Merrill Lynched, ISM contracts, Construction Spending plunges
Summary: Merrill Lynch on the verge of insolvency, ISM contracting with rising prices, as the main economic engine private residential construction spending plunges.
Oil record over $100; gold record over $850; DJIA plunges over 400 points in 4 trading days...
Merrill Lynched.... following Morgan Stanley ($5 billion China Investment Corp); Citigroup ($7.5 billion Abu Dhabi); UBS ($11 billion Singapore)...
As we reported over the weekend, CEO John Thain was forced on Christmas Eve to sell $4.4 billion of stock to Singapore investment firm Temasek and an additional $1.2 billion in stock to Davis Selected Advisers.
Thain also cancelled New Years holiday for his executive staff as they are panhandling Middle eastern and Asian investors for much needed cash.
Today ML sold Merrill Lynch Capital to GE Capital, freeing up $1.3 billion and sold two life insurance units to Dutch provider Aegon for $1.25 billion.
Cash starved Merrill Lynch may be cutting jobs as soon as tomorrow, and the latest write down rumors have escalated to an additional $10 to $15 billion.
Shoring up... National City, one of the 10 largest U.S. banks,
will cut its common stock dividend 49% and eliminate 900 jobs as it stops offering mortgages through brokers.
The job cuts are in addition to 2,500 job losses announced in last year's second half.
Tech not immune... Bank of America downgraded chipmakers Intel, AMD & Texas Instruments.
ISM Index Dec 47.7 vs 50.8 Full Report
Inside the number: under 50 contracting: new orders 45.7 vs 52.6; employment 48 vs 47.8, inventories 45.5 vs 46.9.
Supplier deliveries slowing further 53.3 vs 51.7; Prices rising faster 68 vs 67.5.
"Have received a large volume of price increase notices in the last month with increases between 3 percent to as much as 15 percent." (Chemical Products)
"Business is good, but higher raw material prices are squeezing margins." (Primary Metals)
"The heavy truck industry is not recovering as expected. The latest forecast does not show an increase in orders until Q3 2008." (Fabricated Metal Products)
"General business conditions are slow." (Paper Products)
"Upward price of raw materials, plus low inventories, is pushing price of resins skyward." (Plastics & Rubber Products)
Construction Spending Nov +0.1% vs prior -0.8% Full Report
Inside the number: The good news Private -0.7%; Public +2.5%; YTD total spending -2.5%.
The bad news: private residential construction spending -2.5%; YTD -17.8%.
Oil record over $100; gold record over $850; DJIA plunges over 400 points in 4 trading days...
Merrill Lynched.... following Morgan Stanley ($5 billion China Investment Corp); Citigroup ($7.5 billion Abu Dhabi); UBS ($11 billion Singapore)...
As we reported over the weekend, CEO John Thain was forced on Christmas Eve to sell $4.4 billion of stock to Singapore investment firm Temasek and an additional $1.2 billion in stock to Davis Selected Advisers.
Thain also cancelled New Years holiday for his executive staff as they are panhandling Middle eastern and Asian investors for much needed cash.
Today ML sold Merrill Lynch Capital to GE Capital, freeing up $1.3 billion and sold two life insurance units to Dutch provider Aegon for $1.25 billion.
Cash starved Merrill Lynch may be cutting jobs as soon as tomorrow, and the latest write down rumors have escalated to an additional $10 to $15 billion.
Shoring up... National City, one of the 10 largest U.S. banks,
will cut its common stock dividend 49% and eliminate 900 jobs as it stops offering mortgages through brokers.
The job cuts are in addition to 2,500 job losses announced in last year's second half.
Tech not immune... Bank of America downgraded chipmakers Intel, AMD & Texas Instruments.
ISM Index Dec 47.7 vs 50.8 Full Report
Inside the number: under 50 contracting: new orders 45.7 vs 52.6; employment 48 vs 47.8, inventories 45.5 vs 46.9.
Supplier deliveries slowing further 53.3 vs 51.7; Prices rising faster 68 vs 67.5.
"Have received a large volume of price increase notices in the last month with increases between 3 percent to as much as 15 percent." (Chemical Products)
"Business is good, but higher raw material prices are squeezing margins." (Primary Metals)
"The heavy truck industry is not recovering as expected. The latest forecast does not show an increase in orders until Q3 2008." (Fabricated Metal Products)
"General business conditions are slow." (Paper Products)
"Upward price of raw materials, plus low inventories, is pushing price of resins skyward." (Plastics & Rubber Products)
Construction Spending Nov +0.1% vs prior -0.8% Full Report
Inside the number: The good news Private -0.7%; Public +2.5%; YTD total spending -2.5%.
The bad news: private residential construction spending -2.5%; YTD -17.8%.
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