Jon Stewart Segment On States And Municipalities (Daily Show Video)

On The Daily Show a few days ago, Jon Stewart mentioned how States and local municipalities are taking drastic cuts and raising taxes to close budget deficits. Watch the video after the jump. Here are few headlines he brought up, and you can understand why: Camden lays off nearly half of its police force (Philly.com), Ariz. governor moves to cut 280,000 Medicaid recipients (Modern Healthcare), Cutting class: Do Texas high schools really need senior year? (KVUE.com), Detroit Public Schools proposal would close nearly half its schools by 2013 (upping classroom count and abandoning closed buildings would save $12.4M) (Detroit News).

Jimmy John's Not Happy About Illinois Tax Hike, Fitch Gives "Stable" Rating To Illinois

JimmyJohns
ILLINOIS: Jimmy John's, Beelman Truck Co., CouponCabin and Amazon are not happy about the Illinois income tax hike. Fitch, however, upgraded Illinois' credit rating to "stable" from "negative". Remember when Meredith Whitney talked about State arbitrage?

Tax hike lifts state’s credit rating (Crain's Chicago)

Jimmy John's founder contemplates moving headquarters out of Illinois (The News Gazette)

Listen to an interview with Jimmy John's founder, Jimmy John Liautaud, on WDWS-AM (1/19/2011). He is not happy at all.

Beelman Truck Co. owner on tax hike: Illinois is 'one of the worst states to do business' (BND.com)

Amazon, CouponCabin Threaten As Illinois Moves To Tax Internet Sales (Forbes)

Other reading: O'Hare bond rating depends on relationship with airlines, S&P warns (Crain's Chicago)

Photo credit: Wikimedia

Is State Bankruptcy Law In Play?

Read this New York Times article by Mary Williams Walsh: Path Is Sought for States to Escape Debt Burdens (1/20/2011).
"Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.

Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign." (read more at NYT)
Related:

Bankruptcy code won't cure what ails U.S. states (WestLaw News & Insight)

On the GOP, bankrupt states and government unions by James Pethokoukis (Reuters)

Misunderstandings Regarding State Debt, Pensions, And Retiree Health Costs Create Unnecessary Alarm (The Center on Budget and Policy Priorities)

Newt's remarks at the Institute for Policy Innovation (Newt.org)

Gingrich seeks bill allowing state bankruptcy to avert bailouts (Pensions and Investments)

A Bankruptcy Law—Not Bailouts—for the States by Law Professor David Skeel (Wall Street Journal)

Default and bankruptcy in the municipal bond market (part one) (Self Evident)

Default and bankruptcy in the municipal bond market (part two) (Self Evident)

Google Launching Groupon Competitor, Larry Page Now CEO (GOOG)

Google Offers via Mashable
Interesting day yesterday for Google (GOOG). Here's what happened.

1) They beat earnings estimates

Google Announces Fourth Quarter and Fiscal Year 2010 Results and Management Changes (Google Press Release)

Instant view: Google profit beats, Page becomes CEO (Reuters)



2) Co-founder Larry Page replaced Eric Schmidt as CEO (remains Executive Chairman)

Schmidt Named Executive Chairman of Google as Co-Founder Page Becomes CEO (Bloomberg)

Power Shifts Atop Google (WSJ)

Google’s Management Shift: What Now for M.&A.? (DealBook)

Presidents Obama, Hu Meet with Business Leaders (Video/Text)

Attn: Business Leaders: "President Obama and President Hu of China meet with American and Chinese business leaders at a roundtable meeting in the Eisenhower Executive Office Building". Video and transcript after the jump. Enjoy.

President Hu and President Obama Joint Press Conference Video/Text (1/19/2011)

President Obama and President Hu Jintao of China held a joint press conference in the East Room of the White House on 1/19/2011 (from Whitehouse.gov). Video and transcript after the jump.

Stocks Near Top Says Market Timer Tom DeMark, Sees 11% Fall

Tom DeMark, creator of the DeMark Indicators at Market Studies, told Bloomberg on 1/18 that stocks are near a top. He currently serves as "special advisor" to Steven Cohen who runs the $12 billion hedge fund SAC Capital. The Bloomberg article said Cohen and John Burbank of Passport Capital were partners in the firm. Protect yourself! From Bloomberg:
U.S. stocks are within a week of “a significant market top” that is likely to precede a drop of at least 11 percent in the Standard & Poor’s 500 Index, said Tom DeMark, creator of a set of market-timing indicators.

DeMark’s Sequential and Combo indicators, designed to identify market tops and bottoms, are giving a sell signal on the main U.S. stock benchmark for the first time since mid-2007, he said in a telephone interview." [read more at Bloomberg]

Benzinga interviewed Tom DeMark on 5/20/2010.

Niall Ferguson at Aspen Ideas Festival (ForaTV Video)

Harvard's Niall Ferguson was at the Apsen Ideas Festival on July 8, 2010 speaking at a lecture (with Mort Zuckerman) titled: The Financial Crisis: Will It Lead to America's Decline? The full video can be found at Fora.tv (hat tip zero hedge). In summary, Niall thinks the catalyst for America's decline could be the credibility of fiscal policy. That makes sense. He said to watch when the cost of servicing the debt exceeds the defense budget, which could occur in the next 5 years. On a positive note, Niall said there's a way out for the United States: 1) technological innovation and 2) entrepreneurship. Niall even brought up the possibility of a new Dark Age if the U.S. declines: "When the Roman Empire in the west collapsed, civilization collapsed." "I'm talking about how your daily life is affected. What happens when the aqueducts stop working, metaphorically. What happens when the roads are no longer maintained? That's what happened in the post-Roman world and I don't think the post-American world would be so very different." Wow, so municipalities shut down during the dark ages. Would there still be Facebook?

Rising Energy Prices Could Cause 2008 Redux (Margin and Credit Squeeze)

Oil analyst, Gregor Macdonald, was featured on Max Keiser's show on 1/14/2011 and it's a must see. He mentioned how lower oil production and higher energy prices could affect the credit markets, global stock markets, U.S. economy and oil revenues. Who remembers 2008? Here's a quote by Gregor from video #2 (embedded below):

"As energy prices rise, it crowds out all consumption outside of energy and food purchases. And that will soon enough make global stock markets choke" (due to "margin compression from U.S. corporate profits" and the "declining ability for OECD consumers to increase consumption outside of energy and food")

Commercial Property Price Index Still At 2002 Levels (Moodys/REAL)

Commercial real estate prices are still around 2002 levels and in a sideways channel (3-months delayed). The Moodys/REAL Commercial Property Price Index (CPPI) rose 1.3% to 1.11 in October 2010 (month/month), but it's still down 42% from the 2007 peak (1.91). The index started at 1.0 in year 2000. Find apartment, industrial, office and retail property price indexes at web.mit.edu. Apartments have outperformed all segments. MIT also has a "Transactions-Based Index (TBI)" that uses data from NCREIF.


CPPI All Properties/National


CPPI Apartments/National

Carl Icahn Comedy On Drexel, Texaco/Getty, US Steel In 1980s (Videos)

Famed hedge fund manager / "shareholder activist", Carl Icahn, did stand up financial comedy at Caroline's Comedy Club in Manhattan in 2003. He talked about trading options back in the day, doing business with Drexel Burnham Lambert in the '80s, Leon Black (Apollo IPO coming?), trying to take over US Steel, David Roderick, the Texaco/Getty Oil lawsuit (funny stuff) and Joe Jamail. Read these interesting articles and watch the videos after the jump.

THE BIGGEST BOSSES 47. DAVID RODERICK USX A CEO AS TOUGH AS STEEL (Fortune Magazine, 1987)

"this was followed by a takeover proposal from raider Carl Icahn. By most accounts the company won the strike. Roderick, 63, punctured Icahn's balloon by piling up $3 billion in debt due if the company changed hands. He used the money to restructure the company yet again"....

Houston Lawyer Joe Jamail Sued the $10.5-Billion Pants Off Texaco and Stands to Pocket a Record Fee (People Magazine, 1986)

1) Carl Icahn wants to own US Steel
2) Carl Icahn settles the Texaco/Getty Oil lawsuit (hat tip Livermore Report)

US National Debt Above $14 Trillion, Debt Ceiling In Play Soon ($14.29T)

The U.S. National Debt is a serious issue right now. On 1/13/2011 the U.S. Treasury reported that Total Public Debt Outstanding hit 14,007,216,975,377.59 ($14 Trillion). $9.3 trillion was held by the public and $4.6 Trillion was intergovernmental (source: TreasuryDirect.gov). According to the real-time U.S. National Debt Clock at USDebtClock.org, the National debt is at $14,049,024,219,550. The main problem right now is there's a debt limit in place. Last year Congress raised the debt ceiling to $14.29 Trillion and it is expected to hit that level in May. So Congress will be making major moves in the next few months. I found an interesting fact sheet from the Heritage Foundation that explains what is going: The Debt Ceiling: Time, Options, and Action:
Congress Has Time: Gross federal debt has reached $14 trillion. Ongoing deficit spending (projected at $1.4 trillion for 2011) means the ceiling of $14.29 trillion will initially be reached around mid-March. Treasury’s traditional financial toolbox and revenue surges in April and June should delay the final moment of reckoning to mid-May and possibly as late as July.


Reads: David Rosenberg Likes Muni Bonds, Assange Gets Swiss Bank Info, Hu Visiting U.S.

Articles/Videos 1/17/2010

Apple Media Advisory (Steve Jobs Press Release) - BusinessWire

Barron's 2011 Roundtable - Barron's

David Rosenberg Says This Is A Fantastic Time To Buy Beaten Down Muni Bonds - Business Insider

Argentina farmers in grain export quota strike - BBC

Albert Edwards: "I Have Been Wrong – I’ve Been Too Bullish" (SocGen) - Zero Hedge

The Financial Crisis: Will It Lead to America's Decline? (Niall Ferguson, Mort Zuckerman at Aspen Institute) - Fora.tv (ht Zero Hedge)

Apple In Germany Falls 8% On Steve Jobs' Medical Leave (APC.F Chart)

Steve Jobs, Apple's CEO, is taking a medical leave and Time Cook (COO) is filling in. Here is the media release from Steve Jobs. Apple's stock on the Frankfurt Stock Exchange fell 7.96%. U.S. markets were closed for Martin Luther king Day.  Click the chart for a larger view (APC.F, Apple Inc. - Yahoo Finance).

"Apple Inc. Chief Executive Officer Steve Jobs took a leave of absence as his health deteriorates from battling a rare form of cancer and the effects of a liver transplant he had almost two years ago, according to a person with knowledge of the situation." (read more at Bloomberg.com)

Nasdaq 100 E-Mini March 2011 Future -1.13%, 2293.75
S&P 500 E-mini  March 2011 Future -0.35%, 1285.25


*UPDATE: ES (S&P) +0.29% and NQ +0.36% at 3:30am eastern. Carry on as usual? We'll see what happens tomorrow. AAPL is 19.74% of the Nasdaq 100 ETF, QQQQ.

Gary Shilling: Commodities Clearly In A Bubble

Gary Shilling thinks "commodities are clearly in a bubble" and "stocks aren't there yet, but we could be if things keep up at this rate". He also talked about Inventory/Sales and the savings rate, which he thinks could hit double digits. At what level is bubble territory on the S&P? SPX EPS 107x12 = 1,284, 107x15 = 1,605 or EPS 107 x 18 = 1,926? It is currently trading at 1,293. See the interview with Tom Keen after the jump.

Tunisia, Algeria Protests Due To Unemployment, Rising Food Prices and Politics (Videos)

If you've been following the news recently, Tunisia's ex-President, Zine Al-Abidine Ben Ali, fled the country as violent protests hit Tunis, the nation's capital. Rising food prices, high unemployment and political corruption are to blame, according to the articles below and Al Jazeera English / Euronews videos. Tunisia has a 14.7% unemployment rate and 23% for higher education graduates. Algeria also saw protests and a protestor mentioned rising sugar prices.

Global Agriculture: Adecoagro Files $400 Million IPO (AGRO)

This company will be interesting to watch, especially if the agricultural commodities (and renewable energy?) trend sees another leg higher. If interested, look at the Economist commodity-price index (one month and one year % change) from January 13, 2010. And as you know, rising food prices are causing people to riot in Tunisia and Algeria. Will monetary tightening in emerging markets cool down commodity inflation? Gary Shilling thinks commodities are in a bubble. If interested, the ticker symbol is AGRO according to the DealBook article.
"An agriculture company backed by the billionaire George Soros on Thursday filed to go public in an offering of more than $400 million.

The company, Adecoagro, based in Luxembourg, but with extensive farm holdings in South America, is selling 21.4 million common shares".....
(Read More)

From their website: "Adecoagro is currently one of the leading companies in the production of food and renewable energy in South America. Present in Argentina, Brazil and Uruguay, our main activities include the production of grains, rice, oilseed, dairy products, sugar, ethanol, coffee, cotton and cattle meat."

Photo from website.

New Jersey Gov. Chris Christie vs. Teachers (Town Hall Videos, CNBC)

Below are New Jersey Town Hall videos and a CNBC squawk box video featuring New Jersey Governor Chris Christie. It's getting serious. Christie was featured on 60 Minutes a few weeks ago, along with analyst Meredith Whitney, talking about New Jersey's financial situation and munis in general. These are old videos, but it shows the real life affects of spending cuts due declining state revenues, a stressed tax base, deficits, debts and a State aid squeeze.
"Governor Chris Christie responds to a teacher's question during a town hall meeting at Raritan Township. Discusses the teachers' union and the need for shared sacrifice. September 8, 2010.

MUB Breaks Dec 2010 Low, SEC Looking At Muni Bond Disclosures

On Friday, MUB, the National Municipal Bond ETF, took out the December 2010 low of $96.59 and closed at $96.26. Big red volume is making lower highs (not sure that means much or not), the RSI (relative strength index) is at 26.31 (it hit 10 in December) and the MACD is still in downtrend mode. See the chart after the jump. Last Wednesday Meredith Whitney gave an update on the muni market on CNBC.

According to Charlie Gasparino on Fox Business, the SEC is looking at muni bond disclosures.

"The Securities and Exchange Commission is ramping up its efforts to monitor disclosure problems in the municipal bond market, worried that cities issuing municipal debt are failing to properly disclose budget problems and other issues, thus affecting the price of bonds purchased by small investors, Fox Business has learned." [read more]