E3 Recap: Nintendo Left A Lot Of Questions Unanswered With Wii U
Nintendo came into this week's Electronic Entertainment Expo with the most to prove and the most to show. In the end, it left with the most questions unanswered.
As the E3 video game industry event winds down, analysts and video game experts don't know what to make of Nintendo's Wii U. The controller/console combo combines a traditional Wii console with a tablet like controller, featuring a 6.2-inch screen that can function Wii games on its own. The controller can also be used to interact with the big screen, either through motion control, file sharing or numerous other ways.
The possibilities seem endless, but it's hard to tell what to make of it since Nintendo did not dole out too many details on the Wii U. This uncertainty coming out of the E3 media presentation is the reason why analysts say the company's stock dropped. According to Bloomberg, it dropped 5.63 percent on the Tokyo Stock Exchange.
They left a lot of big questions hanging out in the air, said Scott Steinberg, veteran video game analyst at http://www.toptechexpert.com. As a coming out party, it wasn't a 10. It's kind of like, we're here. There are some interesting uses for the touch screen controller/console. But if there are still questions being asked, you have to ask how effective the presentation was.
For one, many are finding it difficult to categorize the Wii U, Steinberg said. Nintendo says the Wii U is a new console and from that, the company will likely price it accordingly. However, considering it's not a portable gaming system, something that came straight from the mouth of Nintendo President Satoru Iwata, it comes off like a glorified Wii add-on to some consumers.
I think a lot of people aren't sure if it's an interactive toy, a multimedia tablet, of if it's a video game system. People are struggling to figure out what role it plays in the home ecosphere. More will come out and clear this up, but the initial introduction should have given us more answers and less questions, Steinberg said.
In addition, pricing and software was never really brought up. A few titles were announced unofficially, but only Lego City Stories was confirmed. Pricing was never addressed at all.
They (Nintendo) is falling behind PS3 with Move and 360 with Kinect, and it is hard to know if the launch software will be compelling, said Michael Pachter, analyst at Wedbush Securities. Pricing is also an issue; at $300, the device may be more expensive than Kinect or Move bundles a year from now. At more than $300, it will almost certainly be too expensive.
Steinberg said Nintendo also failed to address the growing home entertainment segment. Both Sony with its Playstation Network and Microsoft with Xbox Live have turned their consoles into home entertainment centers with streaming media. Nintendo didn't address that at all.
Lehman sees $60 billion bankruptcy payout, needs time
Lehman Brothers Holdings Inc said it will take longer than expected to win approval of a bankruptcy plan, and projects paying out $60.1 billion as it tries to settle differences with creditors owed six times that amount.
Harvey Miller, a lawyer for Lehman, told U.S. Bankruptcy Judge James Peck at a hearing in Manhattan on Thursday that the company hopes to file a revised Chapter 11 plan in seven to 10 days, and win court approval well before the end of the year.
Miller, a partner at Weil Gotshal & Manges LLP, said Lehman's earlier goal to win approval of a bankruptcy plan by the end of March is no longer feasible.
According to a regulatory filing, Lehman expects to have about $60.1 billion of assets, up from the $57.5 billion it estimated six months earlier, to distribute to creditors once it emerges from its now 28-month-old bankruptcy.
Lehman said the judge will likely let creditors pursue $322 billion of their estimated $369 billion of claims. It said a significant amount of claims are unresolved, including $40.3 billion tied to derivatives.
The company still needs an accord with creditors, including billionaire investor John Paulson, that submitted a competing Chapter 11 plan in December. This group believes Lehman's plan treats big bank creditors better than other creditors.
Once the fourth-largest U.S. investment bank, Lehman filed for court protection on September 15, 2008, in by far the largest bankruptcy in U.S. history, after growing overexposed to real estate, mortgages and complex debt that plunged in value.
The bankruptcy filing is considered one of the main triggers of the global financial crisis.
GOLDEN OPPORTUNITY TO SELL ASSETS
Bryan Marsal, Lehman's chief executive and a principal at restructuring firm Alvarez & Marsal LLC, told Peck that improved market conditions for mergers and acquisitions give Lehman a golden opportunity to sell assets over the next six to 12 months.
Lehman can start repaying creditors once it emerges from bankruptcy. A company typically emerges shortly after it wins approval of a reorganization plan, but it is unclear how fast Lehman might emerge.
Under Lehman's plan, unsecured creditors could recover 10.4 cents to 44.2 cents on the dollar, general unsecured creditors of the holding company could recover 14.7 cents on the dollar, and creditors of derivatives and commercial paper units could recover 21.9 cents to 44.2 cents on the dollar.
The company is separately suing Barclays Plc , JPMorgan Chase & Co and others to recover tens of billions of dollars of assets for distribution to creditors.
Barclays bought Lehman's main U.S. brokerage business shortly after the bankruptcy. Peck is expected to rule early this year on Lehman's claim that Barclays extracted an $11 billion windfall from this transaction.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Caroline Humer and Jonathan Stempel in New York, editing by Dave Zimmerman and John Wallace)
Teck to sell 17 percent stake to China for C$1.7 billion
Canada's Teck Resources said on Friday it will sell a 17.2 percent equity stake to state-owned China Investment Corp in a deal that will help Teck pay down debt while expanding China's portfolio of commodity investments.
China, the No.1 importer of iron ore, copper and other commodities, has been steadily buying stakes in overseas commodity producers in a broad strategy aimed at securing supply for its burgeoning economy.
Teck, a top producer of zinc, copper, and metallurgical coal, said CIC will acquire the 17.2 percent stake through a private placement that will raise C$1.74 billion ($1.5 billion).
This transaction is an endorsement of Teck's future and provides an immediate and very positive impact on Teck's balance sheet, said Chief Executive Don Lindsay. It puts Teck back on the growth track and allows us to deepen our relationship with the largest customer of our core products.
Vancouver, British Columbia-based Teck will sell 101.3 million shares at C$17.21 each, a 7 percent discount to Thursday's closing price of C$18.50 on the Toronto Stock Exchange.
Despite the discount, Teck's shares rose 13.5 percent, or C$2.50 to C$21 in afternoon trade, the biggest gain among base metals miners in Toronto.
The deal, which will give CIC a 6.7 percent voting stake in the company, comes as Chinese companies have been taking advantage of depressed resource prices to buy stakes in producers and lock in access to raw materials.
The Chinese Commerce Ministry recently said it would steadily push its go abroad investment policy, unperturbed by the collapse of a $19.5 billion tie-up between Rio Tinto and Chinese metals conglomerate Chinalco.
The deal provides China with no guaranteed percentage of Teck's production. Teck said that CIC has said it is acquiring the shares for investment purposes as a long-term passive financial investor. The fund has agreed to hold the stock for at least a year after the deal closes in mid-July, Teck said.
CIC was created in 2007 to manage part of China's foreign exchange reserves for higher returns. The $200 billion fund became wary of overseas expansion after losing money from its investments in Morgan Stanley and Blackstone , but it has recently shown renewed interest in overseas markets as the global financial crisis eases.
Teck will use the proceeds of the deal to cut bank debt. The miner took on nearly $10 billion in debt last year to buy Fording Canadian Coal Trust, which made it a top producer of metallurgical coal, or coal used in making steel.
The company has sold some assets to pay down the debt, and has said it planned to sell a 20 percent stake in its coal business. Teck spokesman Greg Waller said the company still plans to sell the minority stake in the coal business.
David Davidson, an analyst at Paradigm Capital, noted there had been recent speculation that Teck would do some sort of equity sale to pay down debt.
He said he doubted the CIC deal would face Canadian regulatory or government obstacles, as it is for an equity stake in the company, rather than a piece of a particular asset.
It doesn't get them any closer to a pound of zinc or a tonne of coal, he said.
However, he said the deal would make it easier for Teck to do future deals with Chinese companies.
Any deal that does come along for a ... stake in Fording or anything else Teck decides to sell, that approval process (in China) has basically been taken care of, he said.
(Editing by Frank McGurty)
College strained by Loughner's behavior
Jared Lee Loughner's interactions with instructors at his Tucson, Arizona community college were strained throughout 2010, with administrators and instructors reporting disturbing out of context comments, inappropriate expressions, and very hostile behavior which culminated in a suspension, according to school police documents.
The incidents involving Loughner, 22, - who has been charged with multiple killings including injury to Congresswoman Gabrielle Giffords - ended with his suspension after the discovery of disturbing YouTube video he was suspected of posting.
Pima Community College in Tucson released 51 pages of police reports on Wednesday, listing various incidents of suspicious activity and disturbances which showed instructors and students growing concerned and fearing for their safety as school officials and police attempted to explain to Loughner why his behavior was inappropriate.
The reports chronicled events involving Loughner and the school starting on February 5 and extending until September 29, when police officers issued the suspension notice at his parents' home.
What follows is a summary of incidents as recorded by police at Pima Community College.
Feb 5 - Why don't we just strap bombs to babies?
In a February 5 report about a February 2 incident following another student's poetry reading, an administrator described Loughner as having a dark personality and being creepy.
The school's division dean Patricia Houston reported to campus police a teacher's concerns about Loughner after he made comments that were a huge leap from the context of the poem and said things about abortion, wars, killing people and 'why don't we just strap bombs to babies.'
In September, as police were investigating a suspicious video thought to be posted by Loughner, the school's Advanced Program Manager Aubrey Conover told authorities about a meeting with him to discuss the incident in a statement to police.
I asked Jared to help me understand his comment. He said that the class had been talking about abortion, which made him think of death, which made him think of suicide bombers, which made him think of babies as suicide bombers, Conover stated.
She told him he needed to give context to his statements, especially when dealing with emotional issues. After a followup with the instructor, Conover said there were no further interruptions although the instructor said Loughner was still acting a bit 'bizzare.'
April 6 - Noises at the library
In an April 6 incident, police were called to the school's library, when a library director said his staff reported that a student sitting at a computer would sometimes make noises loud enough for the staff at the reference desk to hear.
The officer reporting said Loughner said that he was really into music and that sometimes he would be enjoying the music and excitedly utter phrases and words from the songs. After the officer explained it wasn't appropriate, Loughner said it wouldn't happen again.
May 17 - Very hostile
In a May 17 report, Loughner's Pilates instructor said he became very hostile after he found out he would receive a B in the class. Loughner, who was outside the classroom during the talk, replied that it was unacceptable. The instructor said that during the conversation she felt like it might become physical. At her request, a police officer patrolled the area near her classroom for the next and final class meeting without incident.
In the YouTube video made months later where Loughner stated This is my genocide school. Where I'm going to be homeless because of this school, he also said I haven't forgotten the teacher that gave me a B for freedom of speech.
June 3 - The number 6 is 18
In a June 3 police report, a Mayhem Fest!! scribble on a math class paper and an argument where Loughner asserted that the number 6 was 18, triggered concern with one instructor.
Division dean Houston, who brought the incidents to the attention of police, also reported that Loughner's instructor and students in his class were uncomfortable and afraid of any repercussions from Loughner being unstable in his actions.
In an e-mail presented to police by Houston, a counselor said Loughner denied creating a disturbance.
I was not disruptive, I was only asking questions that related to math, Loughner said.
My instructor said he called a number 6 and I said I call it 18, Loughner said. He also asked the instructor How can you deny math instead of accept it?
Loughner told the counselor he had felt scammed in other classes where he failed the course and didn't get his money back. However he denied feeling scammed in math class incident but said it scared him that his freedom of speech rights were being taken away.
After promising to remain silent in class and complete the course successfully, the counselor found no grounds to keep him out of class.
The 'Fest' scribble which had concerned the instructor turned out to be a music festival set to take place sometime during the year, according to logins that Loughner had looked up given to police by Houston.The officer said he had no charges to file on the student. Houston requested that the report be documented.
September 23 - His eyes were jittery and looking up and to the left
A September 23 incident involved a call to police from an instructor who said Loughner disrupted her class after he learned he would only get half a credit on a report for being late. Loughner said it was a violation of right to freedom of speech, the instructor said. He also delayed the start of the class, she said.
One of two officers on the scene said the instructor stated that Loughner stood up when called upon and said Loughner's voice grew louder and louder in a disruptive manner for her and several of her students.
Loughner could not verbalize what the problem was and kept referring back to the freedom of speech, the other officer questioning Loughner outside the classroom after the incident said.
During questioning, Loughner's head was constantly tilted to the left and his eyes were jittery and looking up and to the left, said one officer. He had a confused look in the countenance of his face, said the other.
At Loughner's request, he was escorted to speak with Aubrey Conover, an Advanced Program Manager at the school. She spoke with him privately for about 20 minutes and set up a September 27 meeting.
Loughner seemed to be content with the help he was given and left the office, an officer said. The officers told Conover that they felt through their training and experience that there could be a mental health concern with him, one officer said.
September 29 – ‘Genocide school’ video , Sept 27 meeting, Suspension
On the morning of September 29 an officer was asked to look into a “suspicious video” posted to YouTube posted on September 23 by a user with the account name “2PLOY.”
Statements in the video by a narrator included “This is my genocide school,” “This is Pima Community College, one of the biggest scams in America,” and “I haven’t forgotten the teacher that gave me a B for freedom of speech,” and “This is Genocide America,” among others.
Officer D. Mattocks recognized the speaker as Loughner ffrom the September 23 meeting. The officer contacted Aubrey Conover, the advanced program manager and asked her to issue a written report “as soon as possible.” Allison Ward, the counselor who was also present, was also contacted but had not submitted a report at the time the officer filed his.
He “smiled overtly at inappropriate times”
Conover said in the second meeting on September 27, Loughner said that the first amendment gave him the right to ask questions and that he paid the teacher’s salary so he was entitled to full credit.
Loughner also said he had paid for his courses illegally. When questioned, why Loughner said, “I did not pay with gold and silver,” Conover wrote.
As Conover asked more questions, Jared stated he should not say more. Counselor Allison Ward joined in a subsequent meeting. Also present was his mother, whom Loughner allowed to join by signing a waiver that would allow her to hear details of the incident.
When the counselor asked if Loughner had a support network to help him be successful in school Jared said he did not want to talk about it and that he would follow Pima policies, Conover wrote.
“Throughout the meeting Jared held himself very rigidly and smiled overtly at inappropriate times,” Conover wrote.
‘I realize now that this is all a scam’
On September 29, one officer was dispatched to Loughner’s home to serve him with a notice of immediate suspension letter after the discovery of the Youtube video.
One officer said Loughner “held a constant trance of staring” as he related the event documented in police reports and meetings with the Pima College administration.
The officer said Loughner understood why the police were there and the terms of the suspension letter, which required him to obtain a mental evaluation clearance before returning to the school. Loughner read back the letter to the officer.
“I realize now that this is all a scam,” Loughner said before the officers left.
Market Moving News: EUR/USD - Apr 24
Eur/usd - 1.3157 ... Euro has maintained a firm undertone in Asian morning on dlr's broad-based weakness esp. vs Japanese yen n stops abv 1.3170 are in focus, however, offers fm European names are reported at 1.3180-90 n further out at 1.3220-30. On the downside, buying interest fm Russian n Middle East names is lined up fm 1.3130 down to 1.3110 with mixture of bids n stops seen at 1.3070-80 but decent demand is tipped at 1.3030 n 1.3000. Some traders are awaiting the release of German Ifo data at 08:00GMT...
AUD/USD: Decline from last week's high at 0.7095, extended today to 0.6785
FXstreet.com (Barcelona) - Decline from 0.7095 mar 24 high has extended further today as the Aussie gave away about 130 pips to test support level at 0.6785 (38.2% Fibonacci retracement level of the 4 - 24 Mar rally).
According to the Kshitij Consultancy Service Team, a further decline on the U.S. trading session could be limited at 0.6640: Over US session, if it were to fall further a dip could be limited to 0.6640 mentioned in the morning. As mentioned earlier, this region is seeing the convergence of 8-, 13, and 21-MA on the weekly charts. A rise could be limited to 0.6881 (which had earlier acted as a strong Support).
Solar Flare 2011: May Be Coming Tonight To Earth
It won't be the end of earth, but rather provide our planet a glancing blow.
NASA announced yesterday the Sun unleashed an M-2 (medium-sized) solar flare, an S1-class (minor) radiation storm and a spectacular coronal mass ejection (CME). According to NASA, articles mushroomed up and fell back down covering an area of almost half the solar surface.
The end result, according to NASA models, is the CME is moving to Earth at a rate of at 1400 km/s. By late night June 8 or early June 9, the CME will deliver a glancing blow to Earth's magnetic field. This in turn may provide night sky watchers with auroras, which is when a collision of charged particles directed at the Earth's magnetic field causes a fascinating light display in the night sky.
A solar flare is caused when intense burst of radiation comes from the release of magnetic energy associated with sunspots. Flares are the solar system's largest explosive events. A CME happens when the outer solar magnetic fields are closed, often above sunspot groups, and the confined solar atmosphere can suddenly and violently release bubbles of gas and magnetic fields.
Solar flares and CME can impact the earth when they are facing the planet. Clouds emanating from a CME can erupt in any direction, and then continue on in that direction, plowing right through the solar wind. In this case, the Solar Flare and CME were aimed at the Earth, but not directly enough to tremendously impact the planet.
As a result of the CME, a cloud of charged particles will pass by the Earth and may even affect satellite and communication systems. However, NASA scientists say if there's an impact, it won't be noticeable. In addition, aurora borealis may occur as a result of the CME. It depends on how the Earth's magnetic field is oriented at the time of impact.
The National Oceanic and Atmospheric Administration say there is a 25 percent chance of auroras. For people in high latitudes, such as Antarctica, there is an even greater chance.
Check out the video of the Solar Flare below courtesy of The Sun Today organization.
Judges challenge Obama healthcare law
Lawyers for the Obama administration are in Atlanta fielding questions and defending the president's healthcare law to three federal judges who suggested they may be ready to declare all or part of the law unconstitutional.
Obama's lawyers summed up their case as they appealed a ruling by a Florida judge who declared the Affordable Care Act unconstitutional, according to Reuters. In total, 26 states and the National Federation of Independent Business joined in urging the judges to strike down the law.
The crux of the law is a provision that forces Americans to buy health insurance by 2014 or face a fine equal to 2.5 percent of their income.
As for the judges, they said they knew of no case in American history where the courts upheld the government's power to force someone to buy a product, The Washington Post reported.
I can't find any case like this, said Chief Judge Joel Dubina of the 11th Circuit Court of Appeals. If we uphold this, are there any limits on the power of the federal government? he asked.
Judge Stanley Marcus appeared to agree.
I can't find any case in the past where the courts upheld telling a private person they are compelled to purchase a product in the open market .... Is there anything that suggests Congress can do this?
Other opponents of the healthcare law say it exceeds the authority granted to Congress by the Constitution to regulate interstate commerce.
For 220 years, Congress never saw fit to use this particular power, said former Solicitor General Paul Clement, speaking on behalf of the states challenging the law.
Senior Obama administration lawyer Neal Katyal argued that healthcare is unlike purchasing other products.
You can walk out of this courtroom and be hit by a bus, he said. And if that person does not have insurance, he furthered, a hospital and the taxpayers will be footing the bill. He also argued that since most everyone will likely need medical care at some point in their lives, everyone who can afford to pay, should.
We are not saying the Congress can force someone to buy something, Katyal said. Our point is that people are already buying this good.
Judge Frank Hull, the third member of the panel, repeatedly asked what effect there would be if the court struck down the mandate, but upheld the rest of the law. She said the government exaggerated the magnitude of the mandate, saying it will affect about 10 million persons at most, not the estimated 50 million who are uninsured now.
The Atlanta court is reviewing the decision of Judge Roger Vinson in Pensacola, Fla. In January, he struck down the entire 2,700-page law as unconstitutional.
Market Moving News: GBP/USD - Apr 24
Gbp/usd - 1.4672 ... Despite intra-day fall to 1.4637 on due to concerns over U.K.'s rating after article on U.K. Telegraph, the British pound found good sup there n has recovered on dlr's broad-based weakness, however, offers are still noted at 1.4700-10 n mixture of offers n stops remains at 1.4740-50. On the downside, bids remain at 1.4630-40 n 1.4610 n sizeable stops are building up below 1.4600. Traders are awaiting the release of U.K. GDP n retail sales data at 08:30GMT...
Wall Street rises for second day, boosted by banks
Stocks rose for a second day on Wednesday after JP Morgan Chase's
Jamie Dimon's comments to CNBC television, which reversed a broad decline, came after a speech where he said the bank's bond department had just had its two busiest months ever.
It was the first two-day run-up for the S&P in a month.
The Dow Jones industrial average <.DJI> inched up 3.91 points, or 0.06 percent, to end unofficially at 6,930.40. The Standard & Poor's 500 Index <.SPX> added 1.76 points, or 0.24 percent, to 721.36. The Nasdaq Composite Index <.IXIC> gained 13.36 points, or 0.98 percent, to 1,371.64.
(Reporting by Leah Schnurr; Editing by Jan Paschal)
Looks To See Further Downside Pressure
EURUSD-Having turned off the 1.4177 level, its Jun 11'09 on Wednesday and followed through lower on Thursday, potential for further downside weakness continues to be seen though an early morning recovery higher was seen today. With this view supported by its bearish stochastics, we envisage weakness to initially target its Jun 29’09 low residing at 1.3981 level with a trade below there accelerating further declines towards the 1.3826 level, its Jun 22’09 low. Below the latter will highlight the 1.3738 level, its Mar 19’09 high where a cap is expected. Breaking and closing below there will turn focus to the 1.3618 level, its weekly 200 ema. To the upside, its psycho level resting at 1.4000 will be aimed at followed by the 1.4177 level, its Jun 11'09 where a clearance will open up more upside risk towards the its YTD high at 1.4339.Above there will resume its medium term uptrend towards the 1.4719 level, its Dec 18’08 high and possibly higher targeting the 1.4867 level, its Sept 22’08 high. On the whole, having rejected the 1.4177 level on several occasions, EUR remains vulnerable to downside nearer term.
1.3981 Jun 29’09 low
1.3826 Jun 22’09 low
1.3738 Mar 19’09 high
1.4267 Jun 05’09 high
1.4363 Jun 2’09 high
1.4718 Dec 18’08 high
GBPUSD: Faces Downside Pressure Nearer Term.
GBPUSD: Outlook for GBP continues to point to the downside nearer term following its recent failure at the 1.6427 level, its Jun 29’09 and its subsequent collapse. It closed lower Thursday and was seen facing downside pressure in early trading today. As long as its shooting star high at the 1.6742 level remains unbroken and GBP is limited to its sideways trading range, it remains vulnerable to the downside. Support is initially seen at the 1.6209 level, its Jun 16’09 low followed by the 1.6000 level, its psycho level ahead of the 1.5801 level, its Jun 08’09 low. The last two levels are expected to reverse roles and provide support if tested. Its daily RSI Remains supportive of this view as it is heading to the downside. On the upside, a close back above the 1.6662 and 1.6742 levels must occur to halt its negative nearer term outlook and resume its medium term uptrend towards the 1.7000 level, its psycho level and possibly higher. All in all, with a failure on upside attempts and a return back into its sideways trading range seen, break out of that range is required to create meaningful directional moves.
1.6209 Jun 16’09 low
1.6085 May 27’09 high
1.6000 Psycho level
1.6662 2009 high
1.6742 Jun 30’09 high
1.7000 Psycho level
Vulcan Materials calendar put spreads predicts continued slide
VMC – Vulcan Materials Company – The distributor of construction materials must feel a bit left out given its failure to join in the market rebound festivities. Its shares are flat at $36.35 today, just a scant 5% off the 52-week low of $34.32. Vulcan edged onto our ‘hot by options volume’ market scanner after one investor established calendar spread positions in the April and May contracts. We reckon that this investor has already established a short position on the shares which have declined by more than 50% since the start of 2009. By selling April puts and buying those at the same strike in May the investor is opening the door to having stock put to him should the price settle in-the-money by expiration in the nearby April contract. By establishing the long May put positions the investor retains his short position, although only via options since the short stock position was already put back to him. The trade employed 3,000 spreads at each of the 30 and 35 strike contracts, which also lowered the full premium paid for the May put options. This provides a longer amount of time for this trader to watch the stock’s movement, yet enables him to lock down profits should exercise occur. The worst case scenario would be if shares were to rebound above $35 in April because this would devalue his short position, although the April puts would expire worthless while the May puts would decrease in value. Optimally, this trader would like to see shares decline below $30 by expiration in April as the value of the long puts in May would greatly increase and the puts in April would allow him to take delivery of the underlying shares.
ORCL – Oracle Corp. – Despite a drop of 1.5% to $14.86 in shares of the software and server manufacturer, option investors spent 75 cents scooping up calls expiring in January at the 20 strike. Some 20,000 contracts changed hands adding to an existing 70,000 of open interest at the strike. While these investor are setting lofty expectations about an ultimate increase of more than one third for Oracle’s shares within nine months, it wouldn’t take that much to shift the premium on the calls. The 0.27 delta indicates gains of around a quarter for each dollar recovery in the share price. If shares gain, delta will rise.
XLU –Utilities Select Sector SPDR – Ahead of even yesterday’s big rally for stocks, we noted several large bullish plays occurring in options of utilities and industrial exchange traded funds. Investors often find it more efficient to buy ETFs and then parse the individual stocks in hectic markets. An option buyer turned up to snag 100,000 call options expiring in September today at the 26 line. The trade is marked as a spread, which tells us that this investor could be playing with shares on the underlying in conjunction with options here. Currently the shares are trading 0.4% higher at $23.13, while in order to reach the expiration-based breakeven of $27.00 per share, the fund would still need to rally by 17%.
XHB – Homebuilders Index Fund ETF – Shares of the exchange traded fund have remained relatively flat at $9.12 today after yesterday’s 12% rally. XHB jumped onto our ‘most active by options volume’ market scanner this afternoon after one bullish investor purchased 90,000 calls at the June 12 strike price for 44 cents per contract. The motivation for locking into the purchase of some 9,000,000 underlying shares is unclear, and thus we believe this trade may be tied to stock in some way.
XTO – XTO Energy Inc. – Options activity appears to reveal a bullish stance on the energy company hoping to chop away at the cost of getting lock the stock by August expiration. Shares are responding to cheaper crude oil prices today and are 2.9% lower at $30.50 while this investor spent a 5.57 premium to buy calls at the 30 strike. However, the premium was doubly eroded by the sale of 22.5 strike puts at 1.86 and 40 strike calls at 1.91 in the same month. The net cost of the calls is then reduced to 1.80, which reduces the investors breakeven from a share price of $35.57 to just $31.80. Of course there is no free lunch in the world of options and the investor is at risk of having shares put to him in the event that the trade goes belly up with shares closing below $22.50 at expiration. In addition, a greater amount of calls were sold at the upper strike than were bought at the lower strike. It is possible that stock was involved in this cost-effective combination.
C – Citigroup, Inc. – While shares remain on the rise, today’s 7% rally to $1.56 pales in comparison with the 28% jump experienced yesterday. The excitement surrounding CEO Vikram Pandit’s encouraging words seem to have died down a bit as investors realize rallies – particularly in impaired financial stocks – may become ephemeral. Thus, option traders were seen banking gains by selling calls across several contracts. Some 20,000 calls shed at the September 3.0 strike price stuck out as investors sold out between 34-50 cents per contract on options that traded at 15 cents over the course of the last week.
MS – Morgan Stanley – The global financial services firm must feel elated over today’s 12% share price gain to $23.35. Option traders were seen banking profits in the April contract where 15,000 calls were shed for an average premium of 1.82 each. Despite the encouraging gains made yesterday and today, investors remain cautious on financials. Traders scooped up downside protection at the March 22 strike price by purchasing 9,600 puts for an average of 1.69 each.
HIG – The Hartford Financial Services Group, Inc. – The insurance and financial services company has seen shares increase by 5% to $5.46. Despite the rally, bearish option investors appear to be dominating activity today. In the March contract at the 2.5 strike price, about 9,600 puts were purchased for an average of 12 cents each, indicating perhaps that traders feel the need for downside protection. At the March 5.0 strike price, some 11,000 calls appear to have been sold for an average premium of 1.05. It is likely that these investors are banking gains given rising premiums on now in-the-money call options. Call sales were also observed at the March 7.5 strike where 1,900 traded for an average of 21 cents apiece. Perhaps investors have decided to take the money and run amid recent share price inclines as the sting of the past month’s market turmoil remains fresh in their memories.
MT – ArcelorMittal ADS – The manufacturer of semi-finished and finished steel products has seen its shares rally by about 3% to $20.64. The steel company hopped onto our ‘hot by options volume’ market scanner this morning after one investor established a bearish ratio put spread in the June contract. At the June 17.5 strike price 5,000 puts were purchased for 2.75 each, while at the June 12.5 strike 10,000 puts were sold for a premium of 1.00 per contract. The investor’s net cost for the spread amounts to 75 cents. This strategy implies that the trader sees today’s rally as short-lived and seeks profits from the put spread if shares fall 21% from the current price to the breakeven point located at $16.75. Maximum profits in the amount of 4.25 will have been realized if shares continue to decline to the lower strike price at $12.50. Should shares continue to fall below the lower strike, the net short put leaves the investor vulnerable to losses starting at $8.25 – the breakeven on the downside.
Carlyle, Primus among bidders for AIG unit: sources
Global investors Carlyle and Primus are among the bidders for AIG's Taiwan insurance unit, sources said on Friday, as the troubled U.S. insurer looks to divest some of its global assets.
Friday is the deadline for interested companies to submit their proposals to purchase Nan Shan Life, AIG's Taiwan unit, in a deal that could be worth more than $2 billion, sources close to the bidders told Reuters.
I think almost everybody in the industry is interested in Nan Shan, but the only problem is of course price, so those who decide to submit bids will be really brave and aggressive investors, one source told Reuters.
Chinatrust Financial and Cathay Financial groups in Taiwan, which Taiwan media reported are also interested in buying up Nan Shan, declined to comment.
Representatives for Washington D.C.-based Carlyle and Hong Kong-based Primus Financial Holdings, founded by Robert Morse, a former top Citigroup Inc executive for Asia, declined to comment.
In June, sellside adviser Morgan Stanley distributed key financial data of Nan Shan to potential buyers including some of Nan Shan's domestic rivals.
Several private equity industry sources who looked at Nan Shan said they were concerned about the asset quality of the Taiwanese insurer as well as the gap of price between what the seller targets and the buyer may want to pay for.
Last month, sources told Reuters that several U.S. private equity firms and Taiwanese financial groups, such as JC Flowers, Kohlberg Kravis Roberts and Fubon Financial, were interested in bidding for Nan Shan.
Taiwan's Financial Supervisory Commission Chairman Sean Chen told reporters on Friday regulators would welcome the deal so long as foreign investors have a long-term interest in the island's financial markets.
If AIG sells Nan Shan, it will not be the first foreign firm to get rid of insurance units in Taiwan.
Last October, Holland's ING Groep sold its insurance unit to Fubon for $600 million, while Britain's Prudential got rid of its Taiwan operation to Taipei-based China Life earlier this year.
(Writing by Lee Chyen Yee; editing by Simon Jessop)
NACEL Energy (NCEN.OB) Makes Comment on the American Recovery and Reinvestment Act of 2009
NACEL Energy Corporation is a young and upcoming company that has been gaining recognition as one of the first publicly-traded companies in America that is exclusively developing utility class wind power generation projects.
Today, NACEL provided guidance to shareholders and interested parties, concerning the impact of the American Recovery and Reinvestment Act of 2009 (the “Stimulus Legislation”), signed into law by President Obama in Denver, Colorado on February 25, 2009, on the Company’s Blue Creek, Channing Flats, Swisher and Hedley Pointe wind power projects, all underway in the Texas Panhandle, as well as the Company’s pipeline of new wind projects in feasibility, in three other States.
Under present Federal law, an income tax credit of 2.1 cents/kilowatt-hour, indexed for inflation, exists for the production of electricity from utility class wind turbines. This incentive, termed the renewable energy production tax credit (PTC), was created under the Energy Policy Act of 1992. The Stimulus Legislation includes a three-year extension of the PTC. Consequently, the 2.1 cents/kilowatt-hour tax credit may be applied to all NACEL Energy’s existing and proposed wind power generation projects, through the new expiration date of December 31, 2012.
However, NACEL Energy believes that the most important aspect of the Stimulus Legislation is the new option to elect a 30% investment tax credit (ITC), up front, in lieu of the PTC. This option is available to NACEL Energy for all wind power generation facilities which it places in service in 2010, and also for facilities placed in service before 2013, if construction begins before the end of 2010.
NACEL CEO Brain Lavery commented, “The impact of the American Recovery and Reinvestment Act on NACEL Energy’s expected cash flow from our four Texas projects, now underway, is extremely positive. The Company will additionally endeavor to advance our three wind project opportunities in feasibility, in order to fully capitalize on the provisions of this new legislation.”
Charles Barkley Rips Miami Heat, Prefers Washington Generals
Miami Heat fans don't like Charles Barkley, and Charles Barkley doesn't like them.
Stemming from Barkley's original problem on how LeBron James, Dwyane Wade, and Chris Bosh joined forces to try to win a title together, there has been animosity brewing between both sides since last summer.
On Wednesday, he stated that the fans aren't loud, and claimed the Heat have the worst fans. No question.
Listen, if the Miami Heat were playing the Washington Generals I would pick the Washington Generals, said Barkley, with a chuckle. It's something about that team that annoys me.
Barkley reiterated that the club are a whiny bunch, and he can't root for them, though he admires the skills of their players.
In turn, the outspoken broadcaster and retired NBA legend has been the recipient of a backlash by the Heat fans.
Serving as an analyst for TNT, he received chants of Barkely S****! from the home town fans outside American Airlines Arena in Miami following the Heat's victory over the Bulls in Game Three of the Eastern Conference Finals.
The broadcast team was outside for the post-game wrap up as the derisive chants against Barkley grew louder, and after a t-shirt was thrown at him.
Financial Sector: Bank Bonds In Trouble...UBS Losses...
Financial Sector: Bank Bonds In Trouble...UBS Losses... Citigroup and Bank of America's bond prices are sliding on concern that should the government inject more cash in the troubled banks, they will force bondholders to swap bonds for new debt that offers reduced interest rates or lower face values. U.S. bank debt has lost 7.8% and yields have jumped to record levels compared with benchmark rates in the past month. The four largest U.S. bank currently have about $1 trillion in debt outstanding. Since any reduction in debt at a bank helps boost capital ratios, members of Congress including U.S. Representative Brad Sherman say it’s time for bondholders to share the pain. “These banks can go into receivership, shed their shareholders, shed or reduce the amount they owe to their bondholders and come back out much stronger institutions,” said Sherman, who sits on the House Financial Services Committee. Citigroup’s $789 million outstanding in 7.25% notes due in October 2010 fell 6.5 cents today to 70.5 cents on the dollar and have lost 23.2 cents in the past three weeks. That puts the spread over Treasuries of similar maturity at 32.2 percentage points (3220 basis points). Contracts on the Markit iTraxx financial index of credit default swaps linked to the senior debt of 25 banks and insurers were more expensive today than the Markit iTraxx Europe corporate index. That hasn’t happened since Lehman Brothers Holdings Inc. went bankrupt in September and, before that, JPMorgan’s takeover of Bear Stearns. The numbers suggest systemic stress in the financial system. UBS, Switzerland’s biggest bank, posted a $18 billion loss for 2008, more than initially reported, and said it remains “extremely cautious” about the outlook for this year. The 2008 loss is the biggest in Swiss history. The full-year net loss widened from the figure reported on Feb. 10 because of costs to settle a U.S. tax investigation and additional write downs on securities, the bank said in its annual report. “Our near-term outlook remains extremely cautious,” Chairman Peter Kurer said in a letter to shareholders. “Even after substantial risk reduction, our balance sheet remains exposed to illiquid and volatile markets and our earnings will therefore remain at risk for some time to come.” The firm was forced to raise more than $32 billion from investors, including the Swiss government. UBS has also cut its workforce by 11,000. Citigroup and Deutsche Bank have recently provided better outlooks for 2009. Citigroup CEO Vikram Pandit said in an internal memo (published by Bloomberg yesterday) that his bank was having the best quarter since 2007, when it last posted a profit. Banking shares, including UBS, rallied the past two days. Deutsche Bank, which said revenue in January rose “significantly,” saw the trend continuing in February, CEO Josef Ackermann said last week.
Apple Says Goodbye To DUI Checkpoint Apps
Sorry drunk drivers, Apple's app store can't help you evade the law anymore.
Apple has updated its App Store Review Guidelines to ban implementation of driving under the influence (DUI) checkpoints in apps for iOS-based devices. Apple, along with Google's Android app store and Research In Motion's Blackberry App World, faced pressure from various sources including Congress to remove any apps which helped people evade DUI checkpoints.
Apps which contain DUI checkpoints that are not published by law enforcement agencies, or encourage and enable drunk driving, will be rejected, it now says on section 22.8 of the updated guidelines.
In March, Senators Harry Reid (D-Nev), Charles E. Schumer (D-N.Y.), Frank Lautenberg (D-N.J.) and Tom Udall (D-N.M.) sent a letter to Apple, Google and R.I.M. asking them to take down the apps. RIM complied right away. Google said it was not going to comply. Finally, Apple, who received pressure from Senator Schumer at a recent privacy hearing on Capitol Hill, has decided to take down the app.
The guideline only prohibits DUI checkpoint apps. It says nothing about speed traps, which has not been a focal point by the congressmen.
Apple has had to deal with numerous controversial apps in the past. The company was given flack of one app, which provided the cure for gay people.
Apple did not respond to a request for comment.
Kendall Jenner has hit quite the milestone, 2 million followers on Instagram. Big half-sister Kim Kardashian has nearly 3 million followers on her Instagram account, so she must be pretty proud of her little sister, only a mere million followers behind her.
Kendall Jenner, now a successful model, has shared 656 photos to date. Despite the fact that she is only following 123 people herself, she has managed to get an impressing following. It probably helps that the young star posts pictures of her famous family members: Kim Kardashian, Khloe Kardashian, Mason Disick, Kylie Jenner and her parents, Bruce and Kris Jenner.
Her most recent picture shows when mostly all of the Kardashian-Jenner girls got together with baby Mason to attend a circus. The klan all posed together in front of an African circus elephant.
Jenner must have gotten some flack for posting a picture which revealed her 2 million followers, because her Instagram page now shows that she has a measly 1,993,101 people keeping up to date with her plethora of pictures.
She doesn't seem to have the same problem on Twitter though, where she yields nearly 3.5 million followers while only following 164 people herself. The active tweeter has already compiled 2,600 tweets.
Being that sharing personal matters and thoughts is the Kardashian-Jenner key to getting and staying famous. They mostly all appear on the reality show, Keeping Up With The Kardashians and have gotten their own spinoffs too.
The most popular Kardashian even got herself involved in the Paris Jackson Twitter debacle when she retweeted @ParisJackson's post, adding bad timing, referring to the fights she's been publicly having with her aunts and uncles over her father Michael's estate and rumors being spread about her grandmother Katherine Jackson.
If Kendall Jenner continues to keep up on her Instagram and Twitter account, do you think she'll become as famous as her half-sister, Kim Kardashian?