Daily Archives: November 6, 2009

United Security Of Sparta Georgia Is 116th Bank Failure Of 2009

bearUnited Security Bank, Sparta, Georgia, was closed by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver.

The two branches of United Security Bank will reopen during their normal business hours as branches of Ameris Bank.

According to the FDIC as of September 14, 2009, United Security Bank had total assets of $157 million and total deposits of about $150 million. Ameris Bank will pay the FDIC a premium of 0.36 percent to assume all of the deposits of United Security Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to buy essentially all of the assets.

The FDIC and Ameris Bank entered into a loss-share transaction on about $123 million of United Security Bank’s assets.

Douglas A. McIntyre

Posted on: November 6, 2009 – 5:35 pm in Banking

Home For The Holidays: Consumer Credit Falls Apart

bearIt looks more and more like people will not be traveling or shopping this holiday season.

The Federal Reserve released its monthly consumer credit report which showed activity decrease at an annual rate of 6 percent in the third quarter of 2009.

Total US consumer credit fell $14.8 billlion in September. Of that, revolving credit fell $9.9 billion.

The survey shows that 34% of outstanding consumer credit is held by banks and 21% by finance companies. Read More »

Posted on: November 6, 2009 – 5:21 pm in Economy

Buffett & Berkshire Earn Dough (BRK-A, BRK-B, BNI, MCO)

buffettimage-gates-foundationWarren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) has just reported its Q3-2009 earnings ahead of the formal expectations.  This will be perhaps one of the last similar earnings reports with a relative comparisons because of its recent acquisition of Burlington Northern Santa Fe (NYSE: BNI).  The ongoing selling of Moody’s Corp. (NYSE: MCO) will be very limited in comparison to what change the railroad addition will make.

We were expecting the insurance operations to have a stellar quarter because there were no real storms that made landfall this year in hurricane season.  Thomson Reuters figures are hard to rely upon because of two issues.  There are very few ‘official estimates’ and there are many items inside the Berkshire Hathaway earnings that Buffett includes outside of what other companies include.  The consensus estimates was listed as $1,308.25 per share, but that is again a difficult number to use as a formal estimate.  Net earnings per share was $2,087 and operating earnings were $1,325 per share.  The key metrics are what we want to focus on today.

Read More »

Posted on: November 6, 2009 – 5:10 pm in Banking, Buffett, Conglomerates, Earnings, , , ,

Motorola (MOT) Droid Visits Manhattan

nokBy Douglas A. McIntyre

Some pieces of news are worth mentioning only in passing because they are interesting, but may not mean a thing. CNET says that over 100 people lined up at midnight to be early buyers of the new Motorola (NYSE:MOT) Droid handset at a Verizon (NYSE:VZ) store in Manhattan. The store in Herald Square had 500 phones in stock to meet the early demand.

The Droid is Motorola’s answer to the Apple (NASDAQ:AAPL) iPhone and Palm (NASDAQ:PALM) Pre.

Read more…

Posted on: November 6, 2009 – 1:32 pm in Wireless, , , ,

Is Citi’s Primerica IPO For You (C, MS)

It has been some time in the making and won’t be the last IPO or divestiture out of Citigroup Inc. (NYSE: C).  The company is proceeding to divest its Primerica Inc. via an initial public offering.
Read More »

Posted on: November 6, 2009 – 12:36 pm in Banking, Financial Stocks, IPOs, ,

GE No Rescue for Financial Junk Stocks (GE, FNM, FRE, AIG)

GE LogoGeneral Electric Co. (NYSE: GE) may be the one single bright spot taking the market higher this Friday when you consider the 10.2% unemployment rate and when you look over the latest round of earnings. Both Oppenheimer and Bernstein raised their official GE ratings to “Outperform” in research calls this morning. It depends upon which way the wind blows, but there are many times that GE trades more like some of the troubled financial stocks rather than as the top industrial stock in America.

American International Group, Inc. (NYSE: AIG), Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are all headed in opposite direction of GE. We noted that Fannie had broken the buck in pre-market trading and is back above the $1.00 level now. It is also dragging down Freddie Mac. AIG is adding to larger losses seen at the open.

GE shares are trading up 5.4% at $15.21 and we have already seen over 30 million shares trade hands in the first 20 minutes and pre-market period.

JON C. OGG

Posted on: November 6, 2009 – 9:57 am in Analyst Calls, Conglomerates, Financial Stocks, Trading Alert, , , ,

Today’s Best Market Rumors (11/6/2009) (RTP)(BHP)(BRK.A)

newspaperUpdated throughout the day.

Citigroup (NYSE:C) will re-launch some of its least successful hedge funds  (FT)

The stock market is at risk of not holding 10,000.  (TheStreet)

AIG (NYSE:AIG) will not hold a conference call to avoid uncomfortable questions about its balance sheet  (The Deal)

Sales of Microsoft (NASDAQ:MSFT) Windows 7 are outpacing those after the launch of Vista (Apple Insider)

Abercrombie & Fitch (NYSE:ANF) are likely to fall sharply  (Barron’s)

BHP Billiton (NYSE:BHP) may make another bid to buy rival Rio Tinto (NYSE:RTP)  (FTAlphaville)

“Governments may take as long as a decade to cut debt issuance back to the levels before global markets seized up following the collapse of Lehman Brothers Holdings Inc. last year.”  (Bloomberg)

Berkshire Hathaway (NYSE:BRK.A) is likely to go through a period of sharp job cuts.  (Business Insider)

Douglas A. McIntyre

Posted on: November 6, 2009 – 9:17 am in Rumors, , , , , , ,

Charting the Employment Data: Unemployment At 17.5%

Unemployment data were released today, showing the national rate to have reached 10.2% in October, its highest level since April of 1983.   This number is the Government’s headline unemployment number, which is formally referred to at U3.  There is another number that the Bureau of Labor Statistics puts out each month that has been a primary focus of the “double dip recession” crowd.  This number, referred to as U6, includes all of U3 plus individuals who have stopped looking for work as well as individuals working part time because they cannot find full time positions.  Investors that are skeptical of the sustainability of the U.S. recovery have looked to this number to show the true state of the American consumer.  When counting all the under-employed and discouraged workers in the U.S. economy, it is difficult to see the consumption piece of the economic puzzle making big strides in the coming months.  In October U6 reached 17.5%, a 0.5% increase.  Below is a chart of U3 and U6 since October of 2007 and a chart of month to month changes in non-farm job gains and loses over the same time period.

U3 and U6, October 2007 Through October 2009

U3 and U6 October

Monthly Non-Farm Additions/Loses, October 2007 through October 2009

Non-Farm Payroll October

The October employment data was a bit worse then expected.  The headline unemployment rate was projected to come in at 9.9% and non-farm job losses were expected to be 175,000.  What we got was a headline unemployment rate of 10.2% and 190,000 jobs lost.  There’s alway November.

Garrett W. McIntyre

Posted on: November 6, 2009 – 9:03 am in Economy,

Double-Digit Unemployment… Just How Lagging Is It?

jobless-line-pic2The Labor Department has just reported the unemployment rate and non-farm payrolls data for October.  It isn’t pretty.  The unemployment rate screamed up into the double-digit territory to 10.2%.  The non-Farm Payrolls shrank by a reading of -190,000 versus estimates of -175,000 as the consensus figure.
Read More »

Posted on: November 6, 2009 – 8:40 am in Economy, Labor & Unions

Top 10 Analyst Upgrades, Downgrades, Initiations (AMZN, ANSS, BEBE, CAH, CNQ, CROX, GCO, PEET, O, SBUX)

These are this morning’s top 10 analyst upgrades, downgrades, and initiations seen from Wall Street research calls:

Amazon.com (NASDAQ: AMZN) Raised to Outperform at Bernstein and target raised from $125 to $160.
ANSYS (NASDAQ: ANSS) Raised to Buy at Jefferies.
bebe Stores (NASDAQ: BEBE) Cut to Hold at Brean Murray.
Cardinal Health (NYSE: CAH) Cut to Hold at Jefferies.
Canadian Natural Resources (NYSE: CNQ) Raised to Overweight at Barclays.
Crocs Inc. (NASDAQ: CROX) Reiterated Overweight at Piper Jaffray.
Genesco (NYSE: GCO) Raised to Outperform at R.W. Baird.
Peet’s Coffee & Tea (NASDAQ: PEET) Started as Buy at Janney.
Realty Income (NYSE: O) Raised to Outperform at Credit Suisse.
Starbucks (NASDAQ: SBUX) Reiterated Overweight at Piper Jaffray and raised 2010 targets.

You can join our open email distribution list to get updates on top analyst upgrades and downgrades, top day trader alerts, IPO’s, secondary offerings, Warren Buffett and other guru activity, M&A and more.

JON C. OGG

Posted on: November 6, 2009 – 8:29 am in Analyst Calls, , , , , , , , , ,

China Goes To Texas: The Great Wind Farm Dispute

chinaChinese interests and private capital will build a huge wind farm in West Texas. China-based wind turbine firm A-Power Energy Generation Systems (NASDAQ:APWR) will lead the project. It will cost as much sa $1.5 billion and could supply energy to nearly 180,000.

Senator Charles Schumer of New York State does not like the Texas project, although he might like it more if the turbines were destined for up-state New York. Schumer believes that $450 million in federal stimulus funds could go into the project from the government’s stimulus package. That would help to create as many as 3,000 jobs at turbine plants in China according Reuters. Read More »

Posted on: November 6, 2009 – 6:35 am in Alternative Energy, China, Green Biz,

Airline Industry Gets Ugly Again As BA Fires 3,000

airplaneBy Douglas A. McIntyre

British Airways lost $485 million for the six months that ended in September. The airline’s CEO Willie Walsh told the BBC that this has been the “most difficult year in the history of British Airways”. BA is planning to cut 3,000 more workers in an attempt to return to profitability, but the firm’s outlook for an improvement in passenger traffic is bleak.

The BA news should not be seen in isolation. After a brief period in which analysts and traders hoped for a full-scale turnaround in the global airlines industry, those sentiments have faded.

Read more…

Posted on: November 6, 2009 – 6:20 am in Airlines,

US Guaranteed $4.5 Trillion In Financial Assets Creating Huge Taxpayer Risk

GeithnerThe Congressional Oversight Panel has issued its latest report on how the government’s huge bailout of the financial system is going. The most startling part of the document is that it describes the federal government’s $4.5 trillion guarantee of financial assets which put huge sums of taxpayer money at risk and, according to the panel, created a significant “moral hazard” which could encourage banks to return to risky behavior in anticipation that the government will always provide them with a safety net. Read More »

Posted on: November 6, 2009 – 6:13 am in Banking

Starbucks (SBUX) And The Recovery Of The Upper Classes

bucksStarbucks (NASDAQ:SBUX) does not hand out information about the demographics of its customers, but they are not likely to be people who are poor, indigent, or even lower middle class. The coffee firm announced unexpectedly good earnings and offered a fairly optimistic forecast for its next fiscal year. For its quarter ending September 27, EPS grew from $.01 last year to $.20 and revenue dipped slightly to $2.4 billion.

It needs to be granted that much of the improvement in Starbucks’ bottom line was due to brutal cost cutting, but the tactic worked and that has helped the stock triple in less than a year. Read More »

Posted on: November 6, 2009 – 5:56 am in Earnings, Editor's Picks,

24/7 Wall St. CEO Of The Decade: Jack Welch

welchWho is the greatest American CEO of the last decade? Jack Welch, who retired as GE’s (NYSE:GE) chief in 2001. He held his job at the head of the world’s largest conglomerate for 20 years. During that time, GE’s stock rose from roughly $1.30 to $40. Revenue at the company moved from $27 billion to $130 billion over the same period.

In 1999, Fortune named Welch its “Manager of the Century” Read More »

Posted on: November 6, 2009 – 5:40 am in Management Change,

Wal-Mart (WMT) Drives Price Wars To DVDs

WMTWal-Mart (NYSE:WMT) is not satisfied challenging rivals like Amazon (NASDAQ:AMZN) and Target (NYSE:TGT) in the e-book and toy businesses. Its program to take the lion’s share of the modest number of consumers likely to come out during the end-of-recession shopping season has been extended to DVDs.

Walmart.com has started to offer DVDs which are likely to be hot sellers for only $9.99. Most have retail prices of $25 to $30, so the world’s largest retailer is not likely to be making money on them. It is part of Wal-Mart’s strategy to get people in the “door” and then sell them other items. Read More »

Posted on: November 6, 2009 – 5:11 am in Retail, , ,

Time For T-Mobil To Be Sold To Sprint (S)

nokT-Mobile, the Deutsche Telekom-owned cellular carrier in America, is a failure and an abject one at that. The firm lost 77,000 subscribers in the third quarter. Most analysts blame the attrition on a poor line-up of handset products and tremendous competition from Verizon Wireless (NYSE:VZ)(NYSE:VOD) and AT&T (NYSE:T). Each of the two larger companies added over one million customers in the quarter ending September 30.

T-Mobile has 33.4 million customers in the US and its chances of doing well as the No.4 firm in its sector are fading to nothing. Read More »

Posted on: November 6, 2009 – 4:55 am in Wireless, , , , , ,

Media Digest 11/6/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

newspaperReuters:   The Wall St. insider trading probe lead to another 14 arrests.

Reuters:   Fannie Mae (NYSE:FNM) lost $19 billion and asked Treasury for money.

Reuters:   GM is readying its plans for Opel as some of its workers went on strike.

Reuters:   The pay czar says the jury is still out on reforms. Read More »

Posted on: November 6, 2009 – 3:58 am in Press Digest, , , , , , , , , , , , , , , , , ,

Asia Markets (11/6/2009)

chinaMarkets in Asia rose.

The Nikkei was up .7% to 9,790. Mitsubishi UFJ (NYSE:MTU) was down. Honda (NYSE:HMC) and Sony (NYSE:SNE) both gained.

The Hang Seng rose 1.6% to 21,830.

The Shanghai Composite was up .3% to 3,164.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Posted on: November 6, 2009 – 3:25 am in Autos, , ,