Now that the Fed, Treasury, and Congress have set up plans to bailout everything from banks to car companies to bicycle shops, Treasury Secretary Henry Paulson has decided to turn his attention to the root of all evil–housing.
The argument has been made, and made compellingly, that as long as home prices keep dropping the broader economy cannot recover. Dropping values mean more damage to bank balance sheets and the consumer’s ability to get back his credit sea legs.
24/7 Wall St. will name its annual CEO of the Year next week. The executive will be picked from a field of ten which we will profile this week
The CEOs are chosen on the basis of their company’s stock market and financial performances compared with their own industry groups and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 reviewed revenue growth, operating margins, balance sheets, return on assets, and return on equity
Infineon Technologies (IFX) Misses numbers by a mile. Drops to $1.16 from 52-week high of $13.06.
Rio Tinto (RTP) Falling commodities prices and ongoing disappointment about failed takeover by BHP. Down to $64.35 from 52-week high of $558.65.
Potash Corporation (POT) Fertilizer companies under pressure from falling ag prices. Down to $51.70 from 52-week high of $241.62.
Microsemi (MSCC) CEO accused of lying about degree. Drops to $15.30 from 52-week high of $28.50.
Douglas A. McIntyre
Fighters who are about to go down for good always resort to fighting dirty. Why not? Nothing to lose.
Jim Press, Chrysler’s vice chairman, repeated the party line. If we don’t get cash, we go under.
All districts showed weakness… weakening labor, weak exports, weak housing, commercial real estate declines, lower housing prices, weak retail, mining and energy down, wage pressure subdued, lower manufacturing…. You already know most of this. This was prepared at the Federal Reserve Bank of Minneapolis and based on information collected before November 24.
We have attached a excerpt below.
SanDisk Corp. (NASDAQ: SNDK) has traded up most of the day on options reports from OptionMonster regarding a potential bid from Toshiba. This was after a flurry of call options buying, but the shares have traded up as much as 19% today. Before you dive headfirst in the dark without making sure there is water in the pool, be sure you turn on the lights or dip your toe in first.
According to The Wall Street Journal, "Leaders of the United Auto Workers union are close to signing off on changes to the 2007 labor contract with Detroit’s three auto makers, in a move that would relax job-security provisions and push back the date on when a new health-care trust becomes active."
If this is true, the rank-and-file are likely to vote it down. They have already bled out enough jobs.
Douglas A. McIntyre
In a report out this morning, Deutsche Bank said investors are taking
false comfort in the dividends of mining stocks and said most metals
companies have now gone into "survival" mode and slashing dividends will
be the most readily available source of cash.
Deutsche Bank said Alcoa (NYSE: AA) and Freeport-McMoRan (NYSE: FCX) are
the most likely to cut dividends within the next 2 months. Well,
Freeport-McMoRan did in fact suspend their dividend today, leaving Alcoa
as the next likely.
PCs. cell phone, and video games. Winners every year. Rock solid growth driving remarkable industry earnings.
Nokia (NOK), RIM (RIMM), and PALM (PALM) have destroyed the hope that 2009 will be a strong year for cell phone sales. Now new research shows that PCs are going the way of all flesh as well
The merger between Precision Drilling (NYSE:PDS) and Grey Wolf (NYSE:GW) could turn into the longest running soap opera on Wall Street. Our story last month summed up the action so far. Last night, Precision announced that the shareholders’ meeting was beingmoved to December 23rd, and that the merger terms were being amended.So far, only 54% of Grey Wolf shares have approved the deal, and theshareholder meeting was scheduled for December 9th.
The FT reported that Canadian oil company Nexen (NYSE:NXY) is being courted by France’s Total SA (NYSE:TOT). Total could be preparing a bid for as much as $16 billion for the Canadian company. Total will apparently not make a hostile bid, so it will have to depend on sweet talk and cash to get the deal done. Nexen has said that should it receive a bid from Total, the company would go up for auction to the highest bidder.
24/7 Wall St. will name its annual CEO of the Year next week. The executive will be picked from a field of ten which we will profile this week
The CEOs are chosen on the basis of their company’s stock market and financial performances compared with their own industry groups and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 reviewed revenue growth, operating margins, balance sheets, return on assets, and return on equity
Dillard’s Inc. (NYSE: DDS) could use new blood, literally. The company is run by William Dillard II as CEO (founder’s son) and as Chairman, and its President is Alex Dillard. There are enough Dillard family members running the company that it looks like a family business rather than a public company, and the dual class of stock gives the family control. This company is still running too aggressively, is paying out too much, and has major room for improvements. Shareholders have already spoken out, but you can expect much louder cries in 2009.
Harvard produced Steve Ballmer, Bill Gates, and Jim Cramer.
It has produced eight presidents has hundreds of big company CEOs.
By the look of things, its investment managers are doing better than the market as a whole, but not by much. The university’s endowment is down 22% in the last four months.
Whenever something like this comes along, one has to ask, "Are these guys serious?" Electricite de France (EDF) yesterday offered Constellation Energy (NYSE:CEG) a premium of about 96% to purchase half of Constellation’s nuclear power business. EDF could be too late to the party. Constellation has already mailed adefinitive proxy to shareholders supporting the $26.50/share bid fromWarren Buffet’s Berkshire Hathaway (NYSE:BRK.A) subsidiary Mid-AmericanHoldings. 
A shareholder vote on the sale is scheduled for December 23rd. The total value of the EDF deal could reach $6.5 billion, if EDF buys some non-nuke assets, $4.5 billion just for the nukes. EDF already owns about 10% of Constellation.
If you haven’t heard of a creative and backward way of trying to rapidly acquire assets, you can look to Goldman Sachs Group (NYSE: GS) this morning. The WSJ is reporting that the investment bank gone bank-holding company is considering opening up an online bank. While the report says that the firm is weighing this rather than having decided upon this, that is just so 1990’s.
These are some of the early bird analyst downgrades and negative calls we have seen early this Wednesday morning:
Jon C. Ogg
December 3, 2008
These are some of the early positive analyst calls and analyst upgrades we are seeing this Wednesday morning:
Jon C. Ogg
December 3, 2008
Analysts are of two minds about Google (GOOG). The first is that because it is the most efficient way for companies to reach customers that it will not be hurt much by the recession. As marketers trim budgets, Google will be the media industry mainstay because it is the best advertising tool ever invented.
Mastercard (MA) has a unit which tracks retail sales. The numbers that it posted for November are almost too horrible to believe.
According to The Wall Street Journal, new data from MasterCard SpendingPulse shows that "sales fell 20% from year-ago levels at apparel and department stores combined, 24% at luxury stores and 25% at electronics stores."
No comment necessary.
Douglas A. McIntyre
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