Filed under: India, Housing

Donald Trump Jr, the rather uncharismatic son of reality television personality Donald Trump, is looking to set up his own fund to invest in India’s until recently red hot real estate market.

The younger Trump told Bloomberg that “The fund will be for acquisitions of real estate in the high end, and across the spectrum. The market place is beginning to understand and appreciate luxury, so there is a great opening for us there, as well as in resorts.”

He’s looking to raise $1 billion, but given how cheap investors have become of late, I’m skeptical. What exactly are his credentials? He’s 30-years-old, works for daddy, was a judge on his father’s reality show, and — the icing on the cake — he was ousted from the board of the condo association where he lives.

If this guy can raise a billion bucks, then the economy is considerably stronger than we’re giving it credit for … or investors are considerably dumber.

But for now, these are just “plans” to raise “up to” $1 billion. I wouldn’t hold my breath waiting for the money to role in, and frankly, this looks like a publicity ploy designed to create the impression that Trump Jr. is someone to be taken seriously.

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Filed under: Federal Natl Mtge (FNM), Economic data, Housing

Both Republican and Democratic members of Congress agree that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) may need a taxpayer-funded bailout. Amounts of the bailout have ranged as high as $25 billion.

While this is a whopping massive bucket of money, it pales in comparison to the $217 billion worth of non-agency securities that have fallen in value and the $1.5 trillion in debt downgrades in 2Q alone. In order to mitigate objections from taxpayers opposed to using public monies to bail out a quasi-private industry, those bulwarks of fiscal responsibility in Congress are beginning to draw up plans to curb executive compensation for those who will help Fannie and Freddie crawl out of the hole.

In 2007, Fannie Mae President Daniel Mudd earned a $2.2 million bonus on top of his $10 million salary. Members of Congress want to know why the executives who ran the ship aground were rewarded handsomely for doing so. Some members of Congress have recommended that previous executive bonuses should be given back to the companies. I bet some taxpayers might want to apply this same reasoning to Congressional salaries and perks.

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Filed under: Bad news, Consumer experience, Economic data, Housing, Recession

WHDH, the Boston NBC affiliate, reports that a woman committed suicide because she thought that her mortgage lender was on the verge of foreclosing on her house. There are questions about whether she knew the mortgage company had allowed her an extension. But those questions weren’t resolved before she took her life.

The Patriot Ledger reported that she faxed a suicide note to her mortgage lender. It excerpted her fax: “By the time you foreclose on my home I’ll be dead.” It also indicated that a suicide note found next to the body urged the woman’s husband and son to “take the insurance money and pay for the house.”

The woman and the mortgage company didn’t communicate clearly. The Patriot Ledger noted that the woman had asked the mortgage company for an extension and been allowed one. Yet interested buyers showed up at the property anticipating an auction while her body was still inside. It also interviewed a neighbor who stated that her husband, a plumber, had replaced the backyard deck on the couple’s home so he must have had some money.

As the details of this tragedy sort themselves out, though, one thing is clear. With three million foreclosures expected in America, the stress on families is intense. And not all of them will be able to cope with it.

Peter Cohan is President of Peter S. Cohan & Associates. He also instructs management at Babson College and edits The Cohan Letter.

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Filed under: Forecasts, Economic data, Commodities, Oil, Housing, Federal Reserve, Recession

The Federal Reserve Bank of Kansas City released its Beige Book Report detailing economic activity among the twelve Federal Reserve Districts across the country. The pace of economic activity was quite sluggish throughout much of the country. At the same time, there have been hawkish comments recently by several Fed governors. This leads us to the question of the possibility of a Fed rate increase on the horizon.

However, one must remember that hawkish talk is quite different from hawkish action. As I have stated in my book, Follow the Fed to Investment Success, “watch what the Fed does not what it says.”

The Fed has given no indication that an imminent raise in interest rates is forthcoming. There have simply been hawkish comments, which are an incredibly inexpensive means of maintaining its inflation-fighting credentials. However, every time market turmoil arises, the Fed adopts a more conciliatory tone.

The recent reductions in the Fed Funds Target Rate and the Discount Rate have been driven by severe economic stress on the economy. The Beige Book Report indicates that this stress is not receding to any significant degree. The last thing that the Fed wants is to raise interest rates and then be forced to lower them. This would cause severe damage to Fed credibility.

Although there are inflationary pressures, they’re largely confined to input prices. It is still quite uncertain as to how much of this can be successfully passed on to customers. In addition, wage pressures are minimal. Thus, the inflation picture is quite mixed.

In addition, the primary driver of inflation has been the rise in oil prices. The current drop in these prices should provide some relief for the Fed at least in the near term.

Thus, the Beige Book Report seems to indicate that the hawkish talk remains just that and not a warning about an imminent rise in rates by the Fed.

Doug Roberts is the Founder and Chief Investment Strategist for ChannelCapitalResearch.com, and is the author of Follow the Fed(R) to Investment Success: The Effortless Strategy for Beating Wall Street. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.

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Filed under: Deals, Products and services, XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Politics

Sirius Satellite Radio Inc.’s (NASDAQ: SIRI) $3.5 billion acquisition of rival XM Satellite Holdings Inc. (NASDAQ: XMSR) might at long last be approved by the Federal Communications Commission, according to the Wall Street Journal.

“Republican commissioner Deborah Taylor Tate is the only FCC member left to vote on the deal and she is expected to do so shortly, two FCC officials close to the negotiations stated,” the paper said. “She is expected to sign off on the deal in exchange for a consent decree that resolves several enforcement issues involving the satellite radio companies and a combined fine of about $20 million, an FCC source close to the deal.”

Even with the regulatory hurdles just about cleared, the future of satellite radio is far from clear. As my colleague Douglas McIntyre noted earlier this day, losses at both companies are narrowing but their subscription growth rates are slowing. Both firms also are more than $1 billion in debt.

Though I’m a large fan of the medium, I wonder sometimes whether its moment in the sun has past. Remember BetaMax and 8-track players were considered cutting edge at one time.

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Filed under: Major movement, International markets, Earnings reports, Good news, Products and services, Top Picks 2007, Chasing Value, Stocks to Purchase, Intuitive Surgical Inc (ISRG), Technology, Ideal Stocks for 2008

My favorite company, Intuitive Surgical Inc. (NASDAQ: ISRG), the maker of the da Vinci Surgical System reported earnings Tuesday afternoon that creamed Street guesstimates by 10 cents per share. Intuitive posted earnings per share of $1.28 versus analyst consensus of $1.18.

For the 23rd quarter in a row, just like clockwork and without missing a beat, Intuitive’s top and bottom line growth simply ignored the global economy, blazing its own trail. I wonder how ISRG would have done if the economy was not in the dumps?

Overall, second quarter revenue shot up 56% from $142.2 million to $219.2 million. Instruments and accessories revenue increased 61% to $73.6 million from $45.8 million. Training revenue increased 44% to $29.4 million from $20.3 million during the second quarter of 2007.

Lonnie Smith, Chairman and CEO of Intuitive Surgical, said, “We are pleased with our second quarter revenue and earnings growth. These results reflect the continued adoption of the da Vinci Surgical System platform across a broadening group of surgical procedures.”

He should be a lot more than pleased; I’m. Besides top and bottom line growth along all revenue streams, the company also ended the second quarter of 2008 with cash, cash equivalents and investments of $740 million, up $104 million from December 31, 2007.

I’ve suggested ISRG many times, but looking back to last July for some of my rationale would be worth a gander if you missed it: Intuitive Surgical jumps over 32% - where’s the ceiling? At the time, the stock was trading under $200 per share even after the large increase.

I still think this stock belongs on your watch list and that there is no reason why it won’t double in size in the next few years. I’ve no timetable but I don’t see anything getting in its way. Of course, that is possible, but it seems to hold all of the patents and have the scale, experience and partnerships to hold the court for a long time.

Before the earnings report ISRG closed at $280.23. Afterwards, in extended hours trading, it was changing hands at $332.77 a share. It opened today at $313.495 and traded 16% higher at around $325 by 9:52 am. After Market Update: Closing price $331.13, +$50.90 (+18.16%)

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of ISRG.

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Filed under: After the bell, Earnings reports, Forecasts, Products and services, Amazon.com (AMZN)

The week got off to a shaky start in the wake of several earnings disappointments, thus a lot of attention will be paid to Amazon (NASDQ: AMZN) when it reports its second quarter numbers this afternoon after the market closes.

Analysts are looking to see Amazon show earnings of 26 cents per share, and revenue of $3.96 billion. The last time that the company reported earnings was April 23, when be itat analysts’ estimates by 2 pennies, with a reported 34 cents per share for its first quarter.

It has definitely been a tough couple of months for retailers, but we could see some strength in Amazon as a result of changes it made during the quarter which grants users to shop the store from their cell phones via its new service TextBuyIt.

Analyst forecasts:

Shawn Milne, an analyst with Oppenheimer & Co. , is optimistic regarding this afternoon’s earnings release, and has told his clients that he is looking to see a solid quarter from the company, and expects strong international growth to create upside in the quarter. While he’s overall positive on the company, he did go so far as to warn that there is the potential for a tough quarter for the company’s North American business, stemming from an overall reduction in spending.

Scott Devitt, an analyst with Stifel Nicolaus & Co., is also expecting to see a good quarter, and has predicted that the company is going to match on its revenues estimates and report earnings that are a penny higher than the 26 cents that Wall Street is expecting.

If history is able to repeat itself, we should see a decent quarter from the company. Amazon has been able to match or exceed analysts’ estimates for the last 8 straight quarters, with the last miss coming back in July of 2006.
What are you expecting to see from Amazon this afternoon? Will the company be able to overcome the slowing American economy and put up another strong set of numbers, or will wee see the effect of consumer spending hitting the company’s bottom line? Let us hear your thoughts.

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

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KentuckyFC writes “Earlier this year, Paris-based Aldebaran-Robotics picked up $8 million in venture capital funding to help commercialize its NAO humanoid robot. The target market for this device is research labs working on the next generation of robotic hardware and software. This day, the company has posted a detailed spec of NAO on the arXiv saying that it anticipates the robot to cost about $15,000 each. That’s cheap compared to other humanoids. Fuitsu’s HOAP humanoids cost $50,000 each and various estimates price Honda’s Asimo at $1 million per bot, even though they’re not for sale. Aldebaran-Robotics states that NAO’s cost should come down to about $6,000 as production ramps up.”

Read more of this story at Slashdot.

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oliderid writes “The first official image of a Russian-European manned spacecraft has been unveiled. It is designed to replace the Soyuz vehicle currently in use by Russia and will allow Europe to participate directly in crew transportation.The reusable ship was conceived to carry four people towards the Moon, rivaling the US Ares/Orion system. This project is the Plan A for the European Space bureau. The plan B is an evolution of the ATV proposed by a consortium of European companies led by Astrium.”

Read more of this story at Slashdot.

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Oil, housing could brighten Wall Street’s day - CNN Money
NEW YORK (CNNMoney.com) — U.S. stocks were set to open higher Wednesday amid a backdrop of declining oil prices and the expectation of Congressional relief for the housing crisis. At 4:30 a.m. ET, Nasdaq and S&P futures were higher, signaling a

House vote due on housing bill - CNN Money
WASHINGTON (AP) — The government would help struggling homeowners get new, cheaper loans and be allowed to offer troubled mortgage giants Fannie Mae and Freddie Mac a cash infusion as part of legislation that aims to calm the chaotic housing market

Off-duty cops to patrol Poughkeepsie Housing Authority properties - Mid-Hudson News Network
POUGHKEEPSIE - In a deal brokered between Poughkeepsie Mayor John Tkazyik and the Poughkeepsie Housing Authority Executive Director Bernard Wells, off-duty City of Poughkeepsie police officers will start patrolling Housing Authority properties. The

Workforce housing comes to Columbia County - Mid-Hudson News Network
HUDSON- Columbia County’s first workforce housing project was officially dedicated Tuesday with Governor David Paterson calling it “a premier example for what inexpensive housing should be in the Hudson Valley.” Crosswinds at Hudson, a 70

Lawmakers Agree on Outline of Massive Housing Pact - Wall Street Journal
WASHINGTON — Home and Senate leaders have largely hammered out a compromise deal on a mammoth housing package that would permit the government to bolster Fannie Mae and Freddie Mac in an emergency, overhaul supervision of the housing-finance giants

No short-term fix to rid Phila. park of homeless - Philadelphia Daily News
The above scenes played out early yesterday among homeless people there, and while residents interviewed expressed dismay, city officials recommended there were no short-term repairs. Neither the police nor the mayor’s office offered any solutions

Hill Budget Chief Weighs Odds, Cost Of Rescue Plan - Washington Post
Peter Orszag, Congressional Budget Office director, cites “significant uncertainty” in how much aid, if any, Fannie and Freddie might need. (By Stephanie Kuykendal — Bloomberg News) The Bush administration’s plan to prop up troubled mortgage-finance

Out of reach for country dwellers - BBC News
Successive governments have identified the lack of affordable housing in the British countryside as a problem. Successive governments have also tried - and largely failed - to come up with a solution.

Americans Changing The Way They Live [Housing Tracker] - Seekingalpha.com
Double Edge to Brooklyn’s Success . “Like the neighborhood it helped to reinvigorate, the Brooklyn Brewery is thriving, enough to justify an expansion [It’s] willing to spend $15 million for a bigger brewery that would employ at least twice

Housing downturn is faster than in early 1990s, experts warn - Daily Telegraph
The number of homes being sold last month plunged to a new all-time low, almost halving from the previous year, in the latest evidence of the housing market slump. Experts warned that the property downturn was now certainly faster and more severe

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