The New Reality: FNMA Bailout; Merrill Lynch; DuPont; American Express
The $250 billion Reality The Congressional Budget Office said... Paulson's Fannie and Freddie Mac bailout would probably cost taxpayers $25 billion.
The Nattering One proves the FNMA/FHLMC debacle will cost taxpayers 10 times that much at $250 billion here.
Adjusting To the New Reality... Merrill Lynch analysts: "we are adjusting to the new reality...
We expect GDP to plummet 2.5% in the fourth quarter, and see a similar decline in the first quarter.
With the consumer likely to remain under duress into 2009. Just like consumers, who are insulating their windows and making fewer trips to the malls,
we are adjusting our economic forecasts to the new high-oil-price reality, not to mention the latest round of trauma in the mortgage markets"
The "New Reality"... DuPont; #3 US chemical maker; Q2 net income +11% and the "new reality" from CEO Charles Holliday:
"For those resources that we dig, pump from or grow in the earth, we have reached a new norm and
will not revert to the past in terms of price and availability. Higher-priced natural resources are here to stay."
More "New Reality"... American Express; the biggest U.S. credit card company by purchases...
earnings missed analysts' estimates and the lender withdrew its 2008 forecast as profit from continuing operations dropped 37%.
Q2 profit at the U.S. credit card unit plunged 96% to $21 million, as provisions for losses more than doubled to $1.5 billion.
Uncollectible debt in the division rose to 5.3% vs 2.9%. CEO Ken Chenault:
"The U.S. economic slowdown worsened in June, affecting even American Express's wealthier cardholders with high credit scores.
We are seeing very affluent people who have had historically very, very strong spending history with us cutting back."
The Nattering One muses... the new reality, even the filthy rich are squeaking.
The Nattering One proves the FNMA/FHLMC debacle will cost taxpayers 10 times that much at $250 billion here.
Adjusting To the New Reality... Merrill Lynch analysts: "we are adjusting to the new reality...
We expect GDP to plummet 2.5% in the fourth quarter, and see a similar decline in the first quarter.
With the consumer likely to remain under duress into 2009. Just like consumers, who are insulating their windows and making fewer trips to the malls,
we are adjusting our economic forecasts to the new high-oil-price reality, not to mention the latest round of trauma in the mortgage markets"
The "New Reality"... DuPont; #3 US chemical maker; Q2 net income +11% and the "new reality" from CEO Charles Holliday:
"For those resources that we dig, pump from or grow in the earth, we have reached a new norm and
will not revert to the past in terms of price and availability. Higher-priced natural resources are here to stay."
More "New Reality"... American Express; the biggest U.S. credit card company by purchases...
earnings missed analysts' estimates and the lender withdrew its 2008 forecast as profit from continuing operations dropped 37%.
Q2 profit at the U.S. credit card unit plunged 96% to $21 million, as provisions for losses more than doubled to $1.5 billion.
Uncollectible debt in the division rose to 5.3% vs 2.9%. CEO Ken Chenault:
"The U.S. economic slowdown worsened in June, affecting even American Express's wealthier cardholders with high credit scores.
We are seeing very affluent people who have had historically very, very strong spending history with us cutting back."
The Nattering One muses... the new reality, even the filthy rich are squeaking.
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