its hard to think of writes “There’s an interesting story up at Nature News about scientific ethics. It seems that while one group of scientists is figuring out details about aetosaurs (ancient crocodiles), another group in New Mexico is repeatedly taking credit for their work and naming the new animals they ‘discover’. It also looks like the say government, which has been asked to intervene, is trying to sidestep the issue. ‘The New Mexico cultural-affairs department, which oversees the museum, conducted a review of two of the instances last October and concluded that the allegations were groundless. But some experts call that review a whitewash, claiming that it failed to follow accepted practices of US academic institutions faced with claims of misconduct. Now all three cases are before the Ethics Education Committee of the Society of Vertebrate Paleontology, a professional organization based in Northbrook, Illinois, which is awaiting responses from the New Mexico team before making a ruling.’ How widespread is this kind of thing?”

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eldavojohn writes “Today in a speech the pope denounced human cloning, embryonic stem cell research and artificial insemination, citing them as a violation of ‘human dignity.’ That stated, the pope did ‘appreciate and encourage’ research on stem cells from non-embryonic cells in the human body. The pope encouraged the Vatican to be a leading voice in the philosophy and discussion of bioethics. ‘Church teaching certainly cannot and must not weigh in on each novelty of science, but it has the task to reiterate the great values which are on the line and to propose to faithful and all men of good will ethical-moral principles and direction for new, important questions,’ Benedict stated.”

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An anonymous reader writes “This week a sub-$100,000 rocket belt was unveiled and will be on sale this summer, but that’s the sad thing: it’s still not a real jet pack. Here’s a fascinating inside look at the human-flight industry, full of law-suit scandals, technical difficulties, fuel-economy woes and endless delays. The good news? It all points to the next generation of rocketeer research, with real applications for medical rescue and military technology actually coming on the horizon. From the article: ‘With a little patience, and a little funding, we could actually have the pleasure of grumbling over regulatory issues we never dreamed possible. Like being limited to specific kinds of air strips, because the jet strapped to your back is classified by the FAA as an ultralight. Or being required to wear a ballistic parachute, because Amarena’s Thunderjet design could reach altitudes as high as 10,000 feet (and, for the record, speeds of up to 160 mph, provided someone can solve wind-resistance issues).’”

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Filed under: Good news, Federal Natl Mtge (FNM), Politics, Housing

The $150 billion fiscal stimulus package that’s winding its way through the U.S. Congress will not represent a panacea for the U.S.’s economic ills, an economist argued, but it will represent modest good news for one segment — the beleaguered housing sector.

The fiscal stimulus bill currently under discussion in the U.S. Senate calls for raising Fannie Mae and Freddie Mac’s conforming loan limit to $729,750 through 2008 from the current $417,000.

Conforming loans are conventional, fixed-rate mortgages for good credit borrowers that banks make that are eligible for purchase by Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). When Freddie and Fannie buy these loans from banks, it “frees-up” money that the banks can use to allow mortgages to future borrowers, thus expanding the pool of funds available for mortgages.

Economist Steve Affinito told BloggingStocks Thursday that while it’s important to underscore that the higher conforming loan ceiling won’t eliminate the U.S. housing sector’s recession, it is “a critical, essential step in the right direction,” in his interpretation.

Two issues

“There are two housing problems. One is homes at the higher end for which banks are not making loans, because they are considered ‘jumbo loans’ or non-conforming. Raising the conforming cap will encourage banks to make these loans, stimulating housing activity. That’s good,” Affinito said. “Some argue that raising the cap helps only luxury home buyers, but that’s not the case, given the high price of middle-income housing in many U.S. markets. Also, after Fannie and Freddie buy these loans, the banks can then use the reimbursed money to make loans to non-high-end home buyers, so it’s easy to see how a higher ceiling will increase mortgage availability.”

Fannie Mae stock gained 89 cents to $32.02 and Freddie Mac rose 61 cents to $28.51 in midday Thursday trading.

Further, Affinito said he favored raising the conforming loan limit “though at least 2009,” but “it remains to be seen if the U.S. Senate and President Bush will go along with it.” The Bush Administration’s original bill, which was approved by the U.S. House earlier this week, calls for raising the conforming loan limit only through 2008.

The second housing problem concerns credit-impaired borrowers and people falling behind on their mortgage payments, Affinito said. A program more comprehensive than the U.S. Treasury’s alliance of mortgage counselors, lenders and servicing companies, called HOPE NOW, is needed to assist those homeowners, he said. Affinito stated early data indicates that “only about one half of potential borrowers in danger of foreclosure are being helped.” Further, with an estimated $360-400 billion in adjustable rate subprime loans scheduled to reset in 2008, “we’re going need another program to lower the percentage of foreclosures more,” he stated.

Admittedly, Affinito said no assistance can help borrowers who see no economic future with their homes and choose to go into foreclosure. “But many homeowners want to keep their homes, and that’s what should be the public policy’s focus.”

“Clearly, the higher conforming loan limit isn’t a 100% solution for the housing sector, but it is a step in the right direction,” Affinito stated. “And given the many bad steps taken previously, this is a step we want to take.”

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Filed under: Good news, Federal Natl Mtge (FNM), Politics, Housing

The $150 billion fiscal stimulus package that’s winding its way through the U.S. Congress won’t represent a panacea for the U.S.’s economic ills, an economist argued, but it will represent modest good news for one segment — the beleaguered housing sector.

The fiscal stimulus bill currently under discussion in the U.S. Senate calls for raising Fannie Mae and Freddie Mac’s conforming loan limit to $729,750 through 2008 from the current $417,000.

Conforming loans are conventional, fixed-rate mortgages for good credit borrowers that banks make that are eligible for purchase by Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE). When Freddie and Fannie buy these loans from banks, it “frees-up” money that the banks can use to allow mortgages to future borrowers, thus expanding the pool of funds available for mortgages.

Economist Steve Affinito told BloggingStocks Thursday that while it’s important to underscore that the higher conforming loan ceiling will not eliminate the U.S. housing sector’s recession, it is “a critical, essential step in the right direction,” in his interpretation.

Two issues

“There are two housing problems. One is homes at the higher end for which banks are not making loans, because they’re considered ‘jumbo loans’ or non-conforming. Raising the conforming cap will encourage banks to make these loans, stimulating housing activity. That’s good,” Affinito stated. “Some argue that raising the cap helps only luxury home buyers, but that’s not the case, given the high price of middle-income housing in many U.S. markets. Also, after Fannie and Freddie purchase these loans, the banks can then use the reimbursed money to make loans to non-high-end home buyers, so it’s simple to see how a higher ceiling will increase mortgage availability.”

Fannie Mae stock gained 89 cents to $32.02 and Freddie Mac rose 61 cents to $28.51 in midday Thursday trading.

Further, Affinito said he favored raising the conforming loan limit “though at least 2009,” but “it remains to be seen if the U.S. Senate and President Bush will go along with it.” The Bush Administration’s original bill, which was approved by the U.S. House earlier this week, calls for raising the conforming loan limit only through 2008.

The second housing problem concerns credit-impaired borrowers and people falling behind on their mortgage payments, Affinito stated. A program more comprehensive than the U.S. Treasury’s alliance of mortgage counselors, lenders and servicing companies, called HOPE NOW, is needed to aid those homeowners, he said. Affinito said early data indicates that “only about one half of potential borrowers in danger of foreclosure are being helped.” Further, with an estimated $360-400 billion in adjustable rate subprime loans scheduled to reset in 2008, “we’re going need another program to lower the percentage of foreclosures more,” he said.

Admittedly, Affinito said no assistance can help borrowers who see no economic future with their homes and select to go into foreclosure. “But many homeowners want to keep their homes, and that’s what should be the public policy’s focus.”

“Clearly, the higher conforming loan limit is not a 100% solution for the housing sector, but it is a step in the right direction,” Affinito stated. “And given the many bad steps taken previously, this is a step we want to take.”

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Filed under: Earnings reports, Good news, Housing

Tool supplier Stanley Works (NYSE: SWK) remains optimistic about earnings into 2008, despite deterioration of the U.S. homebuilding market. Even in 4Q2007, when the domestic construction market softened like warm butter, Stanley Works managed to post more than respectable earnings. 4Q sales increased 15% to $1.2 billion. Diluted EPS increased 7% to $1.11, operating margins increased and free cash flow increased 89% from 4Q2006.

4Q2007 was a tough quarter in the U.S., as subprime mortgage losses ran into the billions, banks tightened credit, and construction slowed dramatically. Despite the meltdown in the U.S. market, Stanley posted double-digit sales increases in all its international markets, which helped to offset slower sales in the U.S. The story is the same for FY2007.

Overall, the company is in good shape with net sales up 12% to $4.5 billion, even though only 2% of that growth is organic. More than half of the increase was due to acquisitions. FY2007 diluted EPS increased 15% to $4.00, and free cash flow increased by $99 million to $457 million. Despite forecasting an organic growth rate of 0-1%, CEO John Lundgren says that Stanley Works is well positioned to withstand a possible U.S. recession.

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Filed under: Before the bell, Earnings reports, Google (GOOG), Starbucks (SBUX), Amazon.com (AMZN), Market matters, Bristol-Myers Squibb (BMY), Procter and Gamble (PG), Economic data, Housing, Federal Reserve

Hasn’t the words ‘bond insurance’ been the magic ones to spark a selloff lately? Such has been the case last week; such has been the case yesterday and it seem care about it might be the case again today after MBIA reported a $2.3 billion loss. Stock futures were lower, indicating a similar begin for stocks a day after the Federal Reserve has cut rates yet again by half a point. Today, investors can anticipate to digest much earnings and economic data.

On Wednesday, stocks moved without much of a direction until the Fed announced the rate cut. Wall Street jumped with glee in response with the Dow industrials gaining over 100 points. But then concerns about the bond insurance industry resumed. These companies insured securities backed by mortgages and other loans made to borrowers with weak credit and were hence hit hard by the subprime meltdown. Yesterday, investors feared a possible credit ratings fall, which could trigger further write-downs from companies that hold the insurers’ securities. The Dow industrials ended 37 points lower, or 0.30%, the S&P 500 dropped 6.5 points, or 0.48%, and the Nasdaq Composite lost 9 points, or 0.38%.

Not alleviating much these concerns, bond insurer MBIA (NYSE: MBI) reported its fourth-quarter results, posting a net loss of $2.3 billion, or $18.61 per share, that was far worse than forecasts of a loss of $2.97 per share for the quarter. The loss was due primarily to a $3.5 billion writedown on its portfolio of insured credit derivatives. The company raised $1 billion through the offering of surplus notes and another $500 million through a direct investment by private equity firm Warburg Pincus. MBI shares, which already shut down 12.64% Wednesday, are trading down 4.3% in premarket action.

Some economic readings coming out today:
At 8:30 a.m. EST, December personal income and spending is due.
At the same time fourth-quarter employment cost index and weekly initial jobless claims will also be reported.
As always, however, it is tomorrow’s employment report that investors want to see.

Overseas, Asian stocks ended the session mixed while European markets generally decline in morning trading.

Earnings:
As investors still digest reports from Amazon.com, Inc. (NASDAQ: AMZN) and Starbucks Corp. (NASDAQ: SBUX), they will have a chance to look also at Bristol-Myers (NYSE: BMY) and Procter & Gamble (NYSE: PG) before the open. After the close, search giant Google Inc. (NASDAQ: GOOG) is due to report. Perhaps it could be the tech’s salvation and what Apple couldn’t — lift the tech sector.

Amazon reported strong earnings for the previous quarter with profit that more than doubled on revenue that jumped 42%, beating expectations. But AMZN shares are being punished — down 9.8% in premarket trading — due to a forecast that wasn’t quite what investors had in mind, as well as a lower operating margin for the quarter.

Meanwhile, Starbucks’s Schultz outlined more of the coffeemaker’s plans to refocus the company — no more sandwiches, closing of stores and opening fewer ones. The problems lingered at Starbucks with same-store sales and U.S. traffic declining 1% and 3% respectively. Starbucks posted net earnings of $208.1 million, or 28 cents per share; analysts were expecting a profit of 27 cents per share. SBUX shares were down 1% in premarket trading.

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Filed under: Products and services, Apple Inc (AAPL)

It seems that market analysts and pundits can’t stop pulling out their anal selves from the woodwork to worry about possible sales discrepancies between Apple, Inc. (NASDAQ: AAPL)’s iPhone sales numbers and accompanying AT&T, Inc. (NYSE: T) iPhone activations. Some have even pointed out what I call the one million plus unit discrepancy.

Is this speculate discrepancy way off the mark? Analyst Ezra Gottheil thinks so. There is some market fear that Apple’s iPhone sales not meeting up with AT&T’s iPhone activations means that Apple stands to lose out on two years worth of revenue on those “missing iPhones.” Apple’s sweetheart deal with AT&T gives the tech company a cut of every AT&T iPhone customer’s monthly bill, you see.

Does Apple stand to lose future revenue streams by selling iPhones that are not activated by AT&T customers? Sure — but it’s not a huge financial impact to the company according to Gottheil. Even though quite a few iPhones have been rumored to have been sold, unlocked (using multiple hacking methods) and used with non-AT&T wireless carriers, these numbers have not been wholly verified by either Apple or AT&T. Has AT&T stockpiled unactivated iPhones that represent Apple’s sales numbers and AT&T’s lower iPhone activation numbers? That’s highly doubtful. Until a solid explanation comes forward, is it that massive of a deal to Apple pundits? For the time being, it seems so.

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Jeremiah Cornelius writes “Techdirt columnist, Timothy Lee, hit the metaphoric nail on the head, claiming that e-Voting undermines the public perception of election fairness - even when there is no evidence of wrongdoing. ‘In a well-designed voting system, voters shouldn’t have to take anyone’s actions on faith. The entire process should be easy and transparent, so that anyone can observe it and verify that it was carried out correctly. The complexity and opacity of e-voting machines makes effective public scrutiny impossible, and so it’s a bad idea even in the absence of specific evidence of wrongdoing.’ Add to this the possibility technical faults, conflicts of interest and evidence of tampering, how long before the US vote is viewed as an electronic pantomime?”

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Filed under: Earnings reports, Housing

The subprime follies continued their global run today as European banking giant UBS AG (NYSE: UBS) reported a record $14 billion loss for it fourth quarter. The loss exceeded analyst estimates by $4 billion.

The stock was down over 2% in trading this morning, and over 10% this month.

UBS attributed most of the loss to assets declining in value due to the subprime mortgage situation in the United Says. But according to Bloomberg, Citigroup analyst Jeremy Sigee believes that the losses have expanded to “new areas” — “Value declines have extended beyond just subprime-related exposures, to new areas, for which we do not yet have disclosure on exposure size . . . The recently bolstered capital base remains vulnerable to further erosion.”

This is the really troubling part of the subprime credit crisis: no one knows how far the damage goes. And until the accounting is done, the threat of more and growing losses will continue to hang over the markets.

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