Biofuels behind food price hikes: leaked World Bank report
Fri Jul 4, 3:34 AM ET
Biofuels have caused world food prices to increase by 75 percent, according to the findings of an unpublished World Bank report published in The Guardian newspaper on Friday.
The daily said the report was finished in April but was not published to avoid embarrassing the US government, which has claimed plant-derived fuels have pushed up prices by only three percent.
Biofuels, which supporters claim are a "greener" alternative to using fossil fuel and cut greenhouse gas emissions, and rising food prices will be on the agenda when G8 leaders meet in Japan next week for their annual summit.
The report's author, a senior World Bank economist, assessed that contrary to claims by US President George W. Bush, increased demand from India and China has not been the cause of rising food prices.
"Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases," the report said.
Droughts in Australia have also not had a significant impact, it added. Instead, European and US drives for greater use of biofuels has had the biggest effect.
The European Union has mooted using biofuels for up to 10 percent of all transport fuels by 2020 as part of an increase in use of renewable energy.
All petrol and diesel in Britain has had to include a biofuels component of at least 2.5 percent since April this year.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," the report said.
It added that the drive for biofuels has distorted food markets by diverting grain away from food for fuel, encouraging farmers to set aside land for its production, and sparked financial speculation on grains.
But Brazil's transformation of sugar cane into fuel has not had such a dramatic impact, the report said.
"The basket of food prices examined in the study rose by 140 percent between 2002 and this February," The Guardian said.
"The report estimates that higher energy and fertiliser prices accounted for an increase of only 15 percent, while biofuels have been responsible for a 75 percent jump over that period."
Friday, July 04, 2008
Thursday, July 03, 2008
BEAR RIPS MARKET A NEW ONE!
Hi friends,
Short and sweet, just got back from Fla, warm....ocean wonderful...saw my good friends SSKRAM, and his lovely wife Edwina and Justin too...relaxing...Im back and ready to ROCK and recharged.
Market is now turning on the last? bastion of strength the commodity sector, anytime you party this hardy don't overstay welcome bank some profits.....
Look, I haven;t charted squat, but I have lots to share.......market has broken down BIG TIME, do NOT believe the stats they throw at you.....the real world even has Burns Steakhouse in Tampa with biz down......Tampa Rays not down, saw Mon game.....
I will try to get it all down this SAT, in a more detailed post....look back then or SUnday, and I will do my best to keep my site active!
take care, enjoy 4th....and if you've been with me you've been no worse than IN CASH and SAFE!
Duratek
Short and sweet, just got back from Fla, warm....ocean wonderful...saw my good friends SSKRAM, and his lovely wife Edwina and Justin too...relaxing...Im back and ready to ROCK and recharged.
Market is now turning on the last? bastion of strength the commodity sector, anytime you party this hardy don't overstay welcome bank some profits.....
Look, I haven;t charted squat, but I have lots to share.......market has broken down BIG TIME, do NOT believe the stats they throw at you.....the real world even has Burns Steakhouse in Tampa with biz down......Tampa Rays not down, saw Mon game.....
I will try to get it all down this SAT, in a more detailed post....look back then or SUnday, and I will do my best to keep my site active!
take care, enjoy 4th....and if you've been with me you've been no worse than IN CASH and SAFE!
Duratek
Monday, June 23, 2008
SLOPE OF HOPE SLIPPERY WITH OIL!!!
UPS Drastically Cuts Outlook- AP
UPS, the world's largest shipping carrier, says it is lowering its earnings expectations for the second quarter because of slowing U.S. economic growth and high fuel costs.
Boy that's a surprise huh? It's in words they choose...in bold. New 52 wk low in AH
No sign of bottom nor rally.....rally on what? No one has any clarity...vision of future biz.
FED will keep steady on rates.....headlines read....then will inflation and th0se watching take heed from this, will US $ get dumped...interest rates may rise....ROCK N HARD PLACE instead of ROLL
Maybe see ya July 5th
D
UPS, the world's largest shipping carrier, says it is lowering its earnings expectations for the second quarter because of slowing U.S. economic growth and high fuel costs.
Boy that's a surprise huh? It's in words they choose...in bold. New 52 wk low in AH
No sign of bottom nor rally.....rally on what? No one has any clarity...vision of future biz.
FED will keep steady on rates.....headlines read....then will inflation and th0se watching take heed from this, will US $ get dumped...interest rates may rise....ROCK N HARD PLACE instead of ROLL
Maybe see ya July 5th
D
Saturday, June 21, 2008
BEAR ING DOWN ON THE WORLD And LAST POST FOR AWHILE
Last post for awhile?
Mainly because I put lots of time, thoguht and effort here, and I am not getting an adequate amount of lurker feedback, so there is NO way other than YOU leaving a comment here for me and others that I can tell if ANYONE reads what I post.
SO w/o further ado
Pressure of inflation on profits, declining consumer confidence and ability to ramp up consumption, trouble at the major banks around the world, meaning money available is ONLY ST money, needing to be repaid to the FED, they NEED investors to loan them LONGER term money at some point CONFIDENCE gets restored in CDO’s and other instruments of CREDIT EXPANSION.
I do not think too many are even aware of the Kondratieff cycle (or know how to spell it), and what kind of power it will exert going forward.
What is happening now is needed to correct the imbalances and gorging that has come before it, and normally it happens much faster and retraces back to its beginning.
How far is needed to correct this in terms of Dow points we won’t know until it is over, a shock it would be if we find ourselves challenging the 2002 or 2003 lows!
The markets break and close below 12,000 is significant and the problems created by the commodity bubble are just now being felt and dealt with.
We have WEAK economy, we have inflation, we have already LOW interest rates, a murdered dollar, so where to now…..
Duratek
Mainly because I put lots of time, thoguht and effort here, and I am not getting an adequate amount of lurker feedback, so there is NO way other than YOU leaving a comment here for me and others that I can tell if ANYONE reads what I post.
SO w/o further ado
Pressure of inflation on profits, declining consumer confidence and ability to ramp up consumption, trouble at the major banks around the world, meaning money available is ONLY ST money, needing to be repaid to the FED, they NEED investors to loan them LONGER term money at some point CONFIDENCE gets restored in CDO’s and other instruments of CREDIT EXPANSION.
I do not think too many are even aware of the Kondratieff cycle (or know how to spell it), and what kind of power it will exert going forward.
What is happening now is needed to correct the imbalances and gorging that has come before it, and normally it happens much faster and retraces back to its beginning.
How far is needed to correct this in terms of Dow points we won’t know until it is over, a shock it would be if we find ourselves challenging the 2002 or 2003 lows!
The markets break and close below 12,000 is significant and the problems created by the commodity bubble are just now being felt and dealt with.
We have WEAK economy, we have inflation, we have already LOW interest rates, a murdered dollar, so where to now…..
Duratek
Friday, June 06, 2008
DON'T LOSE YOUR HEAD OVER THESE SHOULDERS
I Just got confirmed from my REP HON company (one of top 3 in country) is raising prices in July 3% but in last 3 months they have been forced to take more action, IN OCT they will pass along an avg of 8.5% ADDT’L INCREASE!!!!!!!!!!!!!!!!!!!!!!!!
OIL could go to $0 tomorrow, and it will take MANY months for this shit to filter thru and or out…recent Head and Shoulders I see on SPX has been broken (by my charting) (meaning trip down to 1325 for sure at min)
MY friends, maybe the IN CROWD and play with this mkt some more, but I suspect this BEAR is JUST getting started
Europe will raise rates to ward off inflation (fight it), FED is done and the US $$ toilet paper as it is is under siege again.
I talk to a LOT of people, my bass teacher (34 yr old guy) knows the problem…..”FED PRINTING PRESS’….DEFEND OUR SHORES DEFEND OUR CURRENCY….none of the knuckleheads running have a clue
OIL could go to $0 tomorrow, and it will take MANY months for this shit to filter thru and or out…recent Head and Shoulders I see on SPX has been broken (by my charting) (meaning trip down to 1325 for sure at min)
MY friends, maybe the IN CROWD and play with this mkt some more, but I suspect this BEAR is JUST getting started
Europe will raise rates to ward off inflation (fight it), FED is done and the US $$ toilet paper as it is is under siege again.
I talk to a LOT of people, my bass teacher (34 yr old guy) knows the problem…..”FED PRINTING PRESS’….DEFEND OUR SHORES DEFEND OUR CURRENCY….none of the knuckleheads running have a clue
Tuesday, June 03, 2008
END OF DAYS
Fed signals end to rate cuts TheStar.com -
Business - Fed signals end to rate cuts
May 25, 2008 JEANNINE AVERSAAP Economics Writer
WASHINGTON (AP) – Sounding a gong couldn't have made it clearer. Federal Reserve officials are putting out the word that further interest rate cuts are unlikely.
Fed Governor Kevin Warsh ditched the central bank's cryptic word tangles and actually waxed poetic. "Even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again," Warsh said, referring to the Fed's key interest rate.
Speaking more central-bankerly, the Fed's No. 2 official, Vice Chairman Donald Kohn, said the current stance of interest-rate policy "appears to be appropriately calibrated for now." Janet Yellen, president of the Federal Reserve Bank of San Francisco, called the current level of rates "appropriate.''
They are amplifying a signal sent by Chairman Ben Bernanke and his colleagues last month that the Fed's most aggressive rate-cutting campaign in two decades may be winding down – finally. The cuts started in September and take months to work their way through the economy.
That does not mean the economy, badly bruised by housing, credit and financial woes, is out of the woods. The Fed, though, is hoping its powerful doses of cuts, along with the government's relief plan of tax rebates and breaks will help lift the economy in the second half of this year.
Zooming prices for energy and food and other commodity prices are raising some concerns that inflation could take off and spread through the economy. Further reductions in interest rates would aggravate the situation.
In fact, the Fed's last rate reduction in late April was "a close call," according to recently released documents of those private deliberations. At that time, two Fed members favored no cut at all, given the concerns about inflation.
Many economists believe the Fed will hold its key rate steady at 2 percent, a four-year-low, at its next meeting on June 24-25 and probably through much, if not all, of 2008.
Holding rates at this level should help foster better economic and employment conditions and moderate inflation, Kohn said.
"The Fed's advertised reluctance to cut again is a wise one,'' said Terry Connelly, dean of Golden Gate University's Ageno School of Business.
Here's what Fed policymakers are up against: Cut rates and bolster a weak economy where employers are eliminating jobs and consumers are pulling back; raise rates and fend off inflation.
With the housing market still flailing and foreclosures at record highs, policymakers probably would shy from pushing up rates – even with the specter of inflation – as the country prepares to vote for a new president, some analysts said.
"The Fed has spent the last eight months ushering homeowners with adjustable-rate mortgages to safety by repeatedly cutting interest rates. They won't want to throw them back under the bus by raising interest rates too much, too soon," said Greg McBride, senior financial analyst at Bankrate.com. "Candidates would have a field day," he said.
Bernanke has said the election would not color the Fed's decisions. "Political considerations will play no role. We will be objective. We will be analytical, and we will do what is right for the economy," he said.
The Fed's political independence is crucial to its ability to maintain credibility with investors on Wall Street and around the globe.
The combination of slow growth and rising inflation has raised fears the country may be headed for a bout of stagflation for the first time since the 1970s. Bernanke and other Fed officials, however, say that is not the case.
Oil prices are marching past $130 a barrel, gasoline prices are closing in on $4 a gallon nationally and food prices are skyrocketing. Given all that, Fed officials cannot afford to let inflation take hold. Once that happens, it can be difficult and painful to break inflation. It could force the Fed to raise rates, which would puts the brakes on spending. Inflation eats into paychecks, whittles away the value of investments and cuts into corporate profits.
"Inflation has been elevated for some time and prices of commodities are surging," Warsh said. "I find these trends particularly vexing at a time when global demand growth, most likely, has slowed," he said.
The Fed's rate reductions since last year have contributed to the drop in value of the dollar. The diminished greenback has been a factor pushing up prices for oil and other commodities. Kohn, however, believed the sagging dollar's role in rising commodity prices "probably has been a small one.''
For now, the Fed is forecasting slower economic growth, higher unemployment and a bigger pickup in inflation for this year than it thought just a few months ago. But Fed officials acknowledge the uncertain environment makes them less confident in their projections.
And conditions can change quickly.
In October the Fed signaled it was going to hit the pause button on rate-cutting campaign. At the time, Fed officials believed additional cuts might not be needed to help the economy survive housing and credit stresses. Then conditions deteriorated, forcing the Fed to do an about-face and lower rates again in December.
AP-ES-05-25-08 1055EDT
Business - Fed signals end to rate cuts
May 25, 2008 JEANNINE AVERSAAP Economics Writer
WASHINGTON (AP) – Sounding a gong couldn't have made it clearer. Federal Reserve officials are putting out the word that further interest rate cuts are unlikely.
Fed Governor Kevin Warsh ditched the central bank's cryptic word tangles and actually waxed poetic. "Even if the economy were to weaken somewhat further, we should be inclined to resist expected, reflexive calls to trot out the hammer again," Warsh said, referring to the Fed's key interest rate.
Speaking more central-bankerly, the Fed's No. 2 official, Vice Chairman Donald Kohn, said the current stance of interest-rate policy "appears to be appropriately calibrated for now." Janet Yellen, president of the Federal Reserve Bank of San Francisco, called the current level of rates "appropriate.''
They are amplifying a signal sent by Chairman Ben Bernanke and his colleagues last month that the Fed's most aggressive rate-cutting campaign in two decades may be winding down – finally. The cuts started in September and take months to work their way through the economy.
That does not mean the economy, badly bruised by housing, credit and financial woes, is out of the woods. The Fed, though, is hoping its powerful doses of cuts, along with the government's relief plan of tax rebates and breaks will help lift the economy in the second half of this year.
Zooming prices for energy and food and other commodity prices are raising some concerns that inflation could take off and spread through the economy. Further reductions in interest rates would aggravate the situation.
In fact, the Fed's last rate reduction in late April was "a close call," according to recently released documents of those private deliberations. At that time, two Fed members favored no cut at all, given the concerns about inflation.
Many economists believe the Fed will hold its key rate steady at 2 percent, a four-year-low, at its next meeting on June 24-25 and probably through much, if not all, of 2008.
Holding rates at this level should help foster better economic and employment conditions and moderate inflation, Kohn said.
"The Fed's advertised reluctance to cut again is a wise one,'' said Terry Connelly, dean of Golden Gate University's Ageno School of Business.
Here's what Fed policymakers are up against: Cut rates and bolster a weak economy where employers are eliminating jobs and consumers are pulling back; raise rates and fend off inflation.
With the housing market still flailing and foreclosures at record highs, policymakers probably would shy from pushing up rates – even with the specter of inflation – as the country prepares to vote for a new president, some analysts said.
"The Fed has spent the last eight months ushering homeowners with adjustable-rate mortgages to safety by repeatedly cutting interest rates. They won't want to throw them back under the bus by raising interest rates too much, too soon," said Greg McBride, senior financial analyst at Bankrate.com. "Candidates would have a field day," he said.
Bernanke has said the election would not color the Fed's decisions. "Political considerations will play no role. We will be objective. We will be analytical, and we will do what is right for the economy," he said.
The Fed's political independence is crucial to its ability to maintain credibility with investors on Wall Street and around the globe.
The combination of slow growth and rising inflation has raised fears the country may be headed for a bout of stagflation for the first time since the 1970s. Bernanke and other Fed officials, however, say that is not the case.
Oil prices are marching past $130 a barrel, gasoline prices are closing in on $4 a gallon nationally and food prices are skyrocketing. Given all that, Fed officials cannot afford to let inflation take hold. Once that happens, it can be difficult and painful to break inflation. It could force the Fed to raise rates, which would puts the brakes on spending. Inflation eats into paychecks, whittles away the value of investments and cuts into corporate profits.
"Inflation has been elevated for some time and prices of commodities are surging," Warsh said. "I find these trends particularly vexing at a time when global demand growth, most likely, has slowed," he said.
The Fed's rate reductions since last year have contributed to the drop in value of the dollar. The diminished greenback has been a factor pushing up prices for oil and other commodities. Kohn, however, believed the sagging dollar's role in rising commodity prices "probably has been a small one.''
For now, the Fed is forecasting slower economic growth, higher unemployment and a bigger pickup in inflation for this year than it thought just a few months ago. But Fed officials acknowledge the uncertain environment makes them less confident in their projections.
And conditions can change quickly.
In October the Fed signaled it was going to hit the pause button on rate-cutting campaign. At the time, Fed officials believed additional cuts might not be needed to help the economy survive housing and credit stresses. Then conditions deteriorated, forcing the Fed to do an about-face and lower rates again in December.
AP-ES-05-25-08 1055EDT
SURGING USE OF CREDIT CARDS
Credit-Card Use Is Surging, Risking Another Debt CrisisTuesday June 3, 1:56 pm ET CNBC
Cash-strapped Americans are ringing up more and more purchases on their credit and debit cards, but there could be a steep price to pay ahead.
Though the trend is a boon for the companies that issue the cards, analysts worry that there could be long-term problems not only for consumers but for the anemic economy and the already-troubled banks that will be underwriting all that risky debt.
"Right now what we're seeing is the US consumer losing their disposable income as they have to spend more and more on necessities because of higher prices for gas and food," says Ron Ianieri, a market strategist and co-founder of the Options University investor education center.
"Normally when you have a certain budget and you can't keep up with the budget one of the easy steps is to extend that budget using credit."
One of the main problems with that is US consumers--and their counterparts in Europe as well--already are delinquent on their credit card payments in numbers not seen in six years. The Federal Reserve last week said credit card delinquencies hit 4.86 percent in the first quarter in 2008, while revolving debt--or the type used in credit purchases--hit $957.2 billion in March, a 7.9 percent increase.
As all that risky, high-interest debt keeps accumulating, consumers will find themselves deeper in a hole that threatens to keep the economy in its sluggish state. Economists worry that the problems are being exacerbated by consumers using credit not only to buy big-screen TVs and patio furniture, but also to pay their mortgages and shop for groceries.
"There's a significant risk to people who are using credit cards to help them try to bridge the gaps that they're facing," says Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness. "The reality is the economic picture isn't going to clear up instantaneously."
Meanwhile, the banks that underwrite the credit card debt stand to lose as the delinquencies continue to rise. Standard & Poor's on Monday issued a dour forecast for banks in 2008, in part because of their exposure to bad debt.
Ianieri ranks his "starting five" in terms of exposure to risky debt: Lehman Brothers (NYSE:LEH - News), Citigroup (NYSE:C - News), Bank of America (NYSE:BAC - News), UBS (NYSE:UBS - News) and Merrill Lynch (NYSE:MER - News).
"It's a disaster, it's a time bomb," Ianieri says. "The credit crisis is a lot more severe than it's being made out to be. I think the government is doing everything it can to keep the severity of this situation under wraps from the general population. I think they're just trying to bide time for these banks."
For the credit card companies, though, it's a different story.
Little to Lose
Visa and Mastercard back comparatively little of the credit actually issued through their cards, meaning they have a low level of risk for defaults and other payment issues. They get paid a fee each time someone uses their cards, and the banks that issue the cards assume responsibility for the debt.
As such, investors and analysts are fawning over the two companies in the face of consumer cash issues and the growth of emerging markets, where credit cards are only beginning to find
popularity.
"The reality is probably some of it is hype, but some is based on fact," Snaith says. "'Check or cash' has been replaced by 'debit or credit' and that's going to be a continuing trend not just in the US but spreading worldwide."
In a note issued last Thursday, Lehman Brothers raised its outlook on Mastercard, escalating its price target to $335 from $300. Other analysts have joined in the enthusiasm, with Stifel Nicolaus on Tuesday jacking up its price target from $312 to $367.
Visa has gained from the enthusiasm for Mastercard. As of noontime trade Tuesday, both Visa (NYSE:V - News) and Mastercard (NYSE:MA - News) were up more than 12 percent since May 23.
"They have no risk. It's per transaction," says Nadav Baum, managing director of investments at BPU Investment Management. "That's why Visa and Mastercard are bucking the trend when it comes to the other financial companies. Even though they group them as a financial company, they're really not."
Lehman analyst Bruce Harting, in his research note on Mastercard, pointed out that the company believes it can duplicate its US business model in countries including Brazil, Hungary, Poland, Russia, India and China, nations where it projects 39 percent revenue growth.
Similarly, Americans shopping abroad might be more inclined to use their plastic as the dollar begins to gain ground against other currencies. A purchase in euros now could cost fewer dollars
by the time the next monthly bill rolls around if the US currency continues to appreciate.
"That's another reason why Mastercard and Visa will continue to do well," Baum says. "It's all hand-in-hand."
Finally, there are the responsible consumers who pay their bills in full every month and are joining the legions of people who no longer want to carry cash. They enjoy taking advantage of the rapid growth of retailers and restaurants offering debit options, plus using points they can
accumulate by utilizing their cards.
"The danger is in painting with a broad brush and casting all consumers as reluctant or unable to spend," says Greg McBride, senior analyst at Bankrate.com. "There are a lot of consumers that are not in the state of distress and can continue to spend in a manner that's not very different than a year or two ago when the economy was stronger. The card-holders that pay their balance in full every month, the incentive is for them to use the cards as much as possible."
*Fact is, many using credit cards to PAY BILLS, etc is of LAST RESORT and at 20% PLUS rates.....
D
Cash-strapped Americans are ringing up more and more purchases on their credit and debit cards, but there could be a steep price to pay ahead.
Though the trend is a boon for the companies that issue the cards, analysts worry that there could be long-term problems not only for consumers but for the anemic economy and the already-troubled banks that will be underwriting all that risky debt.
"Right now what we're seeing is the US consumer losing their disposable income as they have to spend more and more on necessities because of higher prices for gas and food," says Ron Ianieri, a market strategist and co-founder of the Options University investor education center.
"Normally when you have a certain budget and you can't keep up with the budget one of the easy steps is to extend that budget using credit."
One of the main problems with that is US consumers--and their counterparts in Europe as well--already are delinquent on their credit card payments in numbers not seen in six years. The Federal Reserve last week said credit card delinquencies hit 4.86 percent in the first quarter in 2008, while revolving debt--or the type used in credit purchases--hit $957.2 billion in March, a 7.9 percent increase.
As all that risky, high-interest debt keeps accumulating, consumers will find themselves deeper in a hole that threatens to keep the economy in its sluggish state. Economists worry that the problems are being exacerbated by consumers using credit not only to buy big-screen TVs and patio furniture, but also to pay their mortgages and shop for groceries.
"There's a significant risk to people who are using credit cards to help them try to bridge the gaps that they're facing," says Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness. "The reality is the economic picture isn't going to clear up instantaneously."
Meanwhile, the banks that underwrite the credit card debt stand to lose as the delinquencies continue to rise. Standard & Poor's on Monday issued a dour forecast for banks in 2008, in part because of their exposure to bad debt.
Ianieri ranks his "starting five" in terms of exposure to risky debt: Lehman Brothers (NYSE:LEH - News), Citigroup (NYSE:C - News), Bank of America (NYSE:BAC - News), UBS (NYSE:UBS - News) and Merrill Lynch (NYSE:MER - News).
"It's a disaster, it's a time bomb," Ianieri says. "The credit crisis is a lot more severe than it's being made out to be. I think the government is doing everything it can to keep the severity of this situation under wraps from the general population. I think they're just trying to bide time for these banks."
For the credit card companies, though, it's a different story.
Little to Lose
Visa and Mastercard back comparatively little of the credit actually issued through their cards, meaning they have a low level of risk for defaults and other payment issues. They get paid a fee each time someone uses their cards, and the banks that issue the cards assume responsibility for the debt.
As such, investors and analysts are fawning over the two companies in the face of consumer cash issues and the growth of emerging markets, where credit cards are only beginning to find
popularity.
"The reality is probably some of it is hype, but some is based on fact," Snaith says. "'Check or cash' has been replaced by 'debit or credit' and that's going to be a continuing trend not just in the US but spreading worldwide."
In a note issued last Thursday, Lehman Brothers raised its outlook on Mastercard, escalating its price target to $335 from $300. Other analysts have joined in the enthusiasm, with Stifel Nicolaus on Tuesday jacking up its price target from $312 to $367.
Visa has gained from the enthusiasm for Mastercard. As of noontime trade Tuesday, both Visa (NYSE:V - News) and Mastercard (NYSE:MA - News) were up more than 12 percent since May 23.
"They have no risk. It's per transaction," says Nadav Baum, managing director of investments at BPU Investment Management. "That's why Visa and Mastercard are bucking the trend when it comes to the other financial companies. Even though they group them as a financial company, they're really not."
Lehman analyst Bruce Harting, in his research note on Mastercard, pointed out that the company believes it can duplicate its US business model in countries including Brazil, Hungary, Poland, Russia, India and China, nations where it projects 39 percent revenue growth.
Similarly, Americans shopping abroad might be more inclined to use their plastic as the dollar begins to gain ground against other currencies. A purchase in euros now could cost fewer dollars
by the time the next monthly bill rolls around if the US currency continues to appreciate.
"That's another reason why Mastercard and Visa will continue to do well," Baum says. "It's all hand-in-hand."
Finally, there are the responsible consumers who pay their bills in full every month and are joining the legions of people who no longer want to carry cash. They enjoy taking advantage of the rapid growth of retailers and restaurants offering debit options, plus using points they can
accumulate by utilizing their cards.
"The danger is in painting with a broad brush and casting all consumers as reluctant or unable to spend," says Greg McBride, senior analyst at Bankrate.com. "There are a lot of consumers that are not in the state of distress and can continue to spend in a manner that's not very different than a year or two ago when the economy was stronger. The card-holders that pay their balance in full every month, the incentive is for them to use the cards as much as possible."
*Fact is, many using credit cards to PAY BILLS, etc is of LAST RESORT and at 20% PLUS rates.....
D
THIS GUY DOESN'T CARE FOR BENANKE
http://globaleconomicanalysis.blogspot.com/
I am looking for a little more rally here, then good chance STEEP retrace is due.
D
I am looking for a little more rally here, then good chance STEEP retrace is due.
D
Wednesday, May 28, 2008
REAL WORLD INFLATION
Dow Chemical blames Washington for price hikesWednesday May 28, 10:52 am ET
Dow Chemical to raise prices up to 20 percent, blasts Washington for 'true energy crisis'
MIDLAND, Mich. (AP) -- Dow Chemical Co. will raise product prices by up to 20 percent almost immediately to offset the soaring cost of energy and raw materials, and the CEO of the chemical giant lashed out Washington on Wednesday for failing to develop a sound energy policy.
Dow Chemical to raise prices up to 20 percent, blasts Washington for 'true energy crisis'
MIDLAND, Mich. (AP) -- Dow Chemical Co. will raise product prices by up to 20 percent almost immediately to offset the soaring cost of energy and raw materials, and the CEO of the chemical giant lashed out Washington on Wednesday for failing to develop a sound energy policy.
BANKS MISS EASY FIX
Banks miss an easy housing fix
Lenders say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
By Les Christie, CNNMoney.com staff writer
Last Updated: May 28, 2008: 7:32 AM EDT
NEW YORK (CNNMoney.com) -- Banks say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
Lenders are taking much longer than necessary to approve short sales, according to Duane LeGate, of House Buyers Network, a short sale specialist.
In a short sale, a homeowner who cannot keep up with their loan asks the lender to take a dollar amount less than what is owed on a home's mortgage, and forgive the remainder of the unpaid debt.
So if a borrower has a mortgage balance of $100,000 and finds a buyer who will pay $95,000 for the house, the lender agrees to accept that $95,000 and close out the loan.
"There was a much greater chance of success with these in the past," said LeGate
Ideally in a short sale, everyone wins. Borrowers avoid the ugly foreclosure process that destroys their credit, while lenders recoup more of their costs than they would by spending the time and money it takes to kick an owner out and resell the property.
Lenders typically lose about 19% of a mortgage's value in a short sale, according to Clayton Holdings, a Conn.-based, provider of loan analytics, while they lose an average of 40% on loans that go into foreclosure.
Coldwell Banker CEO Jim Gillespie agrees that short sales are taking too long to complete. And he speaks from firsthand experience; a short-sale offer he made on a house in Marin County, Calif. in late fall didn't win approval until April.
But most buyers can't, or won't, wait that long."That's been our biggest challenge - keeping the buyers interested long enough as we wait and wait for an answer," said Jeff Morrell, a Colorado Springs real estate agent who specializes in short sales.
Running out the clock
John Fitzmorris, a short-sale expediter in East Stroudsburg, Pa., was working with Robson and Laura Pereira, who were behind on their mortgage, to market their home before a foreclosure would take it away.
"She worked, but he had a construction business that went defunct," said Fitzmorris. "That put them in trouble."
Falling home prices in the area made a normal sale impossible; the couple was upside-down in their mortgage, owing more on the property than it was worth on the current market.
After they fell behind on their payments, Laura Pereira said, "the bank sent me a letter asking me to call for help. I called them four or five times and they never got back to me. We had three [short sale] offers on the house at the time."
Fitzmorris, who has been doing short sales for more than 20 years, contacted the bank about a short sale well before the foreclosure date.
"We sent an authorization letter listing us as the contact for a short sale, a sales agreement, a completed seller's information document as well as listing and marketing information to First American Loss Mitigation, which was handling the Pereira's foreclosure process, on January 24," he said. The buyer was very interested - enough to pay for a title search.
A month later, Fitzmorris sent another complete package, including a sales contract, to the bank and started to call daily for feedback on the short-sale offer.
Greystone didn't respond until March 10, when it said that it had the file and would process it.
But by March 27 the bank still hadn't approved the short sale, and the Pereira's property went to sheriff's sale.(The bank did not respond to several requests for comment.)
"The offer we sent to the bank was $129,500," said Fitzmorris. "But another investor, TM Builders, bought the property at the sheriff's sale for $100,265."
By the time the Pereira's lost their house, they owed a total of $160,000, including principal of $144,500 in addition to late fees, legal fees, and so forth. So in the end, the bank lost $60,000 on the loan, when it could have lost $30,000 by doing a short sale.
Ironically, TM Builders flipped the home to Fitzmorris's buyer for the $129,500 short-sale price, money the bank would have gotten had it acted more quickly.
"The sellers did what they could to mitigate the problem but the bank didn't respond, which hurt both the sellers - with an unnecessary foreclosure permanently impacting their credit - and the bank," said Fitzmorris.
Usual suspect
The difficulty in getting short sales approved stems from the same hurdles facing all the other foreclosure prevention efforts. The fact that the majority of mortgages are pooled and securitized makes it hard to get approval to change the terms of the mortgages.
"It has to do with who owns the loan," said LeGate. "If a mortgage is stuck in a pool somewhere, when something goes wrong, no one knows who the actual owner of the note is."
Additionally, the volume of troubled borrowers makes it hard for lenders to keep up. The housing crisis has put an enormous burden on mortgage servicers, the companies that manage loans for securities investors.
At many servicers, said LeGate, "There's no one really skilled at loss mitigation, and these guys have more work than they were prepared to do."
And with foreclosure filings breaking new records each month, there's no sign that this problem will ease any time soon.
Says Laura Pereira, "I feel the bank really let us down."
Lenders say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
By Les Christie, CNNMoney.com staff writer
Last Updated: May 28, 2008: 7:32 AM EDT
NEW YORK (CNNMoney.com) -- Banks say they want to help troubled homeowners, but they are delaying deals that could save everyone - including the lenders themselves - a lot of time and money.
Lenders are taking much longer than necessary to approve short sales, according to Duane LeGate, of House Buyers Network, a short sale specialist.
In a short sale, a homeowner who cannot keep up with their loan asks the lender to take a dollar amount less than what is owed on a home's mortgage, and forgive the remainder of the unpaid debt.
So if a borrower has a mortgage balance of $100,000 and finds a buyer who will pay $95,000 for the house, the lender agrees to accept that $95,000 and close out the loan.
"There was a much greater chance of success with these in the past," said LeGate
Ideally in a short sale, everyone wins. Borrowers avoid the ugly foreclosure process that destroys their credit, while lenders recoup more of their costs than they would by spending the time and money it takes to kick an owner out and resell the property.
Lenders typically lose about 19% of a mortgage's value in a short sale, according to Clayton Holdings, a Conn.-based, provider of loan analytics, while they lose an average of 40% on loans that go into foreclosure.
Coldwell Banker CEO Jim Gillespie agrees that short sales are taking too long to complete. And he speaks from firsthand experience; a short-sale offer he made on a house in Marin County, Calif. in late fall didn't win approval until April.
But most buyers can't, or won't, wait that long."That's been our biggest challenge - keeping the buyers interested long enough as we wait and wait for an answer," said Jeff Morrell, a Colorado Springs real estate agent who specializes in short sales.
Running out the clock
John Fitzmorris, a short-sale expediter in East Stroudsburg, Pa., was working with Robson and Laura Pereira, who were behind on their mortgage, to market their home before a foreclosure would take it away.
"She worked, but he had a construction business that went defunct," said Fitzmorris. "That put them in trouble."
Falling home prices in the area made a normal sale impossible; the couple was upside-down in their mortgage, owing more on the property than it was worth on the current market.
After they fell behind on their payments, Laura Pereira said, "the bank sent me a letter asking me to call for help. I called them four or five times and they never got back to me. We had three [short sale] offers on the house at the time."
Fitzmorris, who has been doing short sales for more than 20 years, contacted the bank about a short sale well before the foreclosure date.
"We sent an authorization letter listing us as the contact for a short sale, a sales agreement, a completed seller's information document as well as listing and marketing information to First American Loss Mitigation, which was handling the Pereira's foreclosure process, on January 24," he said. The buyer was very interested - enough to pay for a title search.
A month later, Fitzmorris sent another complete package, including a sales contract, to the bank and started to call daily for feedback on the short-sale offer.
Greystone didn't respond until March 10, when it said that it had the file and would process it.
But by March 27 the bank still hadn't approved the short sale, and the Pereira's property went to sheriff's sale.(The bank did not respond to several requests for comment.)
"The offer we sent to the bank was $129,500," said Fitzmorris. "But another investor, TM Builders, bought the property at the sheriff's sale for $100,265."
By the time the Pereira's lost their house, they owed a total of $160,000, including principal of $144,500 in addition to late fees, legal fees, and so forth. So in the end, the bank lost $60,000 on the loan, when it could have lost $30,000 by doing a short sale.
Ironically, TM Builders flipped the home to Fitzmorris's buyer for the $129,500 short-sale price, money the bank would have gotten had it acted more quickly.
"The sellers did what they could to mitigate the problem but the bank didn't respond, which hurt both the sellers - with an unnecessary foreclosure permanently impacting their credit - and the bank," said Fitzmorris.
Usual suspect
The difficulty in getting short sales approved stems from the same hurdles facing all the other foreclosure prevention efforts. The fact that the majority of mortgages are pooled and securitized makes it hard to get approval to change the terms of the mortgages.
"It has to do with who owns the loan," said LeGate. "If a mortgage is stuck in a pool somewhere, when something goes wrong, no one knows who the actual owner of the note is."
Additionally, the volume of troubled borrowers makes it hard for lenders to keep up. The housing crisis has put an enormous burden on mortgage servicers, the companies that manage loans for securities investors.
At many servicers, said LeGate, "There's no one really skilled at loss mitigation, and these guys have more work than they were prepared to do."
And with foreclosure filings breaking new records each month, there's no sign that this problem will ease any time soon.
Says Laura Pereira, "I feel the bank really let us down."
Monday, May 26, 2008
Friday, May 23, 2008
BEAR ALIVE AND KICKING?
Donwtrend line was tested broken but more importantly IMHO it didnt HOLD (not enough BUYING UMMPGHHHH) and now it is back where it belongs..........but rising MA'S as shown (up red arrow) MIGHT help......we should now work our way down to the lows IMHOMONEY as TOILET PAPER only works for so long,
FED is shown now as worthless POS, f'd up the whole system...created money out or THIN AIR to BAIL OUT BSC.....and the money center whores.......insiders get paid.....lemmings dont get laid...what a mouth I have today.....
BANKS would implode if all the freebie money sent out as helping stimulus were presented at same time.
FED created this mess......FED should be closed down.
D
Thursday, May 22, 2008
Thursday, May 15, 2008
NO INFLATION?
Martin desk rep came in..on $7K order (from San Diego) freight was 17%....$1,190 NOW fuel surcharge added 40% of the $1,190 adds addtl $476 making my freight now 25% of the $7K
This our reo was told was as “cheap as its gonna get….” This 40% will apply to almost EVERYTHING SHIPPED TO SELL IN THIS COUNTRY!!
Duratek
Monday, May 12, 2008
INTERESTING STATS
P/Es & Yields on Major Indexes
Dow Indexes
Find Historical Data WHAT'S THIS?
Friday, May 09, 2008
http://online.wsj.com/mdc/public/page/2_3021-peyield.html?mod=topnav_2_3000
Dow Indexes
Find Historical Data WHAT'S THIS?
Friday, May 09, 2008
http://online.wsj.com/mdc/public/page/2_3021-peyield.html?mod=topnav_2_3000
Sunday, May 11, 2008
CATCH 22
Transport rally stemmed from Buffets interest and higher oil? (alternative to trucking?)
Investment in alt energy funds or stocks key ahead of Dem's victory?
How wounded gold bull? With $$ rally oil's rise suspect along with WANING DEMAND FROM YES R?? NO!!!!!
Price back below my recent downtrend line, ominous PEEK above preceded.
Strength is VERY SELECTIVE....APPL etc.
INFLATION WHERE IT HURTS.....food energy etc.....( I have FUEL SURCHARGES NOW FROM MOST SOURCES) price increases coming mid year now and now incl's CHinese manuf
DEFLATION WHERE IT KILLS....ASSETS...stocks....HOUSING one of MAIN drivers of economy.
HOUSING PRICES NOT STABLE OR BOTTOMED......leads to addt'l Banking write downs.....
CREDIT CRUNCH NOT CREDIT EXPANSION.....banks tighten standards.....STRANGLING ECONOMY
SOME SPENDING YES.....BIZ out there, but for those who shake a fist of paper....
Happy Mothers Day!
Duratek
Investment in alt energy funds or stocks key ahead of Dem's victory?
How wounded gold bull? With $$ rally oil's rise suspect along with WANING DEMAND FROM YES R?? NO!!!!!
Price back below my recent downtrend line, ominous PEEK above preceded.
Strength is VERY SELECTIVE....APPL etc.
INFLATION WHERE IT HURTS.....food energy etc.....( I have FUEL SURCHARGES NOW FROM MOST SOURCES) price increases coming mid year now and now incl's CHinese manuf
DEFLATION WHERE IT KILLS....ASSETS...stocks....HOUSING one of MAIN drivers of economy.
HOUSING PRICES NOT STABLE OR BOTTOMED......leads to addt'l Banking write downs.....
CREDIT CRUNCH NOT CREDIT EXPANSION.....banks tighten standards.....STRANGLING ECONOMY
SOME SPENDING YES.....BIZ out there, but for those who shake a fist of paper....
Happy Mothers Day!
Duratek
Friday, May 09, 2008
CLOUDY< GLOOMY MONRING IN B'MORE
I AM SHORT AGAINST 1400 SPX (actually slightly above stop loss 1405.....this is MY position from yesterday, I never suggest YOU take any action....for amusement only!@) just putting my cards on table
Using RENKO charts...more later.
http://money.cnn.com/2008/05/09/news/economy/creditcards/index.htm?postversion=2008050905 Americans barely getting by using Credit cards....STORY NEVER TOLD.
Rally had become INCREASINGLY SELECTIVE....less stock going up.
WE have INLFATION and DEFLATION (housing)
http://money.cnn.com/2008/05/08/news/inflation_crunch.fortune/index.htm
I personally think stock prices will follow.....Friday has makings of BIG DOWNER....watch GOLD and Interest rates too for clues...
Duratek
Using RENKO charts...more later.
http://money.cnn.com/2008/05/09/news/economy/creditcards/index.htm?postversion=2008050905 Americans barely getting by using Credit cards....STORY NEVER TOLD.
Rally had become INCREASINGLY SELECTIVE....less stock going up.
WE have INLFATION and DEFLATION (housing)
http://money.cnn.com/2008/05/08/news/inflation_crunch.fortune/index.htm
I personally think stock prices will follow.....Friday has makings of BIG DOWNER....watch GOLD and Interest rates too for clues...
Duratek
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