Archive for August, 2009

  • The Energy Bubble
    , August 31st, 2009 at 9:09 am

    George Trefgarne says we’re about to enter an age of cheap energy. For example, the U.S.’s supply of natural gas has effectively doubled thanks to the industry’s new ability to extract gas from difficult rock formations. Trefgarne writes: When it comes to gas, America is the new Russia. And for the rest of the world, tight gas equals one thing: freedom.”

  • Economists Predict They’ll Be Disappointed
    , August 31st, 2009 at 8:32 am

    From a poll of economists:

    Three-quarters said they would like to see the government cut spending over the next two years, while only 28 percent projected the reductions would actually take place.
    The economists also favored increased regulation of financial markets, including greater oversight of derivatives, requirements on financial institutions to put more of their own funds at stake when securitizing mortgages and reform of the credit-rating companies.
    This was the most surprising finding for Chris Varvares, the president of NABE and of Macroeconomic Advisers LLC in St. Louis.
    “This tends to be a fairly conservative group, and you can see it except when it comes to regulation,” Varvares said in an interview. “They definitely are into more regulation in financial services.”

    The survey also showed that 56% think the Fed will keep rates unchanged for the next six months. Nearly 80% think a second stimulus isn’t necessary.

  • Canada to issue up to $3B in U.S. dollar bonds
    , August 31st, 2009 at 8:29 am

    Here’s an interesting story. The Canadian government is issuing bonds dominated in U.S. dollars. I didn’t know the Canadian government had done this before. The article said that it’s the first foreign currency offering in more than a decade.
    I support these kinds of products. For one, it keeps governments honest plus it helps diversify your debt obligations. I’d like to see the U.S. Treasury issue debt dominated in things like euros, gold, silver, oil and even shares in AIG and Fannie Mae.

  • Nation’s Unemployment Outlook Improves Drastically After Fifth Beer
    , August 28th, 2009 at 11:37 am

    From The Onion:

    WASHINGTON—Despite ongoing economic woes and a jobless rate that has been approaching 10 percent, U.S. unemployment projections drastically improved Monday after the consumption of five beers.
    It’s going up,” leading economist David Singleton said confidently, indicating the predicted growth in jobs with an upward wave of a Bud Light bottle. “All the way up. By the end of the month. No problem.”

    (more…)

  • Scary Sentence of the Day
    , August 27th, 2009 at 11:25 am

    This doesn’t look good:

    Bank of America, Citigroup, Fannie Mae and Freddie Mac have accounted for more than 40pc of all trading on the New York Stock Exchange so far this week.

  • Bernanke Victim of Identity Theft
    , August 27th, 2009 at 11:09 am

    If you’re going to take someone’s ID, targeting one of the most powerful men in the world might not be a good idea:

    Last summer, just as he was dealing with the first rumblings of the financial crisis on Wall Street, Bernanke learned that a thief had swiped his wife’s purse—including the couple’s joint check book. Days later, someone started cashing checks on the Bernanke family bank account, the documents show. “It’s fair to say he was not pleased,” said one close associate of Bernanke, who asked not to be identified discussing what the Fed chairman considers a private matter.
    The theft of the Bernanke check book—never publicly revealed until now—soon became part of a wide-ranging (and previously underway) identity-theft investigation by the Secret Service and the U.S. Postal Inspection Service. The probe culminated in recent months with a series of arrests, criminal complaints, and indictments brought by federal prosecutors in Alexandria, Va. The targets: members of a nationwide ring that used an inventive combination of old-fashioned thievery and high-tech fraud to loot the bank accounts of unsuspecting victims.

    (Via: Clusterstock)

  • GDP Unchanged
    , August 27th, 2009 at 9:29 am

    The government revised its estimate for second-quarter GDP growth, and the revised number was the same as the initial report — -1.0%. Wall Street was expecting -1.5%.

    The drop, while representing a record fourth consecutive decline, was far smaller than the previous two quarters. It also was stronger than the 1.5 percent decline that private economists expected.
    The new report found that businesses slashed their inventories more than first reported and cut back more sharply on investment in new plants and equipment. But those reductions were offset by revisions that showed smaller dips in consumer spending, exports and housing construction.
    The 1 percent rate of decline in the second quarter followed decreases of 6.4 percent in the first quarter and 5.4 percent in the final three months of 2008, the sharpest back-to-back declines in a half-century. The four straight quarterly declines in G.D.P., which measures the country’s total output of goods and services, mark the first time that has occurred on government records that date to 1947.

  • Stocks Vs. Bonds—Another Look
    , August 26th, 2009 at 1:24 pm

    Here’s an interesting chart. I divided the total return of two index funds, the Vanguard 500 Index Investor (VFINX) by Vanguard Long-Term Investment-Grade (VWESX). The chart begins in 1988.
    It’s a quick-and-dirty way to look at how well stocks have done against bonds.
    image847.png
    Although stocks have historically outperformed bonds, that hasn’t been the case in recent years. Bonds haven’t been just less volatile, they’ve been more profitable over the last ten years.

  • JoS. A. Bank to accelerate expansion
    , August 25th, 2009 at 1:17 pm

    This is good news for JoS. A. Bank Clothiers (JOSB):

    JoS. A. Bank Clothiers Inc. said Tuesday that it will open more stores in fiscal 2010 than planned for the current year to take advantage of real estate opportunities.
    The retailer expects to open 30 to 40 new stores in fiscal 2010, compared with an estimated 10 to 15 stores in fiscal 2009.
    “Quality real estate opportunities are beginning to open in the marketplace and we are ready to expand our store base at a more rapid rate,” President and CEO R. Neal Black said in a statement.
    The openings are part of the company’s long-term goal of running 600 stores. It currently has 467 stores.

  • Medtronic’s Earnings
    , August 25th, 2009 at 12:18 pm

    Medtronic (MDT) reported adjusted earnings of 79 cents a share which matched estimates. Revenues rose 6.1% to $3.93 billion. The market seems mildly displeased as the stock is down today.
    Here’s a look at MDT’s sales and earnings for the past several quarters:
    Quarter………..EPS………….Sales
    Jul-01…………$0.28………..$1,455.70
    Oct-01………..$0.29………..$1,571.00
    Jan-02………..$0.30………..$1,592.00
    Apr-02………..$0.34………..$1,792.00
    Jul-02…………$0.32………..$1,713.90
    Oct-02………..$0.34………..$1,891.00
    Jan-03………..$0.35………..$1,912.50
    Apr-03………..$0.40………..$2,148.00
    Jul-03…………$0.37………..$2,064.20
    Oct-03………..$0.39………..$2,163.80
    Jan-04………..$0.40………..$2,193.80
    Apr-04………..$0.48………..$2,665.40
    Jul-04…………$0.43………..$2,346.10
    Oct-04………..$0.44………..$2,399.80
    Jan-05………..$0.46………..$2,530.70
    Apr-05………..$0.53………..$2,778.00
    Jul-05…………$0.50………..$2,690.40
    Oct-05………..$0.54………..$2,765.40
    Jan-06………..$0.55………..$2,769.50
    Apr-06………..$0.62………..$3,066.70
    Jul-06…………$0.55………..$2,897.00
    Oct-06………..$0.59………..$3,075.00
    Jan-07………..$0.61………..$3,048.00
    Apr-07………..$0.66………..$3,280.00
    Jul-07…………$0.62………..$3.127.00
    Oct-07………..$0.58………..$3,124.00
    Jan-08………..$0.63………..$3,405.00
    Apr-08………..$0.78………..$3,860.00
    Jul-08…………$0.72………..$3.706.00
    Oct-08………..$0.67………..$3,570.00
    Jan-09………..$0.71………..$3,494.00
    Apr-09………..$0.78………..$3,830.00
    Jul-09…………$0.79………..$3,933.00