SKY News Summary 02-26-09
The Department of Labor reported that the number of mass layoff events in January decreased by 48 from the prior month, while the number of associated initial claims increased by 11,785. The national unemployment rate was 7.6 percent in January 2009, seasonally adjusted, up from 7.2 percent the prior month and from 4.9 percent a year earlier.
http://www.bls.gov/news.release/mmls.nr0.htm
The Federal Reserve reported that consumer credit decreased at an annual rate of 3 percent in the fourth quarter. Revolving credit decreased at an annual rate of 5-1/2 percent, and nonrevolving credit decreased at an annual rate of 1-3/4 percent.
http://www.federalreserve.gov/releases/g19/current/g19.htm
The Census Bureau reported that sales of new one-family houses in January 2009 dropped 10.2 percent below the revised December rate of 344,000 which is 48.2 percent below the January 2008 estimate of 597,000.This represents a supply of 13.3months at the current sales rate.
http://www.census.gov/const/newressales.pdf
The Census Bureau also announced that new orders for manufactured durable goods in January decreased $9.0 billion or 5.2 percent to $163.8 billion.
http://www.census.gov/indicator/www/m3/adv/pdf/durgd.pdf
There is an interesting article in the WSJ on Altria.
http://online.wsj.com/article/SB123559550617375427.html?mod=todays_us_money_and_investing
Exelon announced that NRG shareholders had tendered 125,403,103 shares of common stock of NRG which represents over 51% of the outstanding shares of NRG common stock. “Yesterday’s result delivers another clear and convincing message to NRG’s board and management that a majority of the company’s owners support Exelon’s offer to combine the two companies. Unfortunately, this is a message the current NRG board and management have apparently chosen to ignore,” said John Rowe, Exelon chairman and CEO. Exelon also announced today it has extended its offer until June 26 at 5:00 p.m.
http://www.exeloncorp.com/aboutus/news/pressrelease/corporate/090226_Shareholder+Support+for+Exelon-NRG+Combination+Grows.htm
An article in the WSJ notes that “hostile offers are unusual in the power sector, where deals normally are amicable because they typically also require approval from state regulators. But Exelon’s move shows that sagging stock values for companies may entice companies to go after each other….Exelon has already applied for regulatory approval in most jurisdictions and believes it can complete the process by the end of the third quarter. It foresees few obstacles because there isn’t much overlap between the two companies and neither is a public utility. Exelon, which owns utilities in Chicago and Philadelphia in addition to a large fleet of nuclear generating plants, sees great value in NRG’s portfolio of fossil-fuel and nuclear power plants and its proposal to build an additional nuclear station in Texas.”
http://online.wsj.com/article/SB123562280068279575.html?mod=wsjcrmain
Iain Campbell, vice president and general manager of North America Service and Global Work Place Solutions for Johnson Controls, testified before the U.S. House of Representatives Committee on Energy and Commerce. He noted that “energy efficiency is the fastest, cheapest and cleanest energy source, and should be the first priority in addressing climate change.”
http://www.johnsoncontrols.com/publish/us/en/news.html
UBS announced that Oswald J. Grübel will be the company’s new Group Chief Executive Officer. Marcel Rohner has resigned. From 2003 until spring 2007, Oswald Grübel was Co-CEO and CEO of Credit Suisse.
http://www.ubs.com/1/e/investors/releases?newsId=162614
Scott Davis, chairman and CEO of UPS, spoke before members of the U.S. Chamber of Commerce in Washington, DC. You will enjoy reading his remarks which, not surprisingly, emphasize global trade as one of he most important tools we have to help lift the country out of the financial crisis. At one point, he shares an interesting story: “Last fall, UPS hosted a global trade conference in Barcelona, and Mikhail Gorbachev was our keynote speaker. In an informal chat with President Gorbachev, he told me about how his grand-daughter loves to shop for shoes – internationally, online. He mentioned that her only problem was how long it takes for UPS to deliver the goods. I think it was an attempt at a joke. I hope it was anyway! I had to tell him, of course, that it’s not UPS. It’s the sad state of customs in his country that impedes the free flow of commerce. And he agreed. The point is that his grand-daughter is one of hundreds of millions of relatively new entrants into the global marketplace…..Another reason global trade is so important is jobs. It’s probably the biggest issue surrounding the trade debate.
Ironically, this should be a strength for the proponents of global trade, but it has become a liability and a political hot potato. Why? Because there is a growing perception, specially here in the U.S., that globalization and free trade are siphoning off jobs to far away places. But let’s examine that for a moment. Average American workers have much more to fear from a systems developer in their own company than they do from a production worker in Mexico. The Bureau of Labor Statistics reports that in layoffs of 50 or more people, between 1996 and 2004, less than 3 percent resulted from import competition or overseas location. Think about that for a moment. Less than 3 percent. We need to recognize, of course, that the 3 percent represents human beings, and it reinforces the importance of support programs and retraining. Let’s flip the focus for just a moment from the jobs lost from free and open global trade to the jobs created. We have not emphasized often enough or well enough just how many jobs global trade creates.
In my own company, trade is clearly creating American jobs. UPS is the nation’s second-largest private employer with 425,000 people. Each time we add 40 new international packages in the U.S. – in other words, 40 packages imported or exported by our customers – we create another new U.S. job somewhere in our system….According to Treasury Department estimates, as many as 57 million Americans are working for companies that engage in global commerce. 57 million! To put that in perspective, it means that two out of every five U.S. non-farm jobs is linked to exports and imports of goods and services. The facts point to only one conclusion: global trade generates jobs. Lots of them.
http://pressroom.ups.com/execforum/speeches/speech/text/0,1403,687,00.html
HP earnings presentation can be found at:
http://media.corporate-ir.net/media_files/irol/71/71087/1Q09_Earnings_Presentation_Final.pdf
In case you missed it, here’s the latest news on Citi from the Wall Street Journal:
http://online.wsj.com/article/SB123560759218177045.html
Sources: Department of Labor, The Federal Reserve, The Census Bureau, The Wall Street Journal, Exelon, Johnson Controls, UBS, UPS, and HP websites.
SKY News Summary 02-24-09
Pepsi will return to its original packaging of Tropicana Pure Premium orange juice. According to the New York Times, “Redesigned packaging that was introduced in early January is being discontinued, executives plan to announce on Monday, and the previous version will be brought back in the next month.”
http://www.nytimes.com/2009/02/23/business/media/23adcol.html?em
“Target Corporation reported net earnings of $609 million for the fourth quarter ended January 31, 2009, compared with $1,028 million in the fourth quarter ended February 2, 2008. Earnings per share in the fourth quarter decreased 34.4 percent to 81 cents from $1.23 in the same period a year ago. All earnings per share figures refer to diluted earnings per share.”
http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1259349&highlight=
IBM, Applied Materials, and the College of Nanoscale Science and Engineering (CNSE) of the University at Albany announced that they will jointly develop process modeling technology for manufacturing 22 nanometer (nm) logic and memory chips. Gary Patton, vice president, IBM Semiconductor Research and Development Center, explains, “To meet the challenges of 22nm, we need to model the entire physical structure of the transistor, and this is now possible with the advent of ultra-powerful, petascale computer processing. By combining Applied’s thin film deposition and etch processing expertise and CNSE’s fundamental science know-how with IBM’s capabilities, we can extend our modeling beyond lithography to help deliver a more complete and validated manufacturing process.”
http://www.appliedmaterials.com/news/pr2007.html?menuID=6
Boeing announced that the United Arab Emirates intends to acquire the C-17 from Boeing for international airlift missions, and humanitarian-relief efforts. http://www.boeing.com/news/releases/2009/q1/090224a_nr.html
Newsweek’s Fareed Zakaria spoke with Alex Molinaroli, the president of power solutions at Johnson Controls, which will supply the battery for Ford’s first plug-in electric vehicle in the upcoming issue. Excerpts are at:
http://www.newsweek.com/id/185797
Medtronic announced its acquisition of Ventor Technologies a developer of transcatheter heart valve technologies for the treatment of aortic valve disease, for $325 million. The new transcatheter valves offer a non-surgical alternative for heart-disease patients. “The combination of Ventor Technologies and our strengths in research and development, operations, medical education and market development will improve patient outcomes and expand physician adoption among both surgeons and interventional cardiologists,” said Bill Hawkins, chairman and CEO of Medtronic.
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1235396058250&lang=en_US
Medtronic also announced it intends to acquire CoreValve, developer of a transcatheter, transfemoral aortic valve replacement product for $700 million. This too is a non-surgical, way of replacing aortic valves using a catheter inserted through an artery in the groin.
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1235395903862&lang=en_US
The Bureau of Labor Statistics reported jobs from March 2008 to June 2008. “The number of job gains from opening and expanding private sector establishments was 7.3 million, and the number of job losses from closing and contracting establishments was
7.8 million. The Bureau also reported that the Consumer Price Index for All Urban Consumers increased 0.4 percent in January. The January level of 211.143 was virtually unchanged from January 2008. The Chained Consumer Price Index for All Urban Consumers increased 0.5 percent in January. The January level of 121.208 was 0.5 percent lower than in January 2008.
http://www.bls.gov/news.release/cewbd.nr0.htm
http://www.bls.gov/news.release/cpi.nr0.htm
The Nasdaq website reports that the ICSC-Goldman stores sales shows retail sales for the week ending February 21 were up 0.6 percent for a yoy rate of -0.8 percent, the best rate so far this year.
http://www.nasdaq.com/asp/econodayframe.asp?page=http://anasdaq.econoday.com/byweek.asp?cust=nasdaq
The Conference Board’s Consumer Confidence Index dropped to another low in February reaching 25.0 down from 37.4 in January. “All in all, not only do consumers feel overall economic conditions have grown more dire, but just as disconcerting, they anticipate no improvement in conditions over the next six months.”
http://www.conference-board.org/economics/ConsumerConfidence.cfm
Chairman Ben Bernanke’s Semiannual Monetary Policy Report to the Congress
Before the Committee on Banking, Housing and Urban Affairs today sparked a rise in the stock prices of financials by saying, during the Q and A, “”I don’t see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when that just isn’t necessary.”
http://www.federalreserve.gov/newsevents/testimony/bernanke20090224a.htm
The Philadelphia Fed issued its February 2009 Business Outlook Survey. It noted that
“all of the survey’s broad indicators for current activity remained negative and fell from their already low levels in January. Employment losses were more substantial this month, and nearly half of the surveyed firms reported declines in both employment and average hours worked. Firms continued to report declines in input prices and prices for their own manufactured goods. Most of the survey’s indicators of future activity improved, continuing to suggest that the region’s manufacturing executives expect declines to bottom out over the next six months….In special questions this month, firms were asked about their current inventory situation. Nearly 44 percent of the firms indicated that their inventories were too high and were expected to decrease during the first quarter; 67 percent said their customers’ inventory plans had also decreased….Expectations for future conditions improved for the second consecutive month, suggesting that the current slump will bottom out in the next six months. The future general activity index increased from 7.4 in January to 15.9 this month, its second positive reading since September 2008.
http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2009/bos0209.cfm
Sources: New York Times, Target, Boeing, Applied Materials, Newsweek, Medtronic, Bureau of Labor Statistics, NASDAQ, Conference Board, Federal Reserve, Philadelphia Federal Reserve websites.
SKY News Summary 02-19-09
The Bureau of Labor Statistics reported that the Producer Price Index for Finished Goods rose 0.8 percent in January due mainly to energy goods which increased 3.7 ercent after falling 9.1 percent in December. The PPI increase follows declines of 1.9 percent in December and 2.5 percent in November.
http://www.bls.gov/news.release/ppi.nr0.htm
The Bureau of Labor Statistics also reported numbers for imports and exports. Import prices fell 1.1 percent in January and 23.4 percent over the past six months due mainly to petroleum prices which fell 2.4 percent. (Petroleum prices fell 69.1 percent over the past six months and 55.0 percent over the past year, the largest 12-month decline since the index was first published in June 1982). Export prices rose 0.5 percent in January after declining in each of the previous five months due mainly to a 6.2 percent rise in prices for
corn, soybeans, and wheat. Despite the January increase, agricultural prices fell 9.7 percent over the past 12 months.
http://www.bls.gov/news.release/ximpim.nr0.htm
The Conference Board reported that the Leading Economic Index increased for the second consecutive month in January. “Five of the ten indicators that make up the leading economic index increased in January. The positive contributors — beginning with the largest positive contributor — were real money supply, the interest rate spread, index of consumer expectations, manufacturers’ new orders for nondefense capital goods, and manufacturers’ new orders for consumer goods and materials. The negative contributors — beginning with the largest negative contributor — were average weekly initial claims for unemployment insurance (inverted), building permits, average weekly manufacturing hours, stock prices, and the index of supplier deliveries (vendor performance).”
http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1
The Federal Reserve released, for the first time, longer-run economic projections, for output growth, unemployment, and inflation, made by Federal Open Market Committee participants. The projections were:
2.5 to 2.7 percent growth in real gross domestic output
4.8 to 5.0 percent unemployment
1.7 to 2.0 percent inflation, as measured by the price index for personal consumption expenditures (PCE).
http://www.federalreserve.gov/newsevents/press/monetary/20090218a.htm
The Census Bureau announced new residential construction statistics for January. Permits for single-family homes decreased 8.0 percent below the December figure of 364,000. Single-family housing starts in January dropped 12.2 percent below the December figure.
http://www.census.gov/const/newresconst.pdf
The Mortgage Bankers Association announced that the Market Composite Index, a measure of mortgage loan application volume, increased 45.7 percent on a seasonally adjusted basis from one week earlier. The Refinance Index increased 64.3 percent from the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.99 percent from 5.19 percent, with points increasing to 1.37 from 1.20 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
http://www.mbaa.org/NewsandMedia/PressCenter/67707.htm
The Federal Reserve announced that industrial production fell 1.8 percent in January or 10.0 percent below its year-earlier level due mainly to a drop in motor vehicle and parts production that resulted from extended plant shutdowns. The output of mines dropped 1.3 percent.
http://www.federalreserve.gov/releases/g17/Current/default.htm
The Philadelphia Federal Reserve surveyed the region’s manufacturing sector and released its February Business Outlook Survey. According to the survey, most of the survey’s indicators of future activity improved, continuing to suggest that the region’s manufacturing executives expect declines to bottom out over the next six months. “The future general activity index increased from 7.4 in January to 15.9 this month, its second positive reading since September 2008. The indexes for future new orders and shipments also improved, increasing 11 points and 16 points, respectively. On balance, firms still expect decreases in employment over the next six months: The future employment index remained negative but increased 12 points from its low reading in January. The index has been negative for five consecutive months. Twenty-seven percent of the firms expect employment to decline further over the next six months; only 10 percent expect employment to increase.”
http://www.philadelphiafed.org/research-and-data/regional-economy/business-outlook-survey/2009/bos0209.cfm
Jim Mulva, Conoco-Phillips CEO, gave a brief, but interesting talk, entitled “International Oil – An Industry Divided” during International Petroleum Week
in London.
http://www.conocophillips.com/NR/rdonlyres/E6A0530F-D4C4-4C9E-B87C-76E324926A81/0/IPW_Speech.pdf
Tom Falk, Chairman and CEO of Kimberly-Clark gave a presentation about the company’s strategies for growing its global health and hygiene business
http://files.shareholder.com/downloads/KMB/507122471×0x273823/9adb2b3c-10f9-447b-84e6-b8b9e25cdc2c/KMB%20CAGNY%20WEBCAST.pdf
Ralph Alvarez will serve on Lilly’s board. He currently serves as president and chief operating officer of McDonald’s Corporation and is also a member of McDonald’s board of directors. As a member of Lilly’s board, Alvarez will serve on both the board’s finance committee and public policy and compliance committee. http://newsroom.lilly.com/releasedetail.cfm?ReleaseID=366348
Procter & Gamble’s A.G. Lafley and Jon R. Moeller spoke at Consumer Analyst Group of New York Conference today. Here are the slides from the presentation:
http://library.corporate-ir.net/library/10/104/104574/items/325037/FA2D2E9E-3BB0-40C2-BCC7-160700B7C8F8_PG_CagnyHandoutFinal.pdf
Russian President Medvedev opened Russia’s first liquefied natural gas plant built by Sakhalin Energy Investment Company Limited (Sakhalin Energy). Shareholders of Sakhalin Energy are OAO Gazprom, Royal Dutch Shell plc, Mitsui & Co., Ltd. and Mitsubishi Corporation. “Nearly all of the 9.6 million ton annual production capacity of the LNG plant has already been committed in long-term contracts to supply customers in Japan, Korea and North America. Sakhalin LNG will be the first Russian gas supplied to these regions. It paves the way for Russia to new markets in the Asia-Pacific region and gives the country the status of a global energy power.””
http://www.shell.com/home/content/investor/news_and_library/press_releases/2009/sakhalin_lng_inauguration_18022009.html
UBS announced that it has entered into a Deferred Prosecution Agreement with the US Department of Justice and a Consent Order with the Securities and Exchange Commission in which it will pay a total of $780 million to the United States and will “implement and maintain an effective program of internal controls with respect to compliance with its obligations under its Qualified Intermediary Agreement with the Internal Revenue Service.” The agreements do not resolve issues concerning the pending “John Doe” summons which the IRS served on UBS in July 2008.The cost for the settlement will be fully charged to the performance year 2008 and will be reflected in the audited results for 2008 to be published in March 2009.
http://www.ubs.com/1/e/investors/releases?newsId=162297
CBS fourth quarter and full year results are shown in these slides:
http://www.cbscorporation.com/assets/documents/CBSQ4Results.pdf
Philip Morris International’s Chief Financial Officer, Hermann Waldemer, addresses investors today at the CAGNY Conference in Boca Raton, Florida. His slides are available at:
http://library.corporate-ir.net/library/14/146/146476/items/324776/33115BF0-21E6-449E-8986-914AB234C783_PMI-2009-02-17-CAGNY-DISTRIBUTION-FINAL.pdf
Sources: Philip Morris, UBS, Shell, P&G, Lilly, Kimberly-Clark, Conoco-Phillips, Philadelphia Federal Reserve, Mortgage Bankers Association, Census Bureau, Conference Board, Bureau of Labor Statistics websites.
SKY News Summary 02-17-09
Here are some great charts on monetary trends from the St. Louis Federal Reserve.
http://research.stlouisfed.org/publications/usfd/20090213/usfd.pdf
Mike Splinter, President and CEO of Applied Materials approves of passage of the economic recovery act, saying that, “This bill does a lot for solar, and will create thousands of ‘green’ jobs just when we need them most. The manufacturing credit is a huge step forward to put Americans to work making solar panels so we all can benefit from clean, affordable renewable energy.” According to the company’s website, “the bill will create a new, 30% tax credit for facilities and equipment engaged in the manufacture of renewable energy-generating property, such as solar panels. It also creates a grant program to allow taxpayers to redeem solar investment tax credits which are unusable to the holder because they do not have sufficient tax liability to offset. Also included is a temporary loan guarantee program for renewable energy projects and repeal of the tax penalty for subsidized energy financing.”
http://www.appliedmaterials.com/news/pr2007.html?menuID=6
Exxon Mobil announced that additions to its proved reserves in 2008 totaled 1.5 billion oil-equivalent barrels, replacing 103 percent of production. “ExxonMobil continues to make quality reserves additions, and has replaced an average of 110 percent of production over the last 10 years,” said Rex W. Tillerson, chairman and chief executive officer. “This strong performance reflects our strategic focus on resource capture, a disciplined approach to investment and excellence in project execution. Reserves additions from the Kearl Phase 1 oil sands project in Canada totaled 1.1 billion oil-equivalent barrels. Proved additions were also made in a diverse range of countries including the United States, Norway, Nigeria, Angola and Australia. Asset sales in 2008 reduced proved reserves by 0.1 billion oil-equivalent barrels. Utilizing December 31 liquids and natural gas prices, proved reserves replacement was 2.0 billion oil-equivalent barrels in 2008, replacing 136 percent of production, including the effect of asset sales. At the end of 2008 ExxonMobil’s proved reserves base increased to 22.8 billion oil-equivalent barrels, split approximately evenly between liquids and gas. ExxonMobil’s reserves life at current production rates is 15.3 years and the portion of proved reserves already developed is 62 percent.”
http://www.businesswire.com/portal/site/exxonmobil/index.jsp?ndmViewId=news_view&ndmConfigId=1001106&newsId=20090216005530&newsLang=en
Johnson Controls has been added to the Calvert Social Index, which measures the performance of U.S.-based socially responsible companies.
http://www.johnsoncontrols.com/publish/us/en/news.html
Medtronic reported third quarter revenue of $3.5 billion.
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1234871554947〈=en_US
Carlos E. Represas, chairman of Nestlé Mexico, was elected to Merck’s Board of Directors.
Mr. Represas is a member of the Latin American Business Council and the boards of the Mexican Health Foundation and the Latin American Chamber of Commerce in Switzerland. Additionally, he is the chairman of the Board of Trustees of Mexico’s National Institute of Genomic Medicine. He also serves on the corporate board of Bombardier Inc., Canada. The company also announced that Dr. Johnnetta B. Cole resigned from the Board of Directors, effective March 1, to become Director of the Smithsonian’s National Museum of African Art.
http://www.merck.com/newsroom/press_releases/corporate/2009_0217.html
James S. Sawyer, Executive Vice President and Chief Financial Officer of Praxair spoke at the Morgan Stanley Global Basic Materials Conference today.
http://www.praxair.com/praxair.nsf/0/49BC02C6650936208525753500577C6F/$file/Praxair-MorganStanleyGlobalBasic-2-17-09.pdf
AC Transit of Oakland, California, has exercised options for four more fuel cell systems from UTC Power for the transit agency’s next-generation hybrid-electric fuel cell buses for public transport. This comes in addition to eight systems purchased early in 2008, the largest single fuel cell bus order in U.S. history. All 12 buses will be delivered in late 2009 through 2010.
http://www.utc.com/utc/News/News_Details/2009/2009-02-11a.html?page=1&year=0
Microsoft Corp. CEO Steve Ballmer along with mobile partners, HTC, LG and Orange, unveiled a new Windows phone at the Mobile World Congress 2009, which seems to imitate the iPhone experience. The new service, “My Phone”, syncs text messages, photos, video, and contacts to the Web, while “Marketplace for Mobile”, is the mobile applications function.
http://www.microsoft.com/presspass/events/mobileworldcongress/docs/partnerlist.doc.
Here’s an interesting use of cloud computing: Halliburton’s Drilling and Evaluation Division, announced the availability of a disk storage platform, which provides customers with petabytes of online capacity. “Unlike traditional tape alternatives, the PetroStor storage solution provides upstream users instant access to all their seismic files and project data archives. Combining enterprise-class storage from NetApp with real-time compression from Storwize, the PetroStor storage solution lowers storage costs to less than $1,000 per terabyte. It enables storage administrators to increase their storage capacity, along with data reliability and performance, while reducing associated infrastructure footprint, cooling and power costs, as well as administrative costs associated with tape transcription and re-mastering.”
http://www.halliburton.com/public/news/pubsdata/press_release/2009/corpnws_021709.html
I always like the National Association of Realtors “Real Estate Insight” publication.
http://www.realtor.org/wps/wcm/connect/69e32d804cc58a36b2f0f3b7f7111181/currentissue.pdf?MOD=AJPERES&CACHEID=69e32d804cc58a36b2f0f3b7f7111181
Elizabeth A. Duke, former chairman of the American Bankers Association, and currently a member of the Board of Governors of the Federal Reserve spoke at the American Bankers Association National Conference for Community Bankers in Phoenix, Arizona yesterday. Whether or not you agree with her position, it is instructive to understand the Fed’s thinking on the mortgage situation which her speech provides. For example, she comments that: “Although the current problems appear to be rooted in high-risk subprime lending, I would like to dispel the notion that these problems were caused in any way by Community Reinvestment Act (CRA) lending. The CRA is designed to promote lending in low- to moderate-income areas; it is not designed to encourage high-risk lending or poor underwriting. Our analysis of the data finds no evidence, in fact, that CRA lending is in any way responsible for the current crisis. In our analysis of loan originations, we found that approximately 60 percent of higher-priced loans went to middle- or higher-income borrowers or neighborhoods, which are populations not targeted by the CRA. Additionally, more than 20 percent of the higher-priced loans that were extended in low- to moderate-income areas, or to low- to moderate-income borrowers, were loans originated by lenders not covered by the CRA. In fact, the analysis found that only 6 percent of all higher-priced loans were made by CRA-covered lenders to borrowers and neighborhoods targeted by the CRA. This very small share makes it hard to imagine how CRA could have caused, or even contributed in a meaningful way, to the current crisis. Further support for this conclusion comes from our finding that serious delinquency rates for subprime loans are high in all neighborhood-income categories, not only those in lower-income areas, as might be thought if the CRA were a contributing force to the subprime crisis. The problems in the high-risk mortgage market, together with the more general pullback in risk-taking across virtually all financial assets, reduced the willingness of lenders to fund all types of mortgages. We are now seeing widespread payment problems in every category of mortgages. To be sure, the deterioration partly reflects households straining to meet their mortgage obligations amid the broader weakening of macroeconomic conditions. However, it also reflects the fact that reduced home equity and tighter mortgage credit have impaired borrowers’ ability to refinance their mortgages in order to cope with income loss, unexpected expenses, or adverse life events.
According to the latest data, 25 percent of subprime loans and 13 percent of near-prime loans are now seriously delinquent–that is, more than 90 days past due or in foreclosure. The serious delinquency rate for prime mortgages, at between 3 percent and 4 percent, is much lower than for nonprime loans, but it has doubled over the past year. Foreclosures have also risen sharply. The available data suggests that lenders initiated 2-1/4 million foreclosures last year, more than twice the number seen in 2006.
In the past, about one-half of foreclosures initiated were cured through a repayment plan or some other arrangement, but the remaining one-half resulted in the loss of a home. The share resulting in home loss could well be higher now given the large numbers of distressed households and the bleak underlying economic conditions.”
http://www.federalreserve.gov/newsevents/speech/duke20090216a.htm
According to the International Council of Shopping Centers, Microsoft has hired a former Wal-Mart executive to oversee Microsoft-branded store openings. The company apparently wants to imitate the Apple store experience. http://www.icsc.org/srch/apps/newsdsp.php?storyid=2484®ion=main
Sources: International Council of Shopping Centers, Federal Reserve, National Association of Realtors, Halliburton, Microsoft, UTC, Praxair, Merck, Medtronic, Johnson Controls, Exxon Mobil, Applied Materials, St. Louis Federal Reserve
SKY News Summary 02-05-09
Here are more earnings presentations:
Johnson Controls
http://www.johnsoncontrols.com/publish/etc/medialib/jci/corporate/investors.Par.45000.File.tmp/Q1%202009%20Johnson%20Controls%20Presentation.pdf
Danaher
http://www.danaher.com/pdf/08_4Q_Preso.pdf
Philip Morris International
http://webcastingplayer.corporate-ir.net/PLAYER/PlayerHost.aspx?c=146476&EventId=2070432&StreamId=1253036&RGS=3&IndexId=&TIK=%7B6f697afe-5a2a-4810-bc98-6d02686c2c34%7D&SID=%7Bb515eaec-2682-475c-91b6-dc3c0a61c49e%7D&Configed=1
and
http://phx.corporate-ir.net/phoenix.zhtml?c=146476&p=irol-newsArticle&ID=1251926&highlight=
Altria
http://www.altria.com/investors/02_00_NewsDetail.asp?reqid=1249688
Spectra Energy
http://www.spectraenergy.com/news/releases/2009/feb/20090205_01.pdf
Merck
http://library.corporate-ir.net/library/73/731/73184/items/320302/0282BA3B-A394-4876-A4E2-59CECABDF5EE_Merck_JPMorgan_1-13-09_FINAL.pdf
http://www.merck.com/newsroom/press_releases/financial/2009_0203.html
Roche
http://www.roche.com/media/media_releases/med-cor-2009-02-04.htm
Cisco
http://newsroom.cisco.com/dlls/2009/fin_020409.html
Here is a link to the Markopolos testimony describing what went wrong at the SEC in the Madoff investigation:
http://www.scribd.com/doc/11622010/Markopolos-Testimony
Halliburton announced that it has been awarded contracts by BP Angola worth over $600 million. The development program is expected to exceed 150 wells.
http://www.halliburton.com/public/news/pubsdata/press_release/2009/corpnws_020209.html
Citigroup released a discussion on its use of TARP funds.
http://www.citigroup.com/citi/press/2009/090203a1.pdf
Berkshire Hathaway will provide Swiss Re with $2.6 billion to shore up capital. Swiss Re posted a loss of about 1 billion francs last year and plans to cut the dividend. The company will disband its financial-markets unit and may seek more capital. Berkshire will own more than 20 percent of Swiss Re. While Swiss Re said it has more capital than regulators require, it needed at least 1.5 billion francs on Dec. 31 to keep its credit rating. http://www.bloomberg.com/apps/news?pid=20601085&sid=a9HwkhMoOfqo&refer=europe
The Bureau of Labor Statistics announced preliminary productivity data for the fourth quarter and for the full year 2008. The seasonally adjusted annual rates of productivity change in the fourth quarter and the annual average changes were:
Fourth Annual averages
quarter 2007-2008
Business sector 3.1 2.7
Nonfarm business sector 3.2 2.8
In the fourth quarter of 2008, productivity increased 3.1 percent in the business sector, with output and hours decreasing 5.2 percent and 8.1 percent, respectively.
http://www.bls.gov/news.release/prod2.nr0.htm
The U.S. Census Bureau reported that new orders for manufactured goods decreased $14.8 billion or 3.9 percent to $362.4 billion in December. This followed a 6.5 percent decrease in November. Excluding transportation, new orders decreased 4.4 percent. Shipments, also down five consecutive months, decreased $11.3 billion or 2.9 percent to $377.6 billion. This decrease was led by petroleum and coal products, which decreased $6.5 billion or 18.2 percent to $29.3 billion.
http://www.census.gov/indicator/www/m3/prel/pdf/s-i-o.pdf
Sources: Census Bureau, Bureau of Labor Statistics, Bloomberg, Citigroup, Halliburton, scribd.com, Cisco, Roche, Merck, Spectra, Altria, Philip Morris, Walgreens, Danaher, Johnson Controls websites.
SKY News Summary 02-03-09
The U.S. Census Bureau announced that construction spending during December 2008 was estimated at a seasonally adjusted annual rate of $1,053.7 billion, 1.4 percent below the revised November estimate of $1,068.8 billion. The December figure is 3.6 percent below the December 2007 estimate of $1,093.5 billion.
http://www.census.gov/const/C30/release.pdf
The Census Bureau also reported that housing vacancy rates in the fourth quarter 2008 were 10.1 percent for rental housing and 2.9 percent for homeowner housing. The Census Bureau said the rental vacancy rate was higher than the fourth quarter rate last year (9.6 percent), but not statistically different from the rate last quarter (9.9 percent). For homeowner vacancies, the current rate was not statistically different from the fourth quarter 2007 rate or the rate last quarter (2.8 percent each).
http://www.census.gov/hhes/www/housing/hvs/qtr408/files/q408press.pdf
The Bureau of Economic Analysis reported that personal income decreased $25.3 billion, or 0.2 percent, and disposable personal income decreased $25.1 billion, or 0.2 percent, in December. Personal consumption expenditures decreased $102.4 billion, or 1.0 percent. Real disposable income increased 0.3 percent in December, compared with an increase of 0.8 percent in November.
http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm
Roche announced interim results from a phase III study of patients with advanced non small cell lung cancer that showed that Tarceva (erlotinib) plus Avastin (bevacizumab) given following initial therapy with Avastin plus chemotherapy extends the time patients live without their disease getting worse.
http://www.roche.com/media/media_releases/med-cor-2009-02-03.htm
Warren Buffett’s Berkshire Hathaway agreed to buy $300 million of debt from Harley-Davidson. Berkshire will get 15 percent interest on the senior unsecured notes. Mr. Buffett also committed $6.5 billion in April to help Mars Inc. buy chewing gum maker Wm. Wrigley Jr. Co., and agreed to spend $8 billion on preferred shares in General Electric Co. and Goldman Sachs Group Inc. In November, Buffett agreed to buy $300 million in debt from USG Corp., North America’s largest maker of gypsum wallboard.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGI2Zbvxadsw&refer=home
Cisco’s CTO, Padmasree Warrior says that cloud computing “will drive a new wave of innovation and investment similar to what we last saw with the Internet explosion of the mid-1990s.” Here is her explanation, which is pretty technical:
http://newsroom.cisco.com/dlls/podcasts/ciscocast_exec_warrior_020209.html
http://newsroom.cisco.com/dlls/2009/ts_012709.html
For those of us who are less high-tech, here is an article from “eweek magazine” that makes the technology understandable:
“Surely by now you’ve heard the position that cloud computing is a great financial investment because of the money businesses save from not having to buy extra hardware and software infrastructure. SAAS (software as a service) lets companies pipe applications and other software over the Internet, aka the cloud. .. Forrester analyst Ted Schadler lists three key benefits to the cloud, starting with speed. SAAS enables businesses to get up and running in a flash. The analyst said a financial services firm migrated its employee portal to a cloud-based vendor and launched it in two months, while another firm he surveyed has spent the last 18 months building its employee portal in-house. Two, he said businesses should ship IT tasks to cloud computing specialists, who “worry about the nuts and bolts so that you don’t have to.” This enables the IT staff to focus on more important business processes. Finally, he says CFOs should be attracted to the by-the-drink payment plans of cloud computing because it keeps cash in the bank longer. Instead of buying hardware, software and consultants to set up and run applications, businesses can pay a cloud-based provider by the user by the month.”
http://www.eweek.com/c/a/Enterprise-Applications/Forresters-Advice-to-CFOs-Embrace-Cloud-Computing-to-Cut-Costs/
A Nov 2007 article explains IBM’s entrance into the cloud:
http://www-03.ibm.com/press/us/en/pressrelease/22613.wss
Here’s an interesting website for home values in an area:
http://www.zillow.com/homes/map/#/homes/for_sale/map/39.028598,-76.541257,39.027541,-76.542641_rect/18_zm/
Johnson Controls-Saft will supply the complete battery system for Ford Motor Company’s first plug-in hybrid electric vehicle which will be introduced in 2012. Alex Molinaroli, President Johnson Controls Power Solutions said that “Today, nearly all batteries for hybrid electric vehicles are manufactured offshore. As the United States works to build a manufacturing infrastructure and supply base for hybrid and electric vehicles, this contract signals significant progress for our industry here.”
http://www.johnsoncontrols.com/publish/us/en/news.html
Amex 4th Q earnings slides
http://library.corporate-ir.net/library/64/644/64467/items/321579/C1A1F85B-CFA0-40F9-BE77-6FB6EA07A249_SlideQ408.pdf“>http://library.corporate-ir.net/library/64/644/64467/items/321579/C1A1F85B-CFA0-40F9-BE77-6FB6EA07A249_SlideQ408.pdf
Royal Dutch Shell4th Q earnings slides
http://www-static.shell.com/static/investor/downloads/financial_information/quarterly_results/2008/q4/q4_2008_presentations.pdf
Texas Instruments 4th Q earnings slides
http://files.shareholder.com/downloads/TXN/539776044×0x267869/251433c9-b4f1-4886-af00-ce752b124d8e/TI4Q2008_FinStmnts_Web.xls
UBS 4th Q earnings slides
http://www.ubs.com/1/e/investors/quarterly_reporting.html
Citigroup 4th Q earnings slides
http://www.citigroup.com/citi/fin/data/p090116a.pdf?ieNocache=179
UTC 4th Q earnings slides
http://www.utc.com/utc/Static%20files/Investor_Relations/2008_q4_earnings.pdfMicrosoft 2nd Q
http://www.shareholder.com/visitors/event/build2/mediapresentation.cfm?MediaID=34588&Player=1&MediaUserID=0#
Intel 4th Q earnings slides
http://files.shareholder.com/downloads/INTC/539789538×0x268407/b82f6928-e46a-4c4a-a246-91d927ff71a0/CES%20Recap%20Investor%20Call-Webcast-Final.pdf
Fifth Third presentation at the Citigroup Financial Services Conference
http://library.corporate-ir.net/library/72/727/72735/items/321749/5033603C-B0AA-45B0-B2AF-058D5B12B34C_FITB_Citi_012809.pdf
UPS 4th Q earnings slides
http://investor.shareholder.com/ups/news/releases.cfm
T. Rowe 4th Q earnings slides
http://corporate.troweprice.com/ccw/files/pressReleases/TROWQ42008EarningsReleaseFinal.pdf
Halliburton 4th Q earnings slides
http://ir.halliburton.com/phoenix.zhtml?c=67605&p=irol-newsArticle&ID=1248036&highlight=
AT&T 4th Q earnings slides
http://library.corporate-ir.net/library/11/113/113088/items/321732/ADB0814B-5097-4F41-A75B-5ECC2C986DE9_4Q08ATTEarnings_Color.pdf
Boeing 4th Q earnings slides
http://www.boeing.com/companyoffices/financial/2008q4/2008q4.pdf
Conoco 4th Q earnings slides
http://www.conocophillips.com/NR/rdonlyres/0CD3FC6B-6FB8-4F58-9E55-027EA77804C3/0/4Q08SlidesFinal_color.pdf
Exelon at Credit Suisse Energy Conference
http://library.corporate-ir.net/library/12/124/124298/items/322513/1CE3DDFE-31FD-492F-9EBA-F9DF4CCC7FB8_Exelon%20Credit%20Suisse%20Presentation%20FINAL.pdf
Exxon 4th Q earnings slides
http://www.exxonmobil.com/Corporate/Files/news_release_supp4q08.pdf
GE 4th Q earnings slides
http://www.ge.com/pdf/investors/events/01232009/ge_webcast_presentation_01232009.pdf
ITW 4th Q earnings slides
http://library.corporate-ir.net/library/71/710/71064/items/322119/E7420102-8248-4DF9-B3CB-43030F0C4046_conference%20call%20Q4%202008%20Original.pdf
J&J4th Q earnings slides
http://files.shareholder.com/downloads/JNJ/507121572×0x264950/c2d48b4a-d107-48ee-b793-0f17ab5033ae/4Q08_WCWeldon_V10_Web.pdf
Kimberly-Clark4th Q earnings slides
http://files.shareholder.com/downloads/KMB/507122471×0x267538/d8c42d25-a861-4033-9fea-e1bbeb4d308b/KMB%20Q4%202008%20Review.pdf
Lilly4th Q earnings slides
http://files.shareholder.com/downloads/LLY/539759750×0x268803/c078c446-2294-4b7e-ae22-a4db5b4fe07e/Q4_2008_Slides_Final1.pdf
Medtronic4th Q earnings slides
http://files.shareholder.com/downloads/MDT/539761447×0x249894/37def39b-89ad-4893-bd0e-098ec971c6cb/Medtronic%20Q2%20FY09%20Earnings%20Release
P&G4th Q earnings slides
http://media.corporate-ir.net/media_files/irol/10/104574/PGOND0809Earnings_1302009.pdf
Praxair4th Q earnings slides
http://www.praxair.com/praxair.nsf/24116e7e98e6297f8525705a006f3694/7295003240266f798525754c00152bb4/$FILE/Praxair4Q08TeleconferenceSlides.pdf
Exelon appointed Admiral Richard W. Mies to its board of directors. Mr. Mies is president and chief executive officer of The Mies Group, a consulting firm.
“Richard brings to the Exelon board additional depth of expertise in oversight of nuclear operations,” said John W. Rowe, Exelon chairman and CEO. “His unique combination of nuclear, policy and business experience gained through military service and providing strategic counsel on national security is certain to strengthen the board.”
http://www.exeloncorp.com/aboutus/news/pressrelease/corporate/090202_Exelon+appoints+Admiral+Mies+to+board+of+directors.htm
Sources: AT&T, Bloomberg, Amex, Johnson Controls, Zillow, Roche, Bloomberg, Cisco,, eweek, IBM, Texas Instruments, UBS, Citigroup, UTC, Microsoft, Intel, Fifth Third, UPS, T. Rowe, Halliburton, AT&T, Boeing, Conoco, Exelon, Exxon, GE, ITW, J&J, Kimberly-Clark, Lilly, Medtronic, P&G, Praxair, Exelon, Bureau of Economic Analysis, Census Bureau