Continue reading Foreclosures continue to mount

Foreclosures continue to mount originally appeared on BloggingStocks on Thu, 11 Jun 2009 14:00:00 EST. Please see our terms for use of feeds.

Continue reading Oil closes out the week strong

Oil closes out the week strong originally appeared on BloggingStocks on Fri, 29 May 2009 17:40:00 EST. Please see our terms for use of feeds.

Continue reading Unemployment continues its rise in April

Unemployment continues its rise in April originally appeared on BloggingStocks on Tue, 26 May 2009 17:00:00 EST. Please see our terms for use of feeds.

There are two competing forces at work in the oil market. On the one hand, OPEC has already cut production by 4.2 million barrels per day since last September. OPEC's secretary has said the producer group was willing to make further cuts when it meets in March. The price of crude has been holding steady near (above or below) the $40.00 per barrel mark.

Another factor weighing on the market is the threat of some 30,000 U.S. refinery workers who may go on strike. This can bring our refinery capacity to a virtual standstill. In Britain, workers staged an unofficial walkout on Friday in protest over the use of foreign workers.

Continue reading Is oil going up or down?

Is oil going up or down? originally appeared on BloggingStocks on Mon, 02 Feb 2009 11:31:00 EST. Please see our terms for use of feeds.

Continue reading Oil gets a bounce from anticipated rise in Chinese demand

Oil gets a bounce from anticipated rise in Chinese demand originally appeared on BloggingStocks on Wed, 26 Nov 2008 12:15:00 EST. Please see our terms for use of feeds.

Continue reading August home sales highlight an already rocky housing market

August home sales highlight an already rocky housing market originally appeared on BloggingStocks on Thu, 25 Sep 2008 17:20:00 EST. Please see our terms for use of feeds.

The oil ministers at OPEC could not leave well enough alone and just tell the world that they would not alter production at their current meeting. They had to add that they might decrease output in March because they believe that economic growth in the U.S. is slowing.

Reacting to these comments, the International Energy Agency said "With the current pressures from the financial system, the economy does not need additional downward pressure on consumer spending and growth from near record oil prices," according to the Financial Times. That is a masterpiece of understatement.

Much of the movement of oil price is now based on rumor and psychology as much as on real measurement of supply and demand. The willingness of China to underwrite gas and diesel prices perverts the global market's normal action. Oil suppliers are now keeping more of their output for growing numbers of cars and new infrastructure building within their own borders. The normal measurements of how oil is priced have warped into something new.

OPEC's hint at a March cut says one thing and one thing only. When oil is over $90, we make more money. The current slowing of the global economy has not dropped prices much. If it does, we can keep prices high by a slight manipulation of what we ship.

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

OPEC tightening in March could slow U.S. GDP more originally appeared on BloggingStocks on Sat, 02 Feb 2008 13:40:00 EST. Please see our terms for use of feeds.

The market spent much of Friday running numbers on what a Microsoft Corp. (NASDAQ: MSFT) buy-out of Yahoo! Inc. (NASDAQ: YHOO) might yield in terms of competition in the online ad market. What may have been missed is that the S&P 500 had its worst January since 1990 according to Reuters.

The S&P fell about 4%, but the figure for the Nasdaq Composite was much worse. It dropped 8%. Some off the most important stocks in the index had breathtaking falls. Apple Inc. (NASDAQ: AAPL) fell-off about 30%. Intel Corp. (NASDAQ: INTC) fell 15%. Google Inc. (NASDAQ: GOOG) moved down 25%. With their huge market caps, these stocks get tremendous weight in the index.

What this tells the market is that Wall Street is deeply mistrustful about any recovery in the economy. Tech helped keep U.S. stocks from an awful year in 2007. They are now extremely unlikely to reprise that role in 2008. That does not leave any sector to help the market through a tough period. The economic slowdown has already touched most industries.

If the past is prelude, the stock market is in for a bone-jarring drop in 2008. A day of M&A news is just a distraction.

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

Excitement over M&A masks Nasdaq disaster originally appeared on BloggingStocks on Sat, 02 Feb 2008 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Emerging markets may not be the safe haven you thought they were

Emerging markets may not be the safe haven you thought they were originally appeared on BloggingStocks on Thu, 17 Jan 2008 16:25:00 EST. Please see our terms for use of feeds.

In late April, Portfolio Recovery (NASDAQ: PRAA) reported better-than-expected earnings, launched a massive share buyback plan, and announced a one-time special dividend payment of $1 per share. The stock jumped on this positive news and has hardly looked back since.

Portfolio Recovery is one company that actually benefits from a deterioration in consumer credit quality. The firm buys up pools of defaulted credit card debt, automobile loans, and even unpaid telephone bills. Because these loans are delinquent or in default, they can be scooped up for just a few pennies on the dollar.

The original lenders that sell this debt can at least recoup some of their losses before writing the loans off the books. And if Portfolio Recovery collects on even a small percentage of the debt it buys, then the company earns a tidy profit. The trick, of course, is not to overpay.

When consumer credit quality is very strong, there are only a limited number of available pools of appropriate debt for Portfolio Recovery to buy. Because of the limited supply of delinquent debt, competition to buy these loans can be heated -- this tends to push up prices and cut into margins. However, with interest rates rising and the economy slowing, default rates on consumer debt have begun to tick higher. This tends to open up more opportunities for Portfolio Recovery to purchase bad debt on the cheap.

I believe the shares deserve to trade at a 20% premium to their growth rate, which would equate to a multiple of 22X this year's earnings estimates. This would give the stock a target near $70 per share.

For more from Paul Tracy, please visit www.streetauthority.com

Portfolio Recovery: Making good on bad debt originally appeared on BloggingStocks on Fri, 22 Jun 2007 14:15:00 EST. Please see our terms for use of feeds.

Lunch at O'Brien's Irish Restaurant & Pub: six bucks (drinks not included) -- oh my! In Santa Monica, with Wilshire Boulevard rents yet -- unbelievable!

Sarah Gilbert and I have been finding little bits of information here and there (Economic indicators coming from more unlikely places) that support the notion the slowing economy is being felt by the "little guy" first, as usual. Small business owners see it first because they have very flat enterprises. (Venice Beach as a leading economic indicator) Owner and staff and that's it. Sometimes just themselves. Employees receiving a paycheck see it early and have the least options to adjust to change, and fixed income seniors -- they're totally stressed out.

Large companies have so many levels of management that by the time the guy at the top feels the pain (assuming he ever does) of the guy at the bottom he has already collected his bonus for his underperforming company. By the time the guy at the top responds to the needs of the guy on the bottom (assuming he ever does) the guy on the bottom has already figured out what he needs to do to survive and has helped himself.

Composing this post in my head walking back from lunch I wondered about how much attention we pay to Wall Street data each day, even though that data really comes to us second-hand from everywhere else.

Continue reading Forget Wall Street -- it's about the Main Street economy!

Forget Wall Street -- it's about the Main Street economy! originally appeared on BloggingStocks on Thu, 24 Aug 2006 12:00:00 EST. Please see our terms for use of feeds.

Some of you laughed when Sheldon Liber pointed to sales of art and crafts in Venice Beach, Calif., as a leading economic indicator -- and some of you (like me) thought it prescient. I couldn't help agreeing, as I'm dialed into the crafts scene here in Portland, Ore., and have watched a startling decline in artsy-fartsy sales since last fall.

Reading today's MarketBeat from The Wall Street Journal [subscription required], then, I found the latest kooky indicator: Bobby. More to the point, the sales of Bobby's grilled chickens. He owns and operates a lunch grill somewhere in the Great Lakes, and his business has fallen sharply, despite lowering his price-per-lunch plate from $7 to $6.25. Notably missing amongst his regulars: the blue-collar workers.

Blogger Jeff Matthews discovered Bobby, and he believes Bobby's chicken sales are an indicator. He writes, "Being in the Midwest, and being a half-dozen hours north of Detroit, what we have here is the real-life impact of those GM and Ford oops-we-make-gas-guzzlers-and gas-is-$3.00-a-gallon headlines, multiplied across dozens of factories and thousands of lives dependent on those companies and their gas guzzlers for work." Matthews believes we'll see the impact in GM, Ford, Toll Brothers, Centex Homes, Lowes, Home Depot.

I'm fascinated to see if these theories end up being correct. Could a slowdown be in the works for the fall?

Economic indicators coming from more unlikely places originally appeared on BloggingStocks on Wed, 23 Aug 2006 13:15:00 EST. Please see our terms for use of feeds.