Archive for the ‘Uncategorized’ Category

Quick Hit: “Oil Slides While Executives Whine”

The price of oil fell by over $5.00 a barrel yesterday after EIA report was released.

Speculators were running for the exits yesterday as demand for their pumped-up product continues to fall.

Oil Executives of the big five oil companies, Exxon Mobil, Chevron, BP, Conoco, and Royal Dutch Shell, testified before the Senate Finance Committee to justify—after amassing huge quarterly profits—the need of government subsidies of $2.1 billion dollars a year.

In a pre-statement with unAmerican overtones, Conoco-Phillips CEO, James Mulva, called the elimination of the subsidies ‘UnAmerican’ and ‘discriminatory.’

With the oil industry making record profits, why continue subsidies?

Read the rest of this entry »

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Quick Hit: “Bernie Goldfarb, The Laughter Never Stops!”

Last week, on one of his shows, Jon Stewart did what he does best. He exposes people and organizations for their stupidity.

Once again it was the faux journalists from Fox’s fair and unbalanced news shows. One of the featured characters, Bernie Goldfarb, took offense and called out Jon for his comedic sarcasm and explains to Jon that if he wants to be a “Social Commentator” he needs to find some guts.

Obviously Bernie learned nothing from Stewart’s embarrassing dissection of Jim Cramer. If he had he surely wouldn’t have made the mistake that Cramer made. But you have to say it took guts for Bernie to spar with “The Great One.” This exchange is equally entertaining. You gotta watch it.

Seriously, Bernie, to generalize in your diatribe that I, as a viewer of the daily show, am unsafisticated and will laff at anything he says is truly an insult and uncalled for. I represent that remark. Generally speaking, Bernie, I think, as a 62 year old, intelligent caucasian, possessing an uncommon amount of common sense—an element seemingly absent from the tea party events—that I can determine when something is funny and when to laugh.

I will admit, being a disabled veteran, (an amputee) that walking in circles is a little disturbing, even to me. But I’m sure that you won’t generalize that because I’m lacking a limb, “I’m not all there.”

Thank you, Bernie Goldfarb, for your insight. I’ll give it some thought when I watch The Daily Show tomorrow night searching vainly for some good social commentary.

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Quick Hit: “A Wild Ride on the Baltic”

This is not Monopoly nor is it Mr. Toad’s Wild Ride at Disneyland. This is serious and it’s not a ride the shipping industry wants to be on.

Do not pass Go, do not collect $200.

On December 24th I wrote that the Baltic Dry Index had fallen for 14 straight days to a low of 3,005 and was threatening to fall below 3,000 for the first time since October 28th.

After the 1st of the year, the next 22 days the Index looked like a frenetic ride at the famed Disneyland Theme Park. Up and down it went reaching its high of 3,299 on January 15th. It toyed with the highs for the next 6 days, but on the 26th it began its recent decline.

With the exception of a couple small bumps, it has fallen to a low of 2,566. The last time it was below 2,600 was October 7th. It has fallen 2,095 points since its most recent high of 4,661 on November 19th.

The Index has again found its way upward and has risen 148 points to 2,714 over the last 4 days.

But still, the question should be posed.

Is the Baltic Dry Index signaling problems ahead?

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Quick Hit: “Maddeaux, Who Dat in the Big Easy?”

On Friday, Rachel Maddow (Maddeaux), and, Kent Jones, traveled to the delta to do her show from New Orleans.

It was a great idea and a great show that captured their resiliency, vibrance, and spirit. It also exhibited their excitment and enthusiasm for their Saints!

Who Dat? The New Orleans Saints, Dat’s Who!

Her guests included Dr. Norman Francis, President of Xavier University of Louisiana, who gave a brief history of bringing the Saints to New Orleans and the difficulties the city and the team had to overcome. Included a look at the levies with John Barry,  and discussion of the years of erosion caused upriver. Kent took us on a culinary adventure forcing us to watch him enjoy and incredible Po Boy sandwich. And Grammy Award winner Terrance Blanchard and bass player David Pulphus took us out, and on our way to the Super Bowl with a rousing version of “When the Saints Go Marching In.”

I’m sure that video of the show will be posted on The Rachel Maddow Show web site soon.

If you didn’t catch it live you can see it before the Super Bowl.

And after the game you might be yellin—Who Dat?

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Recession? Over? When?

In July of 2008 I wrote a humorous look at the economy and sent it to Harpers Magazine.

It would be another 6 months before the Bureau of Labor Statistics would determine that we had been in a recession for the past year. And many in the Markets, Congress, and the administration were surprised—surprised we were in a recession? Surprised we had been in a recession for over a year?

Amazing!

But Main Street knew. Main Street felt it, and is still feeling it. For many hard-working Americans—especially those that are losing their jobs in huge numbers every week—the recession has not ended. It seems it has only ended on Wall Street, at the Big Banks, AIG, and on CNBC!

Now that the current administration, some economists, a whole hoard of Wall Street analysts, financial television and radio, and the wing nuts on the right have declared an end to the recession I felt it would be a good time to repost the article.

•••••

Read my prescient piece on recession from July of 2008: Read the rest of this entry »

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“Maersk’s Economic Bruise”

In the first nine months of two-thousand and eight everything was smooth sailing for the big shipping companies, especially for the largest shipping firm in the world—Maersk. But, the storm was brewing the last quarter of the year and since the beginning of 2009 it hasn’t been smooth sailing for them or any other shipping company.

The shipping giant reported 3rd quarter losses of $778 million and expects losses to exceed $1 billion for the year. This shipping news doesn’t raise enthusiasm for a recovering economy.

In a recent article by John W. Miller in the Wall Street Journal, “Maersk Signals Slow Sailing Ahead,” Maersk CEO, Nils Smedegaard Andersen sees rough sailing through 2010. Paraphrasing Mr. Andersen, “the shipping industry in general will remain under pressure in 2010.”

Maersk is not the only shipping company with “The Shipping Blues.” Neptune Orient Lines Ltd expects losses of $636 million this year. HHLA AG said its 2009 container revenue would fall 30%. And the bankruptcy of Eastwind Maritime a few months ago reduces global fleet size, but still exposes the fragility of shipping companies under current economic conditions.

Under the pressures of a trade boom bubble that could possibly burst, shipping companies stand to lose billions more through the next couple of years. The industry bet heavily on a fervent global economy and many placed orders for new ships during the height of the economic growth. Now they are scrambling to cancel orders, delay deliveries, or negotiate drastically lower prices.

There is at least some slightly positive shipping news. After the worst September at the Port complex of Los Angeles and Long Beach in 9 years, exports were up in October at the Port of Los Angeles. Ronald D. White who has been covering the West Coast ports, reported the increase in exports in his Los Angeles Times article, “Tide may be changing at Port of L.A.

Despite the increase in exports at L.A., exports were down at Long Beach 10.1 % and imports were down at the 5 biggest West Coast ports by 14.2% in October compared to a year ago. It will difficult to see a ‘real’ recovery until shipping recovers.

Maersk and other shipping companies have been badly bruised by the economic slowdown and it appears it may take a long time for that bruise to heal. As shipping goes, so goes the economy.

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“False Positives”

The markets are still bullish almost 8 months after the March 9th bottom. The Dow closed above 10,000 on October 14th and the bulls have been fighting to stay above it since then. But it has been trending below the ten thousand mark for the last 24 or so days.

The hopes were that earnings for the quarter being reported would be decent. This would give the bulls the ammunition to push the Dow and S&P still higher, well above the 10,000 mark.

So, where is the market going?

Read the rest of this entry »

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“Shades of Shipping Hues”

Shades and hues
of shipping news,
Will not diffuse
the Shipping cues.

And markets choose
or just refuse
to see the clues,
Of the storm that brews
around The Shipping Blues.

There is even more depressing news about the difficulties in the shipping industry. Even niche ports, such as the Port of Hueneme, are being affected by the slowing economy.

The Port of Hueneme, in Ventura County, south of Oxnard, north of Los Angeles lost $1.3 million during their fiscal year ended June 30. The profit at the port was $1 million the previous year. The port relies mostly on automobiles and produce at their 130-acre facility.

Ronald D. white, author of the informative article about the problems at the largest ports in the country, has also written about the difficulties at Port Hueneme, “Tiny Port Hueneme is hit by perfect storm.”

The perfect storm White describes is further evidence of the head-winds confronting a perceived recovery.

Despite the need to rebuild inventories the ports have not seen the benefits. The ports are clearly a leading indicator of the economy, and judging from the current traffic, the future doesn’t look too promising.

The ports are indicating that there is little demand for either imports or exports. Demand is down because the consumer’s purchase power has declined drastically. If the consumer is not able to buy the products there is no need to restock inventories.

Until the consumer returns to spending; which cannot be accomplished without jobs, rising salaries, and a reduction in debt, we can expect a slow holiday season.

Maybe then we will see a ‘real’ decline in the overheated stock markets.

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“The Shit Hit the Fan”

This was the busiest Friday for the FDIC in the last 9 years.

There were 9 banks in 4 states that were seized by the FDIC on Friday. This brought the number of failed banks to 115 through October 30th. By comparison only 18 were seized through October in 2008. There were only 8 failures the rest of that year, all in California, Georgia, and Texas.

Texas lost 3 more banks this week as did California, its 14th failure of 2009. Illinois lost 2 more bringing it within one bank foreclosure of Georgia, which has had 20 banks fail in 2009. All 9 banks were units of FBOP Corp.

The three California banks were each big takeovers: Pacific National Bank of San Francisco had assets of $2.3 billion; San Diego National Bank of San Diego’s assets were $3.6 billion; and the largest, California National Bank in Los Angeles, $7.8 billion, Park National Bank of Chicago, had assets around $4.7 billion.

The FBOP’s collapse was related to mortgage securities purchased from Fannie Mae and Freddie Mac as reported by E. Scott Reckard in the Los Angeles Times, “California National Bank fails, is seized by FDIC.”

The most distressing development was the assumption of all three of FBOP’s units by U.S. Bancorp. For some strange reason the FDIC views U.S. Bancorp as a deserving recipient of failed banks. Not only did they assume the deposits of the three California failed banks but were handed the deposits and assets of all nine banks seized on Friday. The total assets of all 9 banks was a cool $19.4 billion.

This calls into question the integrity of the FDIC. Read the rest of this entry »

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“A Jobless Recovery?” Not This Time!

September’s jobs number was a big disappointment for those that are hoping for positive job creation by the end of this year. The job losses for September slipped back with 263,000 non-farm payroll jobs lost after a better than expected smaller decline in August.

The August number was revised with 15,000 fewer job losses to 201,000, from previously reported 216,000. But July was revised upward adding 28,000 more lost jobs bringing the total to 301,000. for a total of 13,000 more job losses for those two months.

Much has been said about the economy already recovering and the possibility that this, like the last recession, will be a jobless recovery.

Not this time!

Past recessions were not confronted with the problems that exist in this one. The confluence of personal and corporate losses exceed those of the past three recessions combined. Though the downward economic spiral has been slowed, the underlying causes of the financial collapse still exist and are troublesome for any healthy recovery.

Unemployment increased to 9.8% and, as many have stated, is headed for double digits. The highest level of those unemployed during the most recent recessions was approximately 6%.

In previous recessions the job losses were mostly centered around a few industries. But during this recession there has been a widespread decline in all areas of employment: labor, manufacturing, and service. As a result there are few, if any, sectors to help pull us out of this economic quagmire.

What will spur a jobless recovery? Read the rest of this entry »

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