Whiskers
It's a small world
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See, there are still some companies pleasently surprising the market.
and another
and another
and another
and another
(Reuters) - Oil refiner Holly Corp (HOC.N: Quote, Profile, Research) reported fourth-quarter profit that beat Wall Street's expectations, helped mainly by stronger sales of refined products and higher prices, sending its shares up more than 6 percent in trading before the bell.
The company reported net income of $49.8 million, or 90 cents a share, compared with $47.7 million, or 84 cents a share in the year-ago quarter.
Sales and other revenue rose 54 percent to $1.44 billion.
Analysts on average were expecting earnings of 63 cents a share, before special items, on revenue of $1,083.2 million.http://www.reuters.com/article/hotStocksNews/idUSBNG32855620080219
NEW YORK (Reuters) - Shares of General Mills Inc (GIS.N: Quote, Profile, Research) rose 1.6 percent in trading before the opening bell on Tuesday, after the maker of brands such as Cheerios cereal raised its 2008 earnings forecast.
Shares rose to $57.30 from a close of $56.39 on the New York Stock Exchange
NEW YORK (Reuters) - OfficeMax Inc (OMX.N: Quote, Profile, Research) posted a better-than-expected quarterly profit on Tuesday, helped by cost-cutting measures amid declining sales, and its shares rose more than 11 percent.
The nation's third-largest office supplies retailer said fourth-quarter profit rose to $71.5 million, or 92 cents a share, from $58 million, or 76 cents, a year earlier.
Feb. 19 (Bloomberg) -- The biggest surprise on Wall Street this year is proving to be the record $16.3 trillion of shares traded in the U.S. as stocks show no sign of rebounding from the first bear market since 2002 and the economy teeters on the brink of a recession.
Daily trading in December and January averaged 7.44 billion shares, 13 percent more than the previous quarterly peak, New York Stock Exchange data show. The pace is a boon to Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., whose equity- trading revenue will slip just 6.1 percent in 2008 from last year's record $36.7 billion, according to Sanford Bernstein & Co. The same income-stream shrank almost 40 percent in 2001 and 2002, after the Internet bubble burst. http://www.bloomberg.com/apps/news?pid=20601109&sid=anc5uXSV7_lY&refer=exclusive
Financials with brokerage arms are going to get a nice injection from increased share trading in the US and UK.
Down at the pub playing the pokies?guess where heaps of retrenched former workers will end up with their payouts
OH Oh...
Watch out beloooowww
reports that noted US fund KKR could not roll-over billions in CPs which have already come due.
Cheers
...........Kauri
OH Oh...
Watch out beloooowww
reports that noted US fund KKR could not roll-over billions in CPs which have already come due.
Cheers
...........Kauri
KKR arm in restructuring talks after repayment delay - report
(Thomson Financial delivered by Newstex) -- KKR Financial (NYSE:KFN) Holdings (KFN) has delayed repayment of billions of dollars of commercial paper for the second time, the Financial Times reported.
The listed affiliate of the private equity group has also begun a new round of restructuring talks with creditors less than six months after a rescue rights issue, the newspaper added, citing a regulatory filing.
KFN said it began talks with creditors and deferred repayment of a chunk of debt due last Friday. It put off February repayments until March 3, but warned that most investors had the right to demand their money back with one day's notice.
KFN also said it had given some note-holders the option of taking a slice of the underlying mortgages in lieu of repayment. It declined to comment further, the newspaper said.
Last Updated: February 20, 2008 08:00 ESTCorporate Bond Risk Soars to Record on CDO Loss Speculation
By Abigail Moses and Hamish Risk
Feb. 20 (Bloomberg) -- The cost of protecting corporate bonds from default soared to a record as investors purchased credit-default swaps to hedge against mounting losses in the $2 trillion market for collateralized debt obligations.
``Investors are accumulating losses,'' said Andrea Cicione, a credit strategist at BNP Paribas SA in London. ``It makes sense to reduce risk and cut losses.''
Securities known as constant proportion debt obligations that package indexes of credit-default swaps may be forced to sell about $44 billion of assets because of a decline in the value of their holdings, UniCredit SpA analyst Tim Brunne in Munich said today. The value of the so-called CPDOs has fallen to as low as 40 percent of face value, according to Morgan Stanley.
Credit-default swaps on the Markit CDX North America Investment-Grade Index of 125 companies with investment-grade ratings jumped 9 basis points to 163 at 7:44 a.m. in New York, according to Deutsche Bank AG.
Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline, the opposite.
The CDX index of credit-default swaps doubled this year as bank losses and writedowns on debt investments soared above $145 billion worldwide. The equivalent iTraxx index in Europe rose 14.5 basis points today to a record 132.5, according to JPMorgan Chase & Co., up from 51 basis points on Jan. 2.
Bank Losses
CDOs package assets and use the income to pay investors. Securities made up of credit-default swaps are known as synthetic CDOs. The notes are losing money as the cost of credit-default swaps rises. CPDOs are based on the CDX and ITraxx indexes.
Moody's Investors Service downgraded 1.1 billion euros ($1.62 billion) of CPDOs arranged by ABN Amro Holding NV, Lehman Brothers Holdings Inc. and BNP Paribas SA last week as asset values fell. CPDOs arranged in 2006 by banks including Amsterdam-based ABN Amro may be forced to unwind if the iTraxx Europe index rises to 140, according to UniCredit's Brunne and BNP's Cicione.
``Different CPDOs have different trigger levels, but once one is triggered the negative technical pressure that is created may well cause other triggers to be hit,'' Willem Sels, a credit analyst at Dresdner Kleinwort in London, said in note to investors today.
CPDO Unwinds
Banks would seek to unwind CPDOs by buying credit-default swap indexes to offset their bets.
``What seems to be clear in both Europe and the U.S. is that the continued unwind of leverage and structured products has continued to lead to underperformance in investment grade,'' Nick Burns, a London-based credit strategist at Deutsche Bank, wrote in a note today.
Contracts on U.K. mortgage lender Alliance & Leicester Plc jumped 40 basis points to 245 after the bank slashed its profit target for this year and next, citing rising borrowing costs and declining valuations on asset-backed securities because of the U.S. subprime mortgage slump.
A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
Contracts on Standard Chartered Plc rose 3 basis points to 112 after the London-based bank abandoned a plan to refinance its $7.15 billion Whistlejacket Capital Ltd. structured investment vehicle, the largest SIV run by a bank to collapse.
KKR Financial
KKR Financial Holdings LLC, the $18 billion publicly traded credit fund run by Kohlberg Kravis Roberts & Co., delayed repaying some of its asset-backed commercial paper and started restructuring talks with its creditors, according to a regulatory filing yesterday.
Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-risk, high-yield credit ratings jumped 21 basis points to 606, according to JPMorgan prices. Contracts on the benchmark Markit iTraxx Asia Ex-Japan index rose by 24 basis points to 295, according to ICAP Plc.
The risk of defaults on European LBO loans is the highest recorded by the benchmark Markit iTraxx LevX Senior Index of loan credit-default swaps. The index fell to 90, according to Bank of America Corp. prices, the lowest since it started in October 2006. A level below 100 indicates loans are valued below par.
To contact the reporter on this story: Abigail Moses in London Amoses5@bloomberg.net
Oh oh... With inflation up, there is no way this can be stopped by the fed now:
Last Updated: February 20, 2008 08:00 EST
Our Economic Dilemma
Although it is too soon to tell whether the United States has entered a recession, there is mounting evidence that a recession has in fact begun. Key measures of economic activity stopped growing in December and January or actually began to decline. The collapse of house prices and the crisis in the credit markets continue to depress the real economy.
The sharp reduction in the federal funds interest rate and the new fiscal stimulus package may, of course, be enough to avert a downturn. Many forecasters still predict that the economy will just slow in the first part of this year and then rebound after the summer. But the hope that monetary and fiscal policies would prevent continued weakness by boosting consumer confidence was derailed by the recent report that consumer confidence in January collapsed to the lowest level since 1992.
If a recession does occur, it could last longer and be more painful than the past several downturns because of differences in its origin and character. The recessions that began in 1991 and 2001 lasted only eight months from the start of the downturn until the beginning of the recovery. Even the deeper recession of 1981 lasted only 16 months.
But these past recessions were caused by deliberate Federal Reserve policy aimed at reversing a rise in inflation. In those cases, the Fed increased real interest rates until it saw the economic slowdown that it thought would move us back toward price stability. It then reversed course, reducing interest rates and bringing the recession to an end.
In contrast, the real interest rate in 2006 and 2007 stayed at a relatively low level of less than 3%. A key cause of the present slowdown and potential recession was not a tightening of monetary policy but the bursting of the house-price bubble after six years of exceptionally rapid house-price increases. The Fed therefore will not be able to end the recession as it did previous ones by turning off a tight monetary policy.
The unprecedented national fall in house prices is reducing household wealth and therefore consumer spending. House prices are down 10% from the 2006 high and are likely to fall at least another 10%. Each 10% decline cuts household wealth by about $2 trillion, and this eventually reduces annual consumer spending by about $100 billion. No one can predict the extent to which the coming fall in house prices will lead to defaults and foreclosures, driving house prices and wealth down even further. Falling house prices also discourage home building, with housing starts down 38% over the past 12 months.
But the principle cause for concern today is the paralysis of the credit markets. Credit is always key to the expansion of the economy. The collapse of confidence in credit markets is now preventing that necessary extension of credit. The decline of credit creation includes not only the banks but also the bond markets, hedge funds, insurance companies and mutual funds. Securitization, leveraged buyouts and credit insurance have also atrophied.
The dysfunctional character of the credit markets means that a Fed policy of reducing interest rates cannot be as effective in stimulating the economy as it has been in the past. Monetary policy may simply lack traction in the current credit environment.
The dysfunctional character of the credit markets means that a Fed policy of reducing interest rates cannot be as effective in stimulating the economy as it has been in the past. Monetary policy may simply lack traction in the current credit environment.
That makes sense now ............ at least we know why they greased the tracks now .
IMF October 2007.
Country................GDP (PPP) $m
United States.........13,543,330 - 19.02%
China....................11,606,336 - 16.551%
Hong Kong..................289,748 - .402%
China (Taiwan)............749,943 - 1.034%
Total China.............12,646,027 - 17.987%
India.......................4,726,537 - 6.576%
Total China + India..17,373,164 - 24.563%
Common sense fix for muni bonds
If muni bonds got the ratings they deserve, we wouldn't need to bail out the bond insurers. We wouldn't need bond insurers at all.By Jon Birger, senior writer
NEW YORK (Fortune) -- What the municipal bond market needs most is not an injection of capital into the bond insurance companies. What it needs is an injection of common sense into its credit rating system.
The simple truth is that the overwhelming majority of tax-exempt bonds issued by states and cities deserve a triple-A credit rating without any bond insurance, given their historically miniscule default rates.
....
So why then do the rating agencies maintain separate rating scales for munis? Fabian contends the rating agencies are simply serving their own interests. If everything were rated double-A or triple-A, there would be little need for bond insurance. And no bond insurance would mean the rating agencies wouldn't be able to charge for two ratings per bond issue an insured rating in addition to the underlying rating instead of just one.
...
Municipal bonds have always been substantially better credit risks than the bond insurance companies insuring them. That made no sense a year ago, and with the credit markets hanging in the balance, it makes even less sense today.
http://money.cnn.com/2008/02/20/mag...ings.fortune/index.htm?postversion=2008022104
Whooaaaaaa. Isnt PPP just a theory binded by economic assumptions, of which do not apply in reality? Last time I checked. A simple look at the BigMac index would agree.
arrr, well now, the problem is that common sense is not all that commonWhat it needs is an injection of common sense into its credit rating system
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