By Mark Pason, at 8:05 am on July 24th, 2009
S&P 500 Futuers up +2 to 970.90
Futures are pointing higher as Wall Street digests earnings misses from Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) Overall market sentiment seems positive though, with doom and gloom starting to be replaced with optimism. The S&P 500 has gained back 50% of the losses it suffered after Lehman went down. This is the highest close since Election Day and the most impressive rally since the Great Depression. So much for a quiet summer. In Europe, we are seeing the longest rally since 2006. The only negative news seems to be the the shrinking British economy. This is the largest yearly decline since the Officer for National Statistics started keeping records in 1955.
Bloomberg reports that Goldman Sachs’ $1.1bb payment to Uncle Sam was a very good P.R. move for venerable Wall Street firm. The payment is about 10% of the $11bb Goldman set aside for compensation. Politicians and critics are warning that obscene pay packages will lead to unwise risk taking, the kind that got us into this mess in the first place. One way Goldman keeps printing money is by High Frequency Trading, which is the new buzz term on the Street. Meanwhile, buy-and-hold is far from dead as Warren Buffett’s Goldman Sachs investment is looking to be a home run.
Schlumberg reported a Q2 profit decline of 57%. The oilfield-services firm reported $0.68 EPS vs. an expected EPS of $0.64. Eriscsson (NASDAQ:ERIC) saw it’s net income drop by 56%.
Washington: The Federal Reserve’s balance sheet trimmed down for the first time since September 2008. The GAO, a government watchdog group, criticizes the Administration’s mortgage plan. Sen. Max Baucus, House Minority Leader John Boehner and House Majority Leader Steny Hoyer are backing a plan to reverse the decision by Chrysler and General Motors to close over 3,000 auto dealerships. Meanwhile, President Obama is about to unveil a $4bb school improvement plan. On the state level, the New York Times is reporting that sixteen states are paying unemployment claims with borrowed money. With more claims coming in, the situation is slowly getting dire, especially for those claims which require review.
What would a day be without news on CIT Group? The 100 year-old firm is telling America that its not seeking bankruptcy but would restructure intead. To the surprise of no one, the Oracle of Omaha made a bid to buy pieces of the company, but CIT politely refused.
A new book out next month about Bernie Madoff reveals some great tidbits about the Ponzi scheming jailbird. He reportedly wore two gold Rolexes, so he always knew the time in London. That should have told investors something right away about the man’s basic math skills.
The best sign that things are coming back to normal: The New York Yankees are winning again and sitting pretty in first place.
By Taryn Cooper, at 3:19 pm on June 1st, 2009
On a day where General Motors filed for bankruptcy, Citi was replaced with Travelers Cos in the Dow, and Cisco Systems joined the Dow as well, the market reacted favorably.
According to CNBC, the S&P 500 ended above its 200-day moving average for the first time in year and a half. Closing at 943, the S&P had its highest close since November last year. The Dow gained 2.6% and the Nasdaq was up 3.1%.
By Robert Perrego, at 10:19 am on May 28th, 2009
General Motors (NYSE: GM) Bondholders issued a statement of acceptance of a sweetened offer which involves issuing warrants to the bondholders such that more participation in upside movements of GM stock is involved.
Also important to the bondholders was that the money the U.S. Government was putting in would be in the form of common stock and thus not as senior debt. If the government money had come in as senior debt it would have left the bondholders shifted from senior debtholders themselves into equity while new money coming in was superior to theirs.
This acceptance has caused the stock to trade higher on speculation the current common stock may not be wiped out as well as causing GM debt to trade up.
This seems to have been enough and now one less roadblock to a fast turnaround bankruptcy for GM is likely.
By Robert Perrego, at 11:17 am on March 24th, 2009
GM is trying to get employees to take a buyout or early retirement offer in order to get their expenses and labor costs under control and guess what the deal is?
From the company that cannot seem to sell enough trucks or cars to turn a profit…
$20,000 in cash and a $25,000 new vehicle voucher.
Ha ha ha!
What is next, their stranded-employee-need-a-ride-home policy? Just take one of those bazillion trucks over there home. Here are the keys. What color do you want? Nahhhh, don’t worry, just bring it back when you want – no one is going to buy it anyway!
This is like taking stamps from a post office buy out – or how about a lifetime’s supply of Big Macs from McDonalds. Oh joy! I can retire now and get that house on the beach!
By Robert Perrego, at 9:19 am on February 27th, 2009
Initial GDP numbers for the fourth quarter of 2008 that were announced a few weeks ago gave some investors cause for hope. The top line number announced initially was that the U.S. economy had contracted at a 3.8% pace with common expectations of a contraction of 5%. Of course the negative ninnies cited an increase in inventories of 1.2% and there we were again right back at down 5%.
Oh well – at least it wasn’t worse right?
Well it is! Revised numbers on the Q4 GDP all of a sudden are a big negatory 6.2%. Hey, will someone please turn the lights off and close that office down before we end up at negative 10% already!
Consumer spending, which usually makes up about 2/3rds of GDP has left the building with Elvis. Consumers are slamming those wallets shut in anticipation of tougher times ahead – or maybe it is because a whole lot of them no longer have jobs. General Motors, a key participant in the ‘Hey, I Got More Problems’ parade is talking about letting another 47,000 people go worldwide. The surprising thing here is none of us thought they still were employing that many people these days anyways. In General Motors next revision don’t be surprised if they start firing people working for General Electric – how many people can this company fire anyway?
