Economy Blog

(February 12, 2008 03:52 PM, by Bryan Caplan) Our years overlapped, but when I was an undergrad at Berkeley, I never met Aaron Wildavsky. My loss. Here’s a……
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Federal Reserve Chairman Ben Bernanke told Senate Republicans at their weekly closed-door luncheon that he expects the housing sector to start improving later this year.
“He led us to believe that the housing situation should begin to ameliorate by the end of the year… not get over with, but begin to ameliorate,” Sen. P…
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addslashes(Top 10 Most Searched Stocks on TheStreet.com, February 12

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$$$ Buffett not good enough for Ambac [Reuters]

$$$ SocGen’s rogue problem - was Kerviel, at 31, too old? [FT Alphaville]

$$$ Bebo [WallStrip]

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On Wednesday morning, we’ll get to see earnings out of Coca-Cola Co. (NYSE: KO). The estimates from First Call for the world’s leading beverage giant are $0.55 EPS on $7.01 Billion in revenues. Next quarter estimates are $0.62 EPS on $6.66 Billion in revenues and estimates for fiscal Dec-2008 are $3.00 EPS on $31.1 Billion in revenues. Analysts have an average price target north of $66.00. We recently chose Pepsico (NYSE: PEP) in an earnings and valuation measurement for our go-to defensive stock picks for the first part of 2008, and that was long before Pepsi did incredibly well off…
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The credit crunch has realized a cottage industry of prognosticators predicting where the next shoe will drop — collateralized loan obligations, municipal bonds, leveraged loans, what-have-you. In most cases, they’ve all been right.
Lately there’s been significant stress in collateralized loan obligations, which are losing value, even though these securities, in terms of risk, aren’t quite on the level of low-rated subprime debt, but aren’t foolproof either. In this case, we’re talking about bank loans, w…
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On Tuesdays, I like to do what I call investigative journalism. Also called, by some in the field,“Google Image searching.” Little anthropological looks into what’s up at hedge funds, the p…
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The auction rate market is getting worse as the media is giving it more and more play. Today I heard Citigroup had at least two issues within my home state of Maryland where the auction rate was 10%. Three interesting notes on these two particular issues…Both are insured, but one was FSA and the other was CIFG.In both cases the underlying issuer has an “A” rating. One is a hospital system and the other is a water and sewer utility….
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Blue Nile Inc. (NASDAQ: NILE) is seeing a total smack-down in after-hours trading. The Seattle-based online jewelry retailer said Q4 net income rose considerably to $7.54 million which translates to $0.45 EPS. This is up from $5.75 million, or $0.35 in Q4-2006, and analysts at First Call had consensus at $0.44 EPS. NILE’s sales increased 23% to $111.9 million from $90.7 million, and First Call has estimates at $113.15 million. While earnings were acceptable, the guidance is horrible. For the first quarter of 2008, Blue Nile expects $0.11 to $0.14 EPS on relatively flat net sales compared to the Q1-2007…
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Here we go:
Correlation on the five-year investment-grade Markit iTraxx Europe index - a measure of investor fears of a system-wide crash - reached new highs of 45 percent today.
Correlation sets a price on the market’s fear that a few bad apples will default versus its fear of an economic cataclysm.
The pricing is based on portfolios of credits, such as collateralised debt obligations (CDOs), which have been divided into tranches based on different degrees of default risk.
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Sam Gustin reckons that Google, for all its protestations, could actually benefit from a Yahoo-Microsoft merger. I’m more likely to take Google at its word, but Sam says that Google is playing a sophisticated game: trying to delay the merger in order to maximize the amount of time and effort that the companies spend merging as opposed to competing with Google. Once they’ve actually merged, he says, Google has little to fear and quite a lot to look forward to: there’s a very good chance that the two companies will spend years trying to mesh their disparate cultures, while Google goes on a tear and sews up all manner of fast-growing web-based opportunities.
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While the yuan resumes trading after the Lunar New Year holiday period.…
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Dycom Industries (DY) Company lowers forecast. Falls to $15 from 52-week high of $34.13. Nortel Networks (NT) Sel-off at the end of the day. No news. Falls to $10.28 from 2-week high of $31.79. Tapestry Pharmaceuticals (TPPH) Company cuts 65% of work-force move toward Chapter 11. Falls to $.04 from 52-week high of $2.07. Nxstage Medical (NXTM) Bigger than expected quarterly loss. Sells off to $8.01 from 52-week high of $15.61. Neurometrix (NURO) Company has loss in quarter. Falls to $4.04 from 52-week high of $12.10. Vertex Pharmaceuticals (VRTX) Costs running higher than expected. Drops to $16.04 from 52-week high…
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Website Pros (NASDAQ: WSPI) just posted what are actually very strong earnings when you consider the current climate right now. The hosting, e-commerce, domain registrar (and more) posted earnings of $0.13 non-GAAP EPS on $31.3 million before exclusionary acquisition items and $30.9 million after. First Call had estimates at $0.11 EPS on $31.26 million in in revenues. The company put guidance for 2008 non-GAAP EPS at $0.78 to $0.82, above the $0.77 consensus estimate. It also puts 2008 revenues at $133 to $137 million, while consensus estimates are $134.4 million. The company’s customer metrics looked better quarter over quarter as…
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addslashes(The Real Story Wrap, February 12

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Seattle Times, February 12, 2008

Starbucks stores to shut 3 hours on Feb. 26 for retraining baristas

The Onion, March 14, 2004

Starbucks To Begin Sinister ‘Phase Two’ Of Operation…
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Buffalo Wild Wings, Inc. (NASDAQ: BWLD) is not really feeling the pinch of a recession. The company posted EPS at $0.34 on a 9.7% rise in revenues to $91.4 million. First Call had estimates at $0.36 EPS on $91.8 million in revenues. Same-store sales rose 3.4% at company-owned stores and 2.3% at franchised stores. Its fiscal 2007 EPS came in at $1.10 on net income of $19.654 million. The company offered guidance for 2008 at 15% unit growth in 2008 and net income growth of 25% for 2008. Its 52-week trading range is $18.25 to $47.75, and shares closed down…
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Employees at ESOP companies tend to be an enthusiastic bunch. Actually, that’s somewhat of an understatement. As I reported “How to Get Workers to Think and Act Like Owners” and related articles on employee ownership, I often found myself thinking, “What kind of Kool-Aid are these people drinking, and where can I find some?” Most people I interviewed were charged up about their jobs and companies and thrilled to own a piece of the business.
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First Solar has backed off from earlier heights.

Strong results are expected when First Solar reports quarterly earnings tomorrow, but for the time being, investors may have had enough. The shares, which rose a ridiculous 795% in 2007, are down 29% in 2008, coming under a bit of pressure with the rest of the solar sector.
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We were told to get into General Motors Corporation (GM) on Stop Trading. The short position by Kynikos Associates’ in MBIA Inc. (MBI) and Ambac Finanical Group Inc. (ABK) makes sense to Jim. Last a call on Sears Holding Corporation (SHLD) was discussed as Cramer still trusts Eddie Lampert.
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