Filed under: Other issues, Housing, Federal Reserve

The U.S. Federal Reserve announced that $16.5 billion of its first $20 billion in loans under its term auction facility went to institutions in the New York district [subscription required], an area that includes the headquarters of some of the nation’s largest banks, The Wall Street Journal reported on Friday. The Fed doesn’t disclose loan sizes or borrowers’ identities.

Meanwhile, the Fed’s Dallas district reported loans of $1.4 billion, while the St. Louis district reported loans of $1 billion.

Earlier this fall, the Fed established the term auction facility as an substitute short-term loan operation because banks were reluctant to access the Fed’s traditional short-term window, the discount window. Banks became reluctant to borrow from the discount window because of the stigma attached: doing so can telegraph distress to other banks.

Fed Analysis: So far, the Fed’s effort, along with the effort of the European Central Bank and other major central banks, to provide short-term loans to banks appears to be working. Both overnight and two-week liquidity has improved, as measured by yield spreads and transaction conditions. A later announcement by the Fed to maintain the term auction facility “for as long as necessary” further calmed the markets. Still, investors/readers should keep in mind that the housing correction / credit quality issue is young: given the plethora of at-risk subprime loans and related assets, more default declarations are undoubtedly ahead in 2008.

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Filed under: Launches, Newspapers, Gannett Co (GCI), Housing

Just for fun, the newspaper industry that is facing excruciating pressure as news seekers and advertisers flock to the web, now has another negative catalyst to deal with. The housing slowdown and sharp drop in sales is causing a significant drop in newspaper advertising for real estate, a significant chunk of many small papers’ overall revenue.

The Tribune Company saw a 40% year over year decline in its real estate ad sales for November. Gannett (NYSE: GCI) is also looking at a 27% drop.

This short-term revenue drop that’s a result of macroeconomic factors could extend into the long-term. When the housing market does rebound, will people go back to newspapers? Or will have the internet continue to make inroads, hastening the decline of newspapers into oblivion.

As bleak as the outlook for the industry looks, several highly-respected investors have made big bets on it. Sam Zell recently acquired Tribune, and Warren Buffett has been a long-term investor in the sector.

For contrarian investors, the industry might be worth a look.

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Filed under: Other issues, Housing, Federal Reserve

The U.S. Federal Reserve announced that $16.5 billion of its first $20 billion in loans under its term auction facility went to institutions in the New York district [subscription required], an area that includes the headquarters of some of the nation’s largest banks, The Wall Street Journal reported on Friday. The Fed doesn’t disclose loan sizes or borrowers’ identities.

Meanwhile, the Fed’s Dallas district reported loans of $1.4 billion, while the St. Louis district reported loans of $1 billion.

Earlier this fall, the Fed established the term auction facility as an alternative short-term loan operation because banks were reluctant to access the Fed’s traditional short-term window, the discount window. Banks became reluctant to borrow from the discount window because of the stigma attached: doing so can telegraph distress to other banks.

Fed Analysis: So far, the Fed’s effort, along with the effort of the European Central Bank and other major central banks, to provide short-term loans to banks appears to be working. Both overnight and two-week liquidity has improved, as measured by yield spreads and transaction conditions. A later announcement by the Fed to maintain the term auction facility “for as long as necessary” further calmed the markets. Still, investors/readers should keep in mind that the housing correction / credit quality issue is young: given the plethora of at-risk subprime loans and related assets, more default declarations are undoubtedly ahead in 2008.

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Filed under: Launches, Newspapers, Gannett Co (GCI), Housing

Just for fun, the newspaper industry that is facing excruciating pressure as news seekers and advertisers flock to the internet, now has another negative catalyst to deal with. The housing slowdown and sharp drop in sales is causing a significant drop in newspaper advertising for real estate, a significant chunk of many small papers’ overall revenue.

The Tribune Company saw a 40% year over year decline in its real estate ad sales for November. Gannett (NYSE: GCI) is also looking at a 27% drop.

This short-term revenue drop that’s a result of macroeconomic factors could extend into the long-term. When the housing market does rebound, will people go back to newspapers? Or will have the internet continue to make inroads, hastening the decline of newspapers into oblivion.

As bleak as the outlook for the industry looks, several highly-respected investors have made large bets on it. Sam Zell recently acquired Tribune, and Warren Buffett has been a long-term investor in the sector.

For contrarian investors, the industry might be worth a look.

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Filed under: Bad news, Economic data, Housing

New homes sales fell by 9% in November 2007 to a seasonally-adjusted annual rate of 647,000 — a 12-year low — the U.S. Commerce Department announced Friday (pdf). The November 2007 statistic represents the lowest figure since April 1995.

Analysts had expected new home sales to decline to a seasonally-adjusted annual rate of about 720,000 units in November 2007.

For the past 12 months, U.S. new home sales declined 34.4%. Sales in the Midwest fell the most, 38.7%, followed by a drop in the South of 34.3%, a slump in the West of 33.8% and finally a decline of 28.1% Northeast.

The median sales price of new houses sold in November 2007 was $239,100, or down 0.4% in the past 12 months, while the average sales price was $293,300, or up 0.5% from November 2006.

Housing’s stats

Economist Steve Affinito told BloggingStocks Friday the November 2007 new home sales statistic contained tiny good news.

“It shows a contracting home building market that’s going to continue to impact the economy throughout 2008,” Affinito stated. “I’d like to be more encouraging, but we have falling sales, stagnant prices, a rising backlog of homes and tougher mortgage lending stipulations. And that means the housing sector will continue to correct and serve as a contraction force on the U.S. economy.”

Affinito added that housing’s continued doldrums, “will keep the Fed’s eye on the need to cut short-term interest rates at least two more times in 2008.” He sees another 50-75 basis points in total Fed interest rate deductions in 2008. “And with these housing numbers, we’re going to need them,” Affinito said.

The seasonally-adjusted estimate of new houses for sale at the end of November 2007 was 505,000, which represents a supply of 9.3 months at the current sales rate, up from 8.8 months in October 2007.

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Filed under: Bad news, Economic data, Housing

New homes sales fell by 9% in November 2007 to a seasonally-adjusted annual rate of 647,000 — a 12-year low — the U.S. Commerce Department announced Friday (pdf). The November 2007 statistic represents the lowest figure since April 1995.

Analysts had expected new home sales to decline to a seasonally-adjusted annual rate of about 720,000 units in November 2007.

For the past 12 months, U.S. new home sales declined 34.4%. Sales in the Midwest fell the most, 38.7%, followed by a drop in the South of 34.3%, a slump in the West of 33.8% and finally a decline of 28.1% Northeast.

The median sales price of new houses sold in November 2007 was $239,100, or down 0.4% in the past 12 months, while the average sales price was $293,300, or up 0.5% from November 2006.

Housing’s stats

Economist Steve Affinito told BloggingStocks Friday the November 2007 new home sales statistic contained little good news.

“It shows a contracting home building market that’s going to continue to impact the economy throughout 2008,” Affinito said. “I’d like to be more encouraging, but we have falling sales, stagnant prices, a rising backlog of homes and tougher mortgage lending requirements. And that means the housing sector will continue to correct and serve as a contraction force on the U.S. economy.”

Affinito added that housing’s continued doldrums, “will keep the Fed’s eye on the need to cut short-term interest rates at least two more times in 2008.” He sees another 50-75 basis points in total Fed interest rate deductions in 2008. “And with these housing numbers, we’re going to need them,” Affinito said.

The seasonally-adjusted estimate of new houses for sale at the end of November 2007 was 505,000, which represents a supply of 9.3 months at the current sales rate, up from 8.8 months in October 2007.

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Filed under: Before the bell, International markets, Deals, Law, Berkshire Hathaway (BRK.A), Market matters, Citigroup Inc. (C), Economic data, Housing

Wall Street seems bent on finishing 2007 on a high note and after yesterday’s large selloff following Pakistan’s former prime minister and opposition leader Benazir Bhutto’s assassination, futures are up this morning, indicating U.S. stocks could start higher.

Yesterday, U.S. stocks tumbled on the assassination news — fearing further unrest in one of U.S.’s allies in its war on terror in Afghanistan and due to weaker-than-forecast rise in durable-goods orders. The positive consumer confidence report couldn’t offset the news. The Dow industrials dropped 192 points, or 1.42%, the Nasdaq Composite fell 47 points, or 1.75%, and the S&P 500 lost 21 points, also 1.42%.

News that could be moving the market this morning include speak of big bank asset sales and later some data that is due out:

The Wall Street Journal reported Friday that several banks, including Citigroup (NYSE: C) and HSBC Holdings (NYSE: HBC) are considering sales of any of their assets, from branches to entire units.

Economic data today includes Chicago PMI, a manufacturing sentiment index for December, due out a little after the opening bell.
No doubt, though, that investors await the release of November existing and news home sales due out at 10 a.m. EST. The report is expected to show further declines with new home sales in November approaching an 11-year low. What worries economists is that there is no end in sight to the housing recession that’s threatening to stall growth in 2008. Still, others say that there is improved consumer sentiment due to the lower prices.

Overseas, and not surprising, Asian markets tumbled following Bhutto’s assassination. Japan’s Nikkei closed down 1.7% also due to report of higher prices and falling factory output. In Europe, several reports indicating slower economies were out and by midday, markets were blended.

In corporate news, seems that Warren Buffett is sprinting towards the new year with yet another deal news Friday: Berkshire Hathaway (NYSE: BRK.A) reached a deal to purchase reinsurer NRG from Dutch financial-services giant ING (NYSE: ING) for $433 million (€300 million).

Also, mall retailer The Finish Line Inc. (NASDAQ: FINL) must complete the $1.5 billion purchase of Genesco Inc. (NYSE: GCO), a judge ruled Thursday, saying that Genesco executives did not commit fraud during negotiations. GCO shares are up 27% in premarket trading.

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Filed under: Good news, Products and services, Toyota Motor Corp. (TM)

Although Toyota Motor (NYSE: TM) basically invented the popular notion of hybrid automobiles years ago by making the Prius compact passenger automobile the spokescar of the hybrid world, the automaker now has its sights set a little higher. Toyota wants to sell at least one million Hybrid cars every year shortly after 2010 gets here.

Although Toyota wasn’t the first automaker with some form of hybrid vehicle on the road, it’s been the most aggressive marketer of such technology and resulting cars by far. Even though the hybrid Prius has sold only 1.25 million units since first being introduced in 1997, Japan’s largest automaker thinks that mark can be hit annually within a few years. Are those plans too ambitious?

If fuel prices stay at the level they’re at now, it’s not inconceivable to think Toyota can’t hit that mark. The automaker has publicly stated that it wants a hybrid drivetrain in every vehicle it sells come 2020, so to get that kind of expertise ramping, it needs to move quite a few hybrid cars this year and increase that amount each year going forward.

The internal combustion engine still is not perfected, so transitioning millions of automobiles to a hybrid drivetrain in a little over a decade sounds like a risky plan to many. If Toyota can begin selling a million of them per year long before that, though, it just might have a chance.

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Filed under: Good news, Products and services, Toyota Motor Corp. (TM)

Even though Toyota Motor (NYSE: TM) basically invented the popular notion of hybrid automobiles years ago by making the Prius compact passenger vehicle the spokescar of the hybrid world, the automaker now has its sights set a little higher. Toyota wants to sell at least one million Hybrid automobiles every year shortly after 2010 gets here.

Although Toyota wasn’t the first automaker with some form of hybrid vehicle on the road, it’s been the most aggressive marketer of such technology and resulting automobiles by far. Even though the hybrid Prius has sold only 1.25 million units since first being introduced in 1997, Japan’s largest automaker thinks that mark can be hit annually within a few years. Are those plans too ambitious?

If fuel prices stay at the level they’re at now, it’s not inconceivable to think Toyota can’t hit that mark. The automaker has publicly said that it wants a hybrid drivetrain in every vehicle it sells come 2020, so to get that kind of expertise ramping, it needs to move quite a few hybrid automobiles this year and increase that amount every year going forward.

The internal combustion engine still isn’t perfected, so transitioning millions of vehicles to a hybrid drivetrain in a tiny over a decade sounds like a risky plan to many. If Toyota can start selling a million of them per year long before that, though, it just may have a chance.

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Filed under: Products and services, Consumer experience, Competitive strategy, Marketing and advertising, CBS Corp ‘B’ (CBS)

With the writers still on strike, late night hosts are gearing up to putting on shows without help from any writers [subscription required]. For the past two months, while Hollywood writers have been on strike, late night television viewers have been served up re-runs of their favorite speak shows, but that is about to change.

It has definitely been a strange time for our late night shows to be on hiatus. With the now heating up presidential race offering up loads of good material, you know that the late night hosts have just been dying to get back into the action. But, don’t anticipate to be seeing the same sort of shows you’re used to seeing when they return to the air next week. The shows should prove to be very different than business as usual.

The exception to this rule might be the two late night shows on CBS (NYSE: CBS). David Letterman’s production company, Worldwide Pants Inc., is currently in speaks with the Writers Guild of America and hopes that its “Late Show with David Letterman” and “Late Late Show with Craig Ferguson” will be able to reach a deal to grant its writers to be able to contribute to its shows.

One of the aspects of late night that we have come to love and expect is the interviews with major movie actors regarding their new releases. While this typically represents at least one guest each night, it could be lacking from the shows when they return in the next few weeks. Most major actors have vowed that they’ll support the writers and avoid the talk shows. The negotiations between Worldwide Pants Inc. and the guild could be the only thing that leads to actors being able to come out and promote their upcoming releases.

One thing is for sure, as the shows start to slowly come back on, we’ll all be getting our fill of commentary on the current presidential candidates, and who can complain about that?

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor’s Observer.

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