Economy Blog

In the latest Wall Street Journal forecasting survey economists were decidedly gloomy across the board, but one area remained constant: inflation expectations.
The economists trimmed forecasts for growth this year, lowering the full year estimate to 1.6% from 2% in the prior survey, while increasing the odds of recession to 49%. They lowered estimates for home prices, housing starts, and the number of jobs created over the next 12 months, raising expectations for the unemployment rate. However, estimates of consumer-price growth weren’t moved lower. They remained unchanged.
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The next piece of major economic data comes in a week with the retail sales report for January. Reports from retailers already offer cause for concern. Capital Economics today offers another sign of caution, and it goes back to the surprise drop in the Institute for Supply Management’s nonmanufacturing index that shook markets yesterday.
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(February 6, 2008 03:30 PM, by Bryan Caplan) A year ago, I asked:Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather……
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Fed monitoring for bond insurer impacts-Bernanke
“Given the adverse effects that problems of financial guarantors can have on financial markets and the economy, we are closely monitoring developments,” Bernanke said.
MBIA to Raise Additional $750 Million of Capital…
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$$$ The Remunerative Powers of OO [Long or Short Capital]

$$$ Honesty Is Not the Best Policy [Going Private]

$$$ Drugs [WallStrip]

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How times change.
When America Online announced its acquisition of Time Warner in January 2000, it was heralded as a sign that new media was eclipsing old media. The more pessimistic regarded it as an uncomfortable apex of a period when dealmaking was done using overvalued shares as currency.

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Carl Icahn has disclosed in an 13D SEC FILING that he boosted his share ownership in Motorola Inc. (NYSE: MOT). Icahn indicated his ownership of the stake in a notice to nominate four directors to the board sent last week, and he noted that shares are undervalued and that he intends to seek further conversations with the company. It appears that Icahn now holds some 114.2891 Million shares of Motorola stock, which is now roughly 5% of the common stock. Icahn is a very smart and influential investor. But it may take more than forcing a share buyback and a…
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addslashes(Breaking: Cisco Scares

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One of the main themes of the Money:Tech conference is the way in which companies and investors can search and aggregate and mine blog information in order to help generate the elusive alpha. There was even a slide in John Mahoney’s talk which showed a screen capture of a search for YHOO on one of his products; the top result was a p…
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Northwest (NYSE: NWA) and Delta (NYSE: DAL) are getting very close to announcing a merger. According to the FT “the airlines may clinch the landmark accord as early as mid-February, the people said, though they cautioned that negotiations may still stall or even collapse.” While merging airlines in periods of high fuel costs and a tight economy may make some sense, the savings are probably overrated. Customers service and other back office jobs can be cut, but knocking down flght crew expenses often leads to serious and disruptive labor disputes. There is no solid evidence that the mess which always…
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addslashes(The Real Story Wrap: February 6

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Earlier today, Goldman Sachs CFO David Viniar became the latest to sound the alarm about what’s going on in the credit markets, saying that they’re trading like “we’re in the middle of the worst recession we’ve seen in a very, very long time.”
It could be that Mr. Viniar is providing a bit of cover fire for reduced revenues for the venerable firm in coming months (it is possible, after all), but it’s hard to deny his observation that &…
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Regulators May Limit S&P, Moody’s Structured Business
And I’ll vote for that and more: boot them out of that business altogether. The credit rating agencies have no business rating structured finance, new scale or not. Their track record speaks for itself, fully responsible for $146 billion in losses.
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Cisco Systems, Inc. (NASDAQ: CSCO) did give guidance in the conference call, and the shares got whacked over a less confident in near-term visibility and a weak January that is expected to last for several months. Below are some of the guts of Chambers’ paraphrased comments: “Despite macroeconomic changes, we remain comfortable with long-term growth projections…. Long term 12-17% yr/yr, but at risk of stating the obvious there may be times that the growth will be above and below…… US is experiencing challenges… we are seeing US and EU customers remaining cautious….. product order growth was in low-teens…. orders were…
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The new Trader Monthly is out today and since a lot of it is unavailable online and I’ve never seen or heard of anyone voluntarily buying the print edition, I decided I would read it for you and say something if anything good happened to come up. I never thought I’d say this, but something did. A profile of Morgan Stanley CEO John Mack, by CNBC reporter Charles Gasparino, which begins with, I shit you not, a quote from G…
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While trading in most Asian currencies is suspended for Lunar New Year holiday.…
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Charles Plosser, president of the Federal Reserve Bank of Philadelphia, resumed a hawkish tone today after the central bank’s aggressive rate cuts last month. In a speech to the Birmingham Rotary Club in Alabama, Mr. Plosser said he expects a weak economy in the first half of this year (growing at a 1% rate) before recovering in the second half. But he devoted much of his speech to concerns about inflation. He expects core inflation (excluding food and energy) to remain between 2% and 2.5% this year, above his target. Mr. Plosser, a voter on the F…
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According to David Rubenstein of The Carlyle Group:
The 1970s and 1980s were the “Bronze Age” of private equity, when early buyout deals emerged, culminating in 1989 with Kohlberg Kravis Roberts’ leveraged buyout of RJR Nabisco and then the collapse of the proposed buyout of United Airlines.
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Our Buy List is down 8.68% for the year, but we’re holding up much better than the rest of the market. Since January 14, the S&P 500 is down 6.34%. We’re only off 2.54%….
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Akamai Technologies Inc. (NASDAQ: AKAM) has just posted normalized earnings of $0.41 EPS on revenues of $183.2 million. First Call had estimates of $0.37 EPS and $174.61 million in revenues. Estimates for the next quarter are $0.38 EPS and $183.04 million in revenues. Estimates for fiscal 2008 are $1.65 EPS and $803.93 million in revenues. Full-year cash from operations was $235.4 million, and at year-end Akamai had approximately $633.5 million of cash and equivalents on hand. Akamai also noted that it added 29 customers to end with 2,645 customers; a 13% annual gain. Sales through resellers were 16% of quarterly…
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