Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Boeing is worth an evaluation.

The Boeing Company (NYSE: BA) is the world's largest aerospace company.

In general, analysts expect 3-5% revenue growth in FY 2008, and 7-10% in FY 2009 as Boeing's increased aircraft production to meet high order backlogs offsets production delays in the 787 Dreamliner.

Moreover, although not to give short-shrift to Boeing's Integrated Defense Systems division, now the world's second-largest military contractor, behind Lockheed Martin (NYSE: LMT), the major driver of BA's future value-added will continue to be its commercial aviation operation, led by the next-generation 787 Dreamliner.

U.K. home repossession claims by mortgage lenders increased 16% from a year ago to their highest level since the early 1990s, Bloomberg News reported Friday.

The U.K.'s Ministry of Justice said possession claims, the first step in the foreclosure process, increased to 38,688 in Q1 2008, from 27,530 in Q1 2007, Bloomberg News reported.

Anglo-American housing slump

London-based economist Mark Chandler told BloggingStocks Friday the large foreclosure rise indicates that the air is easing out of the housing balloon, and that the housing correction that began in the United States, is "clearly washing shore in the U.K."

Billionaire investor Kirk Kerkorian said he may up his stake in Ford beyond 5.5%, as he follows-through on his intention to purchase additional shares, Bloomberg News reported Friday.

Kerkorian, in a Friday SEC filing, reiterated that his Tracinda Corp. will pay $8.50 per share for 20 million additional shares of Ford (NYSE: F), which will give him a 5.5% stake, Bloomberg News reported. In the filing, Tracinda added that it may "from time to time, propose business strategies and, subsequent to the expiration of the offer, acquire additional shares."

Shares of Ford rose 5 cents to $8.25 in Friday morning trading on the news.

A gold star for Ford

Independent stock analyst C. Leonard Bauer told BloggingStocks Friday Kerkorian's stance is "a definite gold star" for Ford, concerning its turnaround program.

"Kerkorian's decision, because of his investment history and knowledge of the auto sector, will telegraph to other institutional investors that it's time to start moderately adding to your Ford position," Bauer said. "Don't misunderstand, this turnaround story is only about 30% complete, but at this stage you can make a good case for buying a modest share amount." Bauer added that he does not have a rating on Ford nor own the company's shares.

Ford installed former Boeing (NYSE: BA) executive Alan Mulally as part of an effort to re-vamp production and revise its fleet to compete in the global auto marketplace. Ford's legacy cost reduction efforts have gone well; fleet revision progress has been slower, many analysts agree.

The U.S. trade deficit fell substantially in March 2008, to $58.2 billion, the U.S. Commerce Department announced Thursday, as the slowing U.S. economy reduced consumer demand for imported automobiles, furniture and consumer goods, among other categories.

The March 2008 trade statistic was the lowest trade gap since November 2003, the Commerce Department said.

Economists surveyed by Bloomberg News had expected the March 2008 trade deficit to be $60.8 billion.

The February 2008 trade deficit was revised lower to $61.7 billion from $62.3 billion. The trade deficit was $59.0 billion in January 2008.

In March 2008, nominal imports decreased 2.9% to $206.7 billion, while nominal exports fell 1.7% to $148.5 billion.

Slowing U.S. economy weighs

Economist David H. Wang told BloggingStocks Friday the March 2008 trade report clearly displays the effects of a slowing U.S. economy.

"We see a clear pullback in domestic demand in March [2008], and the core import number was down 3%, so that's indicative of fewer consumers making purchases, which is consistent with belt-tightening and U.S. payroll reductions," Wang said. "It's clear now our nation is demanding less from international suppliers, which will have a negative effect on their economies, as well."

An OPEC official said Friday the cartel may meet to boost output ahead of its September 2008 meeting if crude oil prices keep rising, Reuters reported Friday.

"If the price keeps going up, OPEC may consult on an increase in production before it meets in September," the OPEC source told Reuters Friday, speaking on condition that he not be identified. He added that the increase "would have to be more than 500,000 barrels per day" to have an impact.

Oil Friday hit another record high, increasing $2.20 to $126.20 per barrel Friday morning, before easing back to $125.25, on concern about production in Nigeria amid civil unrest, and on emerging market oil demand growth, particularly in China and India. Further, institutional investor demand for oil as an asset class is also contributing to oil's record rise, many analysts agree.

'Two years, $75 late'

Economist Glen Langan told BloggingStocks Friday talk of a potential OPEC action on production is two years too late. "OPEC is two years, $75 late, I'm sorry to say," Langan said. "OPEC knew for two years that higher production was needed to help meet unprecedented emerging market demand, but they failed to act in the interests of the global economy."

Readers of this space know that one of the preferred sectors has been the oil/oil services sector. Further, with oil now well above $110 per barrel, one may think that all of the affordable oil plays have been bid up. Indeed, most have, but not Chevron.

Chevron Corporation (NYSE: CVX) is the third-largest integrated oil company in the United States.

Chevron's organic reserve replacement, excluding Canadian oil sands, is sub-par, but just about every other dimension of CVX's operation rates good to strong.

Chevron's most attractive dimension? CVX has the equivalent of 'the facilities of significance' in an oil-challenged world, and especially in a gasoline-challenged United States: 22 fuel refineries, to go along with 2 asphalt plants, for a total refining capacity of 2.21 million barrels per day. Almost half of that fuel refining is based in the United States.

With the U.S. economy still exhibiting signs of anemic growth (or worse), it's best to consider including a few defensive stocks in your portfolio, and with the aforementioned in mind, General Mills is worth an evaluation.

General Mills, Inc. (NYSE: GIS) is the second largest U.S. producer of ready-to-eat breakfast cereals, including several iconic brands, and is a leading producer of other packaged consumer foods.

Most analysts see GIS's FY 2008 revenue advancing 6-8%, followed by a 7-10% rise in FY 2009.

Analysts also like the fact General Mills has braced itself for the higher-cost commodity era as a result of efficiency improvements, productivity gains, and a more-favorable product mix. The Reuters FY 2008/FY 2009 EPS consensus estimates for GIS are $3.48 to $3.78.

When one travels in economists' circles, one tends to tap into the issues, controversies and policy ideas 'dismal science' practitioners are debating.

And one issue economists have rattled around concerns the speed of fiscal policy stimulus, or more accurately, the lack thereof. In the digital age, the internet has propelled a host of speed-enhancing changes, and it occurred to this group of economists that U.S. Government policy is decidedly behind the curve in this area.

Here's why: economist David H. Wang noted that the U.S., in an attempt to jump-start its economy stalled by the nation's worst housing slump in more than 15 years, has implemented a host of monetary policy changes to provide monetary stimulus quicker. The U.S. Federal Reserve cut key, short-term interests multiple times during a 10-week span (and later implemented additional rate cuts), and devised two, new, Fed-administered institutions to address the credit crisis, provide liquidity, and ensure the orderly operation of financial markets.

Growth is slowing in all regions of the world, and inflation is rising, but the International Monetary Fund's No. 2 person in charge says a repeat of the 1970s stagflation period isn't likely.

IMF First Deputy Managing Director John Lipsky said the "inflation speed-up must be taken seriously as it creates potentially significant challenges to economic stability," Bloomberg News reported Thursday. However, Lipsky added that a return to 1970s-style stagflation isn't likely, but it cannot be totally ruled out.

Oil, commodity-rooted inflation

Further, Lipsky underscored that the current inflation rise is being driven by a fundamental increase in demand for commodities, primarily oil, and to a lesser extent by supply constraints around the world, Thomson Financial reported Thursday via Forbes.com. Hence, the recent price increases are likely to prove finite, Lipsky added, unless these items keep rising more rapidly than other items.

Economist David H. Wang told BloggingStocks Thursday he agreed with Lipsky's categorization of the most-recent rise in inflation but added that government subsidies may prevent a pullback in commodity prices, especially oil. Classic economic theory holds that as the price of a good rises, people will use less of it. However, governments in China, Venezuela and the Middle East, among other nations, subsidize gasoline/fuel, lowering its cost, which discourages conservation, Wang said. The United States does not subsidize motor fuel at the federal level, but individual states do subsidize heating oil/natural gas for low-income citizens.

As serious as the oil issue is in the United States, the west, and globally, considering its impact on economic development, circumstances could become even more challenging, in the quarters ahead, if present trends continue.

That's because, due to emerging market growth and per capita energy consumption rates in the United States - the oil -producing world "could be in a position of unprecedented pricing power," according to economist Glen Langan.

Langan says "could be" because the pricing power oil producers currently have, while significant, is not absolute. And oil-consuming nations still have time to regain some control over their oil bills. Oil Thursday reached a record high of $123.74 per barrel before closing slightly lower.

Here's the current global oil supply / demand landscape, as Langan sees it: daily global oil supply exceeds demand by the smallest of margins. It's the major reason the price of oil has been trending up for more than 5 years, but oil-consuming nations can increase that margin, via conservation, increased efficiency, and alternative sources of energy.

The European Central Bank and the Bank of England Thursday each kept their key, short-term interest rates the same, at 4% and 5%, respectively, the banks announced. Economists surveyed by Bloomberg News had expected both the ECB and BOE to maintain current interest rate levels.

In its previous meeting, the ECB had kept its benchmark interest the same at 4%; meanwhile, the BOE lowered its key rate by 25 basis points to 5% from 5.25% on 10 April 2008.

In contrast, the U.S. Federal Reserve has lowered its key, short-term interest rate five times, or by 325 basis points, to 2% from 5.25%, as it attempts to jump-start a U.S. economy dragged to near-stall levels by its worst housing slump in a generation.

Further, for at least the time being, the ECB and BOE do not appear to be concerned about the euro's and the pound's steady, two-year rise versus the dollar. The euro traded at $1.5383 and the pound at $1.9583 in Thursday morning trading; each is about 4% off its 2008 highs.

Initial jobless claims decreased 18,000 to 365,000 for the week ended May 3, below the consensus estimate, the U.S. Labor Department announced Thursday. Claims for the previous week were revised up 3,000 to 383,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 370,000.

Also, the 4-week moving average increased 2,500 to 367,000. Economists view the 4-week average as a better indicator of unemployment conditions, as it smooths-out anomalies for strikes, holidays, or other idiosyncratic events.

Economist Peter Dawson said this week's job report "shows that soft labor conditions are an enduring feature of the sluggish U.S. economy. Hiring in both small and large companies has to turn up before we can say this economy is gaining some traction."

The largest increases in initial claims for the week ending April 26 were in: Massachusetts, +5,591, New York, +4,648, Kentucky, +3,776, New Jersey, +3,521, and Michigan, +3,238. The largest decreases were in: Texas, -3,373, Rhode Island, -1,835, California, -1,689, Pennsylvania, -1,597, and, Connecticut, -1,423.

Meanwhile, the number of continuing claims decreased by 10,000 to 3.020 million from a revised 3.030 million for the week ended April 26, the latest period for which figures were available.

Economic Analysis: Another poor weekly jobless report. Weekly claims were above the consensus estimate, and the 4-week moving average remains at an elevated level. Further, the continuing claims total remains over 3 million -- an indication of a soft job market. That statistic, combined with a elevated 4-week average, indicates that labor market conditions are not improving -- a decided negative for the U.S. economy.

Readers of this space know that my investment bias is toward large-cap companies with demonstrated business models that have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the aforementioned in mind, Caterpillar is worth a review.

Caterpillar (NYSE: CAT) is the world's No. 1 manufacturer in earth moving equipment and a leader in construction/agricultural equipment.

In general, analysts see CAT's 2008 revenue increasing 7-10% on strong international growth; North American revenue is expected to be flat.

Analysts also like the fact that Caterpillar is well-positioned to secure new business in emerging market economies for construction, infrastructure and land development work.

Meanwhile, raw material / core component costs are expected to continue to rise, limiting margin growth. The Reuters F2008/F2009 EPS consensus estimates for CAT are $6.02/$6.77.

The ever-incisive FT columnist Martin Wolf offers prudent and timely advice concerning the reforms needed to ease credit market doldrums and right the global financial state of things.

One key practice Wolf would like to see addressed is bank / mortgage lender selling of mortgages they originate.

Designers of the practice had good intentions: It was designed to free-up capital so banks / mortgage lenders could have more money available for future homebuyers. A noble intention.

Unfortunately, as tradition reminds us, the road to perdition (and record housing sector slumps) is paved with good intentions. The problem, Wolf notes, is that the originate-and-distribute model encouraged banks / mortgage lenders to originate (in many cases for handsome fees) high-risk, very-poor-credit-quality mortgages with reckless abandon, because originators knew that the loan would be sold, and its status as a performing asset would be entirely someone else's problem. Save the best (mortgages), get rid of the rest.

It's not surprising, Wolf notes, that the originate-and-distribute model became laden with sloppy, irresponsible and even fraudulent loans. Wolf's reform: originators must be required to retain a portion of the equity of securitized loans. Hence, if / when they go bad, the originator loses money too.

Economic Analysis: Wolf's proposed financial / bond market reform is on the mark. If every party, including the originator, has a stake in a mortgage's repayment status, that will lead to higher-quality loans, while at the same time retaining the secondary market's benefit of freeing-up capital for new mortgages.

The dollar rallied to a six-week high Wednesday after U.S. productivity increased at a larger-than-expected rate and sentiment surfaced that Europe's economy may have slowed considerably.

The dollar rose about 2 cents versus the euro -- a large move in the currency market -- to $1.5370 on Wednesday afternoon. The dollar also gained against the world's other major currencies, rising about 2 cents to $1.9530 versus the British poundת about 0.5 cents to $1.0555 versus the Swiss franc and about one-half yen to 104.85 yen versus Japan's yen.

U.S. productivity gives dollar a lift

Earlier in the day, the U.S. Labor Department announced that U.S. worker productivity increased at a 2.2% annual pace in Q1 2008, well above the 1.7% Bloomberg News survey consensus estimate.

Independent currency trader Andrew Resnick told BloggingStocks Wednesday the Q1 2008 productivity data, combined with a sense that the European Central Bank is behind-the-curve concerning interest rate cuts to deal with slowing economic growth, put traders in dollar-buy mode.