"Our enthusiasm is clearly a notch below where we were at the beginning of the year," write Credit Suisse analysts, starting to see a bit of froth creep into small caps. At 16.4x earnings, the Russell 2000 (IWM) "has admittedly lost its valuation appeal." For now, they're buyers on dips, but should the index near the 1,000 level, valuation pressure will really start to be felt. [View news story]
FWIW, 16.4x earnings is projected in a year. The current P/E is 33. Me thinks the estimates are frothy NOW.
Thank goodness for a pick up in railcars needed for petroleum, because it looks like they have an excess of about everything else. http://bit.ly/ZbLfY6
Fannie Mae (FNMA.OB) is working on an accounting change that could allow it to repay up to $61.5B of the $88B that it owes to the Treasury. Under the change, Fannie would reclaim tax benefits that were written down after the government took it over in 2008. The return of billions of dollars to the government "could have important repercussions for reform and other housing-finance discussions," says analyst Jim Vogel. [View news story]
Btw...FNMA owes the treasury $116.1 bil as the outstanding balance of the senior preferreds. To date they have paid approx $40.1 in dividends to the Treasury for the use of those funds. The dividends are onerous and unfair to the shareholders. Now the treasury takes all shareholder equity over $3bil this year as a dividend payment.That maximum shareholder equity of $3 bil gets reduced to zero by 2018, not allowing the shareholders the ability to build capital. The potential return on the taxpayer's investment could be 20% or more with the huge profits Fannie and Freddie are earning. This would make my local loan shark proud. But, should we expect the same from our government.
Fannie Mae (FNMA.OB) is working on an accounting change that could allow it to repay up to $61.5B of the $88B that it owes to the Treasury. Under the change, Fannie would reclaim tax benefits that were written down after the government took it over in 2008. The return of billions of dollars to the government "could have important repercussions for reform and other housing-finance discussions," says analyst Jim Vogel. [View news story]
Question; I thought the Deferred tax assets (DTAs) were tax credits available to be used to offset future taxes. Many of the articles I read suggest that FNMA would be making a one time payment to the treasury with the DTAs. I can see how the DTAs would be a paper asset on the balance sheet and increase the shareholder net worth which would trigger and equal sum be forwarded to the treasury as a dividend under the senior preferred agreement. However, the increase is non-cash, no? Where does the cash come from to pay the dividend?
The FHA says it is working on a plan to merge some of the operations of Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) in a new venture, separate from the two firms, which would operate a secondary mortgage market infrastructure to be used by Fannie and Freddie. The new firm could either be sold or used "as a foundational element of the mortgage market of the future." [View news story]
To be clear, it is not the FHA, it is the FHFA, the regulator for Fannie and Freddie. The FHA has their own problems to sort out
As Chimera Receives Its Final NYSE Extension, A Filing Or Buyout Better Come Soon [View article]
For all practical purposes CIM can not be bought out before they catch up with their "paper work" as the board of directors could not even think about accepting an offer without accurate financials. CIM would open themselves up to a strong lawsuit if they did otherwise.
Actually the "prior" was not 51.6. The last 6 months wee corrected earlier this week. No nobody seemed to have noticed.
But first here is the headline from December: Chicago PMI Beats, New Orders Up
Live Trading News-Dec 29, 2012 The Chicago Purchasing Managers Index PMI for the month of December rose from 50.4 in November to 51.6, the 3rd straight monthly increase ...
Pretty positive headline...
Here are the corrected numbers. PMI dropped every month since July. Perhaps January will be corrected too. (Changes all revised figures for NAPM-Chicago index and new orders component after ISM-Chicago issues corrected data) Jan 28 (Reuters) - The Institute for Supply Management-Chicago on Monday released corrected annual revisions to its index of Midwest business activity. The NAPM and New Orders figures were corrected. The revised figures for the past six months follow: Dec Nov Oct Sept Aug July NAPM-Chicago 50.0 50.2 50.7 50.9 54.1 54.6
More on Amazon's (AMZN) Q4: The company swung back from its Q3 loss as North America sales rose 23% Y/Y to $12.175B and International sales gained 21% to reach $9.093B. Growth in the company's Electronics segment outpaced Media segment sales. Free cash flow decreased 81% to $395M for the trailing twelve month period compared to a year ago with real estate outlays factoring in. For Q1, the company sees $15.0B-$16.6B in revenue and expects profit to fall in a range of -$285M to $65M. A conference call is scheduled for 5:00 EST. AMZN changes direction, now +3.2% AH. (PR) [View news story]
Bloomberg earlier before earnings... Bloomberg editor Mark Gimen points out that Apple earned $13.1 billion in profits last quarter. From the time Amazon turned a profit in 2003 to the end of 2011, Amazon has earned $5.1 billion in profits. (From inception, adding up losses, it's ~$1.5 billion, says analyst Benedict Evans.)
We want to say that again: Amazon's total profits are ~$5.1 billion. Apple did more than double that in the last three months. (Amazon's price-earnings ratio is currently a mind-boggling 3,275x. Apple's is 10x. Traditional valuation metrics are obviously pointless for Amazon, but if you were to use Amazon's PE for Apple, the stock would be trading at $144,618 per share, for a market cap of $136 trillion. Those numbers are totally meaningless, but it's funny to think about.)
Fannie Mae's Efforts Could Lead To The Break Up Of A Key Monopoly Among The Big Banks [View article]
You wrote; "For those looking to establish a position in Fannie Mae, now may be a great time to establish a position in the company as I believe the chances for a favorable ruling by the FHFA are pretty good."
Hmm..I don't see how the ruling will affect the price per share for Fannie. If Fannie and Freddie's strong profits can't hardly budge the PPS, I don't see how this issue will.
however, what we need is to get the FHFA to release us from conservatorship. It is unfair for the US Treasury to now take all profits without us shareholders being allowed to redeem some of the senior prreferreds. I have now set up a website for us Fannie and Freddie shareholders at FannieandFreddieShareh... We also have a FaceBook page at same. I see you own the common. Please come by and check us out.
Amazon Should Post Strong Results, But Sales Tax Impact In Question [View article]
Have you checked out AMZN on Alexa.com. http://bit.ly/SNjlmK Below the chart you can add a website to compare. Compare AMZN with EBAY. Look at 'pageviews/user' and 'time on site'. EBAY appears to have done better on both. Even Walmart.com and Bestbuy.com looked to have had better holiday results under traffic stats relative to their online presence. I think ebay announced a 19% increase in revenues. The street is looking for 29% for AMZN. Looking forward to Tuesday to see the results.
The Federal Reserve reports FY2012 profit of $91B, $88.9B of which was remitted to the Treasury, up from $75.4B a year ago. Results are about inline with expectations. Shares -0.5%. [View news story]
Fed Reserve trades on the pink sheets under the symbol PONZI.
This is a case where profits are bad, very bad. It means the fed has printed more money. It means taxpayers have had to pay more in interest on debt. It means the Federal reserve is still screwing your grandmother out of her retirement funds.
AIG will not join Hank Greenberg's lawsuit against the government, reports the WSJ as board members are more concerned about damage to the firm's reputation rather than the wrath of Greenberg and his lawyers. [View news story]
Long AIG here too! Hank Greenberg thinks the government abused their use of power with AIG, how would like to be a Fannie or Freddie shareholder? The Treasury charged both FnF a BILLION dollars each just to be put them into conservatorship. Then they forced both to draw funds that they did not need issuing senior preferred shares to the Treasury, and then required them to pay an onerous 10% dividend on those shares. Combined FnF have paid over $50 BILLION in dividends. Then in August the Treasury demands that starting this year FNF is required to hand over ALL profits to the Treasury in the name of dividends. Fannie has drawn $116.1 bil. from the Tsy, and has paid $28.5 bil in dividends as of the last 10-Q. Taxpayers net investment in Fannie is now $84.7 bil. If Fannie shows the same profits next year as this, they would be turning over to the Treasury nearly $13 bil in profits, for a lofty 15% return on the taxpayers net investment. On top of all of this, the Treasury issued themselves warrants for 79.9% ownership in FNF. At least the AIG shareholders could pay back the Treasury and escape their debtor prison.
The use of non-conventional drilling techniques in places like North Dakota and Texas has created an explosion in U.S. oil production, to the point where it's expected to surpass Saudi Arabia in crude production by 2020. The government now predicts the U.S. industry could pump 14% more oil this year alone, rising to 7.3M bpd in 2013. That's 300K more than its December forecast, and 900K bpd more than what was produced in 2012. [View news story]
Global warming? Then look at it globally. Why are we assume that oil will not be drilled elsewhere if we do not drill for it? It probably will and better produced here with our tighter environmental standards than other places. Anyway...Record colds in China and India. http://bit.ly/UIhePb
Amazon's (AMZN) Jeff Bezos says he would prefer to reward investors with cash flow instead of boosting margins. The exec has his focus on the company's formidable free cash flow position which is forecast to increase 65% this year to $10.68 per share. "Free cash flow, that’s something investors can spend," Bezos sings. [View news story]
...and things just got more competitive (even lower margins) for AMZN...
8:59 AM Is a clarification coming from Target (TGT)? First Adopter notes the information flowing from the retailer on its online price matching program (I, II) reads such that a consumer could match the prices listed at Amazon.com and receive yet another 5% off using their REDcard. If the deal holds, it's a coup for Target consumers but a bit of a margin pinch for the company.
"Our enthusiasm is clearly a notch below where we were at the beginning of the year," write Credit Suisse analysts, starting to see a bit of froth creep into small caps. At 16.4x earnings, the Russell 2000 (IWM) "has admittedly lost its valuation appeal." For now, they're buyers on dips, but should the index near the 1,000 level, valuation pressure will really start to be felt. [View news story]
Me thinks the estimates are frothy NOW.
A sudden surge in crude oil traffic sees Union Pacific (UNP) and other operators pulling old trains back into action, and leaves them wondering how heavily to invest in future traffic flows, and where to place their chips. [View news story]
http://bit.ly/ZbLfY6
Fannie Mae (FNMA.OB) is working on an accounting change that could allow it to repay up to $61.5B of the $88B that it owes to the Treasury. Under the change, Fannie would reclaim tax benefits that were written down after the government took it over in 2008. The return of billions of dollars to the government "could have important repercussions for reform and other housing-finance discussions," says analyst Jim Vogel. [View news story]
Fannie Mae (FNMA.OB) is working on an accounting change that could allow it to repay up to $61.5B of the $88B that it owes to the Treasury. Under the change, Fannie would reclaim tax benefits that were written down after the government took it over in 2008. The return of billions of dollars to the government "could have important repercussions for reform and other housing-finance discussions," says analyst Jim Vogel. [View news story]
The FHA says it is working on a plan to merge some of the operations of Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) in a new venture, separate from the two firms, which would operate a secondary mortgage market infrastructure to be used by Fannie and Freddie. The new firm could either be sold or used "as a foundational element of the mortgage market of the future." [View news story]
As Chimera Receives Its Final NYSE Extension, A Filing Or Buyout Better Come Soon [View article]
Jan. Chicago PMI: 55.6 vs. 50.5 expected, 51.6 prior. [View news story]
But first here is the headline from December:
Chicago PMI Beats, New Orders Up
Live Trading News-Dec 29, 2012
The Chicago Purchasing Managers Index PMI for the month of December rose from 50.4 in November to 51.6, the 3rd straight monthly increase ...
Pretty positive headline...
Here are the corrected numbers. PMI dropped every month since July. Perhaps January will be corrected too.
(Changes all revised figures for NAPM-Chicago index and new orders component after ISM-Chicago issues corrected data) Jan 28 (Reuters) - The Institute for Supply Management-Chicago on Monday released corrected annual revisions to its index of Midwest business activity. The NAPM and New Orders figures were corrected. The revised figures for the past six months follow: Dec Nov Oct Sept Aug July NAPM-Chicago 50.0 50.2 50.7 50.9 54.1 54.6
More on Amazon's (AMZN) Q4: The company swung back from its Q3 loss as North America sales rose 23% Y/Y to $12.175B and International sales gained 21% to reach $9.093B. Growth in the company's Electronics segment outpaced Media segment sales. Free cash flow decreased 81% to $395M for the trailing twelve month period compared to a year ago with real estate outlays factoring in. For Q1, the company sees $15.0B-$16.6B in revenue and expects profit to fall in a range of -$285M to $65M. A conference call is scheduled for 5:00 EST. AMZN changes direction, now +3.2% AH. (PR) [View news story]
Bloomberg editor Mark Gimen points out that Apple earned $13.1 billion in profits last quarter. From the time Amazon turned a profit in 2003 to the end of 2011, Amazon has earned $5.1 billion in profits. (From inception, adding up losses, it's ~$1.5 billion, says analyst Benedict Evans.)
We want to say that again: Amazon's total profits are ~$5.1 billion. Apple did more than double that in the last three months.
(Amazon's price-earnings ratio is currently a mind-boggling 3,275x. Apple's is 10x. Traditional valuation metrics are obviously pointless for Amazon, but if you were to use Amazon's PE for Apple, the stock would be trading at $144,618 per share, for a market cap of $136 trillion. Those numbers are totally meaningless, but it's funny to think about.)
Amazon (AMZN): Q4 EPS of $0.21 misses by $0.07. Revenue of $21.27B (+27% Y/Y) misses by $101M. Shares -6.3% AH. (PR) [View news story]
Q4 revenue of $21.27 billion missed expectations of $22.23 billion
Fannie Mae's Efforts Could Lead To The Break Up Of A Key Monopoly Among The Big Banks [View article]
Hmm..I don't see how the ruling will affect the price per share for Fannie. If Fannie and Freddie's strong profits can't hardly budge the PPS, I don't see how this issue will.
however, what we need is to get the FHFA to release us from conservatorship. It is unfair for the US Treasury to now take all profits without us shareholders being allowed to redeem some of the senior prreferreds. I have now set up a website for us Fannie and Freddie shareholders at FannieandFreddieShareh... We also have a FaceBook page at same. I see you own the common. Please come by and check us out.
Thanks for the article. Joe
Amazon Should Post Strong Results, But Sales Tax Impact In Question [View article]
http://bit.ly/SNjlmK
Below the chart you can add a website to compare. Compare AMZN with EBAY. Look at 'pageviews/user' and 'time on site'. EBAY appears to have done better on both. Even Walmart.com and Bestbuy.com looked to have had better holiday results under traffic stats relative to their online presence. I think ebay announced a 19% increase in revenues. The street is looking for 29% for AMZN. Looking forward to Tuesday to see the results.
The Federal Reserve reports FY2012 profit of $91B, $88.9B of which was remitted to the Treasury, up from $75.4B a year ago. Results are about inline with expectations. Shares -0.5%. [View news story]
This is a case where profits are bad, very bad. It means the fed has printed more money. It means taxpayers have had to pay more in interest on debt. It means the Federal reserve is still screwing your grandmother out of her retirement funds.
AIG will not join Hank Greenberg's lawsuit against the government, reports the WSJ as board members are more concerned about damage to the firm's reputation rather than the wrath of Greenberg and his lawyers. [View news story]
Hank Greenberg thinks the government abused their use of power with AIG, how would like to be a Fannie or Freddie shareholder? The Treasury charged both FnF a BILLION dollars each just to be put them into conservatorship. Then they forced both to draw funds that they did not need issuing senior preferred shares to the Treasury, and then required them to pay an onerous 10% dividend on those shares. Combined FnF have paid over $50 BILLION in dividends. Then in August the Treasury demands that starting this year FNF is required to hand over ALL profits to the Treasury in the name of dividends. Fannie has drawn $116.1 bil. from the Tsy, and has paid $28.5 bil in dividends as of the last 10-Q. Taxpayers net investment in Fannie is now $84.7 bil. If Fannie shows the same profits next year as this, they would be turning over to the Treasury nearly $13 bil in profits, for a lofty 15% return on the taxpayers net investment. On top of all of this, the Treasury issued themselves warrants for 79.9% ownership in FNF. At least the AIG shareholders could pay back the Treasury and escape their debtor prison.
The use of non-conventional drilling techniques in places like North Dakota and Texas has created an explosion in U.S. oil production, to the point where it's expected to surpass Saudi Arabia in crude production by 2020. The government now predicts the U.S. industry could pump 14% more oil this year alone, rising to 7.3M bpd in 2013. That's 300K more than its December forecast, and 900K bpd more than what was produced in 2012. [View news story]
http://bit.ly/UIhePb
Amazon's (AMZN) Jeff Bezos says he would prefer to reward investors with cash flow instead of boosting margins. The exec has his focus on the company's formidable free cash flow position which is forecast to increase 65% this year to $10.68 per share. "Free cash flow, that’s something investors can spend," Bezos sings. [View news story]
8:59 AM Is a clarification coming from Target (TGT)? First Adopter notes the information flowing from the retailer on its online price matching program (I, II) reads such that a consumer could match the prices listed at Amazon.com and receive yet another 5% off using their REDcard. If the deal holds, it's a coup for Target consumers but a bit of a margin pinch for the company.