Archive for February, 2012

Found: MFGlobal Monies!

Authorities believe they have traced more than 90% of client monies prior to subsequent transfers from MF Global.

Here’s Dealbook:

“Investigators have determined what happened to nearly all of the customer money that disappeared from MF Global around the time of its bankruptcy last Oct. 31, but have not publicly disclosed their progress, fearing that doing so might cripple efforts to recover the cash and pursue potential wrongdoing, people briefed on the investigation said.

While authorities have traced hundreds of millions of dollars to banks, MF Global’s trading partners and even the firm’s securities customers, investigators remain uncertain about whether they can retrieve the money.

Some recipients were entitled to payouts from MF Global, which could make clawing back the money difficult. For instance, securities customers withdrawing their money as MF Global began to collapse were paid from accounts that belonged to futures clients, according to other people briefed on the matter.”

I expect we will see JPMorgan (JPM) as a counter-party recieved lots of that cash.

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Source:
After a Delay, MF Global’s Missing Money Is Traced
By BEN PROTESS and AZAM AHMED
Dealbook, January 31, 2012, 9:42 pm
http://dealbook.nytimes.com/2012/01/31/mf-globals-missing-money-is-slowly-being-tracked-down/

Category: Corporate Management, Legal, Really, really bad calls

A Real Phony

Frederick Sheehan is the co-author of Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve. His new book, Panderer for Power: The True Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession, was published by McGraw-Hill in November 2009. He was Director of Asset Allocation Services at John Hancock…Read More

Category: Federal Reserve, Think Tank

Why the Fed Trumps Weakening Economy

Here’s my (2nd) Yahoo Finance video from yesterday: > Click for video > First video is here A Housing Bottom Is Nowhere In Sight; there’s a nother in the queue

Category: Federal Reserve, Investing, Media

10 Mid-Week AM Reads

My reads this AM: • Worst Profits Since 2006 Fail to Dent Rally in Europe Stocks (McClatchy) • Rating Firms Face Pressure on Hill (WSJ) • The pitfalls of the Facebook IPO (LA Times) see also Personal Data’s Value? Facebook Is Set to Find Out (NYT) • Apple Invades $3.8 Trillion Wintel Office Market With…Read More

Category: Financial Press

Ritholtz: Economy’s Lousy, But US Stocks Still Look Good

Yesterday morning (January 31, 2012), I recorded this video with Yahoo Daily Ticker:

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Source: Barry Ritholtz: Yes, The Economy’s Lousy, But Stocks Still Look Good

Category: Economy, Investing, Video

ADP private job adds a touch light

ADP said 170k private sector jobs were added in Jan, 12k below estimates and Dec was revised down by 33k to 292k. The Dec figure though is still well above the Government Payroll figure of 212k reported last month. Also, ADP reported a 204k job gain in Dec while the Government said it was 120k….Read More

Category: MacroNotes

Earnings Season: Lackluster Earnings, Weak Guidance

MarketBeat (WSJ Blog) – Here’s Another Reason To Fret Over Earnings: Corporate Guidance Not So Hot

The lackluster quarterly earnings season has been well documented, but weak corporate guidance is perhaps the more important takeaway from this reporting period. With earnings season almost halfway over, more companies are offering downbeat views as opposed to optimistic outlooks, suggesting corporate culture isn’t so hot on near-term economic prospects in the U.S. as well as abroad. Bespoke Investment Group’s spread between percentage of companies raising guidance compared to those lowering views stands at -3.3 percentage points. More from Bespoke:

Last quarter was the first earnings season since the financial crisis ended where the guidance spread finished negative. Unless we get a pretty big reversal by the time earnings season ends in mid-February, it looks like we’re now going to have two consecutive quarters with a negative guidance reading.

Comment

Jim Bianco was on FOX Business yesterday discussing the markets.  To view the interview click on the image above. To view any of our recent interviews click here.

In the interview Jim explained that the current earnings season is not going well.  Below are some charts that show this.

Click to enlarge:

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The charts below show the year-over-year growth rates for earnings expectations for Q4 2011 and Q1 2012.  These growth rates have slumped from the mid-teens to low single digits.  Note that Q4 2011 earnings growth jumped in the week ending January 27, 2012.  Apple’s blowout earnings accounts for this jump.  Factset explained it well:

Factset – Earnings Insight for January 27, 2012

Overall S&P 500 Earnings Growth is 11.5%, But Drops to 1.0% excluding AIG & Apple
The blended (combines actual results for companies that have reported and estimates for companies yet to report) earnings growth rate for the fourth quarter currently stands at 11.5%. If the final earnings growth rate is 11.5%, it will mark the ninth consecutive quarter of double-digit earnings growth for the index. Eight of the ten sectors are reporting earnings growth for the quarter, led by the Financials (60.4%), Information Technology (11.9%), and Industrials (10.6%) sectors. However, it is important to note that two companies in the index are responsible for nearly all of the earnings growth in the S&P 500 for Q4 2011: AIG and Apple If AIG and Apple are excluded from the index, the blended earnings growth rate for the S&P 500 would drop to 1.0% from 11.5%. For AIG, comparisons to weak year-ago earnings are driving the unusually high dollar-level growth. The current mean EPS estimate for AIG for Q4 2011 is $0.60, relative to actual EPS of -$16.20 reported for Q4 2010. In Q4 2010, the company recorded $4.2 billion net charge to strengthen Chartis loss reserves, which accounted for much of the loss for the quarter.  On the other hand, Apple reported substantial growth in revenue and earnings for Q4 2011. On the earnings side, the company reported EPS for Q4 2011 of $13.87, which was 116% above year-ago actual EPS ($6.43). On the sales side, the company reported revenue of $46.3 billion, which was 73.3% above year-ago actual revenue ($26.7 billion).

Most earnings analysis is done on an operating earnings basis.  Because the definition of operating earnings differs from one person to the next, the “beat rates” and growth rates quoted by different services (Bloomberg, Thomson, Factset, etc.) will also differ.

The chart in this block uses Bloomberg’s earnings analysis.  Bloomberg excludes AIG’s charge from a year ago as part of its “operating earnings” calculation.  This is why its earnings expectations shown below are closer to Factset after AIG is excluded.

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Category: Markets, Think Tank

Questions for Facebook IPO Investors

Last year (January 12th, 2011) I posed 5 Questions for Facebook Investors into the then private company Facebook: 1. Facebook (FB) claims 500 million subscribers. How many of these are active users — at least once or twice per week? How many of these are dead accounts, with no activity for 30 days? 90 days…Read More

Category: IPOs, Venture Capital, Web/Tech

Matthew’s Day Off

Missus Big Picture, who teaches fashion illustration & design, tells me that her students are watching the 1986 flick Ferris Buellers Day Off in order to understand the Superbowl commercial for Honda. If you are familiar with the movie (DVD here), the commercial parallels the film in lots of amusing ways. Here is the extended…Read More

Category: Film, Weekend

Breaking Down Google’s 2011 Revenue

Via Venturebeat, we see this massive Google revenue review: > click for ginormous version

Category: Technology, Think Tank, Valuation, Web/Tech