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GM GA! AIG (AIG) may get a lifeline for its shares
Posted Jan 27th 2009 4:02AM by Douglas McIntyre
Filed under: Deals, Amer Intl Group (AIG)
The worst may be over for AIG (NYSE:AIG), or its is getting closer.
The sale of the insurance firm's large aircraft leasing operation, International Lease Finance Corp., has drawn capital from sovereign funds which have been sitting on the sidelines as financial supporters of buyouts.
According to Reuters, potential buyer for the operation "include Singapore's Temasek Holdings Pte Ltd, Dubai's investment arm Istithmar World, Kuwait Investment Authority and China Investment Corp, the sources said." The business could be worth $10 billion.
The fact that there are any shoppers at all is a sign that the credit markets may be easing, at least for attractive deals. But, the news is important for AIG shareholders, including the US government which holds 80% of the insurance firm's shares. So far, AIG has not been able to auction off the businesses it is trying to sell because buyers can't get funding.
If the deal goes, AIG should jump from $1.26, very near its 52-week low.
Lol. Morning BWNR!
Hahaha! True enough! NITE does get old more often than not! lol.
That's my hope as well! lol. gl cyclone!
Strong is ACTC at almost 60%!!!!
Agreed. Support still rolling here, with deuces still visible! :)
BWNR. 0.013. +18.18%. ACTC. MONSTER! 0.2894. +80.88.
ACTC 0.26 with room to move! :)
ACTC!!!! 0.258!!! Who says Chicago ain't got no more pull??
Dart! What's up my man?
What a clown! lol.
ACTC. We hit 0.25!!!
Sweet ACTC hitting gains of 50%! 0.24.
Capone loves ACTC - AGAIN!
ACTC doing me proud again this Monday!
Liking your style Cat! lol.
ACTC. Flying. 0.229. +43%!
Question is will the results really be available that quickly or are we looking down the line?
We crack deuces and drinks on me! lol.
Hahhaha! Cheap suit! LMAO!
BWNR. Waking up this Manic Monday!
ACTC. HOD. 0.20!!
Always plugged in bro!
Hello again J! Great minds think alike here! LOL.
Thanks Doc, I forgot about the dollar status at the time. Cheers!
Looking electric already!!!
ACTC. BWNR. Coming on strong at the bell!
Lol. A little bit. :)
Some of these expected earnings are sending shivers through the markets!
Before the bell: Futures rise following Pfizer/Wyeth deal, ahead of earnings
Posted Jan 26th 2009 7:37AM by Melly Alazraki
Filed under: Before the bell, International markets, Earnings reports, Deals, Pfizer (PFE), Market matters, McDonald's (MCD), Caterpillar (CAT), Economic data, Oil
U.S. stock futures were higher Monday morning after Pfizer (NYSE: PFE) agreed to buy Wyeth (NYSE: WYE) in what is the biggest pharma deal since 2000. The earnings season continues in full force with Caterpillar and McDonald's set to report earnings this morning.
As President Obama continues to work on the economy and appoint his advisors and cabinet members, Congress is set to consider Obama's choice to head the Treasury Department as well as act on legislation to spur economic growth.
Overseas, Asian markets declined, but European markets rose Monday led by banks after Barclays calmed markets by reassuring on capital. Meanwhile, oil prices crept up to above $46 a barrel Monday.
Economic figures today include December leading indicators and existing home sales, both due out at 10:00 am, and both are expected to show further decline.
I hear that! :)
Morning Wise. Yep. Still feeling BWNR today. Could help with the Alcatraz slush fund.
I'll take that as an SSB guarantee! lol.
Oil back over $46 even as US sees deeper recession By PABLO GORONDI, AP
posted: 19 MINUTES AGOcomments: 359PrintShare
Text SizeAAA-Oil prices crawled back above $46 a barrel Monday after falling more than $1 as White House officials warned the U.S. recession would likely worsen in coming months, undermining demand for crude.
Light, sweet crude for March delivery rose 25 cents to $46.72 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract rose Friday $2.80 to settle at $46.47. Earlier Monday, it fell to $45.25 before recovering.
In London, the March Brent contract was up 32 cents to $48.69 on the ICE Futures exchange.
Monday's recovery continued last week's trend, which saw the Nymex contract gain over 9 percent even as demand concerns magnified, confounding market experts.
"From a logical point of view, there is no reason for spot Nymex crude oil to trade above $40," said The Schork Report edited by U.S. trader and analyst Stephen Schork. "OPEC is cutting production because no one is buying their oil. And, given the dire global economic outlook ... that is not about to change."
The U.S. economy, the world's largest consumer of crude, will "get worse before it gets better," Vice President Joe Biden said Sunday, dampening expectations that a massive government stimulus package will quickly spur growth.
Congress is working on an $825 billion plan — about two-thirds new government spending and the rest tax cuts — that proponents expect will create as many as 4 million jobs.
Weak global demand for crude will likely continue to weigh on prices, said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore. U.S. crude inventories have soared in the last three weeks, a sign that drivers are cutting consumer spending amid the worst recession in decades.
"The demand isn't there yet, and I don't think it will come back until the second half of 2009," Chu said. "Unless there is a geopolitical event or some very positive economic news, oil should drift down to the $35-$40 range."
Trading volumes were low Monday in Asia as many countries in the region celebrated the Lunar New Year holiday.
Investors will be looking to U.S. earnings results this week for signs of the economy's health. Hundreds of companies will issue reports including Procter & Gamble Co., Kimberly-Clark Corp. and Starbucks Corp.
Crude investors often use equity markets as a gauge of sentiment about the economy. Oil has fallen about 69 percent since peaking at $147.27 a barrel in July, joining a steep decline in stock markets around the world.
The Dow Jones industrial average fell 2.5 percent last week.
"If the Dow falls 300 points, crude is going down too," Chu said.
In other Nymex trading, gasoline futures were up 0.56 cent to $1.16 a gallon. Heating oil gained 0.19 cent to $1.4524 a gallon while natural gas for February delivery slid 10.9 cents to $4.409 per 1,000 cubic feet.
GM E EXPRE$$! More sobering news : Geithner Debt Sales to Benefit From Paulson Failures (Update2)
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By Daniel Kruger and Dakin Campbell
Jan. 26 (Bloomberg) -- Former Treasury Secretary Henry Paulson’s inability to restore confidence in the financial system is creating unprecedented demand for U.S. debt as his successor prepares to sell the most bonds in history.
Timothy Geithner, who may be confirmed as head of the Treasury today, will have the benefit of near record-low yields as he presides over auctions of as much as $150 billion of notes and bonds the next three weeks. Goldman Sachs Group Inc., one of the 17 primary dealers that are required to bid at the auctions, said last week the U.S. will likely borrow a record $2.5 trillion this fiscal year ending Sept. 30, almost triple the $892 billion in notes and bonds sold in fiscal 2008.
“There is just such a huge demand from the flight to quality and the flight to liquidity,” that the U.S. will have little difficulty selling the debt, said Joseph Shatz, a senior government bond strategist in New York at Merrill Lynch & Co., another primary dealer. “You have a lot of forces keeping Treasury yields low.”
While Paulson won approval last year to spend $700 billion to stabilize the financial system, bank losses and failures are increasing, sending investors to Treasuries and driving up credit costs for everyone but the government. Four-week Treasury bill rates fell to 0.01 percent last week, while 30-year fixed- rate mortgages averaged 5.12 percent, 2.49 percentage points above 10-year U.S. notes. The difference averaged 1.79 percentage points since the start of the decade.
Citigroup Inc. and Bank of America Corp. sought additional funds after receiving infusions in October. The Standard & Poor’s 500 Index, which fell the most since 1937 last year, is down 7.89 percent this month.
Falling Yields
Yields plunged in the past year as losses and writedowns at the biggest financial companies rose above $1 trillion. Two-year note yields ended last week at 0.81 percent, compared with the average of 3.49 percent this decade, while 10-year rates are 2.62 percent, versus the average of 4.56 percent.
The plunge is helping Geithner, the 47-year-old head of the Federal Reserve Bank of New York since November 2003, because government interest costs are falling even as the amount of debt rises. Interest paid by the Treasury in the last three months fell $18.3 billion as debt rose to $10.6 trillion in December from $9.23 trillion a year earlier, government figures show.
President Barack Obama, 47, and Geithner are counting on demand for Treasuries to finance a $1 trillion budget deficit inherited from the administration of George W. Bush and Paulson, who was chairman of Goldman Sachs before becoming Treasury Secretary in July 2006.
TARP Funds
As the economy worsened last year, Paulson, 62, won approval for the $700 billion Troubled Asset Relief Program that’s injecting capital into financial firms. The $8.5 trillion of initiatives by the Treasury and Fed, including the TARP funds, to prop up financial markets have done little to bring down borrowing costs for consumers and companies.
Even though the Fed cut its target rate for overnight loans between banks to as little as zero in December, from 4.25 percent a year earlier, companies are paying more to sell debt. It costs U.S. companies on average 9.5 percent to borrow in the bond market, up from 6.45 percent a year ago, representing about an extra $30 million a year in interest on every $1 billion of securities, according to Merrill Lynch & Co. index data.
Banks charge each other about 1.07 percentage points more than what it costs the government to borrow for three months, up from an average of 0.32 percentage point before the credit markets seized up in the second half of 2007.
Closing Banks
Regulators closed 25 banks last year, the most since 1993, and shut three this year. New York-based Citigroup and Bank of America in Charlotte, North Carolina, are down more than 50 percent in New York Stock Exchange trading this year after the second- and third-largest U.S. banks sought more funding through TARP. Financial companies shrank to less than 10 percent of the S&P 500 last week, the least since the savings and loan crisis of the early 1990s, and down from the peak of 22.43 percent on Oct. 3, 2006, according to data compiled by Bloomberg.
“When somebody wants to judge the Treasury Secretary you look at the broad stock indexes and the financial stocks,” said Michael Cheah, who manages $2 billion in bonds at AIG SunAmerica Asset Management in Jersey City, New Jersey.
A Paulson representative didn’t return a request seeking comment.
Public Funds
U.S. financial losses may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” New York University Professor Nouriel Roubini, who in January 2007 predicted the economy was headed for a “hard landing,” told a conference in Dubai on Jan. 20. Obama will have to use as much as $1 trillion of public funds to bolster the capitalization of the industry, he estimates.
The government may say this week that gross domestic product contracted 5.5 percent last quarter, the most since it shrank 6.4 percent in the first three months of 1982, according to the median estimate of 66 economist surveyed by Bloomberg. Redmond, Washington-based Microsoft Corp. said last week it will cut as many 5,000 jobs, the first companywide firings in its 34- year history, because sales and profit will probably drop.
“We’re turning up the volume on bad data,” said Maxwell Bublitz, who oversees $3.5 billion in bonds as chief strategist at San Francisco-based SCM Advisors LLC. He said 10-year yields may drop below 2 percent, after ending last week at 2.62 percent. “As we approach 2.75 on the 10-year I kind of want to buy it.”
Quarterly Refunding
To help pay for the bailouts and Obama’s proposed $825 million fiscal stimulus plan, the government will raise $78 billion this week selling debt with maturities ranging from 2 to 20 years. Wrightson, a Jersey City, New Jersey-based research firm specializing in government finance, forecasts the U.S. will auction $69 billion in 3-, 10-, and 30-year securities the week of Feb. 9 as part of the Treasury’s quarterly refunding.
Treasury yields climbed last week from the record lows set in December as Obama revealed details of his economic stimulus plan and the government said the budget deficit soared to a record $485.2 billion in the first three months of the fiscal year that started Oct. 1.
Thirty-year bond yields surged 44 basis points, or 0.44 percentage point, to 3.32 percent last week, the biggest increase since April 1987. Yields dropped to 2.51 percent on Dec. 18, the lowest since the Treasury began regular sales of so- called long bonds in 1977. They were 4.5 percent a year earlier. The yield was little changed as of 2:07 p.m. today in Tokyo.
Currency Manipulator
Geithner helped push yields higher last week by saying during his Senate confirmation hearings that the Obama administration believes China is “manipulating” its currency. Paulson preferred diplomacy over confrontation with China to resolve disputes and, in semiannual reports, refrained from labeling the country a “manipulator.”
The remarks on China’s exchange-rate policy may mean a tougher line with the biggest foreign investor in government debt. China owned $681.9 billion of U.S. securities as of November, Treasury data show.
“There’s concern on the China front,” said Kevin Flanagan, a Purchase, New York-based fixed-income strategist for Morgan Stanley’s individual-investor clients. “Do they fire back and stop buying Treasuries, especially given the huge amount of supply we’re going to need to underwrite over the next few years?”
Efforts Jeopardized
Higher government yields would jeopardize Fed efforts to lower consumer borrowing costs. Fed policy makers meeting tomorrow and the next day are exploring the purchase of longer- maturity Treasuries to push down yields and lower mortgage rates.
While Fed Chairman Ben S. Bernanke and his colleagues risk distorting the Treasury market, the focus on driving borrowing costs lower makes U.S. debt attractive, according to Cheah of AIG SunAmerica.
“Is this a buying opportunity for the Treasury bond market?” said Cheah. “I would say yes. Why? Because the Federal Reserve should be very concerned now with rising yields.”
To contact the reporters on this story: Daniel Kruger in New York at dkruger1@bloomberg.net; Dakin Campbell in New York at dcampbell27@bloomberg.net.
Morning Marine. All quiet in Asia for the lunar new year. Still liking CAAS?
Nice and quiet my man. Cold beers and ESPN! lol. Could be a stressful week.
Monday's "Release Capone!" Stock Watch: OCBM (0.45). ACTC (0.16). and BEEI (0.19).
Lol. How was the weekend buddy?