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Tag Archives: Companies & Markets

Stock-Market Margin Debt Plummets Most Since Q4 2008

Wow, that was fast. Margin calls. During the ugly stock-market December, whose ugliness bottomed out on Christmas Eve, a nasty November, and the ugliest October anyone can remember, margin debt plunged by a combined $93.8 billion, the most since Q4 2008, after Lehman Brothers filed for bankruptcy. In December alone, margin debt plunged by $38.3 billion, to $554.3 billion, FINRA (Financial Industry Regulatory Authority) reported this morning. This was just a hair less than October’s...

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Another Retail Chain Bought & Stripped Bare by Sun Capital Goes Bankrupt

Number five in two years. Here’s the list. “This decision is a difficult, but necessary one,” ShopKo said in its announcement of the Chapter 11 bankruptcy filing. It blamed “excess debt and ongoing competitive pressures” and “a challenging retail environment.” It said it would try to sell its pharmacy business in an auction and close 38 stores of the 360 general merchandise stores that it operates in 26 states, after having already closed about 45 stores last year. In its filing, it...

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4 Months of Carmageddon in the EU Wipe Out Gains for 2018

Ford is big loser, Hyundai-Kia big winner, and Opel is someone else’s problem. Sales in the EU of passenger vehicles dropped 8.4% in December compared to a year earlier. It was the fourth month in a row of sharp year-over-year declines that wiped out the growth of the first eight months of 2018: Sep: -23.5% Oct: -7.3% Nov: -8.0% Dec: -8.4% The ACEA (French acronym for European Automobile Manufacturers Association), which reports the EU registration data, blamed this debacle on the...

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China Auto Sales Plunge 4th Month in Row, 2018 First Down-Year since 1990: Welcome to the Club of Saturation & Decline

China’s consumers rattle global automakers: GM’s sales drop, Ford’s sales collapse. For the month of December, light new-vehicle sales in China plunged 13%, compared to a year ago, to 2.23 million vehicles, the China Association of Automobile Manufacturers (CAAM) announced on Monday. Sales through June had risen 6%, but then came July, and now there have been six months in a row of year-over-year declines – with the last four months dousing any remaining enthusiasm about China’s...

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Bankruptcy Next, PG&E Says. Shares Down 90% in 15 Months. From “Investment Grade” to “Default” in Three Weeks?

California’s rate payers & taxpayers likely on the hook, as we know from PG&E’s first bankruptcy in 2001. “PG&E remains committed to providing safe natural gas and electric service to customers as it prepares to initiate voluntary reorganization proceedings under Chapter 11 [of the bankruptcy code],” PG&E announced this morning. San Francisco-based, the regulated monopoly is one of the largest investor-owned utilities in the US and provides gas and electric services to...

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The Brick & Mortar Meltdown at Movie Theaters. But a Few Movies Still Make it Big

Tickets are expensive. Alternatives are plentiful, convenient & cheap. The year 2018 was a banner year for the movie theater industry in the US. The number of movie tickets sold jumped 9.8% from the prior year to 1.35 billion tickets, according to movie data provider The Numbers. It was the largest jump in the number of tickets sold going back to 1996. It was a massive triumph for the industry. But ticket sales in the prior year, 2017, had been the worst since 1995. And that 9.8%...

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Oops, SpaceX to Lay Off 10% of its Employees after Funding Fiasco in November

What SpaceX is trying to do has “bankrupted other organizations,” it said. SpaceX, the unicorn startup with a newly minted $30.5 billion “valuation” and dreams of sending humans to Mars shortly, will lay off about 10% of its employees, “a person familiar with the matter” told the Los Angeles Times on Friday. The company says on its website that it has “6,000+” employees. TechCrunch reported that SpaceX “employed at least 7,000 people in late 2017 when COO Gwynne Shotwell last gave a...

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THE WOLF STREET REPORT

Nothing Goes to Hell in a Straight Line, not even on Wall Street. I have to admit, it was the most volatile holiday period in the stock market and the credit markets that I can remember – and perhaps in history. All kinds of crazy things happened, just when market participation was thinnest. These were crazy moves. But those crazy moves won’t be the last crazy moves (11 minutes). Here are the ugly long-term charts that Wall Street doesn’t want us to see. And now US...

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Trucking Boom Ends, Next Phase in Cycle Starts

This is a very cyclical business.  In December, orders for new Class-8 trucks — the heavy trucks that haul the products of the goods-based economy across the US — plunged by 43% from a year ago, to just 21,000 orders, the lowest since August 2017, and down by 60% from August 2018. The chart shows the percent change of Class-8 truck orders for each month compared to the same month a year earlier, which eliminates the effects of seasonality (data via transportation data provider FTR):...

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Markets Are in a Tizzy. So What Will the Fed Do?

Investors are waking up after years of somnolent money-making.   Markets are in a tizzy. They’re finally reacting to the Fed’s rate-hike cycle, the slowest rate-hike cycle in history. It took three years to nudge up the effective federal funds rate from near zero to 2.40% now. Throughout, the Fed has communicated its goals of “removing accommodation” from the “financial conditions” in the markets — thus tightening “financial conditions” that had become loosey-goosey during years of...

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