Consumer Confidence Sinks to Record Low
January 11th, 2008Via: AP:
Consumer confidence fell to an all-time low as worries about jobs, energy bills and home foreclosures darkened people’s feelings about the country’s economic health and their own financial well-being.
According to the RBC Cash Index, confidence tumbled to a mark of 56.3 in early January. That compares with a reading of 65.9 in December — and a benchmark of 100 — and was the worst since the index began in 2002.
“People are anxious because everything sounds pretty awful these days,” said Bill Cheney, chief economist at John Hancock Financial Services Group.
Economists cited several factors for consumers’ gloomy outlook:
_Hiring practically stalled in December, pushing the unemployment rate to 5 percent, a two-year high, the government reported last week.
_The meltdown in the housing market has dragged down home values and made people feel less wealthy.
_Harder-to-get credit has made it difficult for some to make big-ticket purchases.
_High energy prices are squeezing wallets and pocketbooks.
_There has been much hand-wringing on Wall Street and Main Street as to whether all these problems will plunge the country into recession.
“Consumers are gloomy. The confidence reading suggests that people believe bad times are upon us,” said Richard Yamarone, economist at Argus Research.
U.S. Government Likely Favors Bank of America Buyout of Countrywide
January 11th, 2008The title should actually be: U.S. Dollar Holders Are About to Buy Countrywide and Most of Them Don’t Even Know It
Countrywide can’t go down.
But the U.S. Dollar can.
Via: AP:
A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.
Bank of America Corp. is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal. The transaction would put the country’s largest mortgage lender, which has experienced a surge in home-loan defaults and has seen its share price plummet, in the hands of the largest U.S. bank by market capitalization.
A Bank of America-led buyout is “the one and only hope that (Countrywide) has” to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co. Egan-Jones warned earlier this week that Countrywide could “falter” unless it receives an infusion of $4 billion in capital within the next two weeks.
“I cannot imagine that the regulators want Countrywide to go under,” said Bert Ely, a banking industry consultant in Alexandria, Va. “I think they’re actually quite nervous about that.”
A combination of Bank of America and Countrywide would require approval from the Federal Reserve, and possibly other agencies. Banking regulators declined to comment on the reports.
Mexico’s Pemex Stopping U.S. West Coast Oil Exports
January 11th, 2008Via: Reuters:
Mexican state oil monopoly Pemex will stop shipping crude oil to the U.S. West Coast from February due in part to a shortage of infrastructure at Salina Cruz port, the company said on Wednesday.
Pemex was only shipping a tiny 20,000 barrels per day of oil to the U.S. Pacific coast out of its total daily exports of around 1.7 million barrels, but will now focus on exports to the U.S. Gulf coast and smaller shipments to Europe and Asia.
Pemex said the decision was made because of limited storage space at Salina Cruz, on the Pacific coast, and bottlenecks with transporting crude oil there from Dos Bocas on the Gulf of Mexico coast where much the country’s oil is produced.
“The volume of crude that will no longer be sent to the U.S. West Coast will be sold in other markets where there are better economic alternatives,” Pemex said in a statement.
Earlier on Wednesday a source at Pemex’s international trading arm told Reuters the company’s oil refinery at Salina Cruz had grown to the point where it needed to use storage tanks formerly used for crude headed for the U.S. West Coast.
“The crude has better opportunities elsewhere,” the source said.
Mexico is the world’s ninth largest exporter of crude oil by volume.
Around 88 percent of Pemex’s oil exports go to the United States, which relies on its southern neighbor as a politically stable oil source second only to Canada.
Dozens Injured as Boy Wreaks Havoc by Playing Trains with City’s Trams
January 11th, 2008“Holy shit. It’ll be like a modern, Apocalyptic mashup of the olden days with Captain Crunch and his handy 2600hz whistle, or, more recently with Adrian Lamo with his old Toshiba laptop (missing keys) and his web browser. These are the real poster children of the asymmetric revolution. The question is, will the kids who will oWn these power systems be in it for fun, or in it to win? Maybe both.”
—New Power Meters in California Can Ration, or Cut Off Electricity by Remote Control
See what I mean?
Via: Scotsman:
A POLISH schoolboy who turned a city’s tram network into a giant toy by manoeuvring rolling stock using a TV-style remote control has been arrested after he caused chaos on the public transport system.
Adam Dabrowski, 14, described by teachers as a model pupil and an electronics genius, hacked into the public transport network in Lodz to change the track points derailing at least four trams and leaving dozens injured.
The teenager had also equipped himself with a hand- drawn map of city tram junctions.
He told police in Lodz in central Poland he had changed the points on tram tracks across the city for a prank. But in one incident alone 12 people were injured.
The giant train set started operating at 1pm on Tuesday when a city tram driver tried to steer his vehicle on to right hand tracks, and found himself helpless to prevent it swerving to the left instead, seemingly of its own accord.
The rear wagon then swung off the rails and crashed into another passing tram, hurling screaming passengers to the floor.
Transport employees said they knew immediately that someone outside their staff had caused the accident.
Miroslaw Micor, spokesman for Lodz police, said: “He studied the trams and the tracks for a long time and then built a device that looked like a TV remote control and used it to manoeuvre the trams and the tracks.”
Mr Micor added: “He had converted the TV control into a device capable of controlling all the junctions on the line and wrote in the pages of a school exercise book the best junctions to move trams around and what signals to change.
“He treated it like any other schoolboy might a giant train set – but it was lucky nobody was killed.
“Four trams were derailed, and others had to make emergency stops that left passengers hurt. He clearly did not think about the consequences of his actions.”
Dabrowski is to face charges of endangering public safety in a special juvenile court.
Merrill Lynch Subprime Losses Are Almost Double Original Estimate
January 11th, 2008Via: New York Times:
Merrill Lynch is expected to suffer $15 billion in losses stemming from soured mortgage investments, almost double its original estimate, prompting the firm to raise additional capital from an outside investor.
Merrill, the nation’s largest brokerage firm, is expected to disclose the huge write-down when it reports earnings next week, according to people who have been briefed on its plans. The loss far exceeds the $12 billion hit many Wall Street analysts had forecast.
Helicopter Ben About to Shift the Confetti Shredder Into Afterburner
January 11th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Gold nearly hit $900 today. Thanks, Ben. No, really. Thank you, sir.
I keep thinking, I need to diversify and hold a little USD. Somehow, I don’t seem to be getting around to it… And that has been a good thing, so far.
Remember, the number to watch on the U.S. Dollar Index is 74.50. That is THE support. If that gets taken out, we’ll likely be taking about gold in four digits, to the left of the decimal place, instead of three.
If consumer stocks bounce on the latest Fed confetti shredder action, let’s all work together to draw up a target list of the most succulent pigs to short/buy puts on to profit from a whipsaw back down. My logic is that the rate cuts will cause more inflation, making things more difficult for consumers.
What companies A) thrive on unnecessary consumer spending in the U.S. and B) haven’t tanked yet?
I’ll start the list with AMZN.
Maybe play APPL again on a retry of $200? I recently made money on APPL to the downside, and I’m superstitious about reshorting pigs, as stupid as that sounds.
What are some other ways to profit from this situation? Hint: I like the ones that allow options plays, since I only do this type of gambling with very small amounts of money.
As you know, our main bets are on cash, gold and food.
Via: Bloomberg:
Federal Reserve Board Chairman Ben S. Bernanke said more interest-rate cuts “may well be necessary” after 1 percentage point of reductions since September to buttress economic growth.
“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” Bernanke said today in his first speech on the economy since the Fed’s Dec. 11 meeting. Recent figures suggested the outlook for “2008 has worsened and the downside risks to growth have become more pronounced,” he said.
The comments increased speculation that the Federal Open Market Committee will cut its benchmark rate by half a percentage point, to 3.75 percent, this month. Wall Street analysts say the odds of a recession have increased after a report last week showed a jump in unemployment.
“A number of factors, including higher oil prices, lower equity prices, and softening home values, seem likely to weigh on consumer spending” this year, Bernanke said in remarks to the Women in Housing and Finance and Exchequer Club in Washington.
The Fed isn’t forecasting a recession, the Fed chief said in response to a question after the speech. “We are forecasting slow growth, but there are downside risks,” he added. “It is important to take substantive action against those risks.”
Bigger Reduction
“From the tone of the speech, a 50-basis point cut seems likely,” Lawrence Lindsey, a former economic adviser to President George W. Bush and ex-Fed governor, said from New York. Though it’s “unlikely” the U.S. is in recession, Bernanke “is quite right to take precautionary measures right now,” he said.
The dollar extended declines and shorter-dated Treasuries rallied after Bernanke’s remarks, while stocks initially rose before dropping. Yields on two-year Treasuries fell to 2.65 percent at 2:13 p.m. in New York, from 2.72 percent late yesterday. The dollar dropped 0.9 percent to $1.48 per euro.
Australia Joins China in Censoring the Internet
January 11th, 2008There will be optional, uncensored connections! Oh joy.
I bet people who opt for the uncensored connections will have a great time with airport security.
“Mr. Smith, your papers appear to be in order, however, we see here that you have opted for a connection to the Internet that has not been cleansed by the Ministry of Truth. Step this way. We have some additional questions for you.”
Companies might also like to know about which employees feel the need to use the uncensored connections at home…
Via: Tech Crunch:
The Australian Government has announced that they will be joining China as one of the few countries globally that broadly censor the internet.
The Labor Party’s policy was announced prior to the Australian Election in November and was justified on the basis that the previous Government’s policy of providing free copies of NetNanny to all Australian households who wanted it didn’t adequately protect children.
As recently as the week prior to the election, Labor Party candidates were telling those concerned about the proposed law that the censorship wouldn’t be compulsory, and that the “clean feed” would be opt-in, not opt-out. Today’s announcement by Telecommunications Minister Stephen Conroy states that the censorship regime will be mandatory, although people will be able to opt-out of it. The problem of course then becomes if you opt-out questions will be asked as to why you want out, which in itself may lead to Government monitoring.
AT&T and Other I.S.P.’s May Be Getting Ready to Filter
January 11th, 2008I know, I know. Don’t panic, “They’re just going to target the file trading traffic.”
Oh sure.
For years, tech savvy employees would game corporate IT environments to get what they wanted, at work. Those same skills could become necessary at home.
Via: New York Times:
For the last 15 years, Internet service providers have acted – to use an old cliche – as wide-open information super-highways, letting data flow uninterrupted and unimpeded between users and the Internet.
But I.S.P.’s may be about to embrace a new metaphor: traffic cop.
At a small panel discussion about digital piracy at NBC’s booth on the Consumer Electronics Show floor, representatives from NBC, Microsoft, several digital filtering companies and the telecom giant AT&T said the time was right to start filtering for copyrighted content at the network level.
Such filtering for pirated material already occurs on sites like YouTube and Microsoft’s Soapbox, and on some university networks.
Network-level filtering means your Internet service provider – Comcast, AT&T, EarthLink, or whoever you send that monthly check to – could soon start sniffing your digital packets, looking for material that infringes on someone’s copyright.
“What we are already doing to address piracy hasn’t been working. There’s no secret there,” said James Cicconi, senior vice president, external & legal affairs for AT&T.
Mr. Cicconi said that AT&T has been talking to technology companies, and members of the M.P.A.A. and R.I.A.A., for the last six months about carrying out digital fingerprinting techniques on the network level.
Washington’s $8 Billion Shadow
January 11th, 2008SAIC is hind titty (in money terms) compared to the top armaments contractors, but it represents the glue that holds the technocracy together.
With regard to the hundreds of millions of dollars worth of apparently botched projects: * pfft * There’s always next year’s budget! Americans pay their taxes, Washington brings the matches.
Via: Vanity Fair:
SAIC is a body shop in the brain business. It sells human beings who have a particular expertise—expertise about weapons, about homeland security, about surveillance, about computer systems, about “information dominance” and “information warfare.” If the C.I.A. needs an outside expert to quietly check whether its employees are using their computers for personal business, it calls on SAIC. If the Immigration and Naturalization Service needs new record-keeping software, it calls on SAIC. Indeed, SAIC is willing to provide expertise about almost anything at all, if there happens to be a government contract out there to pay for it—as there almost always is. Whether SAIC actually possesses all the expertise that it sells is another story.
What everyone agrees on is this: No Washington contractor pursues government money with more ingenuity and perseverance than SAIC. No contractor seems to exploit conflicts of interest in Washington with more zeal. And no contractor cloaks its operations in greater secrecy. SAIC almost never touts its activities in public, preferring to stay well below the radar. An SAIC executive once gave a press interview and referred to the enterprise as a “stealth company,” a characterization that is accurate and that has stuck.
Cryptogon Reader Signs Up for Hosting with Blue Host
January 11th, 2008Thanks to the owner of retireinnovascotia.com for signing up for hosting with Blue Host. Cryptogon received $65 as a result.
