2009 February | money blog

Continue reading Chasing Value: Anglo American upgrade/downgrade

28 02 2009

Chasing Value: Anglo American upgrade/downgrade

Posted by: admin in Stocks Money News

Filed under: International markets, Analyst upgrades and downgrades, Competitive strategy, JPMorgan Chase (JPM), Goldman Sachs Group (GS), Chasing Value, Anglo Amer ADR (AAUK), Best Stocks for 2009

Today one of my picks for the year, Anglo American ADR (NASDAQ: AAUK), was upgraded from neutral to buy at the investment bank now regular bank Goldman Sachs Group, Inc. (NYSE: GS).

It was only yesterday that AAUK was downgraded from neutral to underweight by JPMorgan Chase & Co. (NYSE: JPM). No doubt they were responding to the news that Standard & Poors cut Anglo’s rating two notches to ‘BBB’ based on it’s 40% leverage and the potential for its cash-flow and income to be impacted by continuing soft markets throughout the year in many commodities.

Chasing Value: Anglo American upgrade/downgrade originally appeared on BloggingStocks on Fri, 27 Feb 2009 17:35:00 EST. Please see our terms for use of feeds.

Continue reading Texas Roadhouse (TXRH) Q3 earnings show consumers staying away

28 02 2009

Texas Roadhouse (TXRH) Q3 earnings show consumers staying away

Posted by: admin in Stocks Money News

Filed under: Major movement, Earnings reports, Bad news, Industry, Options, Technical Analysis

Texas Roadhouse (NASDAQ: TXRH - option chain) shares are dropping today after the company reported a third-quarter profit of $8.6 million, or 12 cents per share, missing analysts’ estimates of 13 cents per share. TXRH also warned that earnings for 2008 will be flat with last year’s numbers.

It has been common wisdom that worried consumers won’t be spending their cash on casual dining until they feel more confident about the economy, and the flat full-year forecast from TXRH seems to add weight to that thesis. If you think this stock won’t be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on TXRH.

This morning, TXRH opened at $6.91. So far today the stock has hit a low of $6.23 and a high of $6.96. As of 12:20, TXRH is trading at $6.21, down $0.93 (-13.0%). The chart for TXRH looks bearish and S&P gives TXRH its lowest 1 STARS (out of 5) strong sell ranking.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $7.50 range.

Texas Roadhouse (TXRH) Q3 earnings show consumers staying away originally appeared on BloggingStocks on Tue, 28 Oct 2008 12:52:00 EST. Please see our terms for use of feeds.

Continue reading Short-term interest rates fall on central bank cash injections

28 02 2009

Short-term interest rates fall on central bank cash injections

Posted by: admin in Stocks Money News

Filed under: International markets, Financial Crisis

Notch another day of modest progress for the credit markets.

Short-term interest rates declined early Tuesday, as several central banks in Europe injected more cash into the financial system. The London rate for three-month loans in dollars fell 4 basis points to 3.47%, its 12th straight daily decline. The three-month rate for the euro, or Euribor, fell 5 basis points to 4.85%. However, interest rates in Asia rose, with the Hong Kong interbank offer rate, or HIBOR, rising 10 basis points to 3.84%

In addition, the difference between what banks and the U.S. Treasury pay to borrow dollars for three months, the TED spread, narrowed 14 basis points to 262 basis points Tuesday. The TED spread has now declined 172 points from 434 basis points more than a week ago.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

Short-term interest rates fall on central bank cash injections originally appeared on BloggingStocks on Tue, 28 Oct 2008 09:55:00 EST. Please see our terms for use of feeds.

28 02 2009

Wondering how much of your money will go towards “fixing” the problem?

Posted by: admin in mortgage industry

A great graph by EconomPicData shows just how much of the cash dolled out by Hank Paulson will actually remain in the system. The bottom line? From the $125 billion handed out to-date to the largest 9 banking institutions a mere $17 billion will go towards recapitalizing the system. The rest? Yup - bonuses and compensation.

My head just exploded.

From EconomPicData via Alternet:

It turns out that the nine banks about to be getting a total equity capital injection of $125 billion, courtesy of Phase I of The Bailout Plan, had reserved $108 billion during the first nine months of 2008 in order to pay for compensation and bonuses.

Source [blownmortgage]

28 02 2009

Squatters and Foreclosure: Who Lives Here?

Posted by: admin in mortgage industry

Possession, they say, is nine-tenths of the law. Unfortunately, when the remaining tenth is a mortgage, both homeowners and renters can find themselves evicted as part of the foreclosure process.

Results of an email survey of community and state homeless coalitions conducted by the National Coalition for the Homeless indicate that nearly 61 percent of respondents were already seeing an increase in homelessness before April 2008 when the report was published. More than 37 percent of those responding stated people were able to rent which researchers believe was an indication that they were former homeowners who had lost their homes through foreclosure. The number of foreclosures has continued to increase since the survey was taken so the number of people who are homeless as a result of foreclosure is also probably grown.

Although the housing market has also slowed, not all of the homes vacated because of foreclosure are remaining empty. Across the country foreclosed and abandoned properties are being occupied by squatters. Most squatting is random and unorganized. People seek temporary shelter then move on. Recently, however, some organized attempts to move homeless people into vacant properties for extended residency are being made.

In California, SignOnSanDiego.com reports that individuals claiming to be part of a religious order called the Sovereign Solomon Brothers Archbishop Corporation Sole are filing false grant deeds on foreclosed properties. They aren’t stopping there, either. They a moving tenants into the properties. some of the tenants may have been made homeless by foreclosure themselves. It is unclear whether the tenants knew their occupation of the property is based on questionable legal grounds. Since the recorder’s office is not responsible for verifying the authenticity of the documents being filed, it is often not until a property is resold and a new owner tries to move in that the situation is recognized. By then, determining who the rightful owner of the property is and who has the right to occupy it can take weeks or longer. At least one person has been arrested and charges with filing false documents in connection with this scheme.

A group of homeless activists calling themselves Take Back the Land has helped six families move into foreclosed properties in Miami, FL, according to the Associated Press (AP). This group also helps the families with used furniture, cleaning supplies and even landscape maintenence. No charges have been filed against either the group or the squatters. The City says it is the responsibility of the prpoerty owner, in this case the mortgage lender, to remove squatters or to file complaints that would allow law enforcement to take action.

It is not only recently vacated property that is being occupied or the homeless who are moving in. An “old house that was not properly locked up” became the hiding place for a fugitive in Vermont, WCAX.com reports. This situation demonstrates the dangers of squatting, both for the squatters and the community. In addition, vacant properties can pose health and fire hazards, as well as attracting criminal elements.

There are no quick fixes for the mortgage crisis, vacant properties or homelessness. The National coalition for the Homeless recommends requiring lenders nationwide to file foreclosure deeds within 30 days of the foreclosure sale in order to help identify the reighful owners and tenants of foreclosed properties. They also advocate protecting any existing agreements with tenants or renters and allowing their leases to survive the foreclosure process rather than automatically evicting them when the ownership fo the property is transferred to the mortage company or bank. Of course, the best solution is to help homeowner avoid foreclosure and prevent homelessness, not just during the current crisis but over the long term.

Source [blownmortgage]

27 02 2009

Afternoon Quickie 02/24/2009

Posted by: admin in mortgage industry

Calculated Risk - KCET: The Trashout Squad
The Big Picture - Implode-o-Meter Rolls Out Campaign Against “FHA Subprime”
Mortgage Insider - U.S. doesn’t need to seize banks, Fed chief says
Huffington Post - The Hottest Recession-Proof Jobs
Financial Times - Bernanke calms nationalisation fears

Source [blownmortgage]

Continue reading Growth Matters: Cellfire puts coupons into your mobile

27 02 2009

Growth Matters: Cellfire puts coupons into your mobile

Posted by: admin in Stocks Money News

Filed under: Competitive strategy, McDonald’s (MCD), Kroger Co (KR), Technology

With all the gloom in the global economy, I got to wondering whether there is anything else going on in the world of business. I’m looking for growth because I think that’s what will ultimately bring the economy out of the doldrums. Not surprisingly, that growth is coming from technology companies. In Growth Matters, I look at consumer technology companies that point the way to growth trends — and in the process introduce services and products you may want to explore.

With people looking to save money, coupons are more important than ever. But wouldn’t it be great if you could get the benefits of a coupon without clipping them and taking them with you shopping? If you have a cell phone, you can get this with Cellfire.

Growth Matters: Cellfire puts coupons into your mobile originally appeared on BloggingStocks on Fri, 27 Feb 2009 12:45:00 EST. Please see our terms for use of feeds.

27 02 2009

Elie Wiesel suggests a punishment for Madoff

Posted by: admin in Stocks Money News

One of the saddest stories to come out of the Bernie Madoff saga is that of Elie Wiesel. The Holocaust survivor, Nobel Laureate and activist saw nearly all of the assets of his foundation wiped out in the Ponzi scheme. Wiesel also lost a huge chunk of his personal wealth.

“This was a personal tragedy where we discovered all of a sudden what we had done in 40 years - my books, my lectures, everything - was gone,” he said at a panel discussion on Thursday.

Asked what he thought Mr. Madoff’s punishment should be, he said this: “I would like him to be in a solitary cell with only a screen, and on that screen for at least five years of his life, every day and every night, there should be pictures of his victims, one after the other after the other, all the time a voice saying, ‘Look what you have done to this old lady, look what you have done to that child, look what you have done,’ nothing else.”

If Bernie Madoff weren’t a psychopathic animal without a conscience, that would be a great punishment. But knowing what we know about him, it seems unlikely that it would have any effect.

I say we save Madoff for the iron maiden.

Filed under: Scandals

Elie Wiesel suggests a punishment for Madoff originally appeared on BloggingStocks on Fri, 27 Feb 2009 15:10:00 EST. Please see our terms for use of feeds.

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LATE UPDATE: NYT reports Ben Bernanke sketched out a range of options, including buying delinquent mortgages in bulk and refinancing them into government-backed programs, writing down the value of a loanâ€™s principal amount in â€œcases of badly underwater mortgages,â€ to reflect the decay in real estate values, and bolstering a program run by the Federal Deposit Insurance Corporation that seeks to lower homeownersâ€™ monthly payments on delinquent mortgages.

27 02 2009

Treasury thinks about maybe spreading TARP to foreclosures

Posted by: admin in mortgage industry

A guest post from Constantine von Hoffman, veteran business journalist and author of the blog CollateralDamage.biz, a satirical look at marketing and business.

Latest news has it that the Treasury Dept. is thinking really hard about maybe using some of the $700 billion from the Troubled Assets Relief Program (TARP) to do something about home foreclosures.

Neel Kashkari, who has to administer the Troubled Assets Relief Program, told Senators, “We continue to aggressively examine strategies to mitigate foreclosures and maximize loan modifications.” It is well worth noting that Kashkari offered no actual details as to what this might mean.

This doesn’t seem to indicate any change in Henry Paulson’s willingness to consider an FDIC plan to help homeowners. “Under the FDIC proposal, the government would seek to encourage lenders to modify loans by offering to share the cost of any defaults. The FDIC has said its proposal could prevent about 1.5 million foreclosures.” Paulson has said that use of TARP money for this would be a misuse of the funds. This is odd given his willingness to spend the money on just about anything except homeowners.

Fortunately FDIC chair Sheila Bair does seem to be the only major player in all this concerned with only helping homeowners. And she wants to know how we will get out of all this, too. On Tuesday Bair said that if the government doesn’t devise a way out of its massive financial rescue plan it runs the risk ofÂ becoming a crutch for banks and other institutions over the long term.

“We really need to think through the exit strategy because (government guarantees) could become a crutch,” she said. Weaker financial institutions “need to be allowed to fail,” Bair added.

Bair certainly does seem to be leaning towards some sort of plan built around the Bank of North Dakota model. What’s that, you ask?

Maybe it’s time to try something new. Maybe it’s time for state governments–with federal help–to start some new banks with clean balance sheets that can begin lending on the day they open their doors. There is precedent for this.

There is the Bank of North Dakota. The BND was established by the state of North Dakota, which owns it, in 1919. The reason for its existence is that the farmers and small businessmen of the state were confounded by the same impossibility to secure loans back then that has frozen the nation in place in 2008. The banks were not lending, so the state started a bank which did lend and does to this day. It is making student loans and other kinds of loans that are unavailable elsewhere. The bank is the depository institution for the State of North Dakota’s funds and it also accepts deposits from ordinary people and businesses. Since it is a socialistic institution, not intended to make a profit, it does not have a motive to misbehave, as our private enterprise banks have done.

Any state can start its own bank using the funds it has deposited in private banks. That comes to many billions, and withdrawing so much money at one time could be all that is needed to send any number of banks into death throes. So the switchover would have to be carried out gradually with the federal government, which is so free and easy with its cash, supplying the startup money. (Nepotism alert: author of the above is Nick von Hoffman, my father.)

The BND is a non-profit with very limited services and is not FDIC insured, so it isn’t really a competitor to the commercial banks. It is worth noting that the BND has never in 90 years lost money.

In the spirit of bipartisanship — and common sense — why didn’t Bair get a Cabinet post?