Vortex, Twister or Black Hole?
Snipets from Bloomberg with a large dose of Nattering love... Moving West, again... Dorothy, is that loud sucking and whooshing sound coming from a twister, vortex or... black hole???
Wal Mart & Home Depot , the two largest U.S. retailers, said the housing slump, rising mortgage defaults and high energy prices will depress earnings for the year.
Wal Mart gave lowered guidance for annual profit while Home Depot reiterated a 15% forward decline in per share profit; -2% sales; comp sales -5.2%.
Wal Mart CEO H. Lee Scott: "U.S. consumers continue to be under difficult pressure economically. It is no secret that many customers are running out of money toward the end of the month."
Wal Mart U.S. stores chief Eduardo Castro-Wright: "Consumers today are pressed by a number of factors. Higher energy, higher gas prices and higher interest rates are all stretching their paychecks."
Understatement of the new Millenium: Gordon Fowler, who helps manage $6 billion as chief investment officer at Glenmede Investment Management in Philadelphia:
"The consumer economy has been slowing down for a while now and it's probably tied to what's been going on in the housing market."
Gordon, my man, the estimates are that 80% of all jobs created since 2001 are tied to the housing sector with 20% being service sector related.
And unfortunately, due to emasculation of durable economic activity, the housing sector IS the economy.
As housing fades into the sunset, what remains of our gutted service based McJobs economy shall follow.
Newsflash for those with ADD, there is nothing to fall back on. Question: What 2 things have supported this economy for the last 5 years?
MEW mortgage equity withdrawl due to rising real estate prices; and a rising stock market due to loose money policies.
With real estate just starting to take the BIG dip and the stock markets getting ready to tank as liquidity dries up... the Nattering One waxes nostalgic....
George Bush Sr. circa 1991: "The economy has turned the corner." George Sr. omitted the rest of the statement, which is germain for today's Dubya Shrub economy:
The economy has turned the corner... flipped over three times, struck a tree, and burst into flames.
Imagine whats going to happen when the economic downturn really starts moving into overdrive? Speaking of bursting into flames...
Fitch Ratings further downgraded its issuer default rating on Beazer Homes after the company failed to file a quarterly financial report on time due to accounting problems.
Another ratings agency, Moody's, said it has placed Beazer on review for downgrade. FYI, Dominion Homes was suppossed to report last Friday, what happened? Got me...
The heaviest weighted sector in the SP500 is financial, YTD down 12%...
Sanford C. Bernstein & Co. said the credit-market crisis could cost the biggest U.S. bank; Citigroup, as much as $3 billion in the third quarter alone.
Five brokerages cut their ratings on jumbo (+417K) money lender Thornburg Mortgage, citing concern the company may need to sell assets or reduce its dividend because of a liquidity squeeze.
The mortgage lender postponed its Q2 dividend. Banks that provide lines of credit that allow Thornburg Mortgage to originate loans have also made margin calls in recent days. Stock down 46% on the news.
As reported yesterday: Coventree, the largest non-bank issuer of commercial paper in Canada requested funding because it was unable to refinance $661M in debt that matured yesterday.
The company's commercial paper funds held about 41% of assets in corporate loans and bonds at the end of 2006. About 22% of holdings were backed by residential mortgages and 16% in commercial mortgages.
The firm said today that less than 4% of assets are linked to the U.S. subprime mortgage market.
Coventree shares dropped 74% before trading was halted, on concern that some of its C$16 Billion in funds will be forced to default if they can't get financing.
But wait it gets better... Canadian ratings company DBRS said:
17 Canadian asset-backed commercial paper issuers, are seeking back-up financing from banks after failing to sell their short-term debt.
Moving East... and don't look up now, but you could get flattened by a name brand or brand X...
Sentinel Mgmt Group is 17th in terms of customer money for U.S. FCMs (futures commission merchants); businesses that manage buy and sell orders for commodities futures contracts.
Sentinel invests for clients such as managed-futures funds, high-net-worth individuals and hedge funds.
Investments include short- term commercial paper, foreign currency, investment-grade bonds and Treasury notes.
Today, Sentinel Management Group which manages $1.6 billion, said it asked regulators for permission to freeze investor fund withdrawals.
Also, Global Diversified Investment Grade Income Trust said that one of its funds, MMAI-I Trust...
failed to roll over its commercial paper that matured yesterday, and that Deutsche Bank AG declined to provide emergency funding.
Wal Mart & Home Depot , the two largest U.S. retailers, said the housing slump, rising mortgage defaults and high energy prices will depress earnings for the year.
Wal Mart gave lowered guidance for annual profit while Home Depot reiterated a 15% forward decline in per share profit; -2% sales; comp sales -5.2%.
Wal Mart CEO H. Lee Scott: "U.S. consumers continue to be under difficult pressure economically. It is no secret that many customers are running out of money toward the end of the month."
Wal Mart U.S. stores chief Eduardo Castro-Wright: "Consumers today are pressed by a number of factors. Higher energy, higher gas prices and higher interest rates are all stretching their paychecks."
Understatement of the new Millenium: Gordon Fowler, who helps manage $6 billion as chief investment officer at Glenmede Investment Management in Philadelphia:
"The consumer economy has been slowing down for a while now and it's probably tied to what's been going on in the housing market."
Gordon, my man, the estimates are that 80% of all jobs created since 2001 are tied to the housing sector with 20% being service sector related.
And unfortunately, due to emasculation of durable economic activity, the housing sector IS the economy.
As housing fades into the sunset, what remains of our gutted service based McJobs economy shall follow.
Newsflash for those with ADD, there is nothing to fall back on. Question: What 2 things have supported this economy for the last 5 years?
MEW mortgage equity withdrawl due to rising real estate prices; and a rising stock market due to loose money policies.
With real estate just starting to take the BIG dip and the stock markets getting ready to tank as liquidity dries up... the Nattering One waxes nostalgic....
George Bush Sr. circa 1991: "The economy has turned the corner." George Sr. omitted the rest of the statement, which is germain for today's Dubya Shrub economy:
The economy has turned the corner... flipped over three times, struck a tree, and burst into flames.
Imagine whats going to happen when the economic downturn really starts moving into overdrive? Speaking of bursting into flames...
Fitch Ratings further downgraded its issuer default rating on Beazer Homes after the company failed to file a quarterly financial report on time due to accounting problems.
Another ratings agency, Moody's, said it has placed Beazer on review for downgrade. FYI, Dominion Homes was suppossed to report last Friday, what happened? Got me...
The heaviest weighted sector in the SP500 is financial, YTD down 12%...
Sanford C. Bernstein & Co. said the credit-market crisis could cost the biggest U.S. bank; Citigroup, as much as $3 billion in the third quarter alone.
Five brokerages cut their ratings on jumbo (+417K) money lender Thornburg Mortgage, citing concern the company may need to sell assets or reduce its dividend because of a liquidity squeeze.
The mortgage lender postponed its Q2 dividend. Banks that provide lines of credit that allow Thornburg Mortgage to originate loans have also made margin calls in recent days. Stock down 46% on the news.
As reported yesterday: Coventree, the largest non-bank issuer of commercial paper in Canada requested funding because it was unable to refinance $661M in debt that matured yesterday.
The company's commercial paper funds held about 41% of assets in corporate loans and bonds at the end of 2006. About 22% of holdings were backed by residential mortgages and 16% in commercial mortgages.
The firm said today that less than 4% of assets are linked to the U.S. subprime mortgage market.
Coventree shares dropped 74% before trading was halted, on concern that some of its C$16 Billion in funds will be forced to default if they can't get financing.
But wait it gets better... Canadian ratings company DBRS said:
17 Canadian asset-backed commercial paper issuers, are seeking back-up financing from banks after failing to sell their short-term debt.
Moving East... and don't look up now, but you could get flattened by a name brand or brand X...
Sentinel Mgmt Group is 17th in terms of customer money for U.S. FCMs (futures commission merchants); businesses that manage buy and sell orders for commodities futures contracts.
Sentinel invests for clients such as managed-futures funds, high-net-worth individuals and hedge funds.
Investments include short- term commercial paper, foreign currency, investment-grade bonds and Treasury notes.
Today, Sentinel Management Group which manages $1.6 billion, said it asked regulators for permission to freeze investor fund withdrawals.
Also, Global Diversified Investment Grade Income Trust said that one of its funds, MMAI-I Trust...
failed to roll over its commercial paper that matured yesterday, and that Deutsche Bank AG declined to provide emergency funding.
Comments
The economy has turned the corner... flipped over three times, struck a tree, and burst into flames." ROFLMAO!!!
you said "The heaviest weighted sector in the SP500 is financial, YTD down 12%..."
Doesn't this mean it's time to re-weight the S&P? Perhaps a bit heavier on companies in the auto repo biz, anti-depressant manufacturing, and legal firms who specialize in corporate civil cases?
S&P would be looking pretty good about now with this modest re-mix.