Even with an extra hour to burn last night I still couldn’t find time to post…and other matters conspired the night before that! I’m expecting a houseful again tonight so I’m going to try and get a jump on things before it’s midnight and I don’t have anything to write about…not that tonight’s offering is exactly ‘fresh’…
Stocks Open Lower on Consumer Weakness
By JAVIER C. HERNANDEZ [new kid on the block…]
Published: October 30, 2009
Stocks opened lower on Friday in the face of weak consumer data, retreating from a powerful rally the day before.
The Commerce Department reported that consumer spending in September dropped by the largest amount in nine months, a dreary data point that met Wall Street expectations but reinforced the slow, halting recovery of the United States economy. [Um, excuse me but wasn’t Thursday’s ‘rally’ based on ‘better than expected’ GDP numbers? So the very next day the markets plummet when it is shown that ‘consumer spending’, a segment responsible for 70% of GDP, is the lowest in 9 months…we can only wonder what else they aren’t telling us/lying about?]
The fall in spending was tied to the end of the government’s “Cash for Clunkers” program, which gave car buyers thousands of dollars in vouchers for the purchase of new vehicles. Overall spending fell .5 percent in September, and personal income levels remained flat in light of higher unemployment rates and decreases in wages.
The revival of the consumer sector is considered paramount in turning around the U.S. economy, since purchases by consumers make up about two-thirds of spending in the United States. Another barometer of consumer behavior will come in shortly before 10 a.m., when revised reports on consumer sentiment are released. [Um, the ‘consumer’ isn’t going to ‘come back’ until he/she gets more disposable income to play with and the fuckin greedy employers aren’t smart enough to pay their employees enough to be able to buy their products…then the fucktards sit there and wonder why they don’t have any customers!]
On Thursday, stocks surged on the news that the economy had grown for the first time in a year. The gross domestic product rose at an annualized rate of 3.5 percent in the third quarter, ending the longest contraction since World War II*. The rally continued throughout the day, with major stock averages closing about 2 percent higher. [*Bad news Bubba, it ain’t over yet…not by a million miles!]
But on Friday, investors seemed to come back to earth. [How can you tell?] At the market’s open, the Dow Jones industrial average fell 38.16 points, or 0.38 percent, to 9,924.42, the Standard and Poor’s 500 index dropped 4.95 points, or 0.46 percent, to 1,061.16, and the Nasdaq composite declined 6.18 points, or 0.29 percent, to2,091.33.
Chevron reported Friday that its profit for the third quarter had fallen 51 percent to $3.83 billion, or $1.92 per share, slightly above expectations. [Excuse me? Profits off by half but they’re ‘happy’? WTF!!!]
Overseas, European markets showed modest declines. The FTSE 100 in Britain was flat at 5,137.86, the CAC 40 in France fell by 0.4 percent to 3,697.83, and Germany’s DAX dropped by 0.5 percent to 5,562.49. [At the time this was posted European markets hadn’t closed.]
Asian stock markets rose on Thursday’s enthusiasm about economic growth in the United States, breaking a three-day slump. The Hang Seng in Hong Kong was up by 2.3 percent, the Nikkei in Japan climbed 1.5 percent, and the Shanghai index increased by 1.2 percent.
Hard to say what the markets are going to look like tomorrow (Monday) with the FDIC taking over 9 banks on Friday night.
If you aren’t an ‘insider’ you don’t dare put any money into the markets…which probably explains the low volume and excess volatility we’ve been seeing.
There’s another issue that poked its head above ground yesterday that I’m going to tackle in the ‘wrap-up’ portion of this post.
So it’s onward to tonight’s second offering
Consumer Electronics Makers Show Strength
By HIROKO TABUCHI
Published: October 30, 2009
TOKYO — Sony posted its fourth consecutive quarter of losses Friday, hurt by a strong Japanese yen and sluggish sales. But an aggressive cost-cutting drive and brightening outlook for the global economy encouraged the maker of PlayStation game consoles to trim its loss forecast for the year. [What jumps out at you here good citizen? Once upon a time the US had a highly competitive domestic consumer electronics industry…today that sector is ‘non-existent’ in the US economy. So what’s up with this story? It has absolutely nothing to do with the US economy save the ‘one-sided’ fact that we tend to consume a lot of Japanese electronics…which does absolutely zero good for the US economy! (It’s senseless to consider the ‘crumbs’ realized (solely) by the US stockowners of Japanese firms. They have traded the ‘prime cuts’ of the electronics industry for the contents of its (lower) intestines.]
Meanwhile, Panasonic raised its annual forecast, signaling that the worst might be over for Japanese makers of consumer electronics. Demand for television and gadgets had evaporated with the onset of the global economic crisis.
Sony, based in Tokyo, had a net loss of ¥26.3 billion, or $289 million, in the three months to September compared with a net profit of ¥20.8 billion in the same period a year earlier. The latest results beat analyst forecasts by a wide margin. [Don’t forget, Their ‘dollar’ is roughly equal to one of our pennies…(and our pennies aren’t worth shit!) now tell me that isn’t a blatant case of ‘currency manipulation’!]
Sony cut its net loss forecast for the year ending in March to ¥95 billion from an earlier expectation of ¥120 billion.
Panasonic said it had booked a ¥6.1 billion net profit for the latest quarter, its first profit in a year as sales of its DVD recorders and household appliances showed signs of recovery. [Um, this is apparently a function of ‘planned obsolescence’ as these cheap pieces of junk stop working after a few months of use…]
It forecast its net loss for the year ending in March would be ¥140 billion, down from a previous loss forecast of ¥195 billion. [While both of these numbers ‘look’ horrendous, move the decimal point two places to the left to get an idea of what they’re talking about in dollars.]
Still, performance at both companies could not match Samsung Electronics of South Korea, the world’s largest maker of televisions. [Say what? This is an industry that was founded here in the USA…how the hell did that happen? Like you need to ask…]
Samsung said profit in the latest quarter had tripled to a record of 3.72 trillion won, or $3.14 billion, from 1.22 trillion won in the same period a year earlier, as it capitalized on investment in new panel technologies, as well as in marketing, to grab market share from rivals like Sony and Panasonic.
Sony said sales in the latest quarter dropped 20 percent from a year ago to ¥1.66 trillion. Panasonic saw a similar fall in revenue to ¥1.7 trillion.
Sony’s chief executive, Howard Stringer, is trying to cut costs. Under a turnaround program, the company has eliminated 16,000 jobs, closed eight factories and sold its main North American television factory in Tijuana, Mexico. [WTF!!! Understand good citizen there is NO SUCH THING as a DOMESTICALLY PRODUCED TV set…and these fuckers aren’t exactly giving them away, if you hear what I’m saying…we lost the jobs AND we lost control over pricing BECAUSE we have NO DOMESTIC SOURCE to buy from!]
Mr. Stringer has also tried to get various parts of Sony’s sprawling empire to collaborate more, particularly urging the company’s engineers to work better with developers in software — considered a weakness for the electronics maker.
In a bright spot for Sony, its video game operations seemed to be gaining momentum just as Nintendo, the world’s largest maker of video-game players, appeared to be losing steam. In September, Sony introduced a cheaper version of the PlayStation 3, which helped the console overtake the Nintendo Wii and the Microsoft Xbox 360 to become the top-selling game system in the United States for the month.
Nintendo on Thursday lowered its annual profit forecast by 25 percent on slumping sales of the Wii.
Sony reported strong demand for Michael Jackson’s albums after the artist’s death in June. “This Is It,” a film created from rehearsal tapes left behind by Mr. Jackson could also bolster the company’s sales. Sony bought the tapes for $60 million.
Meanwhile, Sony is seeking to trim losses in its television business by shifting its focus to profitability rather than sales growth. But this has cost Sony global market share in LCD television, which slipped to 14.7 percent in the three months to June from 16.5 percent a year earlier, far behind the market leader Samsung. [Yes, it’s more profitably to wring higher prices out of those who can afford it than it is to make the product itself more affordable…let your ‘inner capitalist’ chew on that one for a while! Think about luxury goods and why they’re priced the way they are…]
The South Korean currency, which is weak compared with the yen, has given Samsung and LG Electronics the ability to undercut prices offered by Sony and other Japanese manufacturers. A stronger currency makes products sold overseas more expensive and erodes earnings in the home currency. [This brings us full circle to the deeply disturbing question of why these people don’t starve to death…which you surely would if you were forced to live on (the US equivalent) of what they get paid, paying US prices!]
Sony’s cellphone joint venture with Ericsson of Sweden has also been a perpetual headache, with no popular smartphone to challenge Apple’s iPhone and the Blackberry from Research in Motion.
Panasonic, meanwhile, is betting on batteries for hybrids and electric cars by acquiring Sanyo Electric, the world’s largest rechargeable battery maker. The Osaka-based company is eliminating 15,000 jobs in a turnaround effort.
Sony shares, which have gained 41 percent since the start of the year, rose 2.8 percent in Tokyo before the earnings announcement Friday.
Shares in Panasonic added 3 percent, extending gains for the year to 16 percent.
I probably could have cut the above piece in half and still made the point that they are clubbing one another to death over ‘pennies’ but you don’t ‘see’ that here…the middlemen (you’re forced to deal with) aren’t that ‘cut-throat’…to each other.
There was an item that caught my attention yesterday which caused me to look at the economy and money from a different direction.
Understand that the current reported, er, ‘spike’ in GDP is being attributed to ‘stimulus spending’…which is basically ‘borrowed’ money. The president is touting the ‘effectiveness’ of his stimulus in ‘retaining’ (more so than actually ‘creating’ new jobs.) Um, doesn’t this mean (since most of the ‘saved’ jobs are in the public sector) that these jobs will go ‘bye-bye’ once the funding dries up?
Worse, most of these ‘saved’ jobs are either in public safety or education…
The latest estimates are the president’s stimulus package have saved roughly a million jobs…which is all well and good BUT.
We have a different problem lurking in the wings, the deficit problem. We’ve handed not billions but trillions to the (global) banking sector that we didn’t have and, given how things are shaping up, it’s not likely we will have that money in the future either.
It is extremely doubtful we can pay back what we’ve already borrowed…never mind borrow more.
Which leaves us in a very dangerous position, perhaps the most dangerous position of all…one that is neither inflation nor deflation but one of total ‘distrust’ of all fiat currencies.
Basically, you walk into a store and your money may or may not be any good…it all depends on how ‘tight’ you are with the proprietor, and even that might not do you any good.
Once the ‘value’ of money falls into question, there isn’t any point in working for it because you don’t ‘know’ what you’re getting in return for your labor. Would you bust your ass all day for a drink of water? Sounds stupid but it could very well come to that in areas where water isn’t plentiful…but then we have the flipside of this bargain…would you do it two days in a row? You wouldn’t do it a third day because you’d be dead from dehydration!
So, what is an honest day’s pay for an honest day’s work and who gets to decide?
‘Money’ is an ‘agreed upon’ thing…once that agreement becomes questionable…all bets are off.
Thanks for letting me inside your head,
Gegner
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