Profits from current production (corporate profits with inventory valuation and capital
consumption adjustments) increased $81.4 billion in the first quarter, compared with an increase of $108.7 billion in the fourth quarter. Current-production cash flow (net cash flow with inventory valuation adjustment) -- the internal funds available to corporations for investment -- increased $30.8 billion in the first quarter, compared with an increase of $69.1 billion in the fourth.
Showing posts with label corporate. Show all posts
Showing posts with label corporate. Show all posts
Thursday, May 27, 2010
Friday, July 31, 2009
Federal Government Receipts Dropping Uh Oh (Graph)
Investor pay attention. Federal government receipts are dropping. This is a negative especially on the dollar. It also means that shortfalls are likely to lead to bigger auctions of government securities down the road.
Once this series becomes more widely discussed in the media it is likely to create investor uncertainty about the future. This is never a good thing for the market.
With the S and P 500 near 1000, investors should start to assume a more cautious stance.
A short fall in government receipts is a negative on the dollar, will likely lead to higher long term interest rates, and could lead to crowding out in the corporate securities market.
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Once this series becomes more widely discussed in the media it is likely to create investor uncertainty about the future. This is never a good thing for the market.
With the S and P 500 near 1000, investors should start to assume a more cautious stance.
A short fall in government receipts is a negative on the dollar, will likely lead to higher long term interest rates, and could lead to crowding out in the corporate securities market.
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Tuesday, June 02, 2009
Corporate Aaa | Ten Year Treasury (Chart)
Moody's Seasoned Aaa Corporate Bond Yield, Weekly, Ending Friday, Percent (Blue)
10-Year Treasury Constant Maturity Rate, Daily, Percent (Red)
Spread narrows slightly, but still a historically wide risk premium.
Rates moving up across all quality preferences.
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10-Year Treasury Constant Maturity Rate, Daily, Percent (Red)
Spread narrows slightly, but still a historically wide risk premium.
Rates moving up across all quality preferences.
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Tuesday, April 21, 2009
Bonds -- Corporate Baa Versus 10 Year Treasury Yield and Spread (Graph)
The spread between Corporate Baa and Treasury bonds remains wide. The risk premium evidences the considerable nervousness in the market place. Action by the Treasury and Federal Reserve are keeping treasury yields artificially low. I am expecting yields across all quality preferences to continue to rise.
Corporate Baa--blue line. 10 Year Treasury--red line.
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In 2007, the spread was running around 175 basis point. It is now in the 550 basis points area.
Corporate Baa--blue line. 10 Year Treasury--red line.
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 Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments. |
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Monday, April 06, 2009
Will Geithner Fire Corporate America?
Tim Geithner said on Sunday's Face the Nation that the Treasury might fire the heads of big banks that depend on financing from the federal government, just as it summarily deposed Rick Wagoner, the former CEO of General Motors -- and before Wagoner, the heads of AIG, Fannie Mae, and Freddie Mac. "Where that requires a change in management and the board, then we will do that," said Geithner.I caught this over on Robert Reich's blog--so away you go.
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Thursday, March 26, 2009
Nonfinancial Corporate Business: Profits After Tax (Chart)
There is a long lag in this chart, so its safe to assume after tax profits are still dropping.
I put this chart up for two reasons. First, if you look closely and think about it, you will see that after tax profits are falling back to the trend. Second, this chart shows how really wild and crazy things were in the period from 2004-2006.
You could infer further that a lot of business got done because of artificially low interest rates and readily available cheap credit. For example, several years worth of houses and cars were built and sold in a short period of time. This explains the oversupply right now. Much of what is going on is simple supply and demand. To much supply lead to a lack of current demand. In other words, the demand had already been supplied--and for years in advance.
If you look and think beyond the obvious, that is what this website is all about, you could conclude it is going to take a while to work off these excesses. It takes time. And, that is exactly what is happening--time.
Corporate after tax profits bear watching. The market will discount the bottom long before it they hit their lows and flatten. Once the bottom is in all comparative economic releases will begin to look good because we will be comparing the then current releases to the very low numbers of the past.
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| Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments. |
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- Option ARM--The Toxic Mortgage
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- Warren Buffett's Annual Letter to Investors (Cliff Notes Version)
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