Daily Archives: April 10, 2009

Confirmed: First-Half Budget Deficit $1 Trillion

As 24/7 Wall St. mentioned in an earlier post, the Federal budget deficit was nearly $1 trillion. The Treasury department issued its numbers today. CBO came out with its figures three days ago.

24/7:  “The Congressional Budget Office issued its estimate for the deficit created in the federal government’s fiscal first half, which ended on March 31. The number was $953 billion. “

“The concern that springs from the numbers is not so much that spending will continue to increase because that will be a product of the new budget and stimulus packages and any additional TARP funds which Congress might approve. The really massive damage to the deficit will likely come on the income side of the ledger and that draws into question, once again, how much money the government can borrow.”

“At the current rate of attrition, income to the government will be off more than $300 billion in the fiscal  period that ends in September. But, the effects of unemployment being close to 10% by then and corporate earnings continuing to fall could push that number up toward $500 billion or more and that can only be remedied if the economy turns on a dime in the next few weeks and begins a nearly miraculous recovery.”

Douglas A. McIntyre

Posted on: April 10, 2009 – 1:35 pm in Economy

Weekly AAPL Headline Roundup: April 9

In addition to today’s Credit Suisse price target upgrade, there’s lots of interesting news for Apple in this pre-earnings (coming April 22) period. Here are the week’s top stories, aggregated from 24/7 Wall St. partner Apple Investor News: Read More »

Posted on: April 10, 2009 – 1:08 pm in Consumer Electronics, PC Companies,

Death a la Carte

It’s not Google that’s killing the media.

By Mark Gimein of  The Big Money

What you are reading now is an article, published by a Web site, The Big Money. One way you could have gotten to it is by going to TBM’s home page. But there’s a good chance you didn’t get to it that way. You may have gotten here by following a link from Slate, one of TBM’s partner sites. Or you may have followed a link from a blog or another news site. Or from a site that aggregates news, such as the Drudge Report. Or through a site like MSNBC.com that does a mix of both. If you happen to be reading it a few days or a month or a year after it first appeared, there is a good chance that you got to it more or less accidentally, through a search on Google (GOOG).

You’d think that by now people would have gotten used to this. But they haven’t. The last days have been big ones for link bashing. Rupert Murdoch accused Google in a speech of “stealing copyrights.” Wall Street Journal Managing Editor Robert Thomson called Google and other aggregators “parasites or tapeworms,” charging Google and other unnamed aggregators with the crime of “encouraging promiscuity” (managing to combine fear of Google and fear of sex, in what could be a model platform for the Republican Party in 2010).

Read more….

Posted on: April 10, 2009 – 10:18 am in Uncategorized

Government Tries To Hold A Gun To The Head Of GM (GM) Creditors

winter5The Treasury is using all of its muscle in The Motor City. Bondholders in GM (GM) and Chrysler think they may do better if the companies go bankrupt than if they take the paltry offer of equity-for-debt exchanges that will bring them a few cents on each dollar of their investments.

The government does not have much of a case, but that is not keeping it from trying to strong-arm a restructuring of the two auto firms. Read More »

Posted on: April 10, 2009 – 5:14 am in Autos,

Banks, With Goldman Sachs (GS) Out Front, Get Ready To Raise Cash

sunset8The market capitalization of some big banks has doubled in a month. All of them will have “stress test” results from the government within a few weeks. Those that get fairly high marks will have both share price strength and a Good Housekeeping Seal to allow them back into the markets to raise capital. Read More »

Posted on: April 10, 2009 – 4:58 am in Banking, , ,

Government Wants Bank “Stress Test” Results To Be Secret

water-lilies5The Federal Reserve keeps saying that many of its dealings with the financial industry must remain secret. Congress keeps insisting that no such secrets should be kept from the taxpayers who are funding the massive bank bailout.  But, Bernanke must believe that taxpayers are too poorly educated and ill-informed to handle complicated data on how companies such as Citigroup (C) and Bank of America (BAC) are doing. If the government’s information about the banks shows problems, it might frighten both investors and the general public. Read More »

Posted on: April 10, 2009 – 4:45 am in Accounting, Banking, ,

Swearing Off The Habit Of Flying: Boeing (BA) Proves A Poorly Run Company Can Still Do Badly

bear15Many people who fly on airplanes do not like it one bit.  Some of these are claustrophobic while others object to the fact that they are not allowed to smoke at 37,000 feet anymore. But, the majority of nervous flyers have anxiety based on their belief that nothing that weighs any number of tons should be able to operate off of the ground at all. To their way of thinking, flying is a physical impossibility which they tolerate because driving from New York to Los Angeles takes five or six days.

The tens of millions of people who do not want to ride on airplanes are getting their way. The recession has hit the airline industry with a rapidly growing attrition of customers. As a reaction, carriers are taking planes out of service as quickly as possible and letting go as many pilots, stewardesses, and mechanics as they can. People who do not want to fly can join those who do in not being able to afford it. Read More »

Posted on: April 10, 2009 – 4:09 am in Aerospace, Airlines, Earnings Warning,

More Quickly Than It Began, The Great Banking Crisis Is Over

bank14Investors find it disconcerting to see the stocks in the huge financial institutions that are at the foundation of the global capital system trading up and down 25% a day, and, in some cases trading in the pennies. Banks became the visible and ugly wound that reminded Wall St. each day what it had torn down what it spent decades building, which was a money-making machine driven by leverage and the cleverest synthetic financial instruments the world has ever seen. Read More »

Posted on: April 10, 2009 – 3:58 am in Banking, , ,

Shorts, Back In Financials, Probably Got Buried. Cut Bets On Tech

bear14Short sellers were figuring that after the bank rally late last month, banks shares were likely to give back some gains. That was working until Wells Fargo (WFC) reported that it would have a good Q1, which probably resulted in a huge short squeeze in bank stocks.

As of the last day in March, shares sold short in Citigroup (C) were up 21% from two weeks earlier to 1.2 billion. Shares short in AIG (AIG) rose 54% to 281 million. The short interest in Wells Fargo was up 8% to 168 million. Shares sold short in JP Morgan (JPM) rose 26% to 70 million. The short interest in US Bancorp (USB) was up 18% to 76 million.  Shares short in Fifth Third (FITB) were higher by 22% to 58 million. Read More »

Posted on: April 10, 2009 – 3:02 am in Short Interest, , , , , , , , , , , , , , , ,

Media Digest 4/10/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

newspaper9According to Reuters, banks have been asked to keep the results of the “stress tests” of their financial conditions confidential.

Reuters reports that the Fed says its current plan is to prevent inflation.

Reuters reports that a new survey of economists says the recession will end in the second half of the year but employment will not improve until well into that last part of 2010.

Reuters reports that Asia’s China-fueled equity rally may run out of steam. Read More »

Posted on: April 10, 2009 – 2:42 am in Press Digest, , , , , , , , , ,

Asia Markets 4/10/2009

sunset7Markets in Asia were higher.

The Nikkei was up .5% to 8,964.

The Hang Seng was closed.

The Shanghai Composite was up 2.7% to 2,444.

Data from Reuters.

Douglas A. McIntyre

Posted on: April 10, 2009 – 2:17 am in International Markets