Posted: November 26, 2009 at 12:29 pm
Dubai World, the de facto sovereign fund for the desert nation, has essentially defaulted on a large portion of its debt. It has asked creditors for a “standstill” on paying back its $60 billion debt until May or perhaps later. Most of the debt is attached to the fund’s real estate arm known as Nakheel.
According to The Wall Street Journal, “The cost of insuring against a Dubai default rose sharply again Thursday in London, to $547,000 per year per $10 million in debt. That was up from $318,000 on Tuesday.”
This may not be the end of it. If Dubai is bailed out by other Arab nations or creditors give it reasonable terms to ease it obligations, sovereign commitments will have their own example of a “moral hazard” to consider. Read Full Story »
Posted: November 26, 2009 at 12:06 pm
Maurice R. “Hank” Greenberg did not start AIG (AIG), but he might as well have. Greenberg took over as head of the insurance company in 1968, the only CEO other than its founder C.V. Starr. Greenberg turned AIG into the largest insurance firm in the world. In 2005 he left during an accounting scandal, then shortly after his departure, problems with toxic assets on the firm’s balance sheet nearly took the company under. A series of government investments totaling $180 billion kept AIG in business. Washington was worried that a collapse of AIG would bankrupt a number of other large companies that had relationships with the firm.
On Nov. 25, AIG and Greenberg agreed to settle all of the outstanding legal issues between them. According to an 8-K filed with the SEC, Greenberg and AIG’s former CFO will receive reimbursement of their legal fees of up to $150 million.
Read more…
Posted: November 26, 2009 at 7:40 am
China’s stimulus package may work too well. The world’s most populous nation is still building large numbers of factories even though its exports remain low. Building the facilities creates jobs and offers the country the chance to be ready to send out a huge amount of goods when the world’s economy recovers without straining its manufacturing capacity
China may have erected so many new manufacturing facilities that it could flood the world with goods as it keeps millions of its workers employed creating products for which that are not enough buyers in the West. Read Full Story »
Posted: November 26, 2009 at 5:02 am
Reuters: Saab’s failure to be bought shows that Chinese companies are having trouble moving into Western markets through M&A.
Reuters: AIG (NYSE:AIG) and former CEO Greenberg settled legal issues between them.
Reuters: Dubai will put a six month standstill to debt payments. Read Full Story »
Posted: November 26, 2009 at 4:41 am
Markets in Asia fell.
The Nikkei was off .6% to 9,383.
The Hang Seng fell 1.8% to 22,210.
The Shanghai Composite was down 3.6% to 3,171.
At the open in Europe, the FTSE fell .7% to 5,327. The Dax was off .8% to 5,757. The CAC 40 fell .9% to 3,776. Rio Tinto (NYSE:RTP) and Deutsche Bank (NYSE:DB) fell sharply.
Data from Reuters and MarketWatch
Douglas A. McIntyre
Posted: November 25, 2009 at 11:51 am
Black Friday is under 48 hours away. We have seen much data and much analysis out there on the topic, but there are two fairly easy conclusions here…. well, make it three. First and foremost is that consumers are still going to get deals galore. The add-in third notion, or the second, is that inventories at stores are going to be very low and many items may have to be bought online (with free or low shipping to boot). But the big conclusion here is that it seems a foregone conclusion that the great deals and (quasi-) price matching and free shipping offered by retailers are still likely to create margin pressure for the retailers even if they have strong top-line sales data.
This is a sampling review of some of the promotions from major retailers. No particular order has been given. Apple, Inc. (NASDAQ: AAPL) and Amazon.com Inc. (NASDAQ: AMZN) are worth note, but the major retailers featured are Wal-Mart Stores Inc. (NYSE: WMT), Best Buy Co. (NYSE: BBY), Costco Wholesale Corporation (NASDAQ: COST), Target Corp. (NYSE: TGT), Kohl’s Corp. (NYSE: KSS), Macy’s, Inc. (NYSE: M), and Nordstrom Inc. (NYSE: JWN).
Read Full Story »
Read more:
Consumer Electronics,
Consumer Goods,
Internet,
Luxury,
Product Review,
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AAPL,
AMZN,
BBY,
COST,
JWN,
KSS,
M,
TGT,
WMT
Posted: November 25, 2009 at 10:43 am
The Department of Energy has just released this week’s oil inventories data. While there are gains almost on all counts, this may not be enough. The key ETFs around the news are the Oil Services HOLDRs (NYSE: OIH), the Ultra Oil & Gas ProShares (NYSE: DIG), the United States Oil (NYSE: USO) ETF and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) reactions based upon the supply data. NYMEX WTI Crude is up $0.06 per barrel at $76.08 10:34 AM EST after the news, which is a far lower price than what has been seen into weekly inventory data in recent weeks.
Read Full Story »
Posted: November 25, 2009 at 9:07 am
Updated throughout the day
Calpers has launched an investigation of its own oversight practices (LA Times)
Hedge fund assets may rebound to pre-crisis levels (Reuters)
GE’s (NYSE:GE) stock price is about to take a run up (The Street)
Facebook and Twitter are preparing IPOs (The Deal)
GM will close Saab (various)
The Apple (NASDAQ:AAPL) iPhone will be sold at the UK’s largest retailer (TechCrunch)
Douglas A. McIntyre
Posted: November 25, 2009 at 9:05 am
Garmin Ltd. (NASDAQ: GRMN) took it right on the chin in recent weeks after Google Inc. (NASDAQ: GOOG) launched its personal navigation system as an app on its new smartphones for free. Despite the company’s guidance and earnings, this stock slid and slid rapidly as shares went from $38.00 down to under $28.00 before its recent stabilization around $31.00 currently. It turns out that the threat may still be a long-term one, but it does not appear to be one today if online shopping data is worth anything.
Read Full Story »
Posted: November 25, 2009 at 8:43 am
We just had a deluge of economic data in Personal Income & Spending for September, a rather solid figure on weekly jobless claims and in continuing jobless claims, and a somewhat tepid durable goods orders data. While there is still nothing robust, the jobs data this morning is the tipping point that allowed equities to run higher.
Posted: November 25, 2009 at 8:23 am
These are this mornings top 10 analyst upgrades, downgrades, and initiations seen from Wall Street research calls. In fact, because today is a short day or partial off for most, there are not even a full ten impact calls:
Brocade Communications Systems (NASDAQ: BRCD) Cut to Hold at Canaccord Adams.
DragonWave (NASDAQ: DRWI) Started as Overweight at Piper Jaffray.
EMC Corp. (NYSE: EMC) Started as Buy at UBS.
JDS Uniphase (NASDAQ: JDSU) Started as Buy at Citigroup.
Microsoft (NASDAQ: MSFT) Reiterated Buy and $33.50 target at Auriga (on CFO departure).
NRG Energy (NYSE: NRG) Cut to Neutral at UBS.
NetApp, Inc. (NASDAQ: NTAP) Started as Buy at UBS.
SAVVIS Inc. (NASDAQ: SVVS) Started as Market Perform at Wells Fargo.
You can join our open email distribution list to receive daily emails with analyst upgrades and downgrades, top day trader alerts, market rumors, merger activity, IPOs and secondary offerings, Warren Buffett and guru activity and more.
JON C. OGG
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Pre-Market Activity,
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NRG,
NTAP,
SVVS
Posted: November 25, 2009 at 5:45 am
More than 13% of people who went to the top 500 retail websites went to Walmart.com for the week ending November 21. The number was up 77% from the previous week, which is not strange because interest in buying holiday gifts should be about to peak.
What is surprising about the numbers from online research firm Experian Hitwise is that Amazon (NASDAQ:AMZN) did not do nearly as well, a sign that bricks-and-mortar companies may have an advantage over online stores because of their decades-old brands. Visits to Amazon.com were only .87% of total visits and that number was off 44% from the week before. Read Full Story »
Posted: November 25, 2009 at 5:31 am
Starbucks (NASDAQ:SBUX) wants to follow Wal-Mart (NYSE:WMT), McDonald’s (NYSE:MCD), Dell (NADSAQ:DELL) and hundreds of other large American companies into China. It is the promised land for consumer spending. The middle class in the world’s most populous nation is growing at an extraordinary rate, even with a modest slowdown in its rapidly rising GDP.
Wang Jinlong, the head of the coffee company on the mainland told Reuters, “It’s absolutely very, very important. This has really become our second home market.” Based on the leveling off of Starbucks business in America, the strategy may be obvious. Read Full Story »
Posted: November 25, 2009 at 5:17 am
The minutes of The Federal Reserve Board and the Federal Open Market Committee for November 3 and November 4 are a study in contradiction and perhaps even confusion.
Members of the committee almost all agreed that the economy is getting better. That is hard to find in the numbers. Consensus estimates for unemployment next year run between 9.3% and 9.7%, but at least one member believes the figure will be 10.2%. GDP is expected to rise 2.5% to 3.5% next year, but one outlier said the figure would be only 2%. Read Full Story »
Posted: November 25, 2009 at 4:56 am
FDIC chair Sheila Bair, who would seem to be one of the less important members of the government’s financial team, yesterday strongly suggested that secured creditors at the largest banks bear losses of as much as 20% to cover the costs of a systemically significant bank failure. That would make the business of providing capital to banks extremely risky. Read Full Story »
Posted: November 25, 2009 at 3:44 am
Reuters: Chinese banks must raise large sums of capital which could test equity markets.
Reuters: AIG’s (NYSE:AIG) CEO had his pay package approved.
Reuters: The Fed sees growth but substantial policy risks. Read Full Story »
Read more:
Press Digest,
AAPL,
AIG,
BLK,
C,
GOOG,
MSFT,
SBUX,
TIVO,
TWC,
WPO
Posted: November 25, 2009 at 3:21 am
Markets in Asia were higher.
The Nikkei rose .4% to 9,442. Mitsubishi UFJ (NYSE:MTU) was down. Sony (NYSE:SNE), Toyota (NYSE:TM), and Honda (NYSE:HMC) rose.
The Hang Seng was up .7% to 22,590.
The Shanghai Composite was up 2.1% to 3,291.
At the open in Europe, the FTSE was up .8% to 5,366. The Dax rose .9% to 5,824. The CAC 40 was up .9%.
Data from Reuters and MarketWatch.
Douglas A. McIntyre
Posted: November 24, 2009 at 4:53 pm
It seems that the end of the recession notices via positive GDP has not reached Main Street America, at least as far as paying for their single-family house. Fannie Mae (NYSE: FNM) has just reported its October 2009 data and the figures are not getting better. The serious delinquency rates are astronomical. We would note that the internal data is for October, but the delinquency data is from September. While the Freddie Mac (NYSE: FRE) data was not yet seen, most consider these step brother and step sister.
Read Full Story »
Posted: November 24, 2009 at 3:42 pm
Merck & Co., Inc. (NYSE: MRK) barely has its Schering-Plough deal behind it. And today came the announcement of its dividend rate, but more importantly came word of a large share repurchase program. The quarterly dividend for common stock is remaining at $0.38 per quarter, which gives a yield of almost 4.20%. It also declared a quarterly dividend of $3.75 per share on the company’s mandatory convertible preferred stock for the first quarter of 2010. But this buyback is what will excite most investors.
Read Full Story »
Posted: November 24, 2009 at 2:26 pm
The November 3 to 4 Minutes of the FOMC meeting are now out, and as you have been told over and over (and over and over)…. It has the flexibility to keep rates low for an extended period. But what is of interest is the new FOMC outlook figures for what lies ahead in unemployment targets.
Read Full Story »
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