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STOCK MARKET WATCH -- Friday, 15 February 2013
[font size=3]STOCK MARKET WATCH, Friday, 15 February 2013[font color=black][/font]
SMW for 14 February 2013
AT THE CLOSING BELL ON 14 February 2013
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Dow Jones 13,973.39 -9.52 (-0.07%)
[font color=green]S&P 500 1,521.38 +1.05 (0.07%)
Nasdaq 3,198.66 +1.78 (0.06%)
[font color=green]10 Year 1.97% -0.03 (-1.50%)
30 Year 3.18% -0.03 (-0.93%)[font color=black]
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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
[/center][font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]
43 replies
= new reply since forum marked as read
= new reply since forum marked as read
Not that anyone on the inside would ever trade that....
Oops
2/15/13 Wal-Mart Executives Sweat Slow February Start in E-Mails
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
Wal-Mart and discounters such as Family Dollar Stores Inc. are bracing for a rise in the payroll tax to take a bigger bite from the paychecks of shoppers already dealing with elevated unemployment. The world’s largest retailer’s struggles come after executives expected a strong start to February because of the Super Bowl, milder weather and paycheck cycles, according to the minutes of a Feb. 1 officers meeting Bloomberg obtained.
Murray’s comments about February sales follow disappointing results from January, a month that Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, said he was relieved to see end, according to a separate internal e-mail obtained by Bloomberg News.
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
more...
http://mobile.bloomberg.com/news/2013-02-15/wal-mart-executives-sweat-slow-february-start-in-e-mails.html
Maybe people don't have any money to spend
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/11/is-congress-really-going-to-miss-its-free-lunch-on-infrastructure/?wprss=rss_ezra-klein
...The big question on infrastructure is whether the White House is correctly reading the politics of the moment. Could Congressional Republicans be ready to sign on to some form of large-scale investment in the nation’s transportation and energy infrastructure? Or is Obama tilting at windmills (literally, in this case).
It comes as we may be approaching the end of a five year period in which investing in the nation’s physical infrastructure has been something close to a free lunch. With interest rates near all-time lows and millions of construction workers unemployed, the last few years have been a time that it would have been a historical bargain for the United States to do upgrades to roads, bridges, and airports that will eventually need to take place anyway. It has been a political breakdown—in particular conservatives’ view of almost any non-defense federal spending as wasteful—standing in the way.
This graph shows total private fixed investment relative to the nation’s potential GDP, going back to 1949. (That’s how much the private sector is spending on both houses and commercial installations). After averaging 15.5 percent from 1949 to 2007, private investment fell as low as 10.6 percent in the economic collapse starting in 2008 (it was 12.2 percent at the end of 2012).
In other words, for the last few years private construction activity has been far below its historic norms. And so long as the private sector isn’t building houses and office buildings and factories, the government can build without crowding out private investment. But that window might not last much longer; at the current pace, private investment will be back to its historical average in another few years. It’s not now or never, exactly, but it very likely will be cheaper now to spruce up the nation’s transportation and energy infrastructure than it will be in the not-too-distant future...
THERE ISN'T AN OPPORTUNITY TO HELP ORDINARY PEOPLE THAT CONGRESS WON'T MISS, IF NOT MAKE FOREVER IMPOSSIBLE FOR GENERATIONS...
...The big question on infrastructure is whether the White House is correctly reading the politics of the moment. Could Congressional Republicans be ready to sign on to some form of large-scale investment in the nation’s transportation and energy infrastructure? Or is Obama tilting at windmills (literally, in this case).
It comes as we may be approaching the end of a five year period in which investing in the nation’s physical infrastructure has been something close to a free lunch. With interest rates near all-time lows and millions of construction workers unemployed, the last few years have been a time that it would have been a historical bargain for the United States to do upgrades to roads, bridges, and airports that will eventually need to take place anyway. It has been a political breakdown—in particular conservatives’ view of almost any non-defense federal spending as wasteful—standing in the way.
This graph shows total private fixed investment relative to the nation’s potential GDP, going back to 1949. (That’s how much the private sector is spending on both houses and commercial installations). After averaging 15.5 percent from 1949 to 2007, private investment fell as low as 10.6 percent in the economic collapse starting in 2008 (it was 12.2 percent at the end of 2012).
In other words, for the last few years private construction activity has been far below its historic norms. And so long as the private sector isn’t building houses and office buildings and factories, the government can build without crowding out private investment. But that window might not last much longer; at the current pace, private investment will be back to its historical average in another few years. It’s not now or never, exactly, but it very likely will be cheaper now to spruce up the nation’s transportation and energy infrastructure than it will be in the not-too-distant future...
THERE ISN'T AN OPPORTUNITY TO HELP ORDINARY PEOPLE THAT CONGRESS WON'T MISS, IF NOT MAKE FOREVER IMPOSSIBLE FOR GENERATIONS...
http://economix.blogs.nytimes.com/2013/02/12/the-growing-corporate-cash-hoard/
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”
Last week, the investor David Einhorn sued Apple, in which his hedge fund has a large stake, over how the company can issue preferred stock. At the heart of the dispute is the $137 billion pile of cash that Apple has accumulated, and whether it could be used to better reward shareholders. Mr. Einhorn’s action highlights a growing problem: many corporations are holding vast amounts of cash and other liquid assets, using them neither for investment nor to benefit shareholders. These assets are largely earned and held overseas, and not subject to American taxes until the money is brought home. Such tax-avoidance techniques, while legal, have come under increasing political attack. On Thursday, Senator Bernie Sanders of Vermont introduced legislation to end deferral and force multinational companies to pay taxes on their foreign-source income.
According to the Federal Reserve, as of the third quarter of 2012 nonfinancial corporations in the United States held $1.7 trillion of liquid assets – cash and securities that could easily be converted to cash. By any measure, corporate cash holdings appear to be high and rising. According to the Federal Reserve, nonfinancial corporations historically held liquid assets of 25 to 30 percent of their short-term liabilities. But this percentage began rising in 2001 and now tends to be in the 45 to 50 percent range. In the third quarter of 2012, it was 44.9 percent. A recent study by Juan Sánchez and Emircan Yurdagul of the Federal Reserve Bank of St. Louis looked at the ratio of cash to assets at all publicly held nonfinancial, non-utility corporations. They found that, historically, such corporations held cash equal to about 6 percent of their assets, but that began rising in 1995 and is now more than 12 percent, as seen below.
Federal Reserve Bank of St. Louis analysis of Compustat data
One obvious explanation for higher cash holdings by corporations is the uncertainty of the economic environment in the aftermath of the financial crisis. They may also face greater difficulty in getting credit on short notice and need to hold more cash as a precaution. Another explanation, put forward by the economists Thomas W. Bates, Kathleen M. Kahle and René M. Stulz, is that the growing research-and-development intensity of corporations forces them to hold more cash than they used to. They also note that companies hold fewer inventories and accounts receivable than they used to. And, they say, these factors make corporate cash flow less dependable than previously, thus necessitating the need for higher cash holdings. A 2011 study by the International Monetary Fund (see Pages 44-49) suggests that higher cash holdings by corporations are simply a sign that they plan new investments in the near future. It says this is a “good omen,” which indicates that “investment could increase substantially over the next year or two.”
However, the dominant explanation for the increased liquidity of nonfinancial corporations appears to be the growing role of multinational corporations and the profits of their foreign operations. In a 2006 speech, the Federal Reserve Board governor Kevin Warsh noted that higher corporate cash holdings were dominated by those with foreign operations. Between 2001 and 2004, the ratio of cash to assets at domestic-only corporations increased 20 percent, while it increased 50 percent among multinational corporations.
While this may indicate that multinational corporations expect better growth potential among their foreign subsidiaries and plan additional offshore investments, a more likely explanation is tax-based. Under American tax law, corporate profits generated offshore are taxable, with a tax credit for taxes paid in foreign jurisdictions. But American taxes don’t apply unless and until such profits are repatriated to the United States. Thus, as long as profits are held abroad, United States taxes are deferred indefinitely. A 2007 study in the Journal of Financial Economics found that among multinational corporations, those facing higher repatriation taxes tended to hold more cash abroad than those facing lower tax burdens. Moreover, cash holdings tend to be higher in countries with low taxes than those with high taxes. Tax sensitivity appears to be more pronounced among technology-based companies.
The major role of R.&D. in large cash holdings may reflect the greater opportunities for tax avoidance among businesses that can easily transfer intangible property abroad without having to move production operations or jobs to other countries. It is a simple matter for companies holding patents, copyrights or trademarks to transfer them to foreign subsidiaries and realize the profits accruing to them in lower-taxed jurisdictions.
MORE AT LINK
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”
Last week, the investor David Einhorn sued Apple, in which his hedge fund has a large stake, over how the company can issue preferred stock. At the heart of the dispute is the $137 billion pile of cash that Apple has accumulated, and whether it could be used to better reward shareholders. Mr. Einhorn’s action highlights a growing problem: many corporations are holding vast amounts of cash and other liquid assets, using them neither for investment nor to benefit shareholders. These assets are largely earned and held overseas, and not subject to American taxes until the money is brought home. Such tax-avoidance techniques, while legal, have come under increasing political attack. On Thursday, Senator Bernie Sanders of Vermont introduced legislation to end deferral and force multinational companies to pay taxes on their foreign-source income.
According to the Federal Reserve, as of the third quarter of 2012 nonfinancial corporations in the United States held $1.7 trillion of liquid assets – cash and securities that could easily be converted to cash. By any measure, corporate cash holdings appear to be high and rising. According to the Federal Reserve, nonfinancial corporations historically held liquid assets of 25 to 30 percent of their short-term liabilities. But this percentage began rising in 2001 and now tends to be in the 45 to 50 percent range. In the third quarter of 2012, it was 44.9 percent. A recent study by Juan Sánchez and Emircan Yurdagul of the Federal Reserve Bank of St. Louis looked at the ratio of cash to assets at all publicly held nonfinancial, non-utility corporations. They found that, historically, such corporations held cash equal to about 6 percent of their assets, but that began rising in 1995 and is now more than 12 percent, as seen below.
Federal Reserve Bank of St. Louis analysis of Compustat data
While this may indicate that multinational corporations expect better growth potential among their foreign subsidiaries and plan additional offshore investments, a more likely explanation is tax-based. Under American tax law, corporate profits generated offshore are taxable, with a tax credit for taxes paid in foreign jurisdictions. But American taxes don’t apply unless and until such profits are repatriated to the United States. Thus, as long as profits are held abroad, United States taxes are deferred indefinitely. A 2007 study in the Journal of Financial Economics found that among multinational corporations, those facing higher repatriation taxes tended to hold more cash abroad than those facing lower tax burdens. Moreover, cash holdings tend to be higher in countries with low taxes than those with high taxes. Tax sensitivity appears to be more pronounced among technology-based companies.
The major role of R.&D. in large cash holdings may reflect the greater opportunities for tax avoidance among businesses that can easily transfer intangible property abroad without having to move production operations or jobs to other countries. It is a simple matter for companies holding patents, copyrights or trademarks to transfer them to foreign subsidiaries and realize the profits accruing to them in lower-taxed jurisdictions.
MORE AT LINK
I'm going to have to get a flask of rum to put around the grandpuppy's neck, when I take him to the dog park...
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