News What is wrong with the US economy? Part 2

[Astronuc]

Vegas, Midwest seek the $8 billion for fast trains
http://news.yahoo.com/s/ap/high_speed_spending

WASHINGTON – The Republicans attacking President Barack Obama's economic stimulus package point to a project they dub the "Sin Express" — a high speed rail link between Anaheim, Calif., site of Disneyland, and Las Vegas.

Not so fast.

In fact, competition for the $8 billion in mass transit construction is just beginning. Backers of numerous other planned high-speed rail corridors around the country are making their case for the money.

They notably include a Midwest initiative long supported by someone with even more clout than Sen. Harry Reid, D-Nev., who strongly supports the Anaheim-Las Vegas line. That would be former Illinois Sen. Obama.

It was Obama's White House that, in the final hours of negotiations over the $787 billion stimulus bill, sought and won the big sum for high-speed rail projects, far above what either the House or Senate had passed. Reid was happy to agree but there's no guarantee the Anaheim-Las Vegas line will win dollars, to be determined by the Transportation Department.

Also in the running are proposed high-speed corridors in the Northeast, the Northwest, Florida and the South.

Howard Learner, president of the Chicago-based Environmental Law and Policy Center, a group promoting a Midwest high-speed rail network, said his area is in excellent position to capture a good chunk of that money. The Federal Railroad Administration, he said, has recognized the Midwest initiative connecting Chicago and 11 metropolitan areas within 400 miles as the system most ready to go.

He and others brushed aside claims that the $8 billion was set aside for Reid's favorite. Obama, who expressed strong interest in high-speed rail investment during the campaign, and his chief of staff Rahm Emanuel, are both from Chicago. Obama's transportation secretary, Ray Lahood, also is from Illinois. So is the Senate's no. 2 Democrat, Richard Durbin.

Quentin Kopp, chairman of the California High-Speed Rail Authority, said he was "delighted to see that the momentum has shifted in favor of high-speed train transportation." He outlined $2 billion in state projects that could be initiated before the Sept. 30, 2012, deadline for committing the $8 billion. Those include electrification of the line from San Jose to San Francisco, home to House Speaker Nancy Pelosi.

But Reid's involvement in crafting the bill still made him and the Las Vegas line a target.

"Billions of dollars for a sin express train from Los Angeles to Las Vegas. Necessary? I don't think so," said Rep. Mike Simpson, R-Idaho.

"Tell me how spending $8 billion in this bill to have a high-speed rail line between Los Angeles and Las Vegas is going to help the construction worker in my district," said House Republican leader John Boehner, whose district is just north of Cincinnati.

Actually, some of the money might ride his way. One offshoot of the Midwest network would connect the Ohio cities of Cleveland, Columbus and Cincinnati.

It certainly looks suspicious that HSR projects are under consideration for districts served by Pelosi and Reid. I'm not sure why the economy would benefit from a high speed rail project from LA to Las Vegas, in which the primary economic activity is entertainment and gambling. It would seem more appropriate to link LA with Phoenix, Tuscon, AZ with extension to Albuquerque, NM and perhaps Dallas, TX.

Advocates of the Anaheim-Las Vegas line envision using the futuristic magnetic levitation or maglev technology, where trains zoom on an air cushion created by powerful magnets instead of wheels. Obama recently cited the maglev system in Shanghai, China, as an example next-generation transit.

"Our prospects are certainly good," said Neil Cummings, president of American Magline Group, a private partnership that is promoting the Maglev train that will carry passengers the 268 miles between the two cities at speeds of up to 310 miles per hour. Last year Congress approved $45 million for environmental and other studies.

. . . .

Well if it's so great, then let the private partnership put up the money. And to use the electrification will require someone to build additional electrical generating capacity and transmission lines to supply the electrical current.

 

[OmCheeto]

Forecasters see higher unemployment in 2009
http://news.yahoo.com/s/ap/20090223/ap_on_bi_ge/troubled_economy

All told, Varvares and his fellow forecasters now expect the economy to shrink by 1.9 percent this year, a much deeper contraction than the 0.2 percent dip projected in the fall.

Perhaps people are thinking positively enough. Bill Clinton was recently recommending that Obama talk more positively about the economy and the state of the world. But then we just finished with an administration in which the president confidently declared that the fundamentals of the economy were strong, or the economy was fundamentally strong.

I think this "1.9 %" figure might be where everyone is coming from.
Even though the markets may have plunged anywhere from 50 to 80%, the economy seems not to have been affected anywhere near as much. I get the feeling that people equate the markets with the economy. Although interconnected, and dependent on each other, they are quite different things. I think it might actually help both if Obama starts flashing that figure around as an indicator that the American economy is not in as bad shape as the markets makes it out to be.

Meanwhile - Asian, European stocks advance on Citigroup report
http://biz.yahoo.com/ap/090223/world_markets.html
So the world markets expect the US government to intervene more than it has.

Why not? The economy's not in that bad shape.

And as for a Vegas-Anaheim rail line? It might turn out to be the newest version of "the bridge to nowhere" joke if they decide to build it:

http://www.lasvegassun.com/news/2009/feb/16/forbes-las-vegas-americas-emptiest-city/"
By Cara McCoy
Mon, Feb 16, 2009 (4:55 p.m.)

Empty and barren are words typically used to describe the desert that surrounds Las Vegas; however, they are now fitting adjectives for the city itself, according to a Forbes Magazine report.

The magazine ranked Las Vegas the No. 1 "emptiest" city in America. Using numbers from the Census Bureau released earlier this month, Forbes compiled data on homeowner and rental vacancy rates for 75 of the largest metropolitan areas in the country. It's the fallout from the housing boom and bust, Forbes said, that has garnered Las Vegas the undesirable title of "most abandoned."

An acquaintance of mine once called gambling "stupid tax".
Which I believe is an ellipsis, as I'm sure he implied that it is a "stupid person's tax".
(We have state run gambling here in Oregon which provides around 3% of the budget, which is good for the smart people because they get a 3% tax break because of all the stupid people.)

If there are enough stupid people in LA that would justify the expense of the line, then maybe...

 

[mgb_phys]

An acquaintance of mine once called gambling "stupid tax".

The bit I don't understand - there is a rollover in this weeks lottery - $50M (or something) and ticket sales have doubled.
So people don't bother buying a ticket for a mere $10M, but if it's $50M then it's worth a gamble!

If there are enough stupid people in LA that would justify the expense of the line, then maybe...

Trouble is it's the intersection of the set of LA people who are stupid enough to gamble and the ones who are careful enough to save money by taking the train and book in advance!

 

[Vanadium 50]

So people don't bother buying a ticket for a mere $10M, but if it's $50M then it's worth a gamble!

It could be rational. If they cut the price by a factor of five and kept the jackpot the same, would they also see sales double?

Of course, if you don't even buy a ticket your odds of winner are, to six decimal places, the same as if you do.

 

[mgb_phys]

Of course, if you don't even buy a ticket your odds of winner are, to six decimal places, the same as if you do.

Or you could buy last weeks ticket. Half price and your odds of winning are only 1 in a million less!

 

[Astronuc]

New U.S. stake in Citigroup may not calm doubts
http://news.yahoo.com/s/nm/20090223/ts_nm/us_citigroup

NEW YORK (Reuters) – Even if the government took a large common equity stake in Citigroup Inc, worries would likely persist about the bank's ability to absorb soaring losses in a deepening recession.

The third-largest U.S. bank by assets is in talks with federal regulators on a plan for the government to increase its stake, a person familiar with the matter said. Converting $45 billion of preferred stock, which the government obtained last fall, to common stock is one of many options, the person said.

An agreement could be announced Monday or Tuesday, CNBC television said.

Citigroup shares rose on Monday after the White House repeated that President Barack Obama believes keeping banks in private hands is "the best way to go.

U.S. bank regulators, meanwhile, said they stood ready to provide more capital to the sector and keep "systemically important financial institutions" viable.

But investors remained worried that losses from credit cards, emerging markets, trading and toxic assets could overwhelm Citigroup Chief Executive Vikram Pandit's efforts to restore the bank's fiscal footing. Analysts do not expect the New York-based bank to be profitable in 2009 or 2010.
. . . .
Washington got the Citigroup preferred shares, which equate to a 7.8 percent stake, when it bailed out the bank last fall and agreed to share in losses on $301 billion of toxic assets.
. . . .

And yet there are still more losses.

Losses are still being written off at other large national and international banks.

 

[Astronuc]

Freddie Mac investigates self over lobby campaign
http://news.yahoo.com/s/ap/20090223/ap_on_go_ot/freddie_mac

WASHINGTON – Lawyers hired by mortgage finance giant Freddie Mac are quietly investigating the firm's own $2 million lobbying campaign, The Associated Press has learned. The lobbying effort helped quash proposed new regulations on the company before the housing market collapsed.

It was not immediately clear how much Freddie Mac is spending to investigate its own conduct or whether it is spending any federal bailout money on the internal probe. The firm was placed under U.S. government control due to its massive investment losses.

The inquiry inside Freddie Mac follows stories by the AP about the company secretly hiring Republican consulting firm DCI Group of Washington to stop a proposal in the Senate in 2005 sponsored by Sen. Chuck Hagel, R-Neb. The legislation would have forced Freddie Mac and Fannie Mae to sell hundreds of billions of dollars worth of assets from their portfolios of mortgages and mortgage-backed securities. At the time, the portfolios were highly lucrative but their value plunged when the housing market collapsed.

The DCI Group did not file lobbying reports describing the work it was performing. . . .


One of Washington's leading law firms, Covington & Burling LLP, has spent more than a month interviewing current and former Freddie Mac employees and executives, according to three people familiar with the matter. These people spoke on condition of anonymity The people familiar with the internal inquiry told the AP that Anthony has interviewed current and former Freddie Mac employees about three issues raised by the AP stories:

_An accounting of the work done for the $2 million in payments to the DCI Group. It targeted 17 Republican senators in 13 states working to defeat Hagel's regulatory legislation by convincing prominent constituents and financial contributors the bill would hurt the housing boom. The measure was never brought to a vote and died.

_An accounting of six-figure payments to 52 outside lobbying firms and political consultants in 2006, including details about what work, if any, the consultants performed for the money paid to their firms. The consultants included former House Speaker Newt Gingrich and ex-Sen. Alfonse D'Amato. The payments to the 52 consultants amounted to $11.7 million. D'Amato's firm, which was paid $240,000, declined to comment. Gingrich's firm was paid $300,000 for strategic advice on a number of issues.

_An accounting of personal use by Freddie Mac executives of company-paid tickets and a company-leased skybox at the Verizon Center.

. . . .

I wonder how much the lawyers are going to make out of this one?

 

[Astronuc]

American International Group, the insurance giant bailed out by the United States government last year, has received a preliminary offer of $11 billion from MetLife for its American Life Insurance Company subsidiary, The New York Times said, citing people with knowledge of the discussions.

But the offer might slip to about $8 billion, as more becomes known about how the global downturn is affecting the unit, called Alico, which has operations in more than 55 countries.

Moreover, A.I.G.'s need for capital appears to be growing so quickly that $8 billion, or even $11 billion, would not come close to filling the hole. A.I.G. is expected to report fourth-quarter losses of perhaps $60 billion early next week, and losses on that scale could initiate a domino effect like the one that flattened the company last September.

The situation appears to leave A.I.G. with two distasteful options, The Times said: selling prized assets to competitors or handing over a big part of its business to the federal government.
. . . .

A.I.G. Unit Gets Bids as Survival Options Shrink
http://dealbook.blogs.nytimes.com/2009/02/25/as-aigs-losses-grow-its-survival-options-shrink/

The American International Group faced two distasteful options on Tuesday: selling prized assets to competitors or handing over a big part of its business to the federal government.

Grappling with huge losses, A.I.G. appears to have few choices as the government focuses on trying to keep the giant insurer from toppling and perhaps injuring other institutions, The New York Times’s Mary Williams Walsh and Michael J. de la Merced write.

The insurer has received a preliminary offer of $11 billion from MetLife for its American Life Insurance Company subsidiary, called Alico, The Times said, citing people with knowledge of the discussions.

But they said MetLife’s offer might slip to about $8 billion, as more became known about how the global downturn is affecting Alico, which has operations in more than 55 countries. The same sources said A.I.G. had received an offer from AXA, for all of Alico except its operations in Japan. The price was not disclosed.

But A.I.G.’s need for capital appears to be growing so quickly that $8 billion, or even $11 billion, would not come close to filling the hole. A.I.G. is expected to report fourth-quarter losses of perhaps $60 billion early next week, and losses on that scale could initiate a domino effect like the one that flattened the company last September. First would come a credit downgrade, then calls from trading partners to post the billions of dollars in collateral that their contracts stipulate after a downgrade.

If A.I.G. failed to produce the required amounts, the financial institutions holding its contracts would have to recognize losses of their own. That would erode their capital, leaving them at risk of downgrades as well.

 

[turbo]

Check the 2/25 story on the Grand View Coffee shop. The owner was running out of options, so he opened a coffee shop staffed with topless wait-staff. There are actually a few guys on the crew, though most are women. He had over 150 applicants for 10 positions in unpaid, tips-only jobs.

http://morningsentinel.mainetoday.com/news/local/5989595.html

 

[mheslep]

Check the 2/25 story on the Grand View Coffee shop. The owner was running out of options, so he opened a coffee shop staffed with topless wait-staff. There are actually a few guys on the crew, though most are women. He had over 150 applicants for 10 positions in unpaid, tips-only jobs.

http://morningsentinel.mainetoday.com/news/local/5989595.html

You paid a visit yet? Where does it say the owner was running out of options?

 

[mgb_phys]

Check the 2/25 story on the Grand View Coffee shop. The owner was running out of options, so he opened a coffee shop staffed with topless wait-staff. There are actually a few guys on the crew, though most are women. He had over 150 applicants for 10 positions in unpaid, tips-only jobs.

Presumably not such an attractive option for the Union of AutoWorkers?

 

[turbo]

You paid a visit yet? Where does it say the owner was running out of options?

No, and given my horrible reactions to perfumes, I won't be visiting. The "running out of options" was part of the back-story. He had tried to start up and run several businesses in that location over the last few years until he decided to try to "topless coffee shop" gimmick. It's a small town, and there was some very vocal opposition from some residents; however the planning board had no legal reason to deny the business a permit. This has been in and out of the news since his initial application for the permit.

 

[Astronuc]

Insurance giant AIG facing possible breakup
http://news.yahoo.com/s/ap/20090227/ap_on_bi_ge/aig_bailout

CHARLOTTE, N.C. – Nearly six months after American International Group Inc. got its first massive bailout from the government, it's still stumbling.

The big insurer keeps losing money and is unable to sell some of its biggest assets. Some Wall Street analysts have stopped tracking it. And it appears on the verge of getting another helping hand from Washington.

Like Citigroup Inc., which on Friday received another round of federal support, AIG is considered too big and too important to fail.

"If the government let's AIG fail, I think you are going to see an enormous sort of shock wave across all industries because AIG had their finger in a lot of different areas," said Russell Walker, a risk management professor at Northwestern University in Chicago.

Expectations are that AIG and the government will announce soon, perhaps as early as Monday, their latest plan to prop up the New York-based company. Late Friday, AIG confirmed it will report its fourth-quarter earnings on Monday before the market opens.

The Financial Times, citing people who spoke on condition of anonymity, reported this week that the government will swap the 80 percent stake it currently holds in AIG for even bigger pieces of three units that would be split off from the company: AIG's Asian operations, its international life insurance business and its U.S. personal lines business. A fourth unit made up of AIG's other businesses and troubled assets could be created as well or sold off in pieces, according to the FT report.

In return for the breakup, the government would relax the terms, or cancel, a portion of the $60 billion loan that was at the center of a restructured $150 billion rescue package, the newspaper said.

The company may also need another loan, its fourth, from the government as it is expected to report a $60 billion fourth-quarter loss Monday.

. . . .

The government is apparently about take a 36-38% stake in Citigroup.

The government revised the contraction of GDP downward from -3.8% to -6.2% on an annual basis.

Banks and economy to keep bears' grip on stocks
http://news.yahoo.com/s/nm/20090227/bs_nm/us_column_stocks_outlook

NEW YORK (Reuters) – Wall Street is unlikely to get a reprieve next week as relentless worries about U.S. banks and the economy could embolden bears to drive the market below the 12-year lows hit on Friday.

Investors will also be looking for further action from the government in its campaign to shore up the financial system. The Federal Reserve will release details early next week on its latest plans, a massive program to support consumer and small business lending, a Fed official said on Friday.

The Term Asset-Backed Securities Loan Facility, also known as TALF, is a key part of the efforts to stop the unraveling of the financial system in the wake of the credit crisis and U.S. housing collapse. The program could grow to up to $1 trillion in size.

A raft of data due out is expected to show the recession-hit economy is worsening. Among the reports, non-farm payrolls for February will shed light on the labor market, with analysts expecting unemployment to reach 7.9 percent.

Following Friday's fall in U.S. stocks, with the S&P 500 closing at a 12-year low, analysts are watching to see if indexes can hold and recover from these lows, suggesting a bottom has been formed, or whether stocks have further depths to plumb.

. . . .

http://marketplace.publicradio.org/display/web/2009/02/27/pm_gdp/

. . .
In this economy the Commerce Department's models didn't work, at all. They overestimated the amount businesses would spend on inventories by $25 billion -- inflating the GDP. But Lowe says the fact business spent less is actually good news.

Lowe: The biggest fear in a recession is that products start to pile up on the shelves to such an extent that stores don't need to order anything anymore.

That leads to more layoffs. But don't get too excited. The Commerce Department also overestimated consumer spending and business spending on big-ticket items, which fell an astounding 27 percent.
. . . .

 

[Astronuc]

Insurer AIG reports $61.7B 4th-qtr loss on continued market turmoil, gov't provides new aid
http://biz.yahoo.com/ap/090302/earns_aig.html

CHARLOTTE, N.C. (AP) -- American International Group is reporting that continued financial market turmoil has resulted in a large fourth-quarter loss.
Monday's results come as the U.S. government is announcing a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.

New York-based AIG, once the world's largest insurer, said Monday it lost $61.7 billion, or $22.95 per share, after a loss of $5.3 billion, or $2.08 per share, a year ago.

The latest results include $7.2 billion in unrealized losses and credit valuation adjustments at AIG Financial Products, the source of credit-default swaps, and pretax losses of $21.6 billion tied to the declining value of AIG's investment portfolio.
. . . .

HSBC to raise $17.7 billion, cut 6,100 jobs in US after 70 percent drop in 2008 profit
http://biz.yahoo.com/ap/090302/eu_britain_earns_hsbc.html

LONDON (AP) -- HSBC PLC, Europe's largest bank by market value, on Monday reported a 70 percent drop in 2008 net profit and said it would raise $17.7 billion in new capital through a share issue while cutting 6,100 jobs in the U.S.

HSBC said it would scale back its consumer lending in the U.S. after being hit hard by the subprime mortgage crisis there, shrinking its consumer loan business there -- although its HSBC USA branch banking business will remain.

By turning to investors for new capital instead of asking for government aid, the bank would avoid the strings that go with the bailouts given to other British banks. It also said it would cut its dividen and not pay bonuses to top executives.

In 2008, net profit tumbled to $5.7 billion from $19.1 billion a year earlier as the company wrote down the value of assets, particularly in the U.S.

. . . .

Dow set to break below 7,000 [a loss of 50% since it's all time high] as AIG gets more gov't funding, posts $61.7B loss
http://biz.yahoo.com/ap/090302/wall_street.html

NEW YORK (AP) -- Wall Street headed for another big drop Monday, one that could hurl the Dow Jones industrials below 7,000, after American International Group Inc. posted a $61.7 billion quarterly loss.

The government said it would give AIG another $30 billion in loans, in addition to the $150 billion it has already given the ailing insurer.

Concerns about the struggling financial sector and the weakening economy have sent stocks to their lowest levels in 12 years. The Dow Jones industrial average has dropped for six consecutive months, and is worth less than half of its October 2007 record high of 14,164.53.

Billionaire Warren Buffett, in his highly anticipated annual letter to investors Saturday, said his insurance and investment company, Berkshire Hathaway Inc., had its worst year ever in 2008. The grim news came a day after the government said gross domestic product for the fourth quarter shrank at an annual rate of 6.2 percent.

Buffett said he is sure "the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond -- but that conclusion does not tell us whether the stock market will rise or fall."

Ahead of the market's open, Dow futures tumbled 152, or 2.16 percent, to 6,900. Standard & Poor's 500 index futures sank 14.60, or 1.99 percent, to 719.60, while Nasdaq 100 index futures lost 21.25, or 1.90 percent, to 1,095.75.
. . . .

The Dow 30 would be even lower if AIG had remained a component.

 

[DrClapeyron]

AIG and this rest of this crisis are a bigger scam than Enron and World Com and the US Government wants to bail them out? It appears that AIG has less to do with insuring and more to do with investing.

 

[Astronuc]

AIG and this rest of this crisis are a bigger scam than Enron and World Com and the US Government wants to bail them out? It appears that AIG has less to do with insuring and more to do with investing.

Gambling actually - and they lost big time. All those Credit Default Swaps that went bad - because way too many people defaulted and folks like Bear Stearns, Lehman Brothers, Merrill Lynch, et al had huge losses simultaneously.

But business is business.

Dow30 - 10:44am ET: 6,901.40 -161.53 (-2.29%)

Dow industrials fall below 7,000; lowest since '97
Dow breaks 7,000 for first time since '97 as AIG gets more gov't funding, posts $61.7B loss
http://finance.yahoo.com/news/Dow-falls-below-7000-as-apf-14510516.html

NEW YORK (AP) -- The Dow Jones industrial average plunged below 7,000 Monday for the first time in more than 11 years as investors grew pessimistic about the health of banks, and in turn the economy.

The Dow hadn't traded below 7,000 since Oct. 28, 1997, and last closed below that mark on May 1 of that year. The credit crisis and recession have now slashed half the average's value since it hit a record high over 14,000 in October 2007.

Investors are again fleeing stocks in response to bad news about financial companies. The government said it would give American International Group Inc. another $30 billion in loans, in addition to the $150 billion it has already given the insurer. AIG also said it lost a record $61.7 billion in the fourth quarter.

Investors are worried about European financial companies, too. HSBC PLC, Europe's largest bank by market value, reported a 70 percent drop in 2008 profit and said it needs to raise $17.7 billion and cut 6,100 jobs.

Meanwhile, billionaire Warren Buffett wrote in his annual letter to investors Saturday he is sure "the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond -- but that conclusion does not tell us whether the stock market will rise or fall."

. . . .

No more buying on margin.

 

[Astronuc]

Not a good day in the equities markets.

12:24pm ET: 6,836.33 -226.60 (-3.21%) Dow Jones Industrial Average (^DJI)


Perhaps it will recover somewhat this afternoon.

Update:

3:27PM ET: 6,781.53 -281.40 (-3.98%)

About 1/2 hr to go and recovery no where in sight.

Ouch!
Dow 6,762.82 -300.11 (-4.25%) 4:03 PM (12 yr low)
Nasdaq 1,322.85 -54.99 -3.99%
S&P 500 700.82 -34.27 -4.66% (12 yr low)


S&P 500's trouble mostly rooted in just 10 issues

NEW YORK (MarketWatch) -- Ten companies, led by ConocoPhillips, Time Warner Inc. and recently acquired Merrill Lynch, are behind the bulk of the carnage that helped fuel the worst two-month start ever for the S&P 500 Index, which on Monday made another run through its November lows.

 

[Astronuc]

A volatile day after yesterday's selloff.

3:45pm ET: 6,725.46 -37.83 (-0.56%) - not bad, but the index has been up and down twice today - bottomed out about noon, recovered by 12:30, the bottomed again just after 1:30 pm, then rallied through 3 pm, then bottomed out about 4 pm.

Back to the future: Stocks' fall may be a milestone
Breach of 12-year lows has some analysts wondering if it's 1932 or 1974

NEW YORK (MarketWatch) -- As U.S. stocks on Tuesday tried and then failed to bounce back from the prior day's stumble to 12-year lows, analysts, technicians and would-be historians debated the significance of the fall, which may or may not signal an important market milestone.
. . . .

GE is down near $7. GE's 52-wk range: $7.02 - 38.52 Hay caramba! Warren Buffett bought it at about $20. Ouch!

GE didn't expect global crisis; aims to `weather the cycle'

TEL AVIV (MarketWatch) -- General Electric Co.'s top executives never expected the financial system's failure and the economic fallout that followed, Chairman and Chief Executive Jeffrey Immelt said in a letter to shareholders. The executive said in the letter that he couldn't say how deep the recession will be or how long it will last but that management is "running GE to `weather the cycle.'" The Fairfield, Conn., industrial and financial-services giant is geographically diverse, taking in 53% of revenue from outside the U.S., and it has a $172 billion backlog in infrastructure projects, Immelt said. But despite management's efforts, he said, GE stock "got hammered. Companies with a presence in financial services, like GE, are simply out of favor." Going forward, the financial industry will be less leveraged, with fewer competitors "and a fundamental repricing of risk," he said.

Yikes! Oops!

 

[mheslep]

...GE is down near $7. GE's 52-wk range: $7.02 - 38.52 Hay caramba! Warren Buffett bought it at about $20. Ouch!...

Yes I'd like that kind of an ouch - guaranteed 10% dividend on preferred shares, net $300m/yr, forever, unless GE pays a penalty to pay him off. Buffett only gets hurt if his dividend gets inflated away. This goes for a lot of the news about his company B. Hathaway - the accounting has to periodically update based on the value of the underlying falling assets but in many cases, so what, the cash is still flowing.
http://www.genewscenter.com/Content/Detail.asp?ReleaseID=4220&NewsAreaID=2&MenuSearchCategoryID=
http://online.wsj.com/article/SB122288377688594651.html

 

[nottheone]

I wonder what it would be like now if a certain idiot hadn't occupied the white house for the last 8 years and the man that really won the election had been president till now.

 

[OmCheeto]

I wonder what it would be like now if a certain idiot hadn't occupied the white house for the last 8 years and the man that really won the election had been president till now.

And would he still have won the Nobel prize?

 

[Astronuc]

GM auditors raise doubts on automaker's viability
http://biz.yahoo.com/ap/090305/gm_annual_report.html

. . . .
GM says in its report that its auditors cited recurring losses from operations, stockholders' deficit and an inability to generate enough cash to meet its obligations in raising substantial doubts about its ability to continue as a going concern.

World stocks mixed as China stimulus hopes fade
European markets fall ahead of interest rate decisions by Europe's leading central banks
http://biz.yahoo.com/ap/090305/world_markets.html
Thursday March 5, 6:44 am ET

. . .
Europe's two leading central banks are expected to cut interest rates, but with the scope for further reductions limited, speculation is growing that the European Central Bank and the Bank of England will effectively start printing money to give their ailing economies a kick start.

Amid increasingly grim economic news, the European and British central banks are likely to cut their benchmark rates by a half percentage point to new record lows of 1.5 percent and 0.5 percent.

. . . .

 

[Count Iblis]

http://www.google.com/hostednews/ap/article/ALeqM5gHs5OM3gFG_DytQQZFbWfgPT08MAD96O0H2G1"

 

[Astronuc]

Citigroup stock falls below $1 a share
http://news.yahoo.com/s/ap/20090305/ap_on_bi_ge/citigroup_stock

CHARLOTTE, N.C. – Shares of Citigroup Inc., once the nation's most powerful bank, fell below $1 a share Thursday.

The stock fell to 97 cents in late morning trading, down 16 cents or 14.2 percent from Wednesday.

New York-based Citi has lost more than 85 percent of its value so far this year, and is down more than 95 percent from a year ago as the bank was pummeled by the financial market crisis.

Citigroup's shares will remain on the New York Stock Exchange. Last week, the NYSE relaxed its listing rules to allow stocks that fall under $1 to still be listed and traded on the exchange.

The exchange said the change was warranted given the "current period of unusual market volatility and decline."

Ordinarily, an NYSE-listed company's shares cannot remain below $1 for more than 30 consecutive days. If that happens, the company gets about six months to prove to the NYSE it can boost its stock price.

. . . .

What a difference a year makes.

 

[Greg Bernhardt]

http://www.comedycentral.com/?source=SEO_SSP_Y&intcmp=SEO_SSP_Y&extcmp=SEO_SSP_Y

 

[Astronuc]

2:33pm ET: 6,625.50 -250.34 (-3.64%)

12 pct. are behind on mortgage or in foreclosure
http://news.yahoo.com/s/ap/20090305/ap_on_bi_ge/states_foreclosures

NEW YORK – A stunning 48 percent of the nation's homeowners who have a subprime, adjustable-rate mortgage are behind on their payments or in foreclosure, and the rate for homeowners with all mortgage types hit a new record, new data Thursday showed.

But that's not the worst of it.

The reckless lending practices in states like Florida, California and Nevada that were the epicenter of the housing crisis are no longer driving up the nation's delinquency rate. Instead, the foreclosure crisis now is being fueled by a spike in defaults in states like Louisiana, New York, Georgia and Texas, where the economies are rapidly deteriorating and thousands are losing their jobs.

A record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year, the Mortgage Bankers Association reported. That's up from 10 percent at the end of the third quarter, and up from 8 percent at the end of 2007.

. . . .

 

[LowlyPion]

http://www.comedycentral.com/?source=SEO_SSP_Y&intcmp=SEO_SSP_Y&extcmp=SEO_SSP_Y

Sadly I think Stewart has a legitimate point about CNBC. Many of them spew the company propaganda in order to secure their continued access. Maria was always deferential to that toad that ran the NYSE Dick Grasso, while he was sucking down his huge salary. These days Gasparino is a total toady to his "sources" defending their high salaries and poor performances. A number of them have done a real disservice to the investing public.

As for Rick Santelli, I think he has gotten a bit of a bad rap. He's always spoken his mind and reflects a certain thinking in the CBOE that only has interest in making profit. At least that's honest. Cramer and that total Republican Party suck up Larry Kudlow, have other agendas than investor well being and reporting the actual news. Like Limbaugh they have figured out that adopting extreme positions, means bread and butter for them.

Broadcasters should be required to carry broadcast malpractice insurance. But of course they are quick to hide behind all their disclaimers after practicing disingenuous dissemination in the name of entertainment.

 

[mheslep]

Broadcasters should be required to carry broadcast malpractice insurance. But of course they are quick to hide behind all their disclaimers after practicing disingenuous dissemination in the name of entertainment.

And posters.

 

[Astronuc]

Headlines from a WSJ/MarketWatch email (March 5, 2009)

Citigroup pushed below a buck a share in latest sell-off

BOSTON (MarketWatch) -- Citigroup Inc. shares dropped below a dollar on Thursday for the first time ever amid the latest sell-off in financial shares as investors questioned the future of the embattled banking giant.


Reporter's Notebook: Plenty of hybrids at AutoNation

AutoNation CEO Mike Jackson has a problem: There are way too many Toyota Prius hybrids sitting on his car lots across America.


GM, auditor express doubts over survival; shares skid below $2

General Motors and auditor Deloitte & Touche voice doubts over the automaker's ability to survive, which in part will depend on car sales rising next year. Shares of GM and smaller rival Ford both come under selling pressure.

 

[Count Iblis]

http://oxdown.firedoglake.com/diary/1884"