Specialty Retailing Industry to Achieve the November SSS Consensus At Least

Analysts at Deutsche Bank Securities report on the performance of Specialty Retailing Industry this month.

In a research note published this morning, the analysts mention that based on 200+ stores holiday survey and scores of store visits, it is expected that the strength of Black Friday/Saturday and Cyber Monday to offset a part of Europe driven macro concerns. The analysts believe that November industry SSS consensus looks achievable to the least on Thursday. Irrespective of the solid sales, the analysts are watchful of the heavy inventory given warm temps. The analysts find gross margins to be the line item look for. 4Q consensus already looks for -140 bp y/y, so perhaps ‘low enough’. Anthro./Urban (Buy, $25.20) screened better in our checks, Abercrombie (Hold, $44.64) /Hollister less so, the analysts add. 

Read More On : Specialty Retailing Industry to Achieve the November SSS Consensus At Least

Tips on how to make money fast in the stock market

Stock exchanges are commercial trading platforms for organizations and investors. Aggressive investment with lofty chances of immense returns has proven good for many investors but not for all. There are few basic principles which can yield better returns in the stock market. A regular monitoring of the stock analysis conducted by expert analysts, help a lot. When you are planning on how to make money fast, in the stock market, you have to be smart enough. It is worth mentioning that in case of fast money making with stock investments, there are always potential risks.

There are several stocks which get launched with massive promotional campaigns. In case of stocks, when a particular one gets exposure, the price sharply rises. For new investors, it is best to regularly check the newsletters; moreover there are several paid services which intimates about the future stocks to be promoted. Many investment analysts propose penny stocks as ideal ones which will rise in value. It is a fact that in most of the cases, penny stocks or the stocks with a value of around $3-$5 a share, provides alluring returns but there are stories of exceptions as well.

All penny stocks cannot offer positive returns as a corporation’s new developments might not be successful in the market. Similarly many of the brokerage firms might suggest you to buy IPO; in the recent past, investors have reaped huge benefits by investing on IPOs. Especially, with the rise of the Chinese manufacturing industry, many of the Chinese IPOs have yielded huge returns. The underwriters can perfectly guide you when you are in search of an IPO.

Many stock investors are trying to be day traders; day trading is simply buying a stock and selling it within a single trading day. Again, in case of day trading also, there remain risks and you need to know how to mitigate the risks. It is best to subscribe to the online newsletters as these newsletters highlight the attractive stocks. In a day, you cannot develop all the necessary skills but with dedication and with your efforts, you can learn how to make money fast in the stock market.

There are few myths about stock market investment; from the very beginning, it is wise to avoid them:

1. Stock investment is like gambling
2. Only rich people and brokers make profits
3. Fallen stocks will rise eventually
4. Stocks with high value have high risks
5. A little knowledge of the market is preferable

Myths might mislead you when you want to know how to make money fast in the stock market. Stock investment is not at all like gambling. By developing strong analytical skills and business sense, one can understand the market index better. Rich investors and brokers are not the only beneficiaries but knowledgeable and intelligent traders or investors can also make profits. There are several fallen stocks that just cannot recover. Risk associated to any investment can never be estimated with valuation of any stock within the trading platform. Scarce knowledge is not enough while investing; you have to understand the market pulse and how the economy influences the market to make money fast with stock investments.

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AT and T to Keep Provision of $4 Billion Costs This Quarter on T-Mobile Risks

AT and T Inc (NYSE: T) is keeping a provision of $4 billion this quarter to cover the risks of a collapse of its $39 billion bid to take over T-Mobile USA, as the transaction has been challenged by the U.S. Justice Department.
Deutsche Telekom, owner of T-Mobile, and AT and T have withdrawn an application to the U.S. Federal communications commission to pursue getting a clearance from the Justice Department. The pre-tax accounting costs are the potential fees due to Deutsche Telekom in case of a breakup.
In August, the transaction was blocked by the Justice Department on the grounds that a merger of AT and T and T-Mobile would hamper competition as it would eliminate one of four national U.S. wireless carriers. The proposed takeover is likely to be sent for a hearing before an agency judge by commissioners on the instructions of FCC Chairman Julius Genachowsky.
Will Draper, an analyst at Espirito Santo in London who has a “neutral” rating on Deutsche Telekom shares said “What that tells you is AT and T’s auditors have now concluded that the deal is likely to fail and have forced the company to take that charge.” He said that the probability of the transaction going through now is about 10 percent, down from 25 percent.
In Frankfurt, Deutsche Telekom rose 11.8 cents, or 1.4 percent, to 8.86 euros and rose 0.7 percent as of 10:09 a.m. whereas in U.S. trading Wednesday, AT and T dropped 1.9 percent to $27.55.

Read more: AT and T to Keep Provision of $4 Billion Costs This Quarter on T-Mobile Risks

German Business Confidence Rises Unexpectedly

For the first time in five months, German business sentiment looked up most unexpectedly even in the face of the worsening debt crisis in Europe. Although economists had expected that the business climate index of the Munich-based Ifo institute would decline to 105.2, it rose to 106.6 from 106.4 in October.
Andrea Rees, chief German economist at UniCredit Markets and Investment Banking in Munich said “Although downside risks certainly remain, doomsday is not around the corner. A recession, and especially a deep and nasty one, is not in the pipeline.”
Even in the face of diminishing demand for Germany’s exports across the euro region, unemployment is near a two-decade low leading to greater consumer spending. However, the growing debt crisis is still casting its shadow on Europe’s largest economy which was evident yesterday when Germany’s offer of sale of its 10-year bonds failed to get the desired response as only 35 percent of the bonds on offer were sold.
In Frankfurt, the euro went up by about a quarter of a cent after Ifo’s report before it went back to $1.3375 at 11:40 a.m. There was a gain of 1.3 percent in the benchmark DAX share Index. Ifo’s gauge of the current situation remained static at 116.7 whereas an index of executives’ expectations rose to 97.3 from 97.

Read more: German Business Confidence Rises Unexpectedly

Moody’s Threatens US Downgrade if $1.2 Trillion Deficit Cuts Not Implemented

Moody’s has warned U.S. that if the $1.2 trillion discretionary spending cuts to begin in 2013 are reduced there would be “negative implications” for their credit rating.
The failure of the congressional super committee to reach a deal on deficit reduction this week has triggered deficit reductions amounting to $1.2 trillion to take place over ten years from 2013. Moody’s did not change the US Aaa rating after the failure of the committee but it has a “negative outlook” on the country’s debt.
In an interview Steven Hess, senior credit officer at Moody’s, said today “If they were to eliminate that process or reduce that amount significantly, that would definitely be a negative for our thinking about the rating. A change in that would increase deficits and therefore the debt over time and would definitely be negative.”

Standard & Poor’s said that after it had downgraded the U.S. on Aug. 5 to AA+, it was not necessary to downgrade it again after the super committee failed to reach a deal. Nearly half of the $1.2 trillion of the automatic reductions will be in the field of defense spending but Republicans say that the defense cuts should be replaced by cuts in other fields and they will bring legislation to prevent defense spending cuts.
President Obama has, however, pledged to veto any efforts to thwart the spending reductions.

Read more: Moody’s Threatens US Downgrade if $1.2 Trillion Deficit Cuts Not Implemented

IRS to Refund $326 Million Transferred to Madoff’s Firm

An agreement has been reached between the U.S. Internal Revenue Service and the trustee who is fighting for the victims of Bernard Madoff whereby IRS will refund $326 million that was earlier transferred to it by Madoff’s firm supposedly on behalf of foreign account holders.

According to the court filing, Madoff’s customers who have valid claims will get the settlement money. Certain payments made by Madoff and his firm had been identified by the trustee, Irving Picard during the course of his investigation. Picard said in the court filing that payments totaling about $330 million had been made on behalf of 145 foreign account holders. The court filing states that about $4.2 million had been erroneously refunded to two of the foreign account holders by the IRS.

Picard said in a filing that “I believe that the payments made to the IRS falsely identified the funds as income tax withholding in order to give the investment advisory arm of Bernard L. Madoff Investment Securities LLC (BLMIS) an air of legitimacy and to avoid inquiries.” He further said that there was no record of any purchase or sale of any securities being made by Madoff’s firm for the benefit of foreign account holders.

About $103 million of the settlement payment will be reserved by the trustee to meet any judgments against the IRS or the trustee. 

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There are Many Opportunities in Japan, says Warren Buffett

Warren Buffett, who became the world’s third-richest person through long-term value investing, remains in favor of investing in Japan, even after the March 11 disaster and the country’s biggest corporate scandal at Japanese Camera maker Olympus Corp. “There are lots of opportunities in Japan”, Buffett, 81, said in Iwaki city. He said he is interested in “businesses that will be around for many, many decades.”

Warren Buffett, chairman of Berkshire Hathaway Inc., is visiting Japan for the first time to see the plant of tool maker Tungaloy Corp., which is owned by the Berkshire subsidiary Iscar, headquartered in Israel. The factory is located approximately 40 kilometers (25 miles) from the Fakushima Daiichi nuclear power plant, from which the radiations are leaking continuously since it was wrecked by the March 11 earthquake and Tsunami.

“The tsunami does not change Japanese people and Japanese business” the chairman and Chief Executive of Berkshire Hathaway said at a news conference. During his later news conference, Buffett also said that the corporate governance scandal that has swallowed up the Olympus Corp., does not affect good businesses.

Read More : There are Many Opportunities in Japan, says Warren Buffett

Peripheral Corporates Under Sovereign Stress

Analysts at Deutsche Bank Securities provides weekly credit strategy as corporates are being under sovereign credit crisis stress.
With Italy and Spain under further stress, a key question as to how corporates from these countries have been impacted in both Government bond market and the credit market. As banks face serious systematic problems as cited previously, non-financial corporates also experience the same issues. Thus, the analyst highlights on corporate’s performance in credit markets and their local sovereign.
The analysts observe that corporate credit moved in line with credit market and other corporates during the 08-09 credit crunch. However, this trend has changed since spring 2010 due to corporate underperformance and debt despairs of their countries. As such, underperformance is directly proportional to their country’s distress. On comparison, the analysts find that corporates have outperformed significantly the local governments over the crisis. Corporates in Portugal & Ireland traded wider than their sovereign and outclassed remarkably. They reached the highs of around 700bp and 1,300bp in July this year. With Italian and Spanish corporates trading wider than their sovereigns till recently and are now c.150bp and c.130bp tighter following the last month’s sovereign under performance.
The government bonds are the main reason for the corporate sovereign gap, as they outperform on sovereign stress and underperform on positive government news. The analyst indicates that corporates have low-beta defensive equivalents of local government bonds. The vital fundamental reason for such conduct is that corporates are priced off the relevant maturity bund and not off the local government. Italy and Spain are stressed presently and not distressed, and the differential may widen further if the current macro persists or may worsen over Eurozone authorities deferring action. If ECB steps in with an enlarged SMP that may save the situation, it could result in corporates underperforming the local government.

Read More : Peripheral Corporates Under Sovereign Stress

Alleghany to Acquire Transatlantic Holdings

Alleghany Corp (NYSE: Y) is holding negotiations to buy reinsurer Transatlantic Holdings (NYSE: TRH) for a total amount of $3.4 billion by paying about $59 to $60 per share. The offer is about 10 percent more than the closing price of Transatlantic on Nov. 18. Reliable sources have revealed that the deal might be announced as soon as today.
Transatlantic is a former unit of American International Group Inc. and it helps insurance companies pool their biggest risk. Its shareholders had rejected merger offers from Allied World Assurance Co., in June and also offers from Omaha, Nebraska-based Berkshire and Bermuda-based rival Validus Holdings Ltd.
On the basis of the price being offered and the company’s 61.6 million shares outstanding as on Sept. 30, the value of Transatlantic would work out to about $3.7 billion. In September the company was planning a $600 million share buyback, with half that amount being planned to be repurchased this year. As such the shares outstanding by the time a deal with Alleghany is completed, would be reduced.
Inside sources also said that an agreement between Transatlantic and Alleghany might not materialize. However, there were no comments from either of the two parties. Transatlantic has also conferred with two other potential bidders in order to identify the best offer.

Read More : Alleghany to Acquire Transatlantic Holdings

Gold Prices Expect to Average $2,000/oz in H2 2012

Analysts at Deutsche Bank Securities provide an insight into Gold prices and demand.

In a research note published yesterday, the analysts mention that according to the report released by World Gold Council (WGC) the Gold demand has reached 1053.9 tons in Q3 2011, up 6% YoY, translating to a record level $58 billion. The investment demand up 33% YoY reflecting the overall growth in demand, as investors sought wealth preservation and portfolio diversification, while central banks continue to purchase. Despite gold price gyrations experienced in Q3 2011, the analysts remain optimistic on gold and expect prices to average $2,000/oz in H2 2012. The US Federal Reserve commits to keep interest rates on hold, while other central banks are seeking diversification and the continued backdrop of Euro Sovereign risk, the analysts add.

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Egg Supplier Dropped by McDonalds over Animal Cruelty Charges

A Minnesota-based egg supplier has been dropped over animal cruelty charges by McDonald’s Corp. An undercover video of operations at the egg producer’s farms in three states by Mercy for Animals shows animal cruelty at five Sparboe Farms facilities in Iowa, Minnesota and Colorado.

The video depicts images that show a worker swinging a bird around by its feet, cramping cages with hens, tossing of male chicks into plastic bags to suffocate and cutting tips of chick’s beaks by workers.
Bob Langert, McDonald’s vice president for sustainability, said in a statement that “The behavior on tape is disturbing and completely unacceptable. McDonald’s wants to assure our customers that we demand humane treatment of animals by our suppliers.”

On Wednesday, the U.S. Food and Drug Administration had issued a warning letter to Sparboe Farms regarding “serious violations” of federal regulations meant to prevent salmonella, found at five Sparboe facilities by its inspectors. According to the warning, eggs from those facilities “have been prepared, packed, or held under insanitary conditions whereby they may have become contaminated with filth, or whereby they may have been rendered injurious to health.”

Sparboe Companies LLC in a statement said that the video was “shocking” and that four employees “who were complicit in this disturbing activity” had been identified by an internal investigation and they were fired this month.

Read More On :  Egg Supplier Dropped by McDonalds over Animal Cruelty Charges

Miramax Plans $142 Million Dividend for Investors with Refinancing

Reliable sources have revealed that Miramax, a producer of films, is planning to pay about $142 million as dividend to its investors. It will raise about $550 million to pay the dividends and to refinance debt that had been taken when the studio was bought from Walt Disney Co. by Colony and investor Ron Tutor for $660 million in December.
The owners will be able to reclaim some cash and will also be able to finance more debt at lower interest rates with the help of the asset-backed bond being offered by Miramax Film NY LLC. In May, Chief Executive Officer Mike Lang had said that since the time of the purchase, deals have been signed by the company with Netflix and Hulu for online distribution of films, and with others, to ensure profitability.
More than $100 million of the capital of the investors will still be retained by them. Standard & Poor’s said that Miramax’s library of more than 700 films and14 television serials will back the securities. Rights of more than 240 books and 300 development projects are also held by the company, as reported by S&P.
The sale is being managed by Barclays Capital and Jefferies Group Inc.

Read More : Miramax Plans $142 Million Dividend for Investors with Refinancing

Shell’s Gulf Well Sets Global Deep Water Record

 Shell Oil Co. said Thursday that a global deep-water record for oil production has been set by a well in the Gulf of Mexico. The well is producing oil from a depth of 9.627 feet below the surface of the Gulf, which is 271 feet more than the previous record, which is also a Shell project in the Gulf and more than six times the height of Empire State Building.
The new record-holder is located in the Tobago Field which is owned by Shell jointly with Chevron and Nexen whereas the previous record holder was in the Silvertip field. Both operate through the Perdido drilling and production platform which is located 200 miles southwest of Houston. The platform is moored in 8,000 feet of water which makes it the world’s deepest-water drilling and production platform.
Information regarding the amount of oil production that is taking place was not provided by the company but it said that the platform’s capacity is 100,000 barrels of oil and 200 million cubic feet of natural gas. Shell spokesman Jaryl Strong said that as the Tobago Field is several miles away from the platform, the oil has to flow on an incline along the sea floor before it can be pumped vertically to the platform.

Read more:  Shell’s Gulf Well Sets Global Deep Water Record

Smothered by a global slowdown, slammed by the floods in Thailand and unable to control the rise of the yen, Japan’s central bank brought down its assessment of the economy and kept its key interest at almost zero. The nine-member policy board of the Bank of Japan lowered its assessment of Japan’s economy at a two-day meeting and resolved to sustain the overnight call rate target at 0 to 0.1 percent.

The board described the economy as picking up but at a “more moderate pace mainly due to effects of a slowdown in overseas economies.” The main areas of concern were described as potential risks from the US and Europe’s debt crises and the ability of emerging economies to control inflation amid rapid growth.

The Bank of Japan said that at present the economy was vulnerable to adverse effects of global headwinds although it would be able to return to moderate growth eventually. Export-reliant Japan has been hit hard by the high value of the yen which reduces the value of repatriated overseas earnings. The yen is considered as a relatively safe haven by investors under the present economic circumstances.

Japan is also concerned about the recent trend of major exporters like Nissan and Panasonic to move part of their production out of Japan. The recent flooding in Thailand has also resulted in reduced production of major industries due to supply shortages.

Read More : Japan Central Bank Sustains Interest Rate at Near Zero Level 

Deutsche Bank Securities Reiterates its HOLD Rating on Euroseas

Analysts at Deutsche Bank Securities reiterate their HOLD rating on the shares of Euroseas Ltd (NASDAQ: ESEA). The 12-month target price is set to $4.00.

In a research note published yesterday, the analysts mention that Euroseas has reported Q3 EPS of $0.05 in line with the estimates and the consensus. The adjusted EPS discounts unrealized derivative and trading securities losses of $1.0 million, but it includes realized interest rate swap losses of $0.2 million, the analysts say. The analysts express their apprehension on Euroseas’ aging fleet and container sector exposure despite the healthy balance sheet and solid dry bulk coverage.

Read More : Deutsche Bank Securities Reiterates its HOLD Rating on Euroseas

S&P Capital IQ Reiterates its BUY Rating on Boeing

Analyst Richard Tortoriello of S&P Capital IQ reiterates his BUY rating on the shares of The Boeing Company (NYSE: BA). The 12-month target price is set to $86.00.
In a research report published this morning, analyst Richard Tortoriello mentions that the company announced an $18 billion deal of supplying 50 777-300ERs to Dubai-based Emirates Airline. This deal is the biggest single order in Boeing’s history in dollars, the analyst says. The analyst believes that this deal will enable BA to solidify its lead over its competitor Airbus in the attractive wide-body market, as 787 has already surpassed Airbus’s A350-XWB. The outlook for BA stays healthy as emerging market airlines continue to raise their fleet size to accommodate more travelers while Middle Eastern countries expanding into commercial aerospace, the analyst adds.

Read More : S&P Capital IQ Reiterates its BUY Rating on Boeing

S&P Capital IQ Reiterates its BUY Rating on DISH Network

Analyst Tuna Amobi of S&P Capital IQ reiterates her BUY rating on the shares of DISH Network, while raising her estimates for the company. The 12-month target price is set to $28.

Analyst Tuna Amobi, in a research note published this morning mentions that with the pending approvals for $1.4 billion Terrestar and $1 billion DBSD deals, Chairman Charlie Ergen recently offered the clearest strategic signal on the potential long term spectrum deployment for mobile video. The analyst believes that DISH Network would go for a JV rather than a solo wireless build out. As the Blockbuster is in the mix increasingly, the new CEO Clayton seems keenly focused on marketing revamp, the analyst adds. The EPS estimates for 2011 and 2012 have been raised from $3.17 to $3.37 and from $2.60 to $2.66, respectively.

Read  More : S&P Capital IQ Reiterates its BUY Rating on DISH Network

GM Q3 Profit Falls 15 Percent to $1.7 Billion With a Loss in Europe

A loss in Europe pulled down GM’s third quarter profit by 15 percent from a year earlier. Its stock dropped 5 percent to $23.88 in premarket trading Wednesday as the company said that it would not be able to avoid a loss in Europe. GM said that as compared to the third quarter last year when it earned $2 billion, or $1.20 per share, its earnings in the same period this year was $1.7 billion, or $1.03 per share.

In spite of the decline, it was GM’s seventh straight quarterly profit and well ahead of Wall Street’s expectations. FactSet analysts had predicted an earnings of 94 cents per share. Against analysts’ expectations of $35.9 billion, its revenue went up to $36.7 billion.

In Europe, GM reported a pre-tax loss of $292 million because of the struggling economy. It performed much better in North America where its profit rose slightly to $2.2 billion. However, in its international operations including China, its earnings dropped 29 percent to $365 million.

Dan Ammann, GM’s chief financial officer said that although the company performed well in the quarter, there is need to improve margin of profit in all areas. The company is more than $1 billion ahead of last year’s pre-tax earnings in Europe but there is need to reduce costs in all spheres of activity and offer the right products that consumers will buy.

Read More : GM Q3 Profit Falls 15 Percent to $1.7 Billion With a Loss in Europe

Microsoft, AOL and Yahoo Join for Online Ad Deal

The three tech giants Microsoft (NASDAQ: MSFT), Yahoo (NASDAQ: YHOO) and AOL are joining hands to sell advertising by pooling their resources, beginning in January. The newly formed alliance will sell leftover ad space but they will continue to maintain their own individual sales teams without appearing to have lost their independence and thereby avoiding scrutiny from antitrust regulators.

The main thrust of this move is to impede the growing popularity of Facebook which is attracting advertisers. Emarketer, a research firm, has ranked Facebook as the leader in US display advertising with a 16% share of online ad market. Google (NASDAQ: GOOG) is already the world’s dominant search engine and it has boosted its popularity and made a foray in display advertising by purchasing DoubleClick in 2008.

From 2% share of the display advertising market in 2008, Google has increased the same to 9% today. During this period, Yahoo’s share fell from 18% to 13%. Microsoft has 5% and AOL has about 4%. With increasing competition from Google and Facebook, the value of ads on Microsoft, Yahoo and AOL have fallen. They are however hoping to push up the price for advertisers for page views.

The alliance between the three tech giants allows them to sell each other’s excess ad space. They said that it was not an exclusive deal and that it would be open to other publishers.

Read More : Microsoft, AOL and Yahoo Join for Online Ad Deal

SEC Says Citigroup ‘Misconduct’ Led to Investors Losing $700 Million

The Securities and Exchange Commission (SEC) stated in a court document filed Monday that at the start of the mortgage meltdown, investors were misled by Citigroup about a housing-related investment and as a result they lost more than $700 million in the deal. SEC also said that all the investor losses were “not necessarily” the result of misconduct and as such it would accept $285 million from Citigroup to settle their cases against the company.

SEC said that the Citigroup made profits of at least $160 million on the transaction. As per the settlement, Citigroup will have to give up its alleged ill-gotten gains of $160 million and pay interest of $30 million in addition to a $95 million penalty, making a total payment of $285 million. However, Citigroup neither admits nor denies wrongdoing under the proposed settlement. Only one mid-level employee at the subsidiary has been charged in the case and he is fighting the charges.

Better Markets, an advocacy group, has asked for rejection of the Citigroup settlement. Dennis Kelleher, the group’s president, said in a statement that “Unfortunately, the SEC seems more interested in issuing press releases and wrapping up its investigations than punishing Wall Street for its massive frauds. Such settlements don’t deter crime. They reward it.”

Although the settlement is modest in comparison to Citigroup’s third-quarter profit of $3.8 billion, SEC has defended it as “fair, adequate and reasonable.”

Read More :  SEC Says Citigroup ‘Misconduct’ Led to Investors Losing $700 Million

Dippin Dots Files for Chapter 11 Bankruptcy Protection

The ice cream maker, Dippin’ Dots Inc. in its struggle to survive and avoid foreclosure filed for Chapter 11 bankruptcy protection on Thursday in U.S. Bankruptcy Court in Paducah, Ky. Dippin’ Dots manufactures quirky and colorful ice cream beads using liquid nitrogen and describes its products as the “ice cream of the future.”

Dippin’ Dots has been in a four-year battle with its biggest lender, Regions Financial Corp., which has moved to foreclosure on the loan this week. The company faced technical default four years ago when the economic crisis was at its peak and when customers watched every dollar they spent.

With about 140 Dippin’ Dots retail locations and 9.952 retail vendors, it faced sales problems when its expensive legal battle was lost over the validity of filing patents that protect its special freezing process. Steve Heisner, the company’s director of administration, customer service and information systems said that “All of that hit us at the same time.”

Although the company made several proposals to Regions for paying a part of the loan, the bank did not agree and posted a foreclosure notice on Tuesday. Its assets are valued at $20.2 million and it owns a 120,000 square-foot plant in Kentucky that is capable of producing 25,000 gallons of frozen dots a day. The company said that its sales are recovering and that its revenue is $27.7 million, above last year’s $26.7 million.

Read More : Dippin Dots Files for Chapter 11 Bankruptcy Protection

KKR Posts Lower Than Expected Loss for Q3 2011

As global equity markets tumbled, a lower-than-expected Q3 loss was reported by KKR & Co., a private equity firm, after the value of its private-equity holdings was written down by 8.5 percent. The company’s pre-tax economic net income was posted as a loss of $592.1 million, or 91 cents a share, from a profit $317.3 million, or 39 cents, a year earlier. However the company’s performance was better than the average analysts’ estimate of a loss of $1.02 a share.

Scott Nuttall, KKR’s head of global capital told reporters that “If you take out the noise, we feel really good about Q3 and the first nine months,” and added that there was a rise of fee-related earnings from $69.5 million a year earlier to $98.2 million in the quarter. He also expressed optimism that many good investment opportunities are coming KKR’s way.

The bulk of the negative investment income of $688.5 million stemmed from KKR’s $4.9 billion of holdings in its own private equity deals most of which were from combinations last year with its publicly traded European fund. KKR’s assets under management fell 5.2 percent from June 30 to $58.7 billion as world stocks plunged 18 percent in the quarter.

Read More : KKR Posts Lower Than Expected Loss for Q3 2011

Alcatel Lucent Shares Fall on Weak Sales and Reduced Guidance

Economic uncertainty in Europe and decreasing demand for its older products made Alcatel Lucent to lower its 2011 full-year guidance as its shares slumped as much as 11% Friday.

Alcatel Lucent said that its fourth-quarter revenue would also be adversely affected.Sales of the company went down 6.8% to €3.8 billion in the third quarter of 2011 against the sales achieved in the same quarter a year earlier. However, a net profit of €194 million was reported for the quarter which was higher by €25 million last time. However, the profit was boosted in part by a one-off tax gain.

Alcatel Lucent said that it is now expecting an adjusted operating margin of about 4% in 2011 which is down 1% from its original target. Chief Executive, Ben Verwaayen said that the company was “not at a level we are satisfied with.” He warned of “weaker revenues than initially planned in the fourth quarter of 2011,”and announced that he would be cutting costs by a further €500 million in 2012.

Mr. Verwaayen said that under the present circumstances of Europe’s debt crisis and an unstable regulatory environment, it was impossible to forecast how the overall telecom equipment market would react in 2012. Alcatel shares fell 9.1% at 0921 GMT as market reacted adversely to the news.

Read More :  Alcatel Lucent Shares Fall on Weak Sales and Reduced Guidance

Derivatives Affect Berkshire Hathaway’s Q3 Earnings

Berkshire Hathaway (NYSE: BRK) lost more than $2 million on derivatives related to stock market performance and ended up posting a smaller third quarter profit on Friday. The conglomerate run by Warren E. Buffett had lost on the same instruments a year ago also, but this year the loss was three times greater.

Although Buffett is highly critical of derivatives in general, he has defended these particular contracts saying that they were secure and that they would ultimately prove to be lucrative. However, in the present situation Berkshire has been hit hard by sharp declines in a wide range of market values like other insurance companies. Berkshire has in its quarterly report to the Securities and Exchange Commission said that the indexes under the contracts went down 11 to 23 percent in the quarter.

Berkshire’s net profit for Q3 declined to $2.28 billion or $1,380 for each Class A share from a year-earlier net profit of $2.99 billion, or $1,814 a share. Cash at the end of the quarter was $34.78 billion as compared to $47.89 billion at the end of June. The decline was mainly due to financing the purchase of chemical maker Lubrizol and investing $5 billion in Bank of America.

Except for its finance business where there was a slight drop, operating income of the company went up across segments.

Read More :  Derivatives Affect Berkshire Hathaway’s Q3 Earnings

Many Large Companies with Big Profits Not Paying Any Taxes

A study conducted by the left-leaning Citizens for Tax Justice and the Institute on Taxation and Economic Policy has revealed that many of the country’s largest public traded companies are not paying any taxes even though they are earning huge profits. In some cases they are also claiming and getting money back from the government.

The study further shows that although the official federal corporate tax is 35% in the U.S., 280 profitable companies are paying taxes in the range of 41% to negative 58%. No federal income taxes were paid by 280 Fortune 500 companies or they enjoyed tax rebates in 2008, 2009 and 2010.

According to the study, 78 of the 280 companies did not pay any federal income taxes or they enjoyed a tax rebate in at least one of those years. It was revealed that in the years that they did not pay any tax, General Electric Co. and Pepsico Holdings earned a total of $156 billion in pretax U.S. profits. They even reported negative taxes to the tune of $22 billion as they received so many tax breaks.

The average effective tax rate for all the 280 companies for the three year period was 19% varying from company to company from a low negative 58% for Pepsico and a high of 41% for Coventry Health Care Inc. GE’s effective tax rate was negative 45% for that period.

Read More : Many Large Companies with Big Profits Not Paying Any Taxes

Unilever Posts Higher Sales on Robust Performance in Emerging Markets

Helped by robust sales in the emerging markets and higher prices, the world’s second-largest producer of branded consumer products Unilever PLC reported Thursday that there was an underlying sales growth of 7.8% in the third quarter. However, the company cautioned that demand in European and American markets is not encouraging.

The dampened demand in Europe and North America was more than offset by booming consumer purchases in Asia, Latin America, Eastern Europe, the Middle East and Latin America shifting the focus of the globalized industry to these emerging markets.

Chief Financial Officer Jean-Marc Huet said that the growth of 13% in the emerging markets has made this fast-growing sector to now account for 53% of Unilever’s total business. In mature markets, the company is facing a challenging outlook from cut-throat competition and austerity measures.

Unilever reported a turnover of euro 12.1 billion in the third quarter with volume growth of 1.9% and prices up 5.8%. Chief Executive Paul Polman said “These results are especially encouraging against the backdrop of very uncertain consumer demand, hugely volatile commodity markets, natural disasters and geo-political uncertainty in many parts of the world even more so given we have taken pricing earlier than competition.”

At 0815 GMT, Unilever shares were down 1.6% at 2,039 pence, in a wider FTSE 100 index that was 0.7% lower.

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Japan to Keep Buying EFSF Bonds

Japanese officials promise to keep purchasing Eurozone bailout bonds as EU looks for external sources for help in solving debt problems.

Last week European leaders came to an agreement to fortify the EFSF using two ways: a special fund and an insurance program for sovereign bonds. Europe will continue to tour in rich Asian economies to gain support for the rescue fund and to expand the investments from cash-rich economies like China. Klaus Regling, head of the European Financial Stability Facility believes that the pledge from Japan to buy EFSF bonds has brought some positive news, whereas China made no such commitment to invest in yet.

So far Japan has bought 20% of debt issued by EFSF, and has shown signs to buy more in the future. The senior Japanese officials indicated that Japanese economy depends on the euro in cash and yield from the EFSF bonds, so it might get difficult for Japan to increase its share beyond 20% of bond purchases. Japan is already struggling to recover from tsunami, March earthquakes, nuclear emergency that shook Fukushima, and headwinds from slow global trades. However, Japanese Finance Minister, Jun Azumi said, Tokyo was ready to take “necessary measures” to help revamp the Eurozone in the interests of its own economy.”

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Fed Forecasts Weak Growth and High Unemployment in the Years Ahead

A gloomy outlook for the coming years has been forecast by the Federal Reserve as it downgraded its projections for the US economy Wednesday. The Fed warned that high unemployment and weak growth of the economy are here to stay for years.

The unemployment rate has been forecast by the Fed to be around 8.6 percent at the end of next year, slightly down from the current 9.1 percent. Even by late 2014, it is expected to be between 6.8 and 7.7 percent. Fed’s forecast in June had projected unemployment to be around 8 percent by the end of 2012.

The Fed’s policymaking board, during a two day meeting that ended Wednesday, did not initiate any action to boost the economy and left the interest rates at their current low levels. Central bank leaders have now reconciled to the idea that the economy is not likely to grow as before because of the consumer debt and a depressed housing market. As such, they feel that employment figures are not likely to improve given the expectations that economic growth will be stunted in 2012.

Fed Chairman Ben S. Bernanke said that “Evidently . . . the drags on the recovery were stronger than we thought,” and added that the problems in the housing market were more severe and stubborn than analysts had thought.

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Private Sector Adds 110,000 Jobs in October

The dismal employment outlook in the U.S. has finally been brightened with the addition of 110,000 jobs by the private sector in October as compared to economists’ expectations of a gain of 101,000 jobs. The ADP National Employment Report also increased the job addition figures of September from the previously reported 91,000 to 116,000. A separate report has indicated that there was a sharp reduction in planned layoffs last month. ADP’s report was jointly developed with Macroeconomic Advisers LLC.

Peter Jankovskis, co-chief investment officer at Oakbrook Investments LLC in Lisle, Illinois said that “It is not a huge amount better, but the fact that it was better than expected and there was a revision in the last month’s number is a pretty encouraging sign.”

The ADP report has been published just before the government’s labor market report which is due on Friday and which will include both public and private sector employment figures. Immediately after the ADP report, U.S. stock Index futures rose while Treasuries widened losses. The dollar extended losses against the euro slightly.

The accelerated growth in the third quarter after a weak first-half performance has ebbed fears that the U.S. economy could be headed for another recession.

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Greek Referendum On Bailout Sends Shock Waves Across Markets

The unexpected announcement by Greek Prime Minister George Papandreou calling for a referendum on the agreement reached between European leaders last week to solve the sovereign debt crisis has sent shock waves which have plunged the Dow by more than 297 points, or 2.05%, to 11,657.96 on Tuesday. Most European indebted nations are not happy with the economic belt tightening that would be required if the above agreement is implemented.

Having lost 2.5% on Monday, stocks extended their losses to Tuesday with the result that in the last two days, U.S. stocks have gone down by 4.7%. Tuesday also saw major European Indexes like France’s CAC 40 and Germany’s DAX tumbling 5% or more.

Charles Crane of Douglass Winthrop Advisors said, “If Greece thumbs its nose at the rest of the EU over this bailout, we go back to where we were before last week’s euphoria. It’s pretty darn disruptive, but could it get worse? Yes.”

Fitch Ratings said that investors are now apprehensive of the increasing threat of the Greek debt crisis getting much worse. It also feels that a referendum will only raise the possibility of a “disorderly” Greek default. Investors are not happy that the seemingly quick-fix solution found by European leaders might not be enough or immediate in solving the sovereign debt crisis.

Michael Farr of Farr Miller & Washington said, “These problems were a long time in the making and will take a long time to mend.”

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BofA Abandons Monthly Debit Card Fee Plan

Bank of America (NYSE: BAC) has finally abandoned its plan to impose a $5 debit-card fee in view of customer resentment and the decision of its rivals to move away from such a controversial step. The second-largest bank of the U.S. has had to forego earnings of between $500 million and $1.4 billion annually which would have accrued to its income by imposing the debit-card fee.

Bank of America had imposed the fee in September because the Dodd-Frank Consumer Protection Act demanded transparency in bank charges and banned certain juicy fees. Customer protests along with criticism from President Obama created uproar against BofA’s decision and its position became weaker as rival banks like Wells Fargo and JPMorgan Chase refused to impose the fee.

Nancy Bush, an analyst at SNL Financial said, “It was a reality smack in the head for these companies and in my view it was much needed.” Chief Executive of the bank, Brian T. Moynihan had defended the imposition of the fee saying that everyone realizes that the bank has a “right to make a profit.”

After widespread demonstrations and a show of resentment among the customers, the bank decided to abandon its plan. In a statement, David Darnell, co-chief operating officer at Bank of America said that the bank had listened to their customers and recognized their concerns and “as a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

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