Author Archive

• Expect a Strong Jobs Report This Friday
  Eddy Elfenbein, March 5th, 2012 at 1:51 pm

  Wall Street is gearing up for the Labor Department’s next report on the jobs market which is due out this Friday. As I’ve discussed, the jobs market has become unusually closely tied to the fortunes of the stock market. Profit margins have gone as far as they can. What this economy needs is more consumers.

  The jobs report normally comes out on the first Friday of the month but due to February being temporally challenged, this report will come out on March 9th.

  The question is: Will we see another 200,000+ non-farm payrolls report? The current consensus expects a gain of 213,000 jobs which is a very good number.

  

  My take is that we should expect to see a strong report this Friday. There are a few reasons why. The first is that the initial jobless claims reports have been very good recently. Also, and this may sound odd, higher gasoline prices may indicate that the economy is doing better at the ground level. We’ve also seen decent reports on housing and retail sales.

  The last few jobs reports have been pretty good. The December report showed a gain of 203,000. We gained another 243,000 in January. I expect to see those numbers revised in Friday’s report.

  Still, we shouldn’t get too excited. Over the last 23 months, the U.S. economy has created 3.165 million jobs. That sounds good, but in the 25 months prior to that the economy lost 8.779 million jobs. In other words, as well as we’ve done, we’ve only gained back roughly one-third the number of jobs lost.

• Stocks Love Gridlock (But Only One Kind)
  Eddy Elfenbein, March 5th, 2012 at 9:56 am

  This is already the best year for the Dow since 1998. At the WSJ, E.S. Browning finds some interesting facts:

  Since 1900, the Dow has averaged a 7.8% annual gain under Democratic presidents, compared with a 3% annual gain under Republicans. With a Democratic president and a Republican Congress, the Dow has gained an average 9.6% a year.

  The worst mix has been a Republican president and a split or Democratic Congress, which on average has produced little or no gains.

  Bespoke Investment Group, in Harrison, N.Y., has uncovered another fact: Only four presidents elected since 1900 have seen the Dow rise 50% or more during their first three years. One is the current president. For the other three—Franklin Roosevelt, Dwight Eisenhower and Bill Clinton—the Dow’s average gain during the fourth year in office was 19.7%. All three were re-elected.

  According to InTrade, it’s quite possible that we’ll see President Obama re-elected and Republicans gain control of both houses of Congress.

• China Cuts Its Growth Rate to 7.5%
  Eddy Elfenbein, March 5th, 2012 at 9:26 am

  I’m happy to report that I’m back at the helm and I’ve fully recovered from whatever it was. Thanks for the get-well emails.

  The stock market looks like it’s going to open lower this morning due to poor economic news from Europe. Also, Wen Jiabao, the Premier of China, said that China’s economy will grow by 7.5% this year. That kind of growth sounds great to us but it’s actually an eight-year low.

  There’s some kinda good news from American International Group ($AIG). AIG said it’s going to sell a big chunk of holdings in AIA Group Ltd., the Asian life insurance company, in order to pack back the U.S. Treasury.

  AIG currently owns about one-third of AIA and they’re planning to sell a bit less than half of their position. This deal will send about $8 billion the government’s way. Not including this deal, AIG still owes the government about $50 billion.

  The U.S. Treasury’s break-even point on AIG is $29 per share and the stock is just above that right now. I would have to think that the Obama Administration would enjoy privatizing AIG just before the election.

• Morning News: March 5, 2012
  Eddy Elfenbein, March 5th, 2012 at 5:47 am

  Merkel Sees Euros Minted From Marks in Trial of German Integrity

  Dallara Says Debt Swap Is on Track

  End of Irish Europe Love Affair May Hurt Bonds

  Foreign Investment in Europe Starts Anew

  Chinese Congress Opens With Upbeat Economic Assessments, and Eyes on the Top

  Apple’s Job Creation Data Spurs an Economic Debate

  AIG Selling $6 Billion of AIA Shares, To Repay Bail-out

  BlackRock’s Bullish Approach to Asia

  India’s Hero Eyes Ducati Amid Takeover Quest

  BP Gains Most in a Month on Gulf Settlement

  Deepwater Oil Drilling Picks Up Again as BP Disaster Fades

  Jaguar Land Rover, Chery Seek OK for $2.8 Billion JV

  SingTel Unveils New Structure and Strategy, Buys Amobee for $321 Million

  James Altucher: Did Obama Really Say He Wants Everyone to Go to College?

  Howard Lindzon: YELP Goes Public…StockTwits Social Web Index Update (SWEB) – The Winners and The Losers

  Be sure to follow me on Twitter.

• Wonder Why People Don’t Like Wall Street
  Eddy Elfenbein, March 2nd, 2012 at 11:02 pm

  Well, that’s not much of a mystery. But still. I really want to see this guy punished:

  Morgan Stanley’s William Bryan Jennings, the bank’s bond-underwriting chief in the U.S., was charged with a hate crime in the stabbing of a New York City cab driver of Middle Eastern descent over a fare.

  William Bryan Jennings?? Seriously?? Who named this guy — Richard Nixon Milhous?

  Mohamed Ammar said the banker attacked him Dec. 22 with a 2½-inch blade and used racial slurs after a 40-mile ride from New York to the banker’s $3.4 million Darien, Connecticut home.

  Jennings, who had attended a bank holiday party at a boutique hotel in Manhattan before hailing the cab, refused to pay the $204 fare upon arriving in his driveway, the driver said. When Ammar threatened to call the local police, Jennings said they wouldn’t do anything to help because he pays $10,000 in taxes, according to a report by the Darien police department.

  Ammar, a native of Egypt, said he then backed out of the driveway to seek a police officer. The banker called him an expletive and said “I’m going to kill you. You should go back to your country,” according to the report, filed in state court in Stamford. A fight ensued as they drove through Darien, and Jennings, 45, allegedly cut Ammar, 44, police said.

  The banker, who eventually fled the cab and turned himself in two weeks later after a vacation in Florida, was charged with second-degree assault, theft of services and intimidation by bias or bigotry. He faces as long as 5 years in prison on the assault charge.

• Morning News: March 2, 2012
  Eddy Elfenbein, March 2nd, 2012 at 5:50 am

  Barclays Takes 8.2B Euros of ECB Money

  Life as Libor Traders Knew It Seen as Abusive

  German Retail Sales Fall

  Swaps Committee Rules No Greece Credit Event on ECB Debt Swap Agreement

  Anheuser Busch-InBev on Shortlist for China Brewery Deal

  Lukoil Shelves $1.8 Billion U.S. Shale Deal

  Oil Tops $110 on Saudi Pipeline Report: Commodities at Close

  Obama Seeks to End Subsidies for Oil and Gas Companies

  Bernanke Has a Day of Sedate Testimony

  Initial Jobless Claims in U.S. Lowest Since March ’08

  Chrysler Sales Increase 40%

  Buffett’s Insurance Growth Engine May Stall

  Southwest, AirTran Receive FAA Milestone

  Where the Jobs Are, the Training May Not Be

  Yelp Prices Its Offering at $15 a Share

  Joshua Brown: Reverse the Streams! Equity Fund Flows Go Positive

  Roger Nusbaum: Bonds Have Lost Their Purpose?

  Be sure to follow me on Twitter.

• Out of Commission
  Eddy Elfenbein, March 1st, 2012 at 10:25 am

  I have to apologize, folks. There’s a flu going around that’s unfortunately gotten to me.

  *GROAN*

  I’m a little feeling better but posting will be light.

• Morning News: March 1, 2012
  Eddy Elfenbein, March 1st, 2012 at 5:38 am

  Monti Expects Euro Debt Firewall Deal This Month

  ECB Said to Buy Portuguese Notes as Bank Returns to Market After a Pause

  IMF Staff Backs Currency Intervention as a Policy Tool in Emerging Markets

  Indian Manufacturing Expands at Close to the Fastest Pace in Eight Months

  Spain’s Plea for Fiscal Leniency Challenges Rules

  Asian Factories See Pick Up in New Orders

  Tensions Raise Specter of Gas at $5 a Gallon

  Bernanke Quells Talk of Fresh Fed Stimulus

  Fannie Mae Challenges Bank of America on Rift

  Nasdaq 3000 Is Rally’s Latest Milestone

  Bonuses Dip on Wall St., but Far Less Than Earnings

  Cantor Bankers Defect to China in Talent War

  Substantial Growth in Ads Is on the Way to Facebook

  Goldman and Cinven to Sell Ahlsell for $2.4 Billion

  A.M.D. Buying SeaMicro for $334 Million

  Cullen Roche: Shutdown the Corporations?

  Jeff Carter: Jumpstarting an Economy

  Be sure to follow me on Twitter.

• Morning News: February 29, 2012
  Eddy Elfenbein, February 29th, 2012 at 5:55 am

  ECB’s Second Three-Year Loan May Be Last

  Europe Delays Debt Talks After Signs of Uncertain Support

  Papademos Gets Backing for $4.3B of Cuts

  Swap Talks Over Greece Could Test the Market

  France Says Google Privacy Plan Likely Violates European Law

  Japan Industrial Output Beats Forecast

  U.S. Cuts Iran Cash Pipeline

  Jewelers Want Platinum for Asians After Gold Vaults

  Home Prices Hit New Depths

  Taxpayers Win as Fed Wraps AIG Bond Sale

  Apple Dividend May Return Part of $98 Billion Cash

  A Record Buyout Turns Sour for Investors

  CVC to Buy Nordic Group Ahlsell for $2.4 Billion

  Standard Chartered Profit Climbs to Record

  Charges Push First Solar Into the Red

  Credit Writedowns: Miserable Wants Company

  Joshua Brown: Kitchen Nightmares – Wall Street Style

  Be sure to follow me on Twitter.

• Morning News: February 28, 2012
  Eddy Elfenbein, February 28th, 2012 at 5:32 am

  Merkel Wins Greek Aid Vote After Warning Lawmakers

  S&P Downgrades Greece To Selective Default, Cites CACs

  Greece Running Out of Alternatives: Krugman

  Santander Agrees to Take Over Polish Bank

  Spain’s Task Gets Tougher After Deficit Miss

  “Big Four” Auditors Brace for Big Changes in China

  Blueprint of China Reforms Leaves Role of Party Vague

  A U.S. Boon in Low-Cost Borrowing

  Bending the Tax Code, and Lifting A.I.G.’s Profit

  U.S. Rule Set for Cameras at Cars’ Rear

  Blackstone Makes $2 Billion Natural Gas Investment

  Bayer Cuts Outlook as Plastics Disappoint

  Panasonic Picks TV Head as New President, Record Loss Looms

  Once Film-Focused, Netflix Transitions to TV Shows

  Dividing Dimon? Analyst Offers Case for a JPMorgan Split

  Cullen Roche: Understanding the Modern Monetary System

  Stone Street: Why I’m Not Looking for a Weak NFP Number

  Be sure to follow me on Twitter.