If everything goes as planned, this week will be the busiest for initial public offerings since 2000.
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These exchange-traded funds, created to give individual investors the same leveraging opportunities that hedge funds have, don't level the playing field -- they distort it.
Typical of what we don't know about these instruments. Typical of the confidence that securities people place in the way ETFs work versus the actual securities they are supposed to represent.
If a major company like UBS, with all sorts of risk controls, couldn't see through what a trader might have been doing as he flitted back and forth through the ETFs to the underlying stocks to the options market, are we really supposed to be able to trust these kinds of desks when they tell us not to worry, that ETFs aren't more powerful than the stocks?
Should we really trust them when they make their assurances that ETFs, particularly the double and triple ETFs, don't affect the markets in bizarre and difficult-to-understand ways, including exacerbating trends that shouldn't be exacerbated?
Despite the fragile economy, Cummins forecasts a 14% compound annual growth rate.
There is more to the company's warning than meets the eye.
By Rick Aristotle Munarriz
Investors shouldn't be surprised by Netflix (NFLX) hosing down its domestic subscriber targets this morning.
Any rational person could see that the company and blinders-donning analysts were underestimating the consumer resentment spurred by Netflix's decision to begin charging subscribers on unlimited DVD plans for streaming access. That move resulted in a price increase of as much as 60% for those wanting to receive optical discs in the mail and stream from the dot-com giant's growing digital catalog.
The outcome isn't a shocker. Netflix was targeting 25 million domestic subscribers by the end of the third quarter two months ago. Now it sees just 24 million accounts in this country when its quarter comes to a close in two weeks.
Struggling to compete with Wal-Mart and Amazon, the toy retailer pins its strategy on exclusive deals.
Toys are a historically low-margin business, and there isn't much room for a specialty retailer when behemoths like Wal-Mart can undercut prices. Yet Toys "R" Us has been able to increase market share.
How has Toys "R" Us survived? By doing a little gambling. The company tries to predict the holiday's hottest sellers and loads up ahead of time, according to MarketWatch. It worked in 2009, when Toys "R" Us had the Zhu Zhu Pets hamsters when other stores ran out.
Fat cats go free, politicians don't get it, and credit is still frozen after one of the biggest market shocks in history.
By Jeff Reeves, InvestorPlace.com
On Sept. 15, 2008, the world learned a debt-riddled Lehman Brothers would be no more. The Dow dropped more than 500 points that day, and a month later the index was off about 25%.
And that was only the beginning.
So what have we learned exactly three years after this market-shaking event? Unfortunately, almost nothing.
No cash? No problem. The newest tenant at The Donald's Wall Street skyscraper is a precious-metals dealer.
The newest tenant at Trump's 40 Wall Street skyscraper is a precious-metals dealer, and Trump has agreed to accept the tenant's $176,000 security deposit in gold. The dealer, Apmex, will give Trump three 32-ounce bars of gold, each about the size of a television remote control, The Wall Street Journal reported.
It's the first time Trump has agreed to gold instead of cash as a lease deposit. "I figured Trump is a smart guy, and he'll realize that taking gold is a better idea than taking cash," said the chief executive of Apmex.
The daily and weekly charts for Freeport McMoRan (FCX) show a flag formation, and a proven technical measure indicates that now is a low-risk time to buy the mining stock.
By Tom Aspray, MoneyShow.com
While fears about a new recession have grown, copper prices have dropped, and the Comex copper futures have declined by almost 16% from the early-August highs. The price of copper is now not far above the highs from early 2010, which is the next key support level.
Over the past few months, reports suggest that the Chinese are once again buying copper after cutting back their purchases early in the year. This week, copper prices in Shanghai have declined over European debt concerns and the belief that a lack of financing would limit new projects.
The clouded outlook for copper prices has certainly put pressure on Freeport McMoRan Copper & Gold, Inc. (FCX), which is down sharply from the July highs. The weekly and daily charts suggest that FCX is forming a bull flag formation, and despite the doom and gloom, it may be very close to a bottom.
Mutual fund managers everywhere are under the gun as Fidelity dumps Harry Lange from Magellan.
By Frank Byrt, TheStreet
Magellan's record since the famed investor Peter Lynch oversaw the fund is marked by fund-manager turnover and a big run-off in assets as its performance has lagged its benchmark and those of its peers.
Magellan isn't alone in seeing shrinking assets as skittish investors jump in and out of funds this year. Redemptions from long-term mutual funds reached $32.5 billion in August after outflows of about $17.1 billion in July. "August marked the most severe mutual fund outflows since November 2008," Morningstar said.
The stock plunges as the company falls far short of subscriber forecasts. This means its video library will suffer as more folks quit.
By Jeff Reeves, InvestorPlace.com
Netflix (NFLX) stock got slammed Thursday -- closing at $169.25, off 18.9% -- after the company announced its dual-pricing model has scared off more customers than expected. Netflix launched a pricing planback in July whereby, starting this month, it would begin charging customers separately for the DVDs it mails out and the streaming video service it provides. Instead of $9.99 for both, NFLX would charge $7.99 for each service.
Netflix had estimated it would wind up with about 3 million DVD-only subscribers and 10 million streaming-only customers. But the real numbers are smaller -- much smaller -- and that could really mess up any of Netflix's plans to improve its video library.
European markets have been on a tear since the US Treasury secretary assured us that we are not about to see a replay of Lehman. Will our market follow suit?
Ever since U.S. Treasury Secretary Tim Geithner made it very clear that, despite what you may think, there will not be Lehman-style crisis in Europe, the European markets that dominate ours have been on fire.
Some people have told me: Wait, in April Geithner said there was no way the U.S. debt would be downgraded and he got that wrong. Why is this any different?
The answer, I think, is that it has been within the control of Europe to get the European banks where they need to be; they have just haven't exercised control. You still have banks issuing big dividends -- how can Banco Santander (STD) have an almost 10% yield? You still do not have disclosure, and you still have derivatives that will be difficult to unwind.
Such a whopping loss on one guy's gamble couldn't have come at a worse time for UBS, and it will likely force the bank into the red for the quarter.
We learned overnight that a "rogue" trader at Swiss bank UBS (UBS) bled out a stunning $2 billion at the company's investment division in the third quarter. These are not clients working with UBS brokers, mind you, but one yeahoo playing with house money to enrich this banking giant and its corporate overlords.
Makes you really wonder who these "experts" are.
UBS shares were slumping by 9% to $11.50 in early trading Thursday on news of the impairment charge the bank should book for the quarter as a result. It's bad enough that there are massive layoffs happening at the bank, bad housing loans that continue to take a toll, the specter of a sovereign debt crisis weighing on credit markets and all the other mayhem in the financial sector. Suffering a $2 billion loss at UBS thanks to one guy's gamble couldn't have come at a worse time, and it likely will force the company into the red for the quarter.
Could Yum Brands be considered a dividend stock? The company announces yet another double-digit increase.
But a solid dividend? Yes, as it turns out. Taco Bell's parent company, Yum Brands (YUM), has authorized a 14% increase in its quarterly dividend. It will be the seventh consecutive double-digit increase for shareholders.
The new dividend is 28.5 cents a share. At Wednesday's closing price of $53.30, the dividend yield would be 2.14%. That's about in line with the 2.11% average dividend yield of all stocks in the S&P 500 index ($INX), Seeking Alpha notes. It's also higher than the 10-year Treasury.
The social-networking company wants to keep employees focused and could push its initial public offering to fall 2012, The Financial Times says.
The IPO was expected sometime in the first quarter of 2012, with many anticipating the Internet company to valued at $100 million. Now the company is looking to go public next September or later, The Financial Times reports.
The reason? The company wants to keep employees focused on product developments instead of the jackpot millions they'll get in an IPO.
Hasbro made big decisions about the popular toy after new federal rules doomed the traditional light bulb.
No more. A law signed by President George W. Bush calls for 100-watt light bulbs to be phased out next year in favor of energy-efficient versions. But the new bulbs are so energy efficient that they don't work in an Easy-Bake oven.
That created a dilemma for Hasbro (HAS), which makes the popular toy. Would the Easy-Bake go the way of the incandescent bulb?
The company decided instead to overhaul the Easy-Bake oven, removing the bulb completely.
The dismal history of failed forecasts.
Last week, I wrote that "most of what was expected to shape the past 30 years never happened, and what did shape the past 30 years was never expected." We live in an unpredictable world, but this doesn't stop experts from making divine forecasts. Predictably, their collective track records stink. As Philip Tetlock, a U.C. Berkeley professor who studies expert predictions, put it, most experts could be beaten by a "dart-throwing chimp." Yet we listen to them. Intently. With confidence.
At least one reader disagreed. In an email, he challenged me to elaborate on three mainstream (not fringe) predictions that never came true.
One could write volumes of books on this topic, and a few have. But challenge accepted. Here are three predictions about the economy that never came to pass.
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[BRIEFING.COM] S&P futures vs fair value: -12.90. Nasdaq futures vs fair value: -30.80. The stock market is on track to begin the session on a lower note as futures on the S&P 500 trade 13 points below fair value. Index futures have spent the entire overnight session in the red amid disappointing quarterly results from a handful of major global companies.
In South Korea, Samsung tumbled nearly 4.0% after reporting results in line with its warning from the beginning of the ... More
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