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Analyst cuts forecast on GMX Resources
NEW YORK (AP) -- A Morgan Keegan analyst said GMX Resources Inc.'s revised production forecast doesn't change his outlook on the natural gas company, since he still believes the Haynesville region can be a "huge" catalyst for the stock.
GMX Resources, which primarily explores and produces natural gas with its activities concentrated in east Texas, on Monday cut its 2008 production guidance to 13 billion cubic feet from a previous forecast range of 13 billion to 13.8 billion cubic feet.
The reduction is due to early delays in getting its horizontal drilling program going in the Haynesville/Bossier Shale acreage in east Texas and north Louisiana and some minor drilling slowdowns associated with hurricanes Gustav and Ike.
Analyst J. Michael Drickamer said the company is waiting on key materials and the delivery of a rig that was to occur in August which will now be delivered late in the fourth quarter.
"None of this changes our outlook," he wrote in a note to investors.
GMX Resources shares fell $1.08, or 2 percent, to $53.45 in Tuesday afternoon trading. The shares have ranged between $23.65 and $88.35 over the past year.
You're 100% right.
But they need to talk now.
Moody's downgraded the financial strength rating of Washington Mutual Bank to E from D+. Additionally, Washington Mutual preferred stock was downgraded to Ca from B2. All ratings of Washington Mutual Bank (deposits and senior unsecured at Baa3, subordinate debt at Ba1, short term Prime-3) and Washington Mutual (senior unsecured at Ba2, subordinate at Ba3, preferred at Ca) were placed under review for downgrade. The downgrade of the Bank Financial Strength Rating resulted from WaMu's severe asset quality issues which are depleting its capital base and leading to an erosion of its franchise. These issues are substantially limiting WaMu's financial flexibility and potentially preventing it from replenishing capital and preserving diversified and stable funding sources. This could lead to the acquisition of WaMu by a stronger financial institution with or without regulatory assistance. Although Moody's believes that the US Treasury's $700 billion asset purchase program has the potential to restore confidence in US banks, benefits of the program to WaMu are uncertain in the short-term. Moody's believes there is the potential that WaMu will be acquired by a larger, more stable financial institution. However, given the depth of the firm's asset quality problems, such a potential transaction could involve regulatory assistance.
VeraSun Energy's stock improves on upgrade
VeraSun Energy Corp.'s stock price rose a second consecutive trading day Monday after an analyst upgraded his rating yet urged investors to be cautious in wake of the ethanol producer's preannounced third-quarter estimates.
Citi Investment Research analyst David Driscoll improved his rating to "Hold" from "Sell" on the Sioux Falls, S.D.-based company.
He reduced his target price to $1.85 a share -- which he described as the floor asset value -- from $3 a share.
"Despite our upgrade, our risk rating remains 'Speculative' as hedging losses are significant and the firm's liquidity issues remain unresolved," he wrote.
He said there is substance in the company, noting its annual production of 1.64 billion gallons of ethanol: "In our opinion, the bad news is now factored into the stock price."
Driscoll's note came after VeraSun announced last week that it expected to post a third-quarter loss between $63 million and $103 million. It also began and canceled a public offering of 20 million shares.
VeraSun's difficulties can be traced to a decision to lock in significant quantities of corn in July when the market reached a peak, Driscoll said. The company generated large losses on its corn position when corn prices fell.
VeraSun's stock hit a record low of $1.33 a share on Wednesday but closed Friday at $1.72 a share. The price rose 7 cents, or 4 percent, to $1.79 a share in Monday afternoon trading.
Are you joking ???
I can't believe this !!!
130$/Barrel
Is it real ?
I don't have live price....
50% RUN
300$ not 30$, Excuse me.
I absolutely Agree with Simmons.
The problem is for the short term trading.
Oil can stay 6 Month around 85-115$ and then run back over 200$ with a vengeance.
Long term, there is incredible opportunity in the market to play the oil peak scenario.
The real mess will be around 2011-2012.
30$ Will be the average price in that time.
Right now, I'm just trying to establish a list of the the best oil play.
Morgan Stanley Announces Plan to Pursue Global Strategic Alliance with Mitsubishi UFJ Financial Group
Morgan Stanley today announced that it has entered into a letter of intent to pursue a strategic alliance with Mitsubishi UFJ Financial Group, Inc. (“MUFG”), Japan’s largest banking group and the world’s second largest bank holding company with $1.1 trillion in bank deposits.
The letter of intent relates to an investment in Morgan Stanley that would eventually reach 20 percent of its equity on a fully diluted basis. The investment would be based on Morgan Stanley's book value as agreed upon completion of satisfactory due diligence. Upon the closing, a representative of MUFG will join the Morgan Stanley board.
In addition to further strengthening the Firm’s capital position, this alliance would benefit Morgan Stanley and MUFG by providing each with a valuable strategic partner as it seeks to enhance its global footprint and capture financial services opportunities around the world. Morgan Stanley was granted approval yesterday by the U.S. Federal Reserve Board of Governors to become a Federal Bank Holding Company.
John J. Mack, Morgan Stanley’s Chairman and Chief Executive Officer, said, “This strategic alliance with Mitsubishi UFJ can put Morgan Stanley in an even stronger position as we look to realize the opportunities we see in the rapidly changing financial marketplace. As one of the largest commercial banks in the world, Mitsubishi UFJ would be a valuable partner as we transition to a bank holding company and build our bank services and deposit base. This alliance also would build on Morgan Stanley’s deep ties and market leadership in Japan and throughout Asia, and help us to continue growing our business in this critically important region. We would be honored to welcome a distinguished bank like Mitsubishi UFJ as a long-term investor and strategic partner of Morgan Stanley, and we would look forward to working closely with them to strengthen both of our businesses.”
The letter of intent is nonbinding and subject to definitive documentation and due diligence. The closing of the transaction would be subject to regulatory approvals and other customary conditions.
The Company’s common stock to be sold in the proposed private placement transaction will not at the time of issuance be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements.
Morgan Stanley (NYSE: MS - News) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 35 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.
Last major investment banks change status
The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks -- Goldman Sachs and Morgan Stanley -- to change their status to bank holding companies.
The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
The change continued the biggest restructuring on Wall Street since the Great Depression.
The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.
The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet. Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.
Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers and the forced sale of investment bank Merrill Lynch to Bank of America.
Investors feared that the last remaining independent investment banks would not be able to survive in their current form. There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.
The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.
In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.
The Fed said its action would take final effect after a five-day waiting period required under law.
The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.
After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.
But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.
The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies. The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.
Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government. But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.
$700B rescue plan may not save some troubled banks
NEW YORK (AP) -- A sweeping government plan to buy up to $700 billion in bad mortgages may not be enough to save some banks, which experts say may be forced to absorb big losses if they sell their troubled assets.
The proposal for the government to soak up the mortgage-backed securities would be the biggest bailout plan since the Great Depression, but experts say a critical issue will be how much it actually pays for the troubled assets.
How the government might acquire banks' toxic debt is still being ironed out, but one approach suggested by Treasury Secretary Henry Paulson involves a process under which financial institutions would propose a price for their mortgage-backed securities and the government would choose the lowest bids.
If banks sell at the proposed price -- say 50 cents on the dollar -- accounting rules would require firms to take the losses on their balance sheets before getting the damaged assets off their books. For weaker banks buffeted by the deepening credit crisis, the losses may hinder their ability to go out raise capital, make loans and ultimately stay afloat, according to industry experts.
"There is a risk that there will be bank failures to come," said Vincent R. Reinhart, former director of the Federal Reserve's monetary affairs division.
While the reverse auctions could help banks set a clearing price for mortgage-related assets, Reinhart said, that "price doesn't mean that every financial firm will be solvent" after those assets are sold.
Another risk is that if the auctions set too low a price for mortgage-related assets, other institutions with bad debt may be forced to take the distressed valuation onto their books under mark-to-market accounting rules, Reinhart said. Mark-to-market rules involve adjusting the price of an asset to reflect its current market value.
"If the auctions don't go well, it will drag down everybody's balance sheet who marks to market," Reinhart said.
The financial system has been battered by $500 billion in losses from the mortgage mess, and the International Monetary Fund has estimated the price tag could ultimately top $1 trillion.
The crisis has forced 11 federally insured banks and thrifts into failure this year. Another 117 banks and thrifts were considered to be in trouble in the second quarter -- the highest level since 2003 -- with the total assets of troubled banks tripling to $78 billion, according to the Federal Deposit Insurance Corp. The agency does not disclose which institutions are on its list, but on average, 13 percent of banks that make the list fail.
Christopher Whalen, senior vice president and managing director of Institutional Risk Analytics, has predicted that 110 banks with assets worth $850 billion are in danger of failing by next summer. He said the Treasury Department's rescue plan hasn't given him reason to be more optimistic.
"If the government comes in and buys these assets at a discount and you're a strong bank, you don't care because you're getting cash and you go off and do business. If you're a weak bank and you take a big hit, you may not have that option," Whalen said.
He said the government may decide that the only option to save some banks is to pay full price for the assets in exchange for equity, which could be sold later.
But that could be risky because if the government pays too high a price, it will be difficult if not impossible to go out and sell the assets for a profit in the future, meaning any losses incurred would be absorbed by taxpayers. But paying too little also is problematic because banks will be forced to take steeper losses that they may not be able to recover from.
"The government should be able to arrange to pick a price that helps the banks but also that allow the government to turn around and make a profit down the line," said Marvin Goodfriend, professor of economics at Carnegie Mellon University.
PEOPLE ARE VERY VERY ANGRY....
SCARY....
PEOPLE ARE VERY VERY ANGRY....
SCARY....
Trois avis sur l'or
Propos recueillis par Perrine Créquy
19/09/2008 | Mise à jour : 22:57 |
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Les analystent peinent à s'accorder sur une tendance pour les cours du métal du jaune, valeur refuge en temps de crise.
Raphaël Gallardo, stratégiste chez Axa investment managers
L'or a bien résisté, contrairement au palladium. Son cours est très corrélé à l'évolution du dollar et aux perspectives d'inflation. Nous pensons que les cours de l'or vont rebondir vers 800 dollars l'once, mais pas beaucoup au-dessus, car nous observons un ralentissement de croissance des ETF, qui sont désormais les moyens les plus utilisés pour miser sur le métal jaune.Globalement, l'évolution du marché des métaux dépend de ce qui, entre le ralentissement de la croissance mondiale et la demande chinoise, aura le plus fort impact. Notre scénario prévoit un ralentissement des économies développées dans un premier temps, puis les pays émergents seront touchés à leur tour. La théorie du découplage ne tient pas. Il y aura une resynchronisation entre les pays développés et les émergents, même si le rythme de croissance de ces derniers restera dynamique.La Chine est exposée à un risque d'atterrissage brutal de son immobilier côtier. Mais avec une dette publique égale à 16% de son PIB et des réserves de change évaluées à 2 trillions de dollars, le gouvernement chinois a les moyens de mener des grands programmes d'infrastructures pour soutenir la croissance. Il a les moyens d'agir et il va s'en servir, car la Chine entend créer 20 millions d'emplois par an.La hausse de la demande de métaux dans le monde est due à la Chine pour 95%. La demande devrait donc rester élevée sur l'ensemble des métaux. L'offre va rester contrainte pour la plupart, du fait de la concentration de la production avec un petit nombre de sociétés extractrices qui sont capables de décider de réduire leur production pour entrainer les cours à la hausse. Une remontée des prix est attendue, sauf pour le zinc qui est dans une tendance baissière. Le cuivre devrait à nouveau flamber, d'autant que les tensions sur l'offre sont grandes, notamment au Chili, qui est l'Arabie Saoudite du cuivre, tant ses réserves sont importantes. Ce pays détient en effet 40% des réserves mondiales de cuivre.
Fabrice Vennin, gérant d'un fonds sur les matières premières chez Meeschaert asset management
L'or peut de nouveau enregistrer une brusque et forte hausse, de l'ordre de celle observée mercredi. Dans les années 1979-1980, le métal jaune a bondi plusieurs fois de plus de 10% par séance. Son cours s'est comporté comme ceux des matières premières.L'or a pris de la valeur avec l'émergence de la crise, et son cours devrait refluer avec la résolution de cette crise. Actuellement, l'inflation se calme et le dollar se raffermit, donc le cours de l'or devrait ralentir, mais son niveau reste élevé.Dans l'allocation du fonds que je gère, je reste très équilibré sur l'or. A court terme, c'est-à-dire d'ici à la fin de l'année, le cours peut grimper jusqu'à 950 dollars l'once.
Thierry Lefrançois, économiste chez Natixis Asset Management
Le mouvement observé sur l'or mercredi correspond à une véritable poussée de fièvre. Le marché n'avait pas réagi lundi et mardi aux annonces inquiétantes dans les secteurs des banques et de l'assurance. La hausse brutale du prix de l'or correspond à un mouvement de panique des investisseurs qui ont fui les marchés actions et se sont reportés vers l'or, considéré comme la valeur refuge par excellence.Comme pour le pétrole, les cours ont tellement fléchi que la production a été interrompue sur certains sites. De plus, le point le plus bas de la crise n'est sans doute pas encore atteint.Nous pensons donc que l'or va continuer de prendre de la valeur. En 2009, il devrait coter à plus de 920 dollars l'once.
Trois points de vue
sur le pétrole
Propos recueillis par Perrine Créquy
19/09/2008 | Mise à jour : 22:58 |
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Les cours du pétrole devraient fléchir, mais ils resteront à des niveaux élevés.
Thierry Lefrançois, économiste chez Natixis Asset Management
Les cours du pétrole fluctuent avec une vitesse impressionnante. La récente et forte montée des cours en quelques mois ne me paraissait pas explicable. C'était une anomalie qui traduisait une bulle spéculative. Cette bulle a éclaté le 11 juillet dernier. Les cours ont reflué, et il est possible d'observer des excès à la baisse.L'Arabie Saoudite choisira sans doute de limiter sa production pour doper les cours, si ceux-ci venaient à s'établir sous la barre de 80 dollars le baril. Ce prix correspond au coût de production des sables bitumeux au Canada, une alternative au pétrole brut. Ce chiffre peut donc constituer un prix plancher pour le pétrole. Nous ne reviendrons pas au prix de référence de 30 dollars le baril, observé encore il y a quelques années.La baisse des derniers jours est due à la crise financière. Toutes les banques qui ont eu des difficultés ont en effet dû débloquer leurs positions sur les matières premières, ce qui explique les fluctuations erratiques des cours.Nous savons que la crise sera longue, et que la demande mondiale de pétrole va fléchir. Après avoir longtemps tenu compte des niveaux des stocks de pétrole aux Etats-Unis, les marchés commencent à se détourner de ces chiffres. Il est normal que les niveaux des stocks soient inférieurs de 5% à ceux observés à la même époque il y a un an, car la consommation a déjà ralenti. Pour les prochains mois, l'incertitude reste le niveau de demande des pays émergents. Mais nous croyons que la croissance de la Chine restera supérieure à 10% par an.Nous maintenons nos prévisions sur les cours du pétrole, qui devraient se redresser en même temps que le dollar se raffermirait, pour s'établir à environ 1,5 euros. Nous tablons sur un prix de 115 dollars pour un baril au quatrième trimestre 2008. Nous estimons que la croissance au Etats-Unis redémarrera à partir du deuxième semestre 2009, et que ce mouvement entrainera un regain de tension sur le pétrole. Le baril devrait s'établir autour de 126 dollar au quatrième semestre 2009.
Fabrice Vennin, gérant d'un fonds sur les matières premières chez Meeschaert asset management
Les cours du pétrole avaient beaucoup monté, mais la correction qui a suivi, entrainant le prix du baril sous la barre des cent dollars, est elle aussi exagérée. Désormais, cette correction est terminée, et la tendance de long terme est haussière. Actuellement, la baisse est due à un reflux technique.D'ici à la fin de l'année, le baril devrait s'établir entre 90 et 115 dollars. Les incertitudes sont grandes pour 2009. Les cours peuvent aussi bien revenir à 80 dollars le baril que s'envoler de nouveau vers les 140 dollars. La spéculation, qui a constitué une grande part de la forte hausse jusqu'à l'été, s'est calmée avec la crise financière. Le pétrole ne remontera donc pas aussi vite vers de tels niveaux.
Régis Collieux, responsable de la recherche sur le pétrole chez BNP Paribas Global Structure Finance
Les fluctuations des cours du pétrole ces derniers jours ne remet pas en question nos prévisions. Jusqu'en 2009, le marché du pétrole va demeurer en rémission, mais la guérison n'est pas pour demain. Depuis le début de l'année, le prix du baril a chuté de 40%, mais cette baisse reste moins importante que celle observée en 1988, quand il est passé de 40 dollars à 8 dollars.Nous sommes convaincus qu'une hausse modérée des cours va se produire jusqu'à la fin de l'année, et qu'elle s'accélèrera franchement courant 2009. Il n'y a pas de raison que les demandes de pétrole de la Chine et de l'Inde fléchissent, compte tenu de leur rythme de croissance. L'Arabie Saoudite est en mesure d'augmenter sa production, de même que le Nigéria, qui produit aujourd'hui moins de barils que permis par les quotas.En étudiant les niveaux d'offre et de demande pour les différents types de pétrole, il apparaît que le pétrole brut représente seulement la moitié des stocks actuels. Un déficit en pétrole brut pourrait donc apparaître dès le deuxième trimestre 2009. L'Opep, le cartel des pays producteurs de pétrole, est en mesure d'assécher le marché dès le premier trimestre 2009, ce qui ferait monter les cours. Il lui suffit pour cela de réduire sa production d'un million de baril par jour.
They're convince this is a scam and they have a spy in the office of the T/A.
The contact they've there as told them "100% Scam, Short at will..."
But maybee this contact are fooling them.....
hehehehehhe
My view is simple :
The Dow will run until 12.000 before breaking the 10000 points during the winter.
In the next weeks, the worst of the subprime crisis will hit the market.
My view is simple :
The Dow will run until 12.000 before breaking the 10000 points during the winter.
In the next weeks, the worst of the subprime crisis will hit the market.
Same here, but I can't give names.
They will only cash in If we get revoked or If a R/S happen.
The U.S. Securities and Exchange Commission took what it called "emergency action" on Friday and temporarily banned investors from short-selling 799 financial companies.
The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.
Short sellers borrow stock with the aim of selling it, then buy it back at a lower price, hoping to pocket the difference. The commission said short sellers add liquidity to the markets during normal conditions, but recent unbridled short selling has contributed to the recent tailspin in the stock market.
"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," said SEC Chairman Christopher Cox in a statement. "The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets."
Cox said the action "would not be necessary in a well-functioning market," and is just one of many actions being taken by the government to jump-start the embattled financial markets.
The SEC also said it would temporarily ease restrictions on companies' ability to repurchase their stock, and force money managers to report their short positions in certain stocks that are not included in the 799 banned companies.
Some market observers, including top bank executives, have also blamed short sellers for the punishing declines in bank stock prices over the past few days. Critics of short sellers have argued that some had been spreading rumors about a company while "shorting" the stock in order to drive the price lower.
The ruling comes after the SEC decided Wednesday to ban the practice of so-called "naked" short-selling, in which investors short the stock without actually borrowing it.
On Thursday, Britain's Financial Services Authority also temporarily banned short-selling for financial companies. The SEC said it is consulting the FSA in the matter.
http://biz.yahoo.com/cnnm/080919/091908_sec_short_selling.html
The U.S. Securities and Exchange Commission took what it called "emergency action" on Friday and temporarily banned investors from short-selling 799 financial companies.
The temporary ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.
Short sellers borrow stock with the aim of selling it, then buy it back at a lower price, hoping to pocket the difference. The commission said short sellers add liquidity to the markets during normal conditions, but recent unbridled short selling has contributed to the recent tailspin in the stock market.
"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets," said SEC Chairman Christopher Cox in a statement. "The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets."
Cox said the action "would not be necessary in a well-functioning market," and is just one of many actions being taken by the government to jump-start the embattled financial markets.
The SEC also said it would temporarily ease restrictions on companies' ability to repurchase their stock, and force money managers to report their short positions in certain stocks that are not included in the 799 banned companies.
Some market observers, including top bank executives, have also blamed short sellers for the punishing declines in bank stock prices over the past few days. Critics of short sellers have argued that some had been spreading rumors about a company while "shorting" the stock in order to drive the price lower.
The ruling comes after the SEC decided Wednesday to ban the practice of so-called "naked" short-selling, in which investors short the stock without actually borrowing it.
On Thursday, Britain's Financial Services Authority also temporarily banned short-selling for financial companies. The SEC said it is consulting the FSA in the matter.
http://biz.yahoo.com/cnnm/080919/091908_sec_short_selling.html
The US is bankrupt. What to do now?
The US is bankrupt. What to do now?
Economists of every political stripe are predicting a slump, the Democratic presidential candidates have all made proposals for an economic stimulus package — and even the Bush administration, long in a convenient denial about the housing crisis and its impact, is trying to put together a plan to jump-start the economy. Here is where the situation gets tough. The USA must stop pretending to be a super power any more. Will they take the path of war?
Yet the stimulus proposals from both parties amount to just a fraction of the amount spent on the US wars in Iraq and Afghanistan. This war was and still a disaster for the US economy. Bush thought that Iraq by now should have been already functioning as a country and the US economy getting the benefits of their Oil to recover the war expenses plus making profits. Well, that never happened. George Bush, will be remembered in history as the man who destroyed the USA, we are living the fall of an empire.
With more bad news emerging on practically every economic front — falling house prices, a credit squeeze, declining consumer spending, stagnant wages and higher inflation — the picture is likely to get worse.
Wall Street has already signaled Corporate Americas plan: grab all the cash you can, and make workers pay.
This was the reason why Oils prices were very high because everyone (hedge funds)was and still now desperately trying to get liquid; and Oil, Gold and Drugs have become the universally accepted world currencies.
The only sensible advice is either to change dollars into other currencies, or buy gold and silver while you still can, because the US is likely to make it illegal to own gold; and stock up on canned food, the price of which is going to go through the roof. Already the major canners have reduced the size of cans by 20% to preserve stock whilst also maximising their profits.
It is universally accepted internationally that the US Dollar is going to collapse some say that it will happen by the end of September 2008.
Some foreign banks have already started to refuse to take US deposits and, since the Patriot Act, any american citizen who manage to send money to a foreign bank, is required to report the fact to the USG, who will make you prove how you obtained it and if you cannot do so, they will automatically label you a 'terrorist' or a 'drug dealer' and confiscate it.
The Bank of South America (Banco del Sur)is trying to organise its own currency for use within the South American continent when the US Dollar finally crashes, based on an initial provision of eight billion dollars.
The social consequences within the US are expected to be extremelly hard.
Bill Gates investit dans le pétrole vert
Publié le mercredi 17 septembre 2008par Stéphane Larcher
Selon nos confrères de Cnet, le jeune retraité investirait, via son fonds Cascade Investment, dans Sapphirre Energy, une entreprise qui ambitionne de fabriquer du carburant automobile à partir d’algues.
C’est l’un des plus gros défis des prochaines années : arriver à fabriquer du carburant à partir d’autres matières que le pétrole. Parmi les différentes pistes de recherche, les algues sont l’une des plus prometteuses, car naturellement riches en huiles et faciles à produire dans des conditions très variées. A l’heure actuelle, aucune prévision de sortie n’existe mais quelques-uns se risquent à imaginer les premières productions dans les trois prochaines années. D’ores et déjà, Saphhire Energy affirme avoir réussi produire un carburant à 91 d’octane à partir d’algues et son procédé pourrait convenir à fabriquer différents types : essence, diesel ou kérosène.potential_main.jpg
Ce deuxième tour d’investissement, d’un montant total de 100 millions de dollars, devrait permettre à l’entreprise de développer ses capacités de production, avec pour objectif de produire 10.000 barils par jour dans un horizon de trois à cinq ans.
Plus d’informations sont disponibles sur le site de Sapphhire Energy
Moody’s sees more subprime pain
More sobering news out of the housing market. Moody’s said Thursday it has boosted its loss projections on pools of subprime mortgage-backed securities, based on the observation that loans made between the middle of 2005 and mid-2007 “are exhibiting worse performance with each successive quarter of origination.”
That’s not a happy trend, because the so-called loss curves are continuing to get worse at a time when they should be flattening out. The ratings agency said the 2005-2007 subprime loans - those made to borrowers with the sketchiest credit histories and lowest scores - are showing more delinquencies and fewer prepayments than those made in previous years.
Those so-called loan vintages are being closely watched on Wall Street, because of the hundreds of billions of dollars in residential mortgage-backed securities that were issued at the tail end of the housing bubble. Defaults and downgrades have left Wall Street firms with heavy losses and caused many of the biggest players in the financial sector to reduce their lending activity, which has the effect of slowing the economy. Fears of outsize mortgage losses have pummeled lenders such as WaMu (WM) and Wachovia (WB) over the past year.
As a result of its latest review of the data, Moody’s boosted its cumulative loss projection on 2006 subprime pools to 22% from the January projection of 14%-18%. Losses will reach as high as 26% on loans made in the fourth quarter of 2006 and 29% in the first half of 2007, the firm said - while cautioning that “uncertainty around projections of further home price declines indicates that there could be volatility around our updated loss expectations.”
http://dailybriefing.blogs.fortune.cnn.com/2008/09/18/moodys-sees-more-subprime-pain/?source=yahoo_quote
Moody’s sees more subprime pain
More sobering news out of the housing market. Moody’s said Thursday it has boosted its loss projections on pools of subprime mortgage-backed securities, based on the observation that loans made between the middle of 2005 and mid-2007 “are exhibiting worse performance with each successive quarter of origination.”
That’s not a happy trend, because the so-called loss curves are continuing to get worse at a time when they should be flattening out. The ratings agency said the 2005-2007 subprime loans - those made to borrowers with the sketchiest credit histories and lowest scores - are showing more delinquencies and fewer prepayments than those made in previous years.
Those so-called loan vintages are being closely watched on Wall Street, because of the hundreds of billions of dollars in residential mortgage-backed securities that were issued at the tail end of the housing bubble. Defaults and downgrades have left Wall Street firms with heavy losses and caused many of the biggest players in the financial sector to reduce their lending activity, which has the effect of slowing the economy. Fears of outsize mortgage losses have pummeled lenders such as WaMu (WM) and Wachovia (WB) over the past year.
As a result of its latest review of the data, Moody’s boosted its cumulative loss projection on 2006 subprime pools to 22% from the January projection of 14%-18%. Losses will reach as high as 26% on loans made in the fourth quarter of 2006 and 29% in the first half of 2007, the firm said - while cautioning that “uncertainty around projections of further home price declines indicates that there could be volatility around our updated loss expectations.”
http://dailybriefing.blogs.fortune.cnn.com/2008/09/18/moodys-sees-more-subprime-pain/?source=yahoo_quote
Moody’s sees more subprime pain
More sobering news out of the housing market. Moody’s said Thursday it has boosted its loss projections on pools of subprime mortgage-backed securities, based on the observation that loans made between the middle of 2005 and mid-2007 “are exhibiting worse performance with each successive quarter of origination.”
That’s not a happy trend, because the so-called loss curves are continuing to get worse at a time when they should be flattening out. The ratings agency said the 2005-2007 subprime loans - those made to borrowers with the sketchiest credit histories and lowest scores - are showing more delinquencies and fewer prepayments than those made in previous years.
Those so-called loan vintages are being closely watched on Wall Street, because of the hundreds of billions of dollars in residential mortgage-backed securities that were issued at the tail end of the housing bubble. Defaults and downgrades have left Wall Street firms with heavy losses and caused many of the biggest players in the financial sector to reduce their lending activity, which has the effect of slowing the economy. Fears of outsize mortgage losses have pummeled lenders such as WaMu (WM) and Wachovia (WB) over the past year.
As a result of its latest review of the data, Moody’s boosted its cumulative loss projection on 2006 subprime pools to 22% from the January projection of 14%-18%. Losses will reach as high as 26% on loans made in the fourth quarter of 2006 and 29% in the first half of 2007, the firm said - while cautioning that “uncertainty around projections of further home price declines indicates that there could be volatility around our updated loss expectations.”
http://dailybriefing.blogs.fortune.cnn.com/2008/09/18/moodys-sees-more-subprime-pain/?source=yahoo_quote
Moody’s sees more subprime pain
More sobering news out of the housing market. Moody’s said Thursday it has boosted its loss projections on pools of subprime mortgage-backed securities, based on the observation that loans made between the middle of 2005 and mid-2007 “are exhibiting worse performance with each successive quarter of origination.”
That’s not a happy trend, because the so-called loss curves are continuing to get worse at a time when they should be flattening out. The ratings agency said the 2005-2007 subprime loans - those made to borrowers with the sketchiest credit histories and lowest scores - are showing more delinquencies and fewer prepayments than those made in previous years.
Those so-called loan vintages are being closely watched on Wall Street, because of the hundreds of billions of dollars in residential mortgage-backed securities that were issued at the tail end of the housing bubble. Defaults and downgrades have left Wall Street firms with heavy losses and caused many of the biggest players in the financial sector to reduce their lending activity, which has the effect of slowing the economy. Fears of outsize mortgage losses have pummeled lenders such as WaMu (WM) and Wachovia (WB) over the past year.
As a result of its latest review of the data, Moody’s boosted its cumulative loss projection on 2006 subprime pools to 22% from the January projection of 14%-18%. Losses will reach as high as 26% on loans made in the fourth quarter of 2006 and 29% in the first half of 2007, the firm said - while cautioning that “uncertainty around projections of further home price declines indicates that there could be volatility around our updated loss expectations.”
http://dailybriefing.blogs.fortune.cnn.com/2008/09/18/moodys-sees-more-subprime-pain/?source=yahoo_quote
Moody’s sees more subprime pain
More sobering news out of the housing market. Moody’s said Thursday it has boosted its loss projections on pools of subprime mortgage-backed securities, based on the observation that loans made between the middle of 2005 and mid-2007 “are exhibiting worse performance with each successive quarter of origination.”
That’s not a happy trend, because the so-called loss curves are continuing to get worse at a time when they should be flattening out. The ratings agency said the 2005-2007 subprime loans - those made to borrowers with the sketchiest credit histories and lowest scores - are showing more delinquencies and fewer prepayments than those made in previous years.
Those so-called loan vintages are being closely watched on Wall Street, because of the hundreds of billions of dollars in residential mortgage-backed securities that were issued at the tail end of the housing bubble. Defaults and downgrades have left Wall Street firms with heavy losses and caused many of the biggest players in the financial sector to reduce their lending activity, which has the effect of slowing the economy. Fears of outsize mortgage losses have pummeled lenders such as WaMu (WM) and Wachovia (WB) over the past year.
As a result of its latest review of the data, Moody’s boosted its cumulative loss projection on 2006 subprime pools to 22% from the January projection of 14%-18%. Losses will reach as high as 26% on loans made in the fourth quarter of 2006 and 29% in the first half of 2007, the firm said - while cautioning that “uncertainty around projections of further home price declines indicates that there could be volatility around our updated loss expectations.”
80$, We need to jump in oil
80$ We need to jump in !
CLR 81% INSIDERS OWNERSHIP
I began thinking about this after reading Tom Gardner's "A 25-Bagger in Five Years," in which he identified three things that give a company the chance to achieve outsized gains over the years -- like 25-baggers that turn $5,000 into $125,000. Of the three he mentions, one characteristic is most important to me: a high level of insider ownership.
Why it matters
This makes sense, right? Think about any of your major personal investments:
1. You are a stockholder, with a good deal of your wealth riding on this company's performance.
2. Founders and managers with high levels of ownership also have their wealth riding on the company's performance.
3. They are doing everything they can to increase the long-term value of their stock -- which is also your stock.
http://www.fool.com/investing/small-cap/why-this-stock-is-a-winner.aspx
Bill Gates invests in algae fuel Bill Gates' investment firm is funding Sapphire Energy, a company that intends to make auto fuel from algae.
http://www.sapphireenergy.com/
Verasun tanked over 70% Wednesday after predicting an enormous loss on record corn prices. I predicted its demise here and actually purchased out of the money puts in anticipation of such a precipitous decline.
Unfortunately for me, I only purchased out to the August expiry and this event occurred a couple weeks too late. However, for anyone that heeded this advice and went with the September puts via the same rationale, it was a windfall today.
The stock dropped from ~$4.00 to ~$1.40 per share and boy, did the Sep $2.50 puts pay off!
These options contracts rose from 5 cents each to $1.00, a 20x return on investment.
I seem to have a knack for just missing enormous market moves that I blog about and don't quite hit right in my actual trading patterns. Check out this post where I missed out on a $25,000 (6,000%) gain overnight by predicting the buyout of AQNT the night before it was announced!
I can rest easy knowing at least I got one of these right this year -580% in 2 weeks on a biotech play.
We broke the 50$ support.....
Incredbile...
All this with the off-shore spinoff coming....
Worst Crisis Since 1930s - No End in Sight
By Dialog NewsEdge Posted: 09/18/08 00:17
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(RAPAPORT) Wall Street Journal: The financial crisis that began 13 months ago has entered a new, far more serious phase.
Lingering hopes that the damage could be contained to a handful of financial institutions that made bad bets on mortgages have evaporated. New fault lines are emerging beyond the original problem -- troubled subprime mortgages -- in areas like credit-default swaps, the credit insurance contracts sold by American International Group Inc. and others firms. There's also a growing sense of wariness about the health of trading partners.
The consequences for companies and chief executives who tarry -- hoping for better times in which to raise capital, sell assets or acknowledge losses -- are now clear and brutal, as falling share prices and fearful lenders send troubled companies into ever-deeper holes. This weekend, such a realization led John Thain to sell the century-old Merrill Lynch & Co. to Bank of America Corp. Each episode seems to bring intervention by the government that is more extensive and expensive than the previous one, and carries greater risk of unintended consequences.
Expectations for a quick end to the crisis are fading fast. "I think it's going to last a lot longer than perhaps we would have anticipated," Anne Mulcahy, chief executive of Xerox Corp., said Wednesday.
"This has been the worst financial crisis since the Great Depression. There is no question about it," said Mark Gertler, a New York University economist who worked with fellow academic Ben Bernanke, now the Federal Reserve chairman, to explain how financial turmoil can infect the overall economy. "But at the same time we have the policy mechanisms in place fighting it, which is something we didn't have during the Great Depression."
Spreading Disease
The U.S. financial system resembles a patient in intensive care. The body is trying to fight off a disease that is spreading, and as it does so, the body convulses, settles for a time and then convulses again. The illness seems to be overwhelming the self-healing tendencies of markets. The doctors in charge are resorting to ever-more invasive treatment, and are now experimenting with remedies that have never before been applied. Fed Chairman Bernanke and Treasury Secretary Henry Paulson, walking into a hastily arranged meeting with congressional leaders Tuesday night to brief them on the government's unprecedented rescue of AIG, looked like exhausted surgeons delivering grim news to the family.
Fed and Treasury officials have identified the disease. It's called deleveraging, or the unwinding of debt. During the credit boom, financial institutions and American households took on too much debt. Between 2002 and 2006, household borrowing grew at an average annual rate of 11 percent, far outpacing overall economic growth. Borrowing by financial institutions grew by a 10 percent annualized rate. Now many of those borrowers can't pay back the loans, a problem that is exacerbated by the collapse in housing prices. They need to reduce their dependence on borrowed money, a painful and drawn-out process that can choke off credit and economic growth.
At least three things need to happen to bring the deleveraging process to an end, and they're hard to do at once. Financial institutions and others need to fess up to their mistakes by selling or writing down the value of distressed assets they bought with borrowed money. They need to pay off debt. Finally, they need to rebuild their capital cushions, which have been eroded by losses on those distressed assets.
But many of the distressed assets are hard to value and there are few if any buyers. Deleveraging also feeds on itself in a way that can create a downward spiral: Trying to sell assets pushes down the assets' prices, which makes them harder to sell and leads firms to try to sell more assets. That, in turn, suppresses these firms' share prices and makes it harder for them to sell new shares to raise capital. Mr. Bernanke, as an academic, dubbed this self-feeding loop a "financial accelerator."
"Many of the CEO types weren't willing...to take these losses, and say, 'I accept the fact that I'm selling these way below fundamental value,'" says Anil Kashyap, a University of Chicago Business School economics professor. "The ones that had the biggest exposure, they've all died."
Borrowing Slowdown
Deleveraging started with securities tied to subprime mortgages, where defaults started rising rapidly in 2006. But the deleveraging process has now spread well beyond, to commercial real estate and auto loans to the short-term commitments on which investment banks rely to fund themselves. In the first quarter, financial-sector borrowing slowed to a 5.1 percent growth rate, about half of the average from 2002 to 2007. Household borrowing has slowed even more, to a 3.5 percent pace.
Goldman Sachs Group Inc. economist Jan Hatzius estimates that in the past year, financial institutions around the world have already written down $408 billion worth of assets and raised $367 billion worth of capital.
But that doesn't appear to be enough. Every time financial firms and investors suggest that they've written assets down enough and raised enough new capital, a new wave of selling triggers a reevaluation, propelling the crisis into new territory. Residential mortgage losses alone could hit $636 billion by 2012, Goldman estimates, triggering widespread retrenchment in bank lending. That could shave 1.8 percentage points a year off economic growth in 2008 and 2009 -- the equivalent of $250 billion in lost goods and services each year.
"This is a deleveraging like nothing we've ever seen before," said Robert Glauber, now a professor of Harvard's government and law schools who came to the Washington in 1989 to help organize the savings and loan cleanup of the early 1990s. "The S&L losses to the government were small compared to this."
Hedge funds could be among the next problem areas. Many rely on borrowed money to amplify their returns. With banks under pressure, many hedge funds are less able to borrow this money now, pressuring returns. Meanwhile, there are growing indications that fewer investors are shifting into hedge funds while others are pulling out. Fund investors are dealing with their own problems: Many have taken out loans to make their investments and are finding it more difficult now to borrow.
That all makes it likely that more hedge funds will shutter in the months ahead, forcing them to sell their investments, further weighing on the market.
History of Trauma
Debt-driven financial traumas have a long history, from the Great Depression to the S&L crisis to the Asian financial crisis of the late 1990s. Neither economists nor policymakers has easy solutions. Cutting interest rates and writing stimulus checks to families can help -- and may have prevented or delayed a deep recession. But, at least in this instance, they don't suffice.
In such circumstances, governments almost invariably experiment with solutions with varying degrees of success. Franklin Delano Roosevelt unleashed an alphabet soup of new agencies and a host of new regulations in the aftermath of the market crash of 1929. In the 1990s, Japan embarked on a decade of often-wasteful government spending to counter the aftereffects of a bursting bubble. President George H.W. Bush and Congress created the Resolution Trust Corp. to take and sell the assets of failed thrifts. Hong Kong's free-market government went on a massive stock-buying spree in 1998, buying up shares of every company listed in the benchmark Hang Seng index. It ended up packaging them into an exchange-traded fund and making money.
Today, Mr. Bernanke is taking out his playbook, said NYU economist Mr. Gertler, "and rewriting it as we go."
Merrill Lynch & Co.'s emergency sale to Bank of America Corp. last weekend was an example of the perniciousness and unpredictability of deleveraging. In the past year, Merrill has hired a new chief executive, written off $41.4 billion in assets and raised $21 billion in equity capital.
But Merrill couldn't keep up. The more it raised, the more it was forced to write off. When Merrill CEO John Thain attended a meeting with the New York Fed and other Wall Street executives last week, he saw that Merrill was the next most vulnerable brokerage firm. "We watched Bear and Lehman. We knew we could be next," said one Merrill executive. Fearful that its lenders would shut the firm off, he sold to Bank of America.
This crisis is complicated by innovative financial instruments that Wall Street created and distributed. They're making it harder for officials and Wall Street executives to know where the next set of risks is hiding and also contributing to the crisis's spreading impact.
Swaps Game
The latest trouble spot is an area called credit-default swaps, which are private contracts that let firms trade bets on whether a borrower is going to default. When a default occurs, one party pays off the other. The value of the swaps rise and fall as market reassesses the risk that a company won't be able to honor its obligations. Firms use these instruments both as insurance -- to hedge their exposures to risk -- and to wager on the health of other companies. There are now credit-default swaps on more than $62 trillion in debt, up from about $144 billion a decade ago.
One of the big new players in the swaps game was AIG, the world's largest insurer and a major seller of credit-default swaps to financial institutions and companies. When the credit markets were booming, many firms bought these instruments from AIG, believing the insurance giant's strong credit ratings and large balance sheet could provide a shield against bond and loan defaults. AIG believed the risk of default was low on many securities it insured.
As of June 30, an AIG unit had written credit-default swaps on more than $446 billion in credit assets, including mortgage securities, corporate loans and complex structured products. Last year, when rising subprime-mortgage delinquencies damaged the value of many securities AIG had insured, the firm was forced to book large write-downs on its derivative positions. That spooked investors, who reacted by dumping its shares, making it harder for AIG to raise the capital it increasingly needed.
Credit default swaps "didn't cause the problem, but they certainly exacerbated the financial crisis," says Leslie Rahl, president of Capital Market Risk Advisors, a consulting firm in New York. The sheer volumes of outstanding CDS contracts -- and the fact that they trade directly between institutions, without centralized clearing -- intertwined the fates of many large banks and brokerages.
Few financial crises have been sorted out in modern times without massive government intervention. Increasingly, officials are coming to the conclusion that even more might be needed. A big problem: The Fed can and has provided short-term money to sound, but struggling, institutions that are out of favor. It can, and has, reduced the interest rates it influences to attempt to reduce borrowing costs through the economy and encourage investment and spending.
But it is ill-equipped to provide the capital that financial institutions now desperately need to shore up their finances and expand lending.
Resolution Trust Scenario
In normal times, capital-starved companies usually can raise money on their own. In the current crisis, a number of big Wall Street firms, including Citigroup, have turned to sovereign wealth funds, the government-controlled pools of money.
But both on Wall Street and in Washington, there is increasing expectation that U.S. taxpayers will either take the bad assets off the hands of financial institutions so they can raise capital, or put taxpayer capital into the companies, as the Treasury has agreed to do with mortgage giants Fannie Mae and Freddie Mac.
One proposal was raised by Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee. Rep. Frank is looking at whether to create an analog to the Resolution Trust Corp., which took assets from failed banks and thrifts and found buyers over several years.
"When you have a big loss in the marketplace, there are only three people that can take the loss -- the bondholders, the shareholders and the government," said William Seidman, who led the RTC from 1989 to 1991. "That's the dance we're seeing right now. Are we going to shove this loss into the hands of the taxpayers?"
The RTC seemed controversial and ambitious at the time. Any analog today would be even more complex. The RTC dispensed mostly of commercial real estate. Today's troubled assets are complex debt securities -- many of which include pieces of other instruments, which in turn include pieces of others, many steps removed from the actual mortgages or consumer loans on which they are based. Unraveling these strands will be tedious and getting at the underlying collateral, difficult.
In the early stages of this crisis, regulators saw that their rules didn't fit the rapidly changing financial system they were asked to oversee. Investment banks, at the core of the crisis, weren't as closely monitored by the Securities and Exchange Commission as commercial banks were by their regulators.
The government has a system to close failed banks, created after the Great Depression in part to avoid sudden runs by depositors. Now, runs happen in spheres regulators may not fully understand, such as the repurchase agreement, or repo, market, in which investment banks fund their day-to-day operations. And regulators have no process for handling the failure of an investment bank like Lehman Brothers Holdings Inc. Insurers like AIG aren't even federally regulated.
Regulators have all but promised that more banks will fail in the coming months. The Federal Deposit Insurance Corp. is drawing up a plan to raise the premiums it charges banks so that it can rebuild the fund it uses to back deposits. Examiners are tightening their leash on banks across the country.
Pleasant Mystery
One pleasant mystery is why the crisis hasn't hit the economy harder -- at least so far. "This financial crisis hasn't yet translated into fewer...companies starting up, less research and development, less marketing," Ivan Seidenberg, chief executive of Verizon Communications, said Wednesday. "We haven't seen that yet. I'm sure every company is keeping their eyes on it."
At 6.1 percent, the unemployment rate remains well below the peak of 7.8 percent in 1992, amid the S&L crisis.
In part, that's because government has reacted aggressively. The Fed's classic mistake that led to the Great Depression was that it tightened monetary policy when it should have eased. Mr. Bernanke didn't repeat that error. And Congress moved more swiftly to approve fiscal stimulus than most Washington veterans thought possible.
In part, the broader economy has held mostly steady because exports have been so strong at just the right moment, a reminder of the global economy's importance to the U.S. And in part, it's because the U.S. economy is demonstrating impressive resilience, as information technology allows executives to react more quickly to emerging problems and -- to the discomfort of workers -- companies are quicker to adjust wages, hiring and work hours when the economy softens.
But the risk remains that Wall Street's woes will spread to Main Street, as credit tightens for consumers and business. Already, U.S. auto makers have been forced to tighten the terms on their leasing programs, or abandon writing leases themselves altogether, because of problems in their finance units. Goldman Sachs economists' optimistic scenario is a couple years of mild recession or painfully slow economy growth.
Copyrighted, Dow Jones & Company, Inc. All rights reserved.
40$ ZONE is very tempting...
VSE management was rated "to be sharp in a difficult operating environment" because they had overbought corn and decided to sell the surplus at a high price. The very next quarter, they stand to loose 3-5X what they had earned before. Does it not feel like betting at a casino?
Like you, I had judged their 'operating' skills in merging two companies, building bulk supply to be able to optimize distribution thru unit trains, and becoming efficient with low volume production (355 million gallons per quarter).
Hopefully, they will step away from the casino table, rather than raising the ante by more bets- by their own filings, 4Q will also be similar impacted.
It will take sometime to work thru this as they have just added $.70/gallon to the cost of their plants( $100M lost over 1.4B gallon production). At 10% interest, this is a 7c cost to every gallon of ethanol that they sell until they can repay this debt.
I think that they have just made themselves a take-over candidate. May be someone will value their plants at $2.50 per gallon? ADM, or an oil company like BP to the rescue?