For the most part, today's Federal Open Market Committee (FOMC) meeting stuck with the program: Keep things calm before Election 2012. "As expected, the Fed wants to stay out of the way of the election and be uninvolved in influencing it. This is what the market expected and it should have no lasting impact on […]
Archives for October 2012
October 2012 - Page 5 of 20 - Money Morning - Only the News You Can Profit From
Dow Chemical (NYSE: DOW) Job Cuts Add to Frightening Trend
The snail's pace recovery from the Great Recession just claimed thousands more victims, with more to come.
On Wednesday, The Dow Chemical Co. (NYSE: DOW), the largest chemical maker in the U.S. by sales, announced 2,400 job cuts. It will also shutter 20 plants in attempts to reduce costs by $500 million as it deals with the gnawing global slowdown.
Facilities to be closed are dotted around the world and include locations in the United States, Belgium, the Netherlands, Spain, the United Kingdom and Japan, according to a press release from the Midland, MI-based company.
The Dow job cuts amount to 5% of the company's global workforce.
Dow CEO Andrew Liveris noted back in July the company is operating in the worst conditions since 2009.
Liveris said in a statement, "The reality is we are operating in a slow-growth environment in the near-term. While these actions are difficult, they demonstrate our resolve to tightly manage operations-particularly in Europe-and mitigate the impact of current market dynamics."
And Dow isn't alone.
Juniper Beats 3Q Ests, View Cautious - Analyst Blog
Juniper Networks Inc. (JNPR) posted adjusted earnings per share (EPS) of 14 cents in the third quarter of 2012, above the Zacks Consensus Estimate of 10 cents. Revenues Juniper’s third quarter revenues inched up 1.1% to $1.12 billion from the year-ago quarter and came slightly above the Zacks Consensus Estimate of $1.07 billion. The marginal […]
Beat and Raise Quarter for Amgen - Analyst Blog
Amgen (AMGN) continued its strong performance in 2012 with third quarter earnings coming in at $1.66 per share, 23 cents above the Zacks Consensus Estimate and 19.4% above the year-ago period. Higher revenues, cost discipline and a lower share count contributed to the year-over-year increase in earnings. Total revenue increased 9.5% to $4,319 million in […]
Home Loan Servicing Solutions - Momentum
Since its third quarter results last week, shares of Home Loan Servicing Solutions, Ltd. (HLSS) have surged about 5.2% to hit a fresh 52-week high of $19.90 on October 22. It also has a solid year-to-date return of 51.3% and an expected long-term earnings growth rate of 5%. The rising share price and positive estimate […]
The Next Stock Market Crash Will Be Bigger Than "Black Monday"
Friday was the 25th anniversary of Black Monday. On October 19, 1987 the Dow Jones Industrial Average fell 508 points, or a mind-numbing 22.6%.
How bad was it?…
Let's put it this way, if it happened today the Dow would drop 2,965 points on the session to finish at roughly 10,158. You can imagine the depression.
Now you know why they call it "Black Monday," even though it occurred in a sea of red.
In absolute or percentage terms it was the largest one-day drop ever– beating the 13.6% drop on the worst day of the 1929 crash.
But then again, the 1929 crash was caused only by human beings. The 1987 event, on the other hand, was largely computer-driven. Of such is progress made!
For British observers like me, Black Monday was memorable as being the first business day after the Great Storm, the first hurricane to hit the British Isles since 1703.
The relief at not having lost a third of the British Navy, which happened on the previous occasion, made Black Monday seem a minor hiccup. I actually bought some shares as the U.S. markets opened, and was delighted to see that they closed at a higher price than I paid!
There was also the satisfaction of hearing about a rather smug ex-colleague, who had received a large payout from the bank where we had worked (no such payout came my way, alas) and had invested it and margined 50% in the U.S. market.
Alas, blessed by Fortune though he was, he was awakened at 1:30 am London time by a margin call for $700,000. I always felt it was something of a fitting recompense for greed and creepiness to authority.
How the Market Crashed
Of course, those whose trading lives don't extend back to 1987 doubtless feel that it can't happen again.
Well, I have news for you….
To continue reading, please click here...
Energy Prices 2013: Renewable Power Could Cause Your Electric Bill to Plummet
As we come to the end of an election campaign cycle, something else will be ending as well.
Wind subsidies.
A poster child for the ongoing debate over government support for renewable energy, the wind subsidy will expire at the end of 2012. Amidst the fog and din of a political war, Congress is not going to renew it.
The wind subsidy amounts to a tax credit of some $22 per megawatt hour. Critics note that the wholesale price of electricity in many parts of the U.S. costs $44. That means the credit accounts for 50% of the grid cost.
On the solar energy side, the primary federal subsidy provides a tax credit of 30% for the cost of installed equipment. That will drop to 10% at the end of 2016. Already, a separate cash grant for up to 30% for solar energy equipment expired at the end of 2011.
Of course, both approaches have generated a considerable amount of criticism from mainly conservative opponents.
These critics claim that the only reason wind and solar are even in the game is because of these subsidies. Without them, they argue these sources of energy are not cost effective otherwise.
Then, there are others who prioritize environmentally friendly energy sources. But the penchant against government involvement and the assumption that federal subsidies are always an inefficient usage of taxpayer funds are at the core of the argument.
So, who is correct?
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Why Facebook Stock Soared After Earnings Report
Facebook stock (Nasdaq: FB) was up almost 10% in the first 30 minutes of after-hours trading today (Tuesday) after the release of its third-quarter earnings report, its second as a public company.
Releasing earnings after market close, the social network leader posted earnings per share of 12 cents, on revenue of $1.26 billion, or 32% higher than the year-ago quarter.
While Facebook did not provide an outlook following its uninspiring second quarter release, analysts were looking for 11 cents per share on revenue of $1.2 billion, according to data from Thomas Reuters.
But this positive vibe doesn't mean Facebook's earnings problems are solved.
This Year's Most Outrageous Examples of Wasteful Government Spending
With bloated federal budgets pushing the United States deeper and deeper into debt, you'd think Congress finally would be putting a stop to wasteful government spending.
Not a chance.
Despite all the handwringing over the rapidly approaching "fiscal cliff" and a debt exceeding $16 trillion, lawmakers have voted to squander tax money on everything from what astronauts might eat on Mars to mind-numbing musicals about global warming.
Last week Sen. Tom Coburn, R-OK, released his annual "Wastebook," which spotlights 100 examples of absurdly wasteful government spending from the previous year.
The items on this year's list add up to $18 billion in government waste. While even Coburn admits that's just a tiny fraction of the $3.7 trillion federal budget, it illustrates how carelessly Washington dispenses with taxpayers' hard-earned money.
"Each of the 100 entries highlighted by this report is a direct result of politicians who are preoccupied with running for re-election rather than running the country, which is what they were elected to do in the first place," Coburn said in the report.
Wasteful Government Spending: 13 Mind-Blowing Expenses
Instead of just bickering about wasteful government spending, Congress should get the ball rolling by going after all the low-hanging fruit in the federal budget.
Here are 13 of the most wasteful government spending examples in 2012, and they all but beg for the budget ax:
- Little Green Menus: NASA spends $1 million a year on developing recipes for foods which astronauts could prepare while visiting Mars, even though the agency has no plans to go there any time soon. But just in case NASA changes its mind someday, it wants to ensure that astronauts on Mars don't experience "menu fatigue."
- Why Fruit Flies Fall in Love: The National Institutes of Health spent $939,771 on research that has discovered male fruit flies are more sexually attracted to younger female fruit flies. "Video of the encounter," the scientists wrote, "showed that the male was much more attracted to the young fly."
If you thought those were bad, they get even worse...
What the Fed Will Do at Today's FOMC Meeting
Optimism swept over investors following the September Federal Open Market Committee (FOMC) meeting, but don't expect the same when this month's two-day Fed meeting wraps up tomorrow (Wednesday).
In fact, don't expect much of anything. No surprises and nothing new are expected.
It's widely agreed that the historic low interest rates won't be raised anytime soon, and there will be no grand announcements of any further game-changing stimulus programs like the Sept. 13 QE3 statement.
No new policy measures are forecast either, as focus has shifted to the Nov. 6 presidential election. Minutes from the meeting will be released Nov. 15, after ballots are cast.
This month's meeting will be more ho-hum and about discussions not delivery.
"The Fed has entered a holding pattern while watching for signs of a substantial improvement in the labor market," Ellen Zentner, senior U.S. economist for Nomura Securities told MarketWatch.