Roland Piquepaille writes “The Tree of Life is an expression first used by Charles Darwin to describe the diversity of organisms on Earth and their evolutionary history. There are only two life forms, — eukaryotes, which gather their genetic material in a nucleus, and prokaryotes, such as bacteria, which have their genetic material floating freely in the cell. Until recently, eukaryotes, which include humans, were divided into five groups. But now, based on work by European researchers, the Tree of Life has lost a branch. After doing the largest ever genetic comparison of life forms they concluded that there are only four groups of eukaryotes.”

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eldavojohn writes “There has long been speculation on why the Sun’s surface is a mere ten thousand degrees while the atmosphere can reach millions. Space.com is reporting that the mystery has now been solved. Researchers looked for Alfven waves in the solar chromosphere and found them. Followup studies employing simulations demonstrated that the energetics work out to transfer energy from the Sun’s surface to its overlying corona.. The magnetic waves may also be the power source behind the solar wind.”

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Filed under: Bad news, Press releases, Products and services, Consumer experience, Deere and Co (DE)

On January 16, 2008, a voluntary recall of approximately 5,400 John Deere Compact Utility Tractors was initiated by the Consumer Product Safety Commission in cooperation with Deere and Co. (NYSE: DE). The problem with the tractors is described as a forward drive pedal that can get stuck, creating a potential for loss of control and injury to people.

The recalled tractor’s model number is 3203, and you might check the CPSC press release for specific serial numbers. It is suggested that consumers discontinue using these particular tractors and contact a John Deere dealer to schedule a free repair. You may reach Deere & Company at (800) 537-8233 between 8 a.m. and 6 p.m. ET Monday through Friday and between 9 a.m. and 3 p.m. ET Saturday. You are also invited to visit the company website at: www.johndeere.com.

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Filed under: Earnings reports, Bad news, Products and services

Engine equipment maker Briggs & Stratton Corporation (NYSE: BGG) continues to struggle with the impact on earnings of a snow engine recall. Thus far in fiscal 2008, warranty expenses for the snow engine recall total more than $20 million in 1Q2008 and an additional $18 million in 2Q2008. Although net sales increased by 13% to $479 million, the company is still running a half-year operating loss of $15 million due to the negative impact from warranty expenses. To cover the warranty expenses, Briggs & Stratton sold an investment in preferred stock, realizing $25 million in after-tax gains.

Briggs & Stratton 2Q earnings were also negatively affected by higher fixed-production costs but lower production output due to expenses incurred in closing one production facility and opening a new production facility for lawn and garden equipment. A bit of good news was that interest expense for the quarter was down due to lower average borrowing because of inventory reductions.

The company is forecasting FY2008 net income in the $60-$68 million range, with diluted EPS of $1.21-$1.37, if — and it is a huge if — net sales grow at a rate of 7%-8%. Investors were prepared for the unpleasant earnings news. The stock closed recently at just over $17, with tiny drop in price as a result of the earnings downturn.

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Filed under: Earnings reports, Good news, Products and services

Parker Hannifin (NYSE: PH), makers of motion and control technologies, was just awarded $2 billion in contracts to supply fuel and hydraulic systems for the new A350 aricraft. Parker’s aerospace division will supply the entire fuel management system for the wide body aircraft. Likewise, Parker aerospace will supply hydraulic power and distribution components and measurement controls for the A350.

News of these awards comes immediately following Parker Hannifin’s posting a record 2Q2008 sales revenue of $2.8 billion, an increase of almost 13%. A healthy 5% of this growth was organic, 3% resulted from four separate acquisitions the company made during the quarter. Net income increased just under 10% to $212 million, and cash flow increased more than 8% to $473 million. As a result, diluted EPS increased 13% to $1.23.

Parker Hannifin reported great results in its international segment. Revenue increased 28% to $1.2 billion, while operating income increased 44% to $175 million. These results helped make up for some softness in the domestic industrial market. While the domestic aerospace segment posted a 7% increase in sales, operating income dropped by 23%. The same is true of the climate control segment which posted a 22% drop in operating income.

On a more positive note, total orders are running 10% ahead of last year, with both industrial and aerospace segments posting 16-19% increases. CEO Don Washkewicz forecasts good order growth throughout all of 2008. As a result, he boosted earnings guidance modestly to the $5.15-$5.40 range.

Parker Hannifin forecasts a number of new product launches in 2008, with more products in the development pipeline. The company has increased its annual dividend for 51 consecutive years and shows no signs of breaking with tradition. The stock currently trades just under $62.

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Filed under: Products and services, Google (GOOG)

Google, Inc. (NASDAQ: GOOG) is famous for just giving things away for free. The company is a huge part of the information economy and grants anyone on the planet with world wide web access free use of its search engine, email, documents, pics and more. In return, it receives lucrative advertising dollars that mostly originate from its search engine. Well, the next free service is about to roll out — to large scientific concerns no less.

Google’s Research website will start offering the free hosting of those enormous datasets scientists use to predict weather, decipher the human genome and fold proteins. Google will make available terabytes of information on its research website for this purpose. A terabyte is 1,000 Gigabytes. That PC you’re using right now? It probably contains 80 Gigabytes to 250 Gigabytes.

In addition to offering free on the web storage hosting for scientific purposes, the company will also make available algorithms that can be used to look at and study information contained within those large, uploaded scientific datasets. In addition to allowing universities unparalleled access to storage and algorithm use for their research needs, those at home who want to explore scientific information never before widely available will have the capability to do so. All that remains will be the large question of how researchers will actually transport their datasets to Google’s system, but for now, the theory is that Google will ship a hard drive array in a suitcase to any interested party so that datasets can be sent to it then shipped back to Google.

Another day, another righteous Google project that seemingly has no monetary impact to the company but does have significant public impact. Isn’t life grand for Google?

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Filed under: International markets, Politics, DJIA, Housing, Federal Reserve

As traders and investors digested the impact of the market’s latest sell-off on both assets and investor psychology, Tuesday’s jolt is likely to speed the passage of a U.S. fiscal stimulus package to boost the ailing U.S. economy, economists and analysts stated Tuesday.

President Bush and U.S. Congressional leaders from both parties are expected to discuss this afternoon that fiscal plan, which should aide place $140-160 billion into the econmy, Bloomberg News reported Tuesday.

Fiscal stimulus: sooner the better

Independent currency trader Andrew Resnick, stated if Tuesday’s market jolt prompts President Bush and lawmakers to concur on a package of tax cuts/rebates and spending increases, then the market’s latest gyrations “will turn out to be a blessing in disguise.”

“One thing we have learned in modern markets is that broad-based fiscal stimulus does increase economic activity and economic growth. If the package is passed relatively swiftly, within a month or two, the economy will begin to see those benefits in late Q2 and Q3 and the markets will sense that, and the markets should stabilize,” Resnick said. “Also, there’s the fact that the markets have pretty much factored-in a $150 billion stimulus package, so any pulling back now wouldn’t be viewed as constructive by the markets.”

Resnick also stated he supported the U.S. Federal Reserve’s emergency monetary policy action to cut key interest rates Tuesday morning - - one where the Fed cut both the Fed Funds rate and the discount rate by 75 basis points. The Fed cut the Fed Funds rate to 3.50% and the discount rate to 4.00%.

“It was the right move,” Resnick stated. “There will always be critics that say ‘The Fed is bailing out a bunch of bad mortgage lending decisions, but the problem is much broader now than bad mortgages. The Fed’s decision has helped re-assure the markets that liquidity is present. It has helped stabilize the foreign exchange market. The dollar hasn’t collapsed. These are not insignificant positives. The Fed’s decision represented the right monetary policy decision.” Resnick added that he is presently flat, or has no currency market positions.

In early Tuesday afternoon trading, the dollar was mixed against the world’s other major currencies, up 0.74 yen to 106.74 yen, and down 1.5 cents to $1.9580 versus the British pound. The dollar also lost about 1.5 cents versus the euro to $1.4601.

Two-part fiscal stimulus?

With Fed’s action reassuring the markets that policy makers remain aware of short-term concerns affecting the markets, traders’ and analysts’ attention turned to longer-term concerns, principally the size of the fiscal stimulus package.

Economist Steve Affinito told BloggingStocks Tuesday he was “glad to see that U.S. Secretary Henry Paulson said a stimulus package less than 1% of GDP wouldn’t be huge enough.”

“A one percent package would mean about $140 billion in fiscal stimulus, which would be helpful, if it’s passed soon,” Affinito stated. “But I’d double it, basically. Congress isn’t apt to pass a package above $250 billion, but this is one case where we could push the limits.”

Affinito favors a larger stimulus package because mortgage defaults, in his interpretation, will continue to act as a contractionary force through 2009 on the already slow-growth U.S. economy. Negative growth conditions in housing, combined with sluggish consumer spending, and the warrant cautious stance by investors, “will undoubtedly serve to limit commercial activity in the quarters ahead,” he stated. Hence, the U.S economy may need an infusion of $150 billion now, then another $150 billion within six or nine months, just to keep growing at a mild rate, Affinito stated.

Affinito said a +$200 billion fiscal stimulus package does carry the risk of increasing inflation, but the counter risk — and in his interpretation, the more serious economic risk — remains economic contraction.

“We have falling houses prices, falling stock prices, and some falling bond prices. That’s a lot of value being taken out of the economy,” Affinito stated. “On balance, those present a far more serious concern for the economy than a spending-induced inflation risk, so the focus has to be on stimulating the economy.”

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Filed under: Other issues, Federal Natl Mtge (FNM), Housing, Federal Reserve, Recession

Given the U.S. market’s 400-point sell-off in its initial minutes of trading, “a Dow close down just 300-points would look like a moral victory” according to one economist.

“All things considered, from a market standpoint, a 300-point down day is a relatively small consequence,” economist David H. Wang told BloggingStocks Tuesday.

Amid the sell-off, the U.S. Federal Reserve, in an emergency monetary policy action, cut key interest rates Tuesday morning - - slicing both the Fed Funds rate and the discount rate by 75 basis points. The Fed cut the Fed Funds rate to 3.50% and the discount rate to 4.00%.

Larger matter: mortgage insurers

Of utmost importance, in Wang’s interpretation, is the health and fate of mortgage insurers, primarily MBIA (NYSE: MBI), and Ambac (NYSE: ABK), but also PMI Group (NYSE: PMI), and MGIC (NYSE: MTG).

Wang stated the mortgage insurers “form a critical foundation in mortgage insurance, and as a result, in the mortgage process.”

“A failure by MBIA or Ambac would mean several banks wouldn’t receive insurance payments for mortgages that go into default, substantially reducing the asset values of those banks,” Wang stated. “That would prompt another market sell off, possibly resulting in a failure by one or more banks.”

Subprime exposure

Wang stated he could not specify the dollar amount of at-risk mortgages insured by MBIA and Ambac, but stated the total was “most likely considerably higher than $200 billion.”

Wang said the U.S. Treasury or U.S. Federal Reserve “will need to undertake a coordinated effort, preferably with major private institutions, to support or buy-out MBIA or Ambac,” if it appears a default by either “would threaten the proper functioning of the markets or create financial contagion.”

Further, the markets appeared to discount, or sense, that some cash infusion into mortgage insurers was up ahead, as despite the Dow’s morning sell-off, the major mortgage insurers rose. MBIA gained $2.20 to $10.75, Ambac surged 2.04 cents to $8.24, MTG gained 46 cents of $14.57, and PMI climbed 15 cents to $6.62.

“The effort to help a mortgage insurer could take the form of major private institutions buying-out the insurer, or infusing capital, or perhaps having a foreign investor, a sovereign, infuse capital,” Wang stated. “The important thing is that an effort be made to guarantee that these insurers remain solvent. Again, if we don’t, we may dodge an insurance bullet this day, but we might not tomorrow.”

Essential: fiscal stimulus, market liquidity

Economist Steve Affinito agreed with Wang, saying that while Washington has rightfully expended energy putting together a needed fiscal stimulus package to stimulate the U.S. economy, it must not lose sight of the liquidity issues facing the markets, prompted by subprime mortgage and related asset defaults.

“Washington has known about the mortgage insurer issue for at least 2 years, but they’ve kind of danced around it. Well, there’s no dancing around it now, in my view. A failure by MBIA or Ambac would create financial havoc….dragging down institutions for panic reasons, not fundamental reasons,” Affinito stated, adding that he favored “an effort led by the Fed, or Fannie Mae (NYSE: FNM) or Freddie Mac (NYSE: FRE), to back the insurers, to see that they’re able to function as liquid, safe insurers of mortgages.”

“Washington and the Fed must remain multi-focused,” Affinito stated. “We need the stimulus package, longer-term, and we also need to maintain market liquidity, shorter-term. The two go hand-in-hand and are essential to helping the U.S. economy and the nation recover from the subprime mortgage mess.”

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Filed under: Earnings reports, Bad news, Bank of America (BAC), Wachovia Corp (WB), Housing, Federal Reserve

The Associated Press reports that Bank of America (NYSE: BAC) and Wachovia Corp. (NYSE: WB) both banked badly in the fourth quarter — seeing profits plunge 95% and 98% — respectively.

Here’re are the lowlights:

• Bank of America: Net income fell to $268 million, or 5 cents per share, in the fourth quarter from $5.26 billion, or $1.16 per share in Q4 2006.
• Wachovia: Net income fell to $51 million, or 3 cents per share, from $2.3 billion, or $1.20 per share, in Q4 2006.

The culprit? Bloomberg News blames home loan write-downs for Wachovia’s bad numbers. Wachovia’s provision for credit losses rose to $1.5 billion from $408 million on September 30. And Bloomberg News fingers $5.28 billion in mortgage-related write-down as reason for Bank of America’s poor results. Some good news for Bank of America: it had a pretax gain of $2 billion from its holding in Visa Inc., the credit-card network that’s planned an initial public offering for later this quarter. We’ll see.

Bank of America is down 5.5% in pre-market while Wachovia is a mere 3.6% lower.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits . He has no financial interest in the securities mentioned.

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TRADE NEWS: Agilent Technologies’ Real-Time Oscilloscope Selected as
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Dogs, cats latest victims of subprime-mortgage mess
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Bayou funds co-founder gets 51 months
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Md. comptroller repays contributions
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New Sweep Service Helps Texas Small Businesses Earn Money Over the
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