Archive for July, 2008
BushHumor on July 31st, 2008
Manufacturing in the U.S. stagnated in July as orders slumped to the lowest level in almost seven years, signaling higher raw material costs and slower spending are hurting producers.
The Institute for Supply Management’s factory index fell to 50, a higher reading than forecast, from 50.2 in June, the Tempe, Arizona-based group said today. A reading of 50 is the dividing line between expansion and contraction.
Manufacturers are scaling back to protect profits and prevent inventories from growing as demand weakens. The drop in the value of the dollar has made U.S. goods more affordable overseas, leading to gains in exports that are keeping factories from sinking.
“The economy is essentially stalled,” David Resler, chief economist at Nomura Securities International Inc. in New York, said in a Bloomberg Television interview. “It will remain that way for the time being. We will see bigger job losses down the road.”
Economists forecast the index would decrease to 49 from 50.2 in June, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from 47.8 to 52.5. Read the rest of this entry »
BushHumor on July 30th, 2008
The Federal Reserve, looking to spur investment in lenders hit by credit-market losses, is weighing three measures to ease rules for private-equity funds that buy bank stakes, people with knowledge of the deliberations said.One proposal would permit buyout firms to use “silo” funds walled off from their other investments to buy the stakes without subjecting the rest of their holdings to more federal oversight, said the people, who declined to be named because the talks aren’t public. Under another scenario, the Fed would let private equity firms exercise more control of banks they invest in. A third plan would encourage firms to team up on bank deals.
Buyout firms are “hesitant to invest in banks because of the various levels of regulation that would apply to them,” said Thomas Vartanian, a partner at Fried Frank Harris Shriver & Jacobson LLP in Washington who advises buyout funds and lenders. “The banks need capital, and private equity has it. Necessity is often the mother of invention.”
Treasury Secretary Henry Paulson has called on banks and brokerages to raise cash as their losses from the collapse of the mortgage market and the ensuing credit-contraction climb to more than $466 billion. Blackstone Group LP and Carlyle Group, the world’s two biggest private-equity firms, discussed the topic when they met with Paulson this month, say people briefed on the talks. Read the rest of this entry »
BushHumor on July 29th, 2008
The Federal Reserve said lending to commercial banks rose to an average daily record while loans to securities firms showed a zero balance for a fourth week.Loans to commercial banks through the Fed’s traditional discount window increased by $2.47 billion to an average $16.4 billion a day in the week ended yesterday, while lending to Wall Street bond dealers fell to zero from an average $9 million, the Fed reported today.
The subprime-mortgage collapse has taken a toll on banks and other financial companies, which have reported $468 billion of writedowns since the start of 2007. Fed officials have responded to the yearlong credit crisis by narrowing the gap between the discount rate and the benchmark rate and increasing the term of commercial-bank loans to 90 days from overnight.
“It reflects the growing use of the discount window as not just an overnight backstop but as a permanent source of funding,” said Louis Crandall, chief economist at Wrightson ICAP LLC, a Jersey City, New Jersey-based research firm. The Fed report shows banks are taking advantage of the lengthened terms, he said.
The average daily total for the discount window surpassed the previous high of $16 billion in the week ended May 28. Commercial banks also have $150 billion in outstanding Fed loans from the central bank’s Term Auction Facility, which conducts sales of 28-day funds every two weeks. Read the rest of this entry »
BushHumor on July 28th, 2008
Pre-Paid Legal Services, which offers legal expense plans for a monthly fee to members, on Monday posted a 14 percent rise in second-quarter profit as its membership rose and costs declined.
For the quarter ended June 30, the company reported net income of $15.1 million, or $1.25 per share, compared with $13.2 million, or 99 cents per share, in corresponding period a year ago.
Per-share results reflects a 10 percent decrease in the number of outstanding shares.
Revenue rose to $116.9 million, up a bit more than 2 percent from last year’s $114.1 million. Membership fees rose 2 percent to $109.5 million, while revenue from associate services gained 6 percent to $6.3 million. Expenses declined 2 percent, to $92.8 million.
Pre-Paid Legal Services sells plans to members that cover a range of legal expenses, similar to medical reimbursement plans. Law firms that are associated with the company’s network handle criminal matters, routine civil issues like wills and home buying, and a program for dealing with identity theft.
In morning trading, Pre-Paid Legal shares fell 74 cents to $42.06
BushHumor on July 14th, 2008
Probably you missed it, but last week there was a fascinating interview on the NPR program Talk of the Nation. The segment featured a scientist named David Goldberg, who answered questions about his research concerning the plausibility of storing massive amounts of carbon dioxide in basalt formations deep below the earth’s oceans.In a paper that is available online and will be published in an upcoming issue of The Proceedings of the National Academy of Sciences, Goldberg and his colleagues write about how a basalt formation off of the coast of Oregon and Washington could potentially store anywhere from 120-150 years of carbon produced by the United States in its cavities (assuming current U.S. emission rates do not increase).
While initially I was extremely skeptical of this idea (because I thought that it might cause all kinds of unintended ecological havoc), by the end of the interview, I was somewhat more optimistic.
The idea of storing carbon dioxide under the ocean reminds me of a rather naive idea I once had as a kid. I thought that a good way to rid the earth of our human waste would be to rocket it into space in huge bundles. Then a giant incinerator in space would burn the garbage. Every time I see a bumper sticker that says “Earth First: We’ll destroy the other planets later,” I chuckle as I am reminded of what a silly idea shooting our litter into space would be. Read the rest of this entry »
