In the latest edition of Better Homes and Gardens I was interviewed for an article called “Before You Refinance” which I believe is a worthwhile piece for anyone considering refinancing their current home loan.  You can read a PDF of Before You Refinance here; or pick up the November issue of Better Homes and Gardens.

The article talks a lot about dubious refinance offers, negative amortization and interest only loans, choosing to pay closing costs vs. not doing so and more.  It’s a good primer for people who are about to jump in the refinance pool.

I’ve written extensively about getting prepared to start the refinance process; and those articles on refinancing are available under the Articles section of this blog.

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Filed under: International markets, China, Economic data

In the weeks ahead, BloggingStocks will take an in-depth look at China’s economic expansion, its impact on the global and U.S. economies, and also review a few stocks likely to benefit from China’s development.

China’s announcement that its economy grew at annualized rate of 11.5% in Q3 has done nothing to quell economists’ concerns that its economy is growing too fast for both the betterment of its mainland citizens and international markets/commerce.

China’s government points to a “successful” slowing of the economy in Q3 to 11.5% from 11.9%. But the minor GDP drop was not what economists were looking for. Economists would have rather seen a Q3 GDP growth rate of 8% or 9% — i.e., a 15%-25% drop in the rate of growth as evidence of a slower economy. Further, little in China’s Q3 report indicated that the country is correcting macroflaws in the economy — namely, too much heavy industry, high energy use, and a dependence on export sales, to go along with another serious flaw: domestic underconsumption.

Regarding the latter, China has taken some measures to help its middle class expand, and domestic consumption is rising. But domestic consumption still is not large enough: China said domestic consumption has accounted for about 37% of economic gains so far in 2007, down from 39% in 2006. In other words, China is still not at a point where consumer spending can support its economy, and also stimulate growth in other countries through the purchase of foreign goods and services.

Continue reading China’s continuing giga-GDP growth

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Filed under: Management, Newspapers, Columns, Mutual funds

In a New York Times column dripping with sarcasm, the brilliant Ben Stein wonders whether we should give top hedge fund managers some taxpayer dollars to manage:

Supposedly, a number of wizard managers consistently earn more than 40 percent a year for their hedge funds. Yes, I know that this conflicts with every bit of investment and market theory — or almost every bit. I know that such a thing should be impossible. But, supposedly, magicians like Steven A. Cohen, founder of SAC Capital in Stamford, Conn., can regularly earn 40 percent a year — often more — on their capital.

But why waste our time on envy or disbelief? Let’s put Mr. Cohen to work for the greater good. Let’s have the federal government issue about $10 trillion in Steven A. Cohen National Debt Retirement Fund Bonds. After interest is paid on the bonds, if Mr. Cohen makes 40 percent on the money, the fund will return 36 percent a year. That means that in only two years, he will have made roughly $10 trillion for the taxpayers, with which he can pay off the entire United States federal debt.

Continue reading Let hedge funds manage taxpayer money?

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Filed under: Management, Citigroup Inc. (C), Merrill Lynch (MER), Bear Stearns Cos (BSC)

The New York Times reports that Merrill Lynch & Co. (NYSE: MER) CEO Stan O’Neal is out. The company has not picked a replacement, but O’Neal will not keep his job, after the brokerage took an $8.4 billion charge for failed credit and mortgage-related investments in the third quarter.

But one has to wonder why he should be the one to take the fall. His peers at Citigroup Inc. (NYSE: C) and Bear Stearns Cos. (NYSE: BSC), both of which also took huge write-downs, are still employed.

O’Neal was a product of his times. He saw that Merrill did not make as much money as it could, so he pressed the firm more deeply into investment banking and underwriting debt for LBOs. The firm began to invest more for its own account and some of those investments were risky.

O’Neal was a brutal cost-cutter and was willing to fire those closest to him if it suited him. His strategy improved the firm’s profits and share price, but he cared nothing for what it cost in morale. He most likely ended up with few allies within his own company. Being a friend was too dangerous.

Merrill’s stock price was $35 in early 2003. In January of this year it traded near $100. Even after all the earning trouble, the share price has doubled in under five years.

Last year, Merrill had net income of $7.5 billion, well above the $4.4 billion in 2004.

But, losing $8.4 billion is unpopular, so whatever O’Neal had done for the firm in the past has been forgotten.

Douglas A. McIntyre is a partner at 247wallst.com.

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Filed under: Consumer experience, Marketing and advertising, Scandals, Media World

In a news piece that is gaining more and more momentum, Rolling Stone issued an article on Friday featuring an interview with hip hop artist Nas about his new album and Universal Music Group’s decision to back his choice for title. Meanwhile, New York area legislators are demanding the State Comptroller withdraw a pension fund from UMG unless the title is changed, arguing that UMG and Nas are “profiting from a racial slur that has been used to dehumanize people of color for centuries.”

Nas can certainly feel confident with his title choice, as the record label has backed him and offered no comment for the piece. According to the rapper, the controversy surrounding the album “is like talking to your children about sex. It’s hard, but it’s important.” Despite the difficulties that may raise among whoever talks about the album, as Nas also states it is “just an album.” Listeners and fans will decide to buy the album presumably on their like or dislike of Nas’s past work and if reviews are positive for this album.

Of course, listeners may be enticed to purchase the album strictly for the title, or they may be turned away. No matter the controversy surrounding the decision, or the decision itself, in the end it appears like any other marketing stunt. Universal Music certainly has nothing to lose in the venture; the company’s share in the music industry is around 30% and they have a wide lead over the next competitor, Warner Music Group (NYSE: WMG), at 25%. In any case, in a month we can see if the controversy amounts to anything and what kind of reception the album will have.

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Filed under: Deals, Consumer experience, Apple Inc (AAPL), AT and T (T), iPhone

Apple Inc. (NASDAQ: AAPL), worried about iPhone supply issues during the holidays, is restricting sales of the handset to two per customer. Also, no cash, only credit cards. Apple wants to know who you are and keep track of whether you are reselling those phones on the internet to make a quick buck.

“Customer response to the iPhone has been off the charts, and limiting iPhone sales to two per customer helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift,” an Apple executive told The Wall Street Journal (registration required). Although the company does not mention it, the move may keep people from buying large numbers of the phones and “unlocking” them so that they can work off the AT&T (NYSE: T) cellular network. AT&T has the exclusive contract to supply a national wireless network for the phone. Every time one is “unlocked” it can be used on competing systems.

Who knows? AT&T may have gone to Apple and made it clear that any program that allows iPhones to be distributed unlocked undercuts that partnership between the two companies. No one outside the companies can tell how much leverage AT&T has.

One thing is certain. If consumers what to send iPhones to all of their friends for Christmas, there is going to be a problem.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Tribune Co. (TRB)

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a foul ball and a plate glass window, these two were meant for one another.

Pity the poor Chicago Cubs fan. The modern Sisyphus has spent a century coaxing his baseball team to the verge of greatness, only to see it collapse into a pile of baseline chalk time after time. The 2007 season was especially painful, after investing $136 million in slugger Alfonso Soriano and inking one of the game’s best managers, Lou Piniella. The team eked into the playoffs, only to be swept in three games by the Arizona Diamondbacks.

The Cubs are part of The Tribune Company (NYSE: TRB), currently in the process of being bought by Sam Zell. Many expect the Cubs to be sold when/if this deal is completed.

Given that the Cubs have provided a century of heartbreak to the windy city, perhaps the team should merge with a company that can make money off of fans’ paroxysms. Emergency Medical Services (NYSE: EMS) could be such a partner.

Continue reading Mergers I’d like to see — Cubbies (TRB) and Emergency Med (EMS)

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Filed under: International markets, Exxon Mobil (XOM), China, Russia, Middle East, Venezuela, Chevron Corp (CVX), ConocoPhillips (COP), BP p.l.c. ADS (BP), Canada, Technical Analysis, Commodities, Oil

Oil Update: Oil is now above $90 per barrel. This latest push higher by oil was blamed, for the most part, on tensions between Turkey and Kurdish Workers Party (PKK) rebels seeking Kurdish independence, which threatens to disrupt oil transport in northern Iraq. Crude oil reached new nominal high Friday of $92.22, although in real terms the price is still below oil’s inflation-adjusted high of $101.70 set in April 1980 during the Iran hostage crisis.

Here’s a snapshot of crude oil market conditions using three analytical frameworks, or measuring sticks, if you will, with a note on several intangibles:

Geopolitical: Add the Turkey/Kurd dispute to Iran (nuclear technology/weapons) and the Iraq War ,to confrontations and military actions that are adding a “war premium” to the price of oil. Depending on the analyst, that war premium has inflated crude oil’s price by $10-$25 per barrel. Political unrest in Nigeria and a hawkish stance in Venezuela also items on analysts’ radar screens.

Continue reading Turkey/PKK dispute contributes to oil’s push higher

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Filed under: AT and T (T), New York Times’A’ (NYT), Comcast Cl’A’ (CMCSA), Gannett Co (GCI), Level 3 Communications (LVLT), Time Warner Cable (TWC)

A collection of widely traded stocks making 52-week lows often shows sentiment for which industries and investing themes are out of favor.

Some of last week’s lows:

Level 3 Communications (NASDAQ: LVLT): The company has one of the largest data and voice networks in the country. But pricing pressure on bandwidth costs and trouble integrating acquisitions did a tremendous amount of damage to the shares when the firm announced third quarter numbers. The stock traded as low as $2.90, down from a 52-week high of $6.80. But, LVLT’s real sin is the amount of debt it carries — almost $7.4 billion. The current market hates balance sheets that indicate too much borrowing.

Continue reading A look at the market through 52-week lows

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Filed under: Press releases, Rants and raves, Scandals, Politics, Sunday Funnies, Headline news

This one obviously became “A Bridge Too Far” fetched, as Alaska Abandons Infamous ‘Bridge to Nowhere’ included in last year’s budget as part of the traditional pork-barrel spending that goes on in Washington — usually following long speeches about trimming the fat.

There is probably nothing more universally consistent in a campaign speech than the promise to cut federal spending. Of course politicians are equally consistent on failing to do so once they are in office. However, in the case of this infamous bridge to an Island of a few hundred residences, the political heat, under the proverbial magnifying glass, was too much.

The public outrage and direct lobbying from various budget watchdog groups and with the support of Senator Tom Coburn, Representative Jeff Flake, and Representative Mark Kirk, the State of Alaska has officially abandoned plans to pursue the infamous Gravina Bridge. Money is still earmarked for the state, but the recently elected new governor decided to drop the project.

Continue reading Sunday Funnies: Alaska abandons infamous ‘bridge to nowhere’

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