Archive for March, 2011
The Dollar, G20, and China
The March 31 one-day meeting of finance ministers and central bankers of the G20 in Nanjing, China, is not expected to produce much of immediate interest, but the signs are pointing to an effort from the Chinese to shake up the international monetary system’s attachment to the US dollar. The Chinese want to talk about the [...]
Mixed Signals in the Currency Markets
Comments by the president of the St. Louis Federal Reserve Bank have given the dollar a push higher, while reports on consumer confidence and housing prices have weighed the greenback down. The British pound has weakened against the dollar as prospects for an interest rate hike have dimmed, consumer confidence has fallen, and now the [...]
Enrollment Slide Hammering For-Profit Schools
Apollo Group, Inc. (NASDAQ: APOL), which operates the for-profit University of Phoenix, has reported second-quarter 2011 results that were considerably worse than expected. Analysts had been expecting EPS of $0.69, and Apollo reported an EPS loss of -$0.45. Revenue of $1.05 billion was slightly better than expectations of $1.03 billion. The really bad news for [...]
Ireland Suggests Haircuts for Bondholders
Comments by Ireland’s minister of agriculture appear to put at risk some €16 billion of the country’s senior unsecured debt. Minister Simon Coveney told an Irish broadcaster, “A sustainable and comprehensive solution for Irish banking that involves recapitalisation but also involves an element of burden-sharing … That is certainly the outcome that the government is looking [...]
Oracle, Intel, HP Call One Another Out
Oracle Corp. (NASDAQ: ORCL) fired the first shot with this announcement on March 22nd: After multiple conversations with Intel senior management Oracle has decided to discontinue all software development on the Intel Itanium microprocessor. Intel management made it clear that their strategic focus is on their x86 microprocessor and that Itanium was nearing the end [...]
It’s All About Spain Now
Now that Portugal has rejected an austerity plan that could have led to a rebuilding of its finances without a bailout by the European Central Bank or the IMF, the equities and currency markets have weighed in by essentially ignoring the entire episode. Bond markets boosted rates on Portuguese debt, but that was no surprise. [...]
The Crack Spread: Theoretical Oil Margins Near 2-Year Highs
Crude oil is, well, crude. That’s why we have refineries – to turn that crude oil into something more useful, like gasoline, heating oil, and even asphalt. Refineries want to generate a profit, of course, so you would assume that the revenue from the distilled products should exceed the cost of the crude oil, but [...]
Customized Volatility: A VIX For Everyone
If you think the world is VIX-y now, just wait, it’s about to get VIX-ier. This, from the CBOE. The Chicago Board Options Exchange (CBOE) today announced that it has filed for Securities and Exchange Commission (SEC) approval to list options based on recently-created volatility indexes that track individual stocks —Apple (AAPL), Amazon (AMZN), Goldman Sachs (GS), [...]
A Way Out for Portugal
As was kind of expected, Portugal’s parliament rejected the government’s austerity plan, and now the country has essentially thrown itself at the mercy of the European Union, the European Central Bank, and perhaps even the IMF. Or maybe not. Portugal is expected to need about €80 billion to set its financial house in order, and the [...]
Putting A Premium On Premium: Changes in Gasoline Consumption
As I was filling up at the gas station the other day, I was thinking about whether high gas prices changes consumer behavior. Noting that the price difference between premium and regular gasoline was about 20 cents, I wondered how many drivers still use the more expensive grade. I had some time, so I did [...]
