Daily Archives: November 1, 2009

The China Stimulus Follies

chinaChina managed to pull another rabbit out of its growth hat. The world’s most populous nation said its GDP grew 8.9% in the third quarter. Some outside analysts are skeptical about how China keeps its records of such things, but its economy is clearly growing faster than that of any other large economy in the world.

Today, China announced its purchasing managers index rose to 55.2 in October up a point from September. The index has risen eight straight months and that has caused economists who follow China to say that the nation’s stimulus package of $585 billion is working perfectly. Read More »

Posted on: November 1, 2009 – 7:07 pm in China, Economy

24/7 WallSt TV: Kraft (KFT) Does Its Shareholders No Favor: Gets Hostile With Cadbury

24/7 WallSt TVThe efforts of Cadbury’s board to keep the company out of the clutches of Kraft (NYSE:KFT) will likely fail because no second bidder has emerged. The Times says that Kraft will make a hostile bid for the UK-based company toward the end of this week. The offer is likely to be at little or no premium to the price at which Cadbury trades now.

Kraft shareholders have every reason to resent the company’s plans to buy Cadbury. The British company is already doing well financially and there is absolutely no reason for Kraft to believe that it can add anything to that performance beyond a one-time set of cost cuts. Read More »

Posted on: November 1, 2009 – 6:04 pm in Food, Mergers and Buy Outs, TV, Uncategorized,

CIT (CIT) Prepares Chapter 11

TVAccording to The Wall Street Journal, CIT (NYSE:CIT) will file for Chapter 11 today. Bondholders will probably provide $4.5 billion in financing for a prepackaged bankruptcy. Senior creditors will likely get $.70 on $1. Carl Icahn, who offered that company $1 billion in financing, may be left out in the cold because CIT may not need the capital he has offered.

Taxpayers are likely to see their $2.3 billion investment in the firm go to zero.

The group that will lose the most money that fastest are the investors who have bought CIT shares over the last several weeks, betting the company would not have to go to court. Shares traded at $2.20 on September 29. On October 19, CIT traded at $1.21. Investing in CIT was a long shot and investors who put their capital into the stock are likely to watch the shares fall to a few pennies tomorrow morning.

Douglas A. McIntyre

Posted on: November 1, 2009 – 2:14 pm in Financial Stocks,

US Kicked Out Of Top Spot In World Economic Forum Survey

uncle samThe World Economic Forum published its most recent Financial Development Report. In the executive summary of the study, written by Nouriel Roubini and James Biodeau, fifty-five countries were graded on seven scales: institutional environment, business environment, financial stability, banking financial services, non-banking financial services, financial markets, and financial access.

The US would be at the top of the list presumably because of its massive capital markets and pools of money invested in the stock and fixed income markets. America’s credit foundations were shaken by the crisis of a year ago, but have at least partly recovered.

The surprise finding of the report is that the UK is now first among the world’s nations covered in the Forum’s survey. Australia was second, followed by the US, Singapore, Hong Kong, Canada, and Switzerland. Read More »

Posted on: November 1, 2009 – 12:03 pm in Economy

The Unusual Suspects (BEAT, CIT, CIT-PZ, GNW, GFIG, HGSI, GSK, MCO, BRK-A, RVSN, CSCO)

bull-and-bear-image2Earnings season is seeming to wind down here, but that won’t stop the unusual suspects of key equity events and issues to watch this coming week.  We are looking into key issues for the coming week in the stocks of CardioNet, Inc. (NASDAQ:BEAT), CIT Group, Inc. (NYSE: CIT), Genworth Financial Inc. (NYSE:  class=GNW), GFI Group Inc. (NASDAQ: GFIG), Human Genome Sciences Inc. (NASDAQ: HGSI), GlaxoSmithKline Plc (NYSE: GSK), Moody’s Corp. (NYSE: MCO), Berkshire Hathaway Inc. (NYSE: BRK-A), RADVISION Ltd. (NASDAQ: RVSN) and Cisco Systems Inc. (NASDAQ: CSCO).
Read More »

Posted on: November 1, 2009 – 11:33 am in After-Hours Activity, Biotech, Buffett, Calendar, Earnings, Financial Stocks, Healthcare, Mergers and Buy Outs, Rumors, , , , , , , , , , ,

UAW Drives Ford (F) Off A Cliff

fordThe UAW rank-and-file rejected a labor pact with Ford (NYSE:F) even though the car company offered each member of the union $1,000 to agree to the deal  The No.2 US auto company now has to deal with the bitter fruit of its own prosperity. Ford has done much better financially than its government-supported rivals GM and Chrysler over the last year and has probably picked up market share on every major car company, foreign or domestic, that has a major presence in the American market. Read More »

Posted on: November 1, 2009 – 8:47 am in Autos, Labor & Unions,