reporter Andrew Khouri contributed to this report.
>>VXX +3.69% (27.16), FAZ +5.37%, QID +3.14%, X -2.09% (40.36), SPY -1.29% (105.91)
However watch copper and FCX. Copper gains on very low LME inventory levels, now 2.975
BL: Pimco Sells Black Swan Protection as Wall Street Markets Fear
By Shannon D. Harrington, Miles Weiss and Sree Bhaktavatsalam
July 20 (Bloomberg) -- Wall Street’s hottest new product is fear.
Almost two years after Lehman Brothers Holdings Inc.’s failure caused world markets to seize up, Pacific Investment Management Co. is planning a fund that will offer protection to investors against market declines of more than 15 percent. Morgan Stanley strategists estimate demand for hedges against such cataclysms helped drive as much as a fivefold increase last quarter in trading of credit derivatives that speculate on market volatility.
The efforts to protect against another disaster, which helped drive up the relative costs of the most bearish credit derivatives to the highest in two years, show that investors’ psyches still haven’t recovered from the Lehman bankruptcy on Sept. 15, 2008, which erased $20.3 trillion in stock market value worldwide and caused credit markets to freeze.
“Everyone is starting to realize that this is going to be a much longer, much more difficult path to recovery,” said William Cunningham, head of credit strategies and fixed-income research at Boston-based State Street Corp.’s investment unit, which oversees almost $2 trillion. “It’s really quite fragile and vulnerable in a way that we haven’t seen in our lifetime.”
Demand for protection against so-called tail risks, extreme market moves that Wall Street’s financial models fail to detect, is increasing as investors react to events such as the May 6 stock market rout that briefly sent the Dow Jones Industrial Average down almost 1,000 points, or Greece’s sovereign debt crisis, which on June 7 sent the euro to a four-year low against the U.S. dollar.
Black Swans
For much of the year before Lehman’s collapse, Nassim Nicholas Taleb warned bankers that they relied too much on probability models and had become blind to potential catastrophes, which he labeled black swans, a reference to the widely held belief that only white swans existed -- until black ones were discovered in Australia in 1697. His 2007 book, “The Black Swan,” contends tail risks are becoming more severe.
To hedge against tail risks, investors usually look for the cheapest insurance against a cataclysmic market sell-off, mainly through derivatives that are expected to multiply in value as prices plummet for everything from stocks to the Australian dollar.
The Indiana Public Employees Retirement Fund, with $14.1 billion of assets, asked financial institutions in January to send information on a tail-risk management program that would protect it against “an extreme market downturn,” according to a request for information on the manager’s website.
Tail-Risk Pioneer
The term long-tail risk is derived from the outlying points on bell-shaped curves that forecasters use to plot the probability of losses or gains in a given market. The most probable outcomes lie at the center. The least probable, such as a decline of 5 percent in an index that most days rises or falls by less than 0.25 percent, are plotted at the “tails” of the curve. The greater the deviation, the longer the tail.
Taleb helped pioneer tail-risk hedging in the 1980s, trading options for banks including First Boston Inc., now part of Credit Suisse Group AG. Taleb built what he later termed a “massive” position in options on Eurodollar futures when the stock market crashed on Oct. 19, 1987. The Dow’s biggest one-day drop in history prompted the Federal Reserve to pump liquidity into the banking system, lowering interbank borrowing rates and causing the futures to surge.
‘Drop Like Flies’
Pimco, manager of the world’s biggest bond fund, Deutsche Bank AG and Citigroup Inc. are among firms offering clients tail-risk protection, either through funds or traded instruments that act as hedges. Taleb said few will have the stomach to stick with the strategy.
“They will drop like flies,” said Taleb, now a professor at New York University’s Polytechnic Institute, who in 1999 set up tail-risk hedge fund Empirica LLC, which he ran for six years. “They and their customers will give up at some point. I’ve seen it before.”
Besides the sovereign debt strains in Europe that led to Greece, Spain and Portugal having their credit ratings reduced, investors such as Kyle Bass, who made $500 million three years ago on the U.S. subprime collapse, are concerned that even top- ranked governments may face hyperinflation from bailing out the global financial system. The U.S. has $8 trillion of Treasuries outstanding, up from less than $4.5 trillion in mid-2007.
China is grappling with a property bubble as its world- leading 11.9 percent economic expansion slows. Prices in 70 cities rose 11.4 percent in June from a year earlier following a record 12.8 percent in April and 12.4 percent in May, according to China Information News.
Market Liquidity
At the same time, traders say that market liquidity, or the ability of investors to easily trade in and out of positions as markets change, hasn’t fully recovered from the Lehman collapse. Even though the amount of Treasuries outstanding has increased about 75 percent the past three years, the average daily trading volume of the securities among the primary dealers has declined about 12 percent, according to Fed data.
“In some of these asset classes, it’s just not practical to reduce risk by selling given the lack of risk appetite and illiquidity,” said J.J. McKoan, co-director of global credit investments in New York at AllianceBernstein LP, where he helps manage $199 billion in fixed-income assets.
Improbable Occurs
Investors were reminded that the improbable can happen by the events of September 2008 -- from the government seizure of mortgage-finance companies Fannie Mae and Freddie Mac to Lehman’s bankruptcy and the near-failure of American International Group Inc., once the world’s largest insurer. Defaults on mortgages given to the least creditworthy borrowers drove financial institutions worldwide to take $1.8 trillion in writedowns and losses.
The seemingly growing occurrences of events that fall on the fringes of probability are prompting pension fund managers and other institutional investors -- who once shunned costly hedging strategies -- to reconsider. And they’re doing it even as economists predict the U.S. economy will grow an average of almost 3 percent through 2012 and as analysts forecast the Standard & Poor’s 500 Index will gain 17 percent through year- end.
“People are trying to move beyond historic notions that tail risk events are so infrequent on the one hand, and so extreme on the other hand, that there is nothing you can do about them,” said Eugene Ludwig, who started a Washington-based risk management firm called Promontory Financial Group after serving as U.S. Comptroller of the Currency under former President Bill Clinton.
‘New Normal’
Pimco Chief Executive Officer Mohamed El-Erian developed tail-risk strategies when he was manager of Harvard University’s endowment in 2006 and 2007, and wrote about the importance of such hedging in his book, “When Markets Collide.”
El-Erian, who describes America’s economic future with the term “new normal,” advocated the strategy he applied at Harvard on returning to Pimco in January 2008. Pimco, which manages about $1.1 trillion, opened its first mutual fund aimed at minimizing risks from systemic shocks that October. The Pimco Global Multi-Asset Fund is co-managed by El-Erian and Vineer Bhansali.
Pimco, the Newport Beach, California-based investment firm that runs the $234 billion Total Return Fund, is using strategies in many of its funds to protect against tail events, said Bhansali, chief architect of the company’s tail-risk management program.
‘Cheap Protection’
“You don’t want to try to be too smart in trying to forecast what is going to happen and which hedge is going to perform better,” said Bhansali, who holds a doctorate in theoretical particle physics from Harvard in Cambridge, Massachusetts, and ran the exotic and hybrid options trading desk at New York-based Citigroup. “What you want to do is accumulate cheap protection.”
The Pimco Tail Risk Hedging Fund 1 will be the first in a potential series of partnerships, according to a private placement filed with the U.S. Securities and Exchange Commission on June 23. The initial fund will be designed to protect investors from a drop of more than 15 percent in a benchmark index that Bhansali declined to identify.
ELVIS
Deutsche Bank is marketing a tail-risk hedging index that gains in value when investor expectation of stock-market volatility increases, according to material the bank sent to clients. The so-called Equity Long Volatility Investment Strategy, or ELVIS, uses derivatives called variance swaps linked to the S&P 500 that bet on the index’s volatility. Derivatives are contracts whose value is tied to assets including stocks, bonds, commodities and currencies, or events such as changes in interest rates or the weather.
Citigroup hired John Liu, a former employee of the Indiana pension fund, about two months ago for a newly formed unit that will advise pension plans, endowments and foundations on tail risk hedging, according to a prospective investor who declined to be named because the hire hasn’t been publicly announced.
Liu was formerly the managing director of equity strategies at Vanderbilt University, the Nashville, Tennessee-based college that in late 2005 tried to hedge portions of its endowment by using tail-risk insurance.
“This has become something of a ‘me-too’ trade lately,” said Mark Spitznagel, a former Taleb trading partner at Empirica, who now runs Santa Monica, California-based Universa Investments LP, which Taleb advises. “These guys are all very new to a difficult game that we’ve been playing for a very long time now.”
Costs Rise
Along with the demand, the costs of tail-risk hedging have also climbed. In June, investors buying options that paid off should the S&P 500 plunge more than 23 percent from its April high were paying 75 percent more than those speculating on gains. The premium was the highest ever, according to data compiled by Bloomberg and OptionMetrics LLC. Options give investors the right to buy or sell shares at a predetermined price.
The risk premiums that investors were willing to pay for the most bearish options on a European credit index rose to the most since before Lehman’s collapse. The so-called three-month volatility skew, a measure of the risk premium for options trading far from their strike price -- known as out-of-the-money -- versus those trading close to the strike, reached 30 percentage points on June 4, the highest in at least two years, and up from 5 percentage points at the end of 2009, Goldman Sachs Group Inc. data show. The skew has since fallen back to 9 percentage points.
In absolute terms, the cost of an out-of-the-money four- month option giving the right to buy protection against default by 125 European companies was $930,000 for a $100 million trade in May, compared with $630,000 yesterday.
‘Sudden Storm’
Goldman Sachs strategists said last month that investors were overpaying for the derivatives as fears of a sovereign default in Europe became too extreme, and not paying enough to hedge against higher-probability scenarios such as a prolonged period of low growth that spares the financial system while causing a jump in defaults among the lowest-rated borrowers.
“To put it into sailing terms, investors are paying a high premium to hedge against a sudden storm,” Goldman Sachs strategist Alberto Gallo in New York said. “But they’re not willing to hedge against a prolonged period of no wind. This creates a buy opportunity for credit.”
Trading in options used to speculate on price swings in benchmark credit-default swap indexes rose as much as fivefold last quarter from the beginning of 2010, according to estimates of activity at Morgan Stanley, said Sivan Mahadevan, global head of equity and credit derivatives strategy at the firm in New York.
Bondholder Protection
“It’s one of the most significant credit developments since 2008,” Mahadevan said. “Investors can’t just think of credit as being a low volatility asset class anymore.”
Credit-default swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt.
Investors should be cautious in following the herd, said Eric Petroff, director of research at Wurts & Associates, a Seattle-based consulting firm that oversees about $30 billion on behalf of institutional investors.
“Products that protect you from tail risk tend to crop up after the tail has occurred,” he said. “Back in 2007, it made a lot of sense to hedge tail risk but now it just seems brilliantly misguided.”
Pine River
Other asset managers that have been hedging against improbable events are creating funds to take advantage of demand. Pine River Capital Management LP, a Minnetonka, Minnesota, firm that has $2.1 billion in assets under management, started the Nisswa Tail Hedge Fund LP last month, according to a June 15 filing with the SEC. The partnership was formed at the request of investors who wanted access to the hedging techniques used by Pine River’s primary multi-strategy fund, which gained 40 percent during 2008 and 2009, according to Aaron Yeary, a co-founder.
“By buying prudent hedges and staying liquid, it allowed us to be on the offense during the crisis,” said Yeary, who is running Nisswa Tail Hedge with Nikhil Mankodi. “Some sold their liquid investments and were left with garbage,” Yeary said, adding that Nisswa Tail Hedge has about $200 million in assets.
Capula, Ionic
Capula Investment Management started a tail-risk fund in March with about $100 million, which has grown to about $650 million, according to a person familiar with the fund, who declined to be identified because the fund details are private. It may top $1 billion in the next two months, the person said.
Ionic Capital Advisors LLC, a New York-based investment firm founded by former employees of Highbridge Capital Management LLC, is offering tail risk protection through Ionic Select Opportunities Fund LLC, according to a private placement notice filed with the SEC on June 11. Mary Beth Grover, a spokeswoman for Ionic, declined to comment.
Taleb said sticking with a tail-risk strategy can be psychologically challenging because payoffs, while big, are less frequent.
“If you looked at numbers over a period of time -- six, seven, eight years -- there’s much higher return,” Taleb said. “But if you watch a trader in any given year, he looks like an idiot. No trader wants to feel like he’s an idiot.”
To contact the reporters on this story: Shannon D. Harrington in New York at sharrington6@bloomberg.net; Miles Weiss in Washington at mweiss@bloomberg.net; Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net
Last Updated: July 19, 2010 20:26 EDT
So far, not much in this earnings season to suggest another leg up in the bull market, as some perma bulls were saying two weeks ago
I remain with a BEARISH bias, and protected with index puts
Recap: GS Equity trading revenue -89%, lowest since Q4 2008, in technology disappointments: IBM shares down 5%, sales missed estimates, TXN down 6%, sales & earnings missed estimates
Even venerable PepsiCo disappoints, and ultra blue chip J&J cuts future earnings forecasts
Housing starts disappoint, so far not much to be happy about
BL: Arctic Ice ‘Melting Fast,’ May Reach All-Time Low, Russia Says
By Maria Kolesnikova
July 20 (Bloomberg) -- Arctic sea ice is melting faster than expected and this season’s loss may match the record reached three years ago, Russia’s environmental agency said.
“Ice in the Arctic is melting very fast,” Federal Hydrometeorological and Environmental Monitoring Service chief Alexander Frolov said today.
The latest figures show that Arctic Ocean ice covered about 10.8 million square kilometers in June, less than at the same time in 2007, when the pack eventually shrank to an all-time low, Frolov told reporters in Moscow. The record was reached Sept. 16, 2007, when the so-called Arctic sea ice extent shrank to 4.14 million square kilometers (1.63 million miles), according to the National Snow and Data Center in the U.S.
Arctic ice coverage may fall as much as 30 percent below the average from 1979-2000, according to Frolov. “This means that many waterways will be ice-free,” he said.
Scientists have highlighted declining Arctic sea ice as an indicator of global warming. Recent “anomalies” suggest that the North Pole may be ice-free during summer within a few decades, rather than by 2080, which is the current prediction of the Intergovernmental Panel on Climate Change, Frolov said.
“The ice may melt fully in summer and freeze in winter,” Frolov said. “This is one possible scenario.”
To contact the reporters on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net,
Last Updated: July 20, 2010 08:06 EDT
BL: Spain, Ireland, Greece Sell Debt as Demand Improves; Hungary Falls Short
By Andrew Davis and Lukanyo Mnyanda
July 20 (Bloomberg) -- Spain, Ireland and Greece sold almost 10 billion euros ($13 billion) of debt, with demand rising for shorter-dated securities, on optimism the European Union’s aid programs will contain the region’s fiscal crisis.
Hungary raised less than planned at a sale of three-month bills, triggering a decline in the forint. Greece, which activated an EU-led bailout package in May to avoid default, auctioned 13-week bills, with investors bidding for 3.85 times the amount on offer, compared with a bid-to-cover ratio of 3.64 times at a sale of 26-week securities a week ago. Spain and Ireland also sold debt.
“Overall funding pressure is losing steam,” said David Schnautz, a fixed-income strategist at Commerzbank AG in London. “We expect the peripheral markets to enjoy even more potential outperformance against the core. Obviously we still have this event risk looming with the banks’ stress tests.”
Concern that Europe’s high-deficit countries wouldn’t be able to meet their financing needs pushed yield premiums to euro-era records and led the EU to design a 110 billion-euro bailout for Greece and a broader 750 billion-euro backstop for the region. The debt crisis prompted governments across Europe to impose additional austerity measures to convince investors they were serious about taming their deficits.
Rating Cut
Ireland, with the euro-region’s biggest budget shortfall, sold 1.5 billion euros of six- and 10-year bonds today. Demand for the shorter-maturity debt was 3.6 times the amount offered, up from 3.1 times at a June auction. The auction came a day after Moody’s Investors Service cut the country’s credit rating one level to Aa2, citing the government’s “significant loss of financial strength.”
The yield premium investors demand to hold Irish 10-year bonds instead of similar-maturity German bunds, the region’s benchmark government security, fell nine basis points to 275 basis points. The yield difference, or spread, between Spain and Germany narrowed three basis points to 173 basis points, the least in a month. The Greek 10-year spread with bunds also fell.
Hungary was the one country that struggled to sell debt. Three days after the International Monetary Fund suspended talks over the new government’s refusal to impose more austerity, Hungary sold 35 billion forint ($156 million) of three-month bills, 10 billion less than planned. The yield rose to 5.47 percent, from 5.28 percent at a sale a week ago.
The forint weakened 0.2 percent to 290.11 per euro as of 1:31 p.m. in Budapest, after advancing 0.4 percent before the auction.
To contact the reporter on this story: Andrew Davis in Rome at abdavis@bloomberg.net.
Last Updated: July 20, 2010 07:33 EDT
>>FAZ +5.62%, pushing $17: Goldman Sachs Profit Drops 82%, Missing Analysts’ Estimates
By Christine Harper
July 20 (Bloomberg) -- Goldman Sachs Group Inc. said second-quarter profit dropped 82 percent, missing analysts’ estimates on a slide in trading revenue five days after settling U.S. regulators’ fraud allegations.
Net income fell to $613 million, or 78 cents a share, from $3.44 billion, or $4.93, a year earlier, New York-based Goldman Sachs said in a statement today. The average estimate of 21 analysts surveyed by Bloomberg was for earnings of $1.99 per share, with estimates ranging from 77 cents to $4.34. Some of the analysts didn’t include costs of the settlement.
Lloyd Blankfein, Goldman Sachs’s chairman and chief executive officer, is working to restore the firm’s reputation after agreeing to pay $550 million to settle the Securities and Exchange Commission’s fraud accusations. The bank’s bigger competitors, including JPMorgan Chase & Co., last week also reported lower trading revenue as market gyrations reduced clients’ willingness to take on risk. Concern that the U.S. economic rebound will stall and reform legislation will crimp profits at finance companies have weighed on their stocks.
“The clouds over the financial industry remain thick,” said Michael Farr, president and founder of Washington-based Farr, Miller & Washington LLC, who manages more than $650 million. Farr, who sold his Goldman Sachs stock when the SEC suit was filed on April 16, said he’s considering buying again.
“You’ve got probably the greatest, most innovative investment bank in the world, leading the category, which looks cheap,” Farr said before earnings were released. “I have not put my money back in yet but I am taking a close look at doing just that.”
Share Performance
Goldman Sachs fell 49 cents, or 0.3 percent, to $145.68 in New York Stock Exchange composite trading yesterday, leaving the stock down 14 percent this year through yesterday. The S&P 500 Financials Index, which tracks the performance of 80 financial company shares, is down 2 percent this year.
The company’s shares rebounded last week on news that the firm had reached a settlement with the SEC over its 2007 sale of a collateralized debt obligation. The cost was lower than the $1 billion some analysts had estimated and the settlement didn’t require any management changes. Analysts slashed earnings estimates in recent weeks on concern market declines would hurt trading revenue as well as on costs related to the settlement and a one-time bonus tax imposed in the U.K.
“People have gotten overly pessimistic on Goldman,” Charles Peabody, an analyst at Portales Partners LLC, said before the earnings were released. “We don’t believe they’ve lost big chunks of their client base, and we do believe in their risk-management capabilities.”
Bank of America
Shares in some of Goldman Sachs’s biggest rivals fell last week after they reported revenue that was lower than investors predicted. JPMorgan Chase’s second-quarter net revenue dropped 9 percent from the first quarter as revenue at the investment bank unit slid 24 percent. Bank of America Corp.’s revenue fell 9 percent as global banking and markets revenue tumbled 38 percent.
Morgan Stanley, which was the second-biggest securities firm after Goldman Sachs before both converted to banks in 2008, is due to report earnings tomorrow.
Investors and analysts said before the earnings that they’re keen for news on how the settlement, which imposes changes to the way Goldman Sachs sells mortgage-related securities, and the wider financial regulatory reform bill passed by the U.S. Senate last week will affect earnings.
“I do think there will actually be business reforms where their risk taking might be reined in,” said Portales Partners LLC’s Peabody. “I don’t think there’s any question that Goldman did play in the grey areas” and curbing that “reduces your opportunities.”
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net
Last Updated: July 20, 2010 08:09 EDT
BL: Housing Starts in U.S. Slide to Lowest Level Since October on Sales Slump
By Bob Willis
July 20 (Bloomberg) -- Housing starts fell in June to the lowest level since October as a slump in sales following the expiration of a government tax incentive caused U.S. builders to cut back.
Work began on 549,000 houses last month, fewer than forecast by the median estimate of economists surveyed by Bloomberg News and down 5 percent from May, Commerce Department figures showed today in Washington.
The retreat following the end of government support shows it will be difficult for the industry that precipitated the recession to sustain a recovery. Mounting foreclosures will swell the supply of houses on the market and pressure prices, while prospective buyers shy away as a lack of jobs shakes confidence in the world’s largest economy.
“Housing will see a notable hangover over the next few months,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “We pulled sales forward with the credit, so it’s a matter of time as we allow demand to catch up. Jobs are the key.”
Economists forecast starts would fall to a 577,000 annual rate, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from 525,000 to 620,000.
Building permits, a gauge of future construction, rose 2.1 percent last month to a 586,000 pace, propelled by a 20 percent jump in multifamily applications that are often volatile. Permits for single-family housing, the biggest part of the market, dropped 3.4 percent to a 421,000 pace, the lowest since April 2009.
Year-Over-Year
Starts were down 5.8 percent from the same month last year, while permits decreased 2.3 percent.
Construction of single-family houses fell 0.7 percent to a 454,000 rate, a 13-month low, after the prior month’s 19 percent slump.
Work on multifamily homes, such as townhouses and apartment buildings, decreased 22 percent to an annual rate of 95,000.
The drop in housing starts followed the April 30 deadline to sign purchase agreements and become eligible to receive a government credit worth as much as $8,000.
All four regions of the country had a decrease in starts last month, led by an 11 percent slump in the Northeast and a 6.9 percent decline in the Midwest.
Builders have to contend with a growing supply of existing homes that is driving down home values as foreclosures rise. Home seizures jumped 38 percent in the second quarter from a year earlier, RealtyTrac Inc. said last week, putting lenders on pace to claim more than 1 million properties this year.
Growing Pessimism
Homebuilder sentiment fell in July to its lowest level since April 2009, according to the National Association of Realtors yesterday, and Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased in July to the lowest level in 11 months, the group reported last week.
Earlier in the month, the Labor Department reported private payrolls rose a less-than-forecast 83,000 in June and total jobs fell by 125,000, the first job decline this year. Economists surveyed by Bloomberg forecast unemployment will end the year at 9.5 percent, unchanged from the rate in June.
Homebuilders are seeing slowing orders. Lennar Corp.’s home sales were running 20 percent to 25 percent lower last month than a year earlier as the expiration of the tax credit sapped demand, Chief Executive Officer Stuart Miller said June 24.
“The new home market and housing in general still face serious headwinds from current economic and legislative conditions,” Miller said on a conference call with investors. “The prospect of additional delinquencies ahead continues to moderate this recovery as shadow inventory continues to be absorbed.”
To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
Last Updated: July 20, 2010 08:30 EDT
______________________
AP: Home construction sinks to lowest level since Oct.
Home construction falls 5 percent in June to lowest level since October; building permits rise
Alan Zibel, AP Real Estate Writer, On Tuesday July 20, 2010, 8:34 am
WASHINGTON (AP) -- Home construction plunged last month to the lowest level since October as the economy remained weak and demand for housing plummeted.
The Commerce Department says construction of new homes and apartments in June fell 5 percent from a month earlier to a seasonally adjusted annual rate of 549,000. May's figure was revised downward to 578,000. The results were driven by a more than 20 percent decline in the volatile condominium and apartment market.
However, building permit applications, a sign of future activity, rose 2.1 percent from a month earlier to an annual rate of 586,000
The slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April.
http://finance.yahoo.com/news/Home-construction-sinks-to-apf-3302765136.html?x=0
PM: AAPL -1.32% (242.22), ADBE -1.99% (27.12), ALTR -1.03% (28), AMD -3.49% (7.18), AMZN +0.23% (120.22) APC -1.14% (45), BAC -1.98% ($13.344), BIDU -1.99% (71.45) BP -2.24% (34.95), C -1.51% (3.92), CNP 14.05, CRUS -5.83% (16.47), FAZ +5.56% (16.70), FCX -0.59% (60.50), FSLR -1.41% (129.70), GLD -0.17% (115.53), GOOG -0.75% (462.67), GS -2.75% (141.64, INTC -1.48% (21.27), JPM -1.69% (38.38), LVS -2.57% (23.13), MOT -1.39% (7.81), QID _2.97% (18.70), QQQQQ -1.50% (44.05) RIG -0.54% (47.82),
RIMM -1.86% (53.26), SPG 83.36, SPY -1.17% (106.05), TLT +0.46% (100.64), VMW -3.09% (27.35), VXX +3.09% (27.35), WYNN (80.01), X -1.99% (40.40),
GS -3% PM, Goldman profit slides on SEC charge, revenue drops
Goldman revenue drops 36 percent, falls shorts of forecasts adding to investor concerns
Stephen Bernard, AP Business Writer, On Tuesday July 20, 2010, 8:24 am
NEW YORK (AP) -- Goldman Sachs Group Inc. has reported its second-quarter net income fell 83 percent to $453 million as its trading revenue fell and it booked a charge for its settlement of civil fraud charges with the Securities and Exchange Commission.
The company's revenue fell short of expectations and sent stock prices falling. Goldman followed IBM Corp., which late Monday reported revenue that disappointed investors.
Goldman's trading revenue fell along with that of other big banks that were hard by the spring plunge in the stock market. The drop in their revenue is adding to investors' concerns about how new federal regulations will affect banks' ability to profit from trading operations.
The company took a $550 million charge to cover the cost of the settlement with the SEC that was announced last week.
Excluding the settlement and other one-time costs, net income after payment of dividends on preferred stock came to $2.75 per share, easily topping the $2.08 analysts forecast.
Revenue fell 36 percent to $8.84 billion, short of the $8.94 billion predicted by analysts.
Shares are down $3.68, or 2.5 percent, at $142.00 in pre-opening trading.
http://finance.yahoo.com/news/Goldman-profit-slides-on-SEC-apf-533644931.html?x=0
>>Why Hasn't Ben Bernanke Warmed Up the Helicopters Yet?
Posted Jul 19, 2010 11:18am EDT by Peter Gorenstein in Newsmakers, Recession, Politics
Related: TLT, TBT, UDN, UUP, GLD, ^GSPC, ^DJI
http://finance.yahoo.com/tech-ticker/why-hasnt-ben-bernanke-warmed-up-the-helicopters-yet-yftt_522216.html;_ylt=At8iHkFHYfOrze8vKSbsw_reba9_;_ylu=X3oDMTFnbnVwcmFpBHBvcwMzBHNlYwNjb250ZXh0dWFsLXRlY2h0aWNrZXIEc2xrA3doeWhhc250YmVuYg--
For all the talk of “Helicopter Ben” and how the Federal Reserve’s extraordinary measures in 2008 and 2009 were going to set off hyper-inflation, it now appears deflation is the greater threat to the economy. The Consumer Price Index fell 0.1% in June, more than expected and a third-straight decline. Core CPI did gain 0.2%, a positive, but still far from a reading of rapid inflation.
Given the looming deflation threat, should the Fed be doing more? That's the question Aaron discusses in the accompanying clip with Dan Gross, columnist with Newsweek.
In 2008, the Fed pulled out every tool in the shed to save the financial system; Bernanke & Co. even invented some new ones. Most notably, the Fed backed the commercial paper market, bought a trillion dollars worth of mortgage-backed securities and rescued AIG.
Now that urgency has been replaced with a sense of complacency, Gross says. “There is a sense in Washington in particular the Fed has kind of done all it’s going to do to help the economy to help the recovery.”
The irony here is that in a famous 2002 speech, Bernanke said the Fed should do all it can to stave off deflation, even if that means dropping money from helicopters. “We seem to be in that moment but I don’t see the helicopters being warmed up yet,” Gross notes.
If the Fed isn’t going to take the lead, Gross believes Bernanke might be well served to take a page out of the Greenspan playbook and at pressure Congress or the White House to act with fiscal policy, perhaps as early as this week's Congressional testimony.
Critics would say that’s only going to increase our already out of control deficit. But Gross says the it’s the lesser of two evils.
The U.S. government should take advantage of historically low rates to borrow money we can then use to increase economic activity. “If we don’t do something to try to increase demand to try to boost employment we could have more serious problems going forward,” he says. (For more on this, see: "Misguided Hysteria": Debt Causes Inflation & Other Common Misperceptions)
Earnings are very good for many, but guidance and forward looking is weak...
AP: Stocks headed lower as Goldman, IBM revenues slip
Stocks headed for lower open after weaker revenues from Goldman, IBM disappoint
Stephen Bernard, AP Business Writer, On Tuesday July 20, 2010, 8:25 am
NEW YORK (AP) -- Stocks are headed for a lower opening after revenues from Goldman Sachs and IBM came in lower than investors expected.
The miss from the leading investment bank early Tuesday was the latest weak of weakness on revenues in this second-quarter corporate earnings season. Late Monday, IBM reported better bottom-line results but its revenues were also weaker than expected.
Ahead of the opening bell, Dow Jones industrial average futures fell 90, or 0.9 percent, to 9,970. Standard & Poor's 500 index futures dropped 10.30, or 1 percent, to 1,053.50, while Nasdaq 100 index futures fell 16.50, or 0.9 percent, to 1,789.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) -- Stocks are set to pull back Tuesday as growing corporate profits don't seem to be enough to satisfy investors.
Technology companies IBM Corp. and Texas Instruments Inc. both reported a jump in earnings after the market closed Monday, but that did not relieve concerns investors have had about potential revenue growth.
Traders have not been focusing on bottom-line profits, but instead on revenue growth and forecasts for future improvement. That's because economic reports in recent months have shown the recovery is slowing, so there is concern about where future revenue growth will come from and how much it will eventually hurt profitability.
A report on the housing market due out later Tuesday is expected to show builders cut back on construction last month and applications for new construction also fell.
IBM's revenue came in short of analysts' forecasts because of a drop in the value of service contracts. It also said sluggish growth in Europe was affecting its revenue. Texas Instruments' revenue rose, but it disappointed as expectations grew for chipmakers following a blowout quarter from fellow Intel Corp.
Goldman Sachs Group Inc., Apple Inc. and Yahoo Inc. are among the companies reporting results Tuesday. Goldman's will be closely watched after big banks last week failed to impress investors. Again the concern is with potential revenue growth. For the financial sector, that takes on added importance because of uncertainty about how much banks will be restricted from trading by new financial regulation reform.
PepsiCo said Tuesday its profit was hurt by foreign currency translations. The maker of Pepsi and Doritos said soft drink sales volume remains weak in North America.
Ahead of the opening bell, Dow Jones industrial average futures fell 69, or 0.7 percent, to 9,991. Standard & Poor's 500 index futures dropped 7.40, or 0.7 percent, to 1,056.40, while Nasdaq 100 index futures fell 16.75, or 0.9 percent, to 1,788.75.
IBM shares fell $6.29, or 4.9 percent, to $123.50 in pre-opening trading. Texas Instruments dropped $1.51, or 5.9 percent, to $24.04. Goldman Sachs shares fell 80 cents to $144.88. Pepsi shares dipped 44 cents to $61.61.
Economists polled by Thomson Reuters forecast housing construction fell 2.2 percent to a seasonally adjusted annual rate of 580,000 in June. Home construction has tailed off since a homebuyer tax credit expired at the end of April.
Investors initially dumped stocks following a report Monday showing homebuilders are pessimistic about future expansion. However, housing reports have largely been weak and expectations remain low for the sector that helped push the economy into recession.
The report is also expected to show that applications for building permits, a sign of future activity, fell 0.7 percent in June to an annual rate of 570,000.
The Commerce Department report is due out at 8:30 a.m. EDT.
Bond prices rose as investors opted for the perceived safety of government bonds. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.95 percent from 2.96 percent late Monday.
Overseas, Britain's FTSE 100 fell 0.4 percent, Germany's DAX index fell 1 percent, and France's CAC-40 fell 1.2 percent. Japan's Nikkei stock average fell 1.2 percent.
HS -5%: Housing starts down in the us, but building permits up
The total 449,000, sharply lower than forecast, but building permits higher than expected
ZH: New Shorting Targets: Equity Update
Submitted by Tyler Durden on 07/20/2010 07:03 -0500From Nic Lenoir At ICAP
Good morning,
Just a quick technical update on the S&P future. We had recommended shorting around 1,087 (a touch early) but the market has shaped a very clean bearish impulse from 1,099. Currently we see a target at 1,045 for this move, after which we could see a rebound to 1,070/1,079 before further downward pressure.
Our big picture view remains very bearish, but the wave pattern from 1,003 to 1,099 is unclear to me. One could argue we had a bullish impulse from the lows but honestly the wave count is very shaky as the volumeless melt-ups show no participation and act a lot more than a Fixed Income or a FX carry trade than a proper bullish risk appetite impulse. In that sense I picture the move from 1,003 to 1,099 more as a corrective rally, and we would now be in bearish wave 3 of III. If that is the case after seeing 1,045 or slightly lower (1,041.50 is the 61.8% retracement of the bounce up) we could consolidate back up to 1,070 and possibly 1,079 (1,080 should not be bypassed) before accelerating lower.
I will update later on USDCAD and USDCLP FX crosses as I believe a break higher of those pairs could be the trigger to deflationary move in financial assets which would go along with our bearish equities view and our call for a bearish correction in Gold in the near term.
Good luck trading,
Nic
http://www.zerohedge.com/article/equity-update-2
Bill Cara: Watch the top line, not the bottom line
Bill Cara’s Blog for July 20, 2010
July 20, 2010 by Bill Cara
Morning Call [8:12am ET] Prior to earnings season, I recommended that traders switch their focus onto the top line versus the bottom line as the latter can be manufactured with the aid of all kinds of tricks. Besides, since the overriding concern today is employment and personal income, it would be hard for a corporation to be expansive with employees if the business itself isn’t growing. Since the US economy is consumer driven, traders need to see revenue growth and enough to meet or exceed expectations.
Yesterday that did not happen with IBM or Texas Instruments and their stocks sold off in after market trading. A few days ago a couple key banks ran into the same problem. This morning all eyes are on Goldman Sachs. The present market environment is so fragile, it seems, that if Goldman Sachs reports a strong quarter, then stocks will rise, defying the Bear pressure that’s been evident since mid-April, and if not, then the broad market will likely tumble.
You’d like to think that a $14.7 trillion US economy would not be so influenced by a company that has annual revenue of about $55 billion and earnings of about $14 billion, but it is, at least at this point.
So, Goldman Sachs just reported. The current quarter revenue is $8.84 billion and earnings were $613 million ($0.78 vs $4.93). The stock is down -2.5% in pre-market trades.
Have a great day.
http://caracommunity.com/content/bill-cara%E2%80%99s-blog-july-20-2010