Week in Review Part II: Street Bytes

On Friday, the market celebrated the third anniversary of the historic market lows for all three major indices.

The Dow Jones closed March 9, 2009 at 6547; the S&P 500 at 676; and Nasdaq at 1268.

Friday, the Dow closed at 12922, up 97% since 3/9/09; the S&P finished at 1370, up 103%; and Nasdaq closed the week at 2988, up 136% since the lows.

I myself didn’t call a bottom that week three years ago, but amidst the depths of despair that many felt, I did stick to my 2009 forecast that the Dow and S&P would both finish up at least 20% and Nasdaq would gain 30%, which proved to be a rather good call.

Alas, this year I have the three down 10% by Dec. 31. But I’ll have more to say on this when we finish the first quarter.

For the week, by the way, stocks finished mixed, with the Dow Jones down 0.4%, while the S&P gained a point, 0.1%, and Nasdaq tacked on 0.4%, its third straight week with the exact same percentage gain.

U.S. Treasury Yields

6-mo. 0.13% 2-yr. 0.32% 10-yr. 2.03% 30-yr. 3.18%

Bonds fell a little on Friday with the solid employment report.   Earlier in the week, Ben Bernanke hinted the stimulus game was over. If the Fed is going to do anything extraordinary this year, you’d think it would do so by Fourth of July because it doesn’t want to be seen interfering in the presidential election thereafter.
Japan’s economy contracted less than the government first thought in the fourth-quarter, down 0.7%, compared with a preliminary estimate of a 2.3% contraction. Japan is still expected to grow 1.5% in the current quarter, according to Barclays Capital.

The Thai government is projecting economic growth of between 5.5% and 6.5% this year as it rebounds from the catastrophic floods of 2011.

Brazil’s economy grew at just a 2.7% pace for 2011, its second-worst performance since 2003. The nation’s finance minister, though, says growth will accelerate to 4.5% this year. [Analysts have it coming in closer to 4.0%.] The economy had grown 7.5% in 2010. Brazil is in the midst of an infrastructure boom tied to the 2014 World Cup and the Summer Olympics two years later. At least it better. There are conflicting reports just how ready they are going to be.

The projected slowdown in China may cause Australian house prices to tumble by more than 5% this year, according to S&P; Aussie exports being negatively impacted. S&P is basing their projection on a “soft landing” in China with GDP growth at 8%.

The Aussie economy grew by just 0.4% in Q4 over Q3 (2.3% on an annualized basis), less than expected. The Reserve Bank of Australia expects growth of 3-3.5% in 2012 and 2013.

Interesting economic barometer. Aer Lingus’ passenger traffic increased by 8.8% last month compared to February 2011, with long-haul numbers up 15.4%.

According to the U.S. Department of Energy, Colombia increased oil production by 450,000 barrels a day between January 2007 and December 2011, compared with 500,000 b/d in Brazil over the same period. As one who has a very small position in an energy company with interests in Colombia, I make note of this. Colombia’s prospects are bright on this front.

Natural-gas prices fell to a 10-year low, $2.30 per million BTUs on a closing basis, Wednesday. [$2.32 to finish the week.] Warmer weather has done a number on demand this winter, pushing inventory to record levels.

We note the passing of long-time energy analyst, Peter Beutel, at the all-too-early age of 56. I had no idea until reading his obituary that he was the son of famed New York television anchor Bill Beutel.

Apple Inc. unveiled the iPad 3, or what is being called “the new iPad,” which will be available starting March 16 in the U.S. and a few other countries. If you go for the model that offers cellular connectivity, your speeds could be as much as 10 times faster, 4G, rather than the 3G found in the iPad 2. Apple is dropping the price of the iPad 2 to $399 in an effort to broaden the market. [Apple shares were unchanged on the week at $545.]

Meanwhile, tech research firm Gartner projects that the launch of Windows 8, coupled with a new wave of ultrabooks, will power PC sales in 2013, up 10%, after an estimated 4.4% growth rate this year. PC shipments worldwide would top 400 million units next year if Gartner is right. The key will be ultrabooks using the Windows 8 operating system.

Cotton prices spiked after India banned exports for the second time in two years; India being the world’s second-largest producer. India is trying to ensure sufficient supply for its domestic textile companies.

Allied Irish Banks is reducing its workforce by 2,500, most of the losses being in the Republic and Northern Ireland, a blow to the Irish government.

According to New York State’s Dept. of Labor, New York City’s economy grew nearly twice as fast in 2011 as first thought, with Gotham adding 85,300 jobs, well above the initial estimate of 44,800. The new data shows Wall Street actually added 3,800 jobs rather than losing 1,900. Huh. An analysis of department data by a real estate services firm projects the city added another 31,600 in January, the largest one-month gain since 1990.

Something doesn’t quite add up, though, as the city’s unemployment rate hit 9.3% in January, up from 9.1% in December.

And, New York City’s Independent Budget Office now says Wall Street bonuses for 2011 fell a whopping 25% to $17.8 billion, nearly double the earlier projected drop the previous week by New York State’s comptroller. It’s all about the impact on the city’s tax coffers. All in all, a confusing set of numbers.

Apartment rents continue to rise. In Manhattan, the average one bedroom with a doorman rose 3.7% to $3,692, though two-bedroom units without a doorman rose 10.5% in February vs. last year to $4,212.

If you want a doorman guarding your bedroom during sleeping hours, that’ll set you back about $40,000, depending on whether you give said sentry kitchen access.
Texas financier R. Allen Stanford was convicted on 13 of 14 counts of fraud, conspiracy and obstruction of justice for his $7 billion Ponzi scheme. The 61-year-old will undoubtedly spend the rest of his time behind bars.

But as the Wall Street Journal observes, the real crime here is that “the vast majority of investor money was sucked into the Stanford operation after SEC examiners began blowing the whistle.”

And they blew the whistle not once, but four times; 1997, 1998, 2002 and 2004. “Each time, they concluded that the Stanford operation was a probable Ponzi scheme and urged SEC action. Each time, the enforcement staff failed to act.”

The payoff was the guy sitting on the investigation, Spencer Barasch, left the SEC to work for Stanford.

Mexican tycoon Carlos Slim tops Forbes magazine’s annual list of billionaires once again, with an estimated net worth of $69 billion. Bill Gates ($61 billion) and Warren Buffett ($44 billion) retain the Nos. 2 and 3 slots, followed by Bernard Arnault, chairman of French luxury goods group LVMH, and Amancio Ortego, founder of Spanish fashion business Zara. I have no freakin’ idea what Zara is. I feel so stupid.

Ford CEO Alan Mulally made $34.5 million in 2011 owing to stock option gains, after he was paid $26.5 million in 2010, so he has been rewarded rather handsomely for Ford’s turnaround; perhaps a bit too much so, as UAW President Bob King said Mulally’s pay was “morally wrong.”

According to the Economic Policy Institute, as reported by the Journal’s James R. Hagerty, “the average inflation-adjusted hourly wage for male college graduates aged 23 to 29 dropped 11% over the past decade to $21.68 in 2011. For female college graduates of the same age, the average wage is down 7.6% to $18.80.”

Yup, kids. You might do better just ridin’ the rails or becoming a river boat gambler.

McDonald’s shares slipped a bit this week on its February same-store comps. February sales in the U.S. were outstanding, up 11.1% over year ago levels, but they were up a less than expected 4% in Europe and disappointed elsewhere. I forgot the Filet of Fish offer. Drat.

The number of airline accidents worldwide dropped in 2011. Among Western-built aircraft, the number of accidents declined from 17 in 2010 to 11 last year, according to the International Air Transport Assn., or one crash for every 2.7 million flights, the lowest in aviation history, according to the trade group.

The number of airline fatalities dropped from 786 in 2010 to 486 in 2011. Africa only had 8 accidents vs. 18 in 2010. This is good!

And this is also good…California’s unemployment rate in January hit 10.9%.   In January 2011 it was 12.1%. It’s a start.

My portfolio: I haven’t said anything about my main China holding recently because the company has gone radio silent until the last week in March. Yes, I’m incredibly frustrated, as I know those of you still playing along with me are.

Carnival Cruise Lines reported a fiscal first-quarter loss, Dec. thru Feb., of $139 million owing to the Costa Concordia disaster. Thus far, Carnival has booked incident expenses of $29 million, with far more to come, one can imagine. It also recorded an insurance recoverable of $515 million, which offset the write-off on the Costa Concordia value, the ship being deemed a “total loss.”   Salvage bids are out but it could take up to 12 months to remove the vessel. Do you think the beer on board is still good? I mean it remains chilled at an appropriate temperature.

Top members of the computer hacking group LulzSec were arrested in New York and elsewhere. Six associated with the group were either under arrest or being sought.

LulzSec is a spin-off of the hacking collective Anonymous.

Harrisburg, Pennsylvania is going to default on its general-obligation bond payments next week. So if you have to go to the bathroom and you live there, you may want to go now because no telling what will happen to city services.

Well you tell me? The city’s receiver said any cash flow while in bankruptcy goes to pay police and fire as essential services, but there’s nothing in what I’m reading about water and sewer service.

Bad week on the P.R. front for Morgan Stanley as a broker, David S. Walker, was meeting with a woman accused of running an Upper East Side brothel, supposedly offering advice on how to expand her business. He hasn’t been accused of any wrongdoing, but it made for great fun in the tabloids in these parts.

And last weekend, it was Morgan Stanley investment banker W. Bryan Jennings, “a $2 million-a-year fat cat,” who made the news for threatening a cab driver who had taken him from Midtown Manhattan to his home in Darien, Conn.   The cabbie asked for the $204 fare and was then allegedly threatened and slashed with a knife by Jennings, who was drunk and refused to pay.

Oh, there is far more to this story that I’m leaving out, some real ugly stuff…I just found it rather amusing on balance, not having a lot of sympathy for fat cats these days. [The driver needed six stitches and is OK.]

In the final week of February sweeps, ABC’s “Good Morning America” came within 164,000 viewers of NBC’s “Today.” Ann Curry isn’t cutting it. Bring back perky Katie! And “Today” better find a way of keeping Matt Lauer, your editor watching the first 22 minutes each morning. “Today” has been the No. 1 morning show for 16 years running. And get this. According to Kantar Media and the New York Post, “Today” earned NBC an estimated $443.5 million through the first nine months of 2011.

But I just saw a blurb that Matt Lauer makes $17 million a year and wants $30 million to stay!   And he gets like 53 weeks vacation a year, too. Nice gig.

Speaking of television, according to a report from Sanford C. Bernstein, teens are not spending all their time on computer screens and cellphones, rather they still “consume the vast, vast majority of their video content via traditional television.” Studying Nielsen data, analyst Todd Juenger wrote that “consumption of television by teens has stubbornly continued to grow, even as new devices have permeated their lives.” [Joe Flint / L.A. Times]

Parents, get them playing Strat-O-Matic baseball and football if they’re going to waste all that time. Might as well learn some math as your editor did in his youth.

Molson Coors Brewing Co. is launching Coors Light Iced T in Canada next month ahead of a possible U.S. rollout. The iced tea-flavored beer will have roughly 4% alcohol content but no caffeine. Boston Beer’s Samuel Adams has had good success with its hard iced tea brand, Twisted Tea. I will be having a taste-testing in the home offices of StocksandNews at an appropriate date and will report back to you my exclusive findings on the group overall.