*you do know how to read the fine print now riggght? You have all been given credit card rate increases so I know you all got the fine print. No excuse. What does this say? COST CUTTING brings profits but SALES WERE OFF. Surprise surprise, let the season begin. I know I should be happy that markets will rise on all of this jiggering, but like I said last night to a sweetie, I just wish they would also tell the investor when it was time to GET THE HELL OUT before it collapses. So I guess I will have to tell you. Pay attention: When the market hits 10,000 you SELL everything!
Surprise profit from Alcoa kicks off earnings season
Aluminum producer Alcoa announced third-quarter earnings of 4 cents a share, the company's first quarterly profit in a year. Alcoa also reported better-than-expected revenue. Bruce Shalett, managing partner of Wynston Hill Capital, said earnings will be the key factor driving capital markets for the next few weeks. "You can't save your way to prosperity, only survival," he said. Forbes (07 Oct.)
Lack of consumer credit hurts U.S. economy
In its seventh straight month of decline, total outstanding consumer credit fell $12 billion in August, or a 5.8% seasonally adjusted annual rate, the Federal Reserve said. Consumer spending amounts to 70% of U.S. economic activity, so its decline is a bad sign for recovery. "The U.S. economy is geared for consumption, so it's going to be hard to get it to grow if the consumer is going to continue to reduce debt. It means we have to rely on government spending to plug the hole," said Jason DeSena Trennert, chief investment strategist at Strategas Investment Partners. The Wall Street Journal (08 Oct.)
*now the weasel will really be in the henhouse, feasting away on any chicken he so desires
BlackRock in talks for risk-rating role
Fund manager BlackRock is in talks with the National Association of Insurance Commissioners about a role in providing risk ratings for U.S. state regulators on insurers' investments. Credit rating agencies had been responsible for this, but regulators were disappointed by their poor performance during the financial crisis. While no value was set for the role, which would involve analyzing risk in bonds backed by residential mortgages that insurers own, the market for these instruments is worth $3 trillion. The Wall Street Journal (08 Oct.)
*this is just too much even for me. Pubby's under Bush and Paulson made it a mission in life to devalue our dollar so as to help their Caterpillar like crony friends make oodles of earnings at the rest of our expense. Yes, Rubin started it but if you recall, when Clinton the jackass left office we had a SURPLUS!
Critics take aim at Obama for drop in dollar's value
The Obama administration is being criticized for allowing the U.S. dollar to fall sharply against other major currencies. In a commentary last week, Sarah Palin, a former Republican candidate for vice president, warned that the low dollar is linked to high government debt and dependence on foreign oil. Treasury Secretary Timothy Geithner defended the administration's policy, saying officials recognize that "the dollar's important role in the system conveys special burdens and responsibilities on us, and we are going to do everything necessary to make sure we sustain confidence." Financial Times (tiered subscription model) (08 Oct.)
* Barney frank is a lying porky pig and porky would be outraged. All his blustering about regulating this and regulating that has all been a smoke screen for his legislation that you can literally drive a mack truck through. Will you Bostonians please do us all a favor and vote him out of office. But not likely, they don't want him to come home either.
CFTC, SEC say Frank's derivatives bill has too many loopholes
Gary Gensler, chairman of the Commodity Futures Trading Commission, and Henry Hu, director of the Securities and Exchange Commission's risk-management division, scrutinized a proposal from U.S. Rep. Barney Frank to overhaul regulation of derivatives markets. "This wording could cause a large number of important entities to fall outside this needed new regulation," Hu said. Gensler said Fannie Mae, Freddie Mac and other key entities could avoid regulation under Frank's plan. The Bond Buyer (free content) (08 Oct.)
*let the games begin! Trade war central may give a lift to one segment of the economy: lawsuits
Trade battle possible between U.S., China regarding steel
The U.S. Commerce Department is investigating China's dumping of steel in the U.S. market. The move was instigated by a petition from U.S. Steel last month regarding carbon and alloy steel pipes. The government already slapped tariffs on tubular and steel pipes from China used in oil drilling and on certain low-priced tires. The Wall Street Journal (08 Oct.)
Canada asks WTO to intervene in trade dispute with U.S.
The Canadian government asked the World Trade Organization to declare illegal U.S. rules regarding country of origin that are making it difficult for Canadian cattle and hog producers to compete with U.S. suppliers. The WTO was asked to bring the matter before a trade-dispute panel. Google/The Associated Press (07 Oct.)