by ilene - May 25th, 2013 11:52 am
Courtesy of Mish.
Factset Buyback Quarterly has an interesting series of charts and facts on corporate share buybacks.
Here is my favorite chart in the series.
Aggregate Buybacks: Dollar-value share repurchases amounted to $93.8 billion over the fourth quarter and $384.3 billion for 2012. The fourth quarter total is in-line with that of Q3, but represented year-over-year growth of 9.6%.
Sector Trends: The Information Technology and Health Care sectors spent the most on quarterly repurchases ($19.8 billion and $14.4 billion, respectively) in Q4 2012. However, of the sectors that averaged $2 billion or more in quarterly share repurchases since 2005, the Industrials sector showed the largest sequential and year-over-year growth (30.6% and 59.4%) in dollar-value buybacks.
Buyback Conviction: Dollar-value buybacks amounted to 79.1% of free cash flow on a trailing twelve month basis, which is the largest value since Q3 2008. The Consumer Discretionary and Consumer Staples sectors both spent more than 100% of their free cash flow (116.7% and 114.2%, respectively). The Energy and Utilities sectors spent $35.8 billion and $1.4 billion, respectively, on buybacks, despite generating negative free cash flow (-$25.7 billion and -$23.5 billion). The Consumer Discretionary sector also led all sectors in repurchasing the most shares relative to its size. Over the trailing twelve months, the sector repurchased shares that amounted to 4.5% of the sector’s average shares outstanding over the year.
Timing Suspect at Best
One look at the above chart is all it takes to see most shares are bought back at high prices rather than low prices.
And check out the latest authorizations.
Looking Forward: Program Announcements & Buyback Potential Going forward, several companies in the S&P 500 have authorized new programs or additions of $1 billion or more since December 31st, including Gap (GPS), Blackrock (BLK), Marathon Petroleum (MPC), L-3 Communications (LLL), Visa (V), Allstate (ALL), Moody’s (MCO), CBS Corporation (CBS), Dow Chemical (DOW), and AbbVie (ABBV). In addition, even larger authorizations were made by United Technologies Corp. (UTX), 3M Co. (MMM), and Lowe’s (LOW), which all announced replacement programs worth approximately $5.4 billion, $7.5 billion, and $5 billion, and Hess Corporation (HES), which announced a $4 billion buyback program on March 4th. Finally, a number of banks were approved to buy back large amounts of
by ilene - May 24th, 2013 7:17 pm
Courtesy of Mish.
Via google translate from Corriere Della Sera, Beppe Grillo is in favor of a “Referendum on the Euro Within a year”
“Europe needs to be rethought. We consider just one year of information and then hold a referendum to say yes or no to the euro and yes or no to Europe. ” Beppe Grillo to ride a strong theme of the last election campaign the 5 Star Movement. “Europe on the euro and the British teach us democracy. No party can claim the right to decide for 60 million people. ”
“I want to go to Europe and re-discuss a Plan B to be in five years, “added the leader M5S, explaining:” When we do, then we are ready for a referendum and we decide whether to stay in the euro or not.”
Sooner or later this sentiment is going to catch fire. And the sooner the better for Europe when it does.
Mike “Mish” Shedlock
by ilene - May 24th, 2013 5:02 pm
Courtesy of John Rubino.
One of the many scary things about writing an investment book is the six months that elapse between the typing of the last word and the book’s appearance in stores. That’s enough time for your predictions to be proven wrong or – nearly as bad – for your predictions to come true and make the book’s advice obsolete.
The temporal jury is still out on Nick Barisheff’s $10,000 Gold. Either it will be this generation’s Dow 36,000, a signpost marking a secular top, or a prescient and gutsy call for faith in gold’s fundamentals at a time when many are giving up.
The latter is more probable, for reasons that Barisheff, CEO of Canadian gold dealer Bullion Management Group, spells out early on. To hit just a few of the high points: the developed world is grossly over-indebted and is holding a 1930s-style depression at bay with insanely-low interest rates unprecedented amounts of newly-created currency. In response, the developing world, led by China, India and Russia, is buying up every bit of gold they can get their hands on, with an eye to the inevitable changing of the currency guard when the dollar, euro and yen are depreciated to nothing and the yuan and ruble rise to take their place. This dynamic, says Barisheff, will send gold soaring – though of course it will actually be gold sitting still and the dollar plunging.
As a gold dealer, Barisheff is at his best when clarifying the differences between paper gold like ETFs and unallocated storage and the real thing like coins and allocated accounts. This paper-versus-physical distinction has become front-page news recently, and is a crucial piece of information for new gold investors. The time will come when millions of people who think they own gold find out that they really don’t. This book’s readers will avoid that fate.
In Barisheff’s analysis, the US is in the final stage before hyperinflation, with debt beginning to overwhelm the system while crucial needs like infrastructure are starved to pay for entitlements, overseas military adventures and interest. Here’s how he describes what comes next:
Stage 5 is hyperinflation, the worst economic phase of the fiat cycle, when currency becomes essentially worthless. Hyperinflation has occurred fifty-six times since 1795. During the Weimar hyperinflation, which we will discuss in more detail below,
by ilene - May 24th, 2013 4:53 pm
Paul Price discusses doing your own research and thinking, and not listening blindly to experts.
by ilene - May 24th, 2013 3:49 pm
The problem with being off the charts is that it impairs the doings of pretty artwork. Zero Hedge complains.
Courtesy of ZeroHedge
By now every single chart laying out every possible permutation of a hopelessly insolvent and overlevered world has been compiled, created, colored and in some cases, animated and socially networked. The following chart showing global debt dynamics over time from the WSJ is no different: it is animated (check) it has lots of pretty colors (check), and it is quite informative because it remembers that in addition to public sector debt, there is a thing called the private sector (sadly it avoids shadow debt: perhaps someone good at making 3D animated charts should take a stab?). This chart succeeds in incorporating everything in one cool animation.
Yet why it may be most memorable, or not as the case may be, is that it is merely the latest chart in a seemingly infinite series which are just not big enough to fit Japan. Perhaps it is time to make a chart of all the charts that need to be bigger to show the true Japanese state of affirs.
That, or in reverence to the sadist joke, pardon "experiment" (as Jens Weidmann would say) that is Abenomics, we can finally start making bigger charts.
Interactive global debt dynamics chart after the jump:
by ilene - May 24th, 2013 3:22 pm
Submitted by Tyler Durden.
With the long-weekend rapidly approaching, ConvergEx's Nick Colas takes a trip to the Hamptons, but through a time warp back to the Great Depression. Examining the social registers (colloquially called the “Blue Book”) from 1927 and 1940, he finds that “The great and the good” of the day had real trouble holding their status during the social upheavals of the late 1920s and 1930s. Only 32% of the families appearing in the Blue Book in 1927 were still there in 1940. The ratio was even worse, at 29%, for the ultra-elite who belonged to the Meadow Club in Southampton. It’s too early to tell what the last few volatile years will do to the upper crust of East Coast society, of course. Or what may still be in store. But when the hedgie in the Bentley cuts you off on Route 27 this weekend, take some solace in knowing he may not be there in a few years.
Via ConvergEx's Nick Colas:
F. Scott Fitzgerald is known for the phrase “The rich are different from you and me.” The full quote, from a 1925 short story, actually goes like this:
“Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft when we are hard, and cynical when we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves. Even when they enter deep into our world or sink below us, they still think that they are better than we are. They are different.”
Ernest Hemingway had a famous retort to “The rich are different” in his story “The Snows of Kilimanjaro”: “Yes, they have more money. But that was not humorous to Scott. He thought they were a special and glamorous race and when he found they weren’t, it wrecked him as much as any other thing that wrecked him.” Yes, these two great American writers were friends. Sort of.
by ilene - May 24th, 2013 2:26 pm
Courtesy of Lee Adler of the Wall Street Examiner
New orders for manufactured durable goods in April increased $7.2 billion or 3.3 percent to $222.6 billion, the U.S. Census Bureau announced today. This increase, up two of the last three months, followed a 5.9 percent March decrease. Excluding transportation, new orders increased 1.3 percent. Excluding defense, new orders increased 2.1 percent. Transportation equipment, also up two of the last three months, led the increase, $5.1 billion or 8.1 percent to $67.6 billion. This was led by nondefense aircraft and parts, which increased $1.9 billion.
from Census Bureau
The consensus forecast was for an increase of 1.6% according to the widely followed survey by Briefing.com. As usual, they weren’t close. The old seasonal adjustment bugaboo reared its ugly head. That and the fact that most economists are quacks practicing the dark arts of economics fraudquackery means that they almost never guess the number.
The media frames it as the economy beating forecasts. In reality the economy does not “beat” or “miss.” The economy is what it is. All the guesswork about what the numbers will be and the attention the media gives that, are just silliness. But that’s the game and many traders play it, trying to guess whether the number will “beat” or “miss,” and on top of that, trying to guess how the market will react to that. It’s a bit of a fool’s errand.
April Real Durable Goods Orders, adjusted for inflation and not seasonally manipulated, rose 3.2% year over year. That compares with a 3.5% year to year decrease in March. In spite of the uptick, the annual rate of change remains in the declining trend in which it has been since early 2010. This deceleration has been consistent whether the Fed was pumping QE full bore or was in a pause. After the initial rebound in 2010, the Fed’s money printing has had no discernible impact. This isn’t new. It’s part of a downtrend in US manufacturing that has persisted since 1999.
Note: In adjusting for inflation, this measure attempts to represents actual unit volume of orders. Also, the use of actual, versus seasonally adjusted (SA) data allows an accurate view of the trend. With SA data, this may not be the case, since SA data can overstate or understate the real underlying…
by ilene - May 24th, 2013 2:25 pm
Courtesy of Larry Doyle.
WOW … This 5-minute video has received very few viewings. That is a shame. Let’s change that.
In a recent Congressional hearing Rep. Steve Pearce throws high hard heat right at the head of Treasury Secretary Jack Lew. In a delivery that would have made Hall of Fame pitcher Bob Gibson proud, Pearce knocks Lew down once, twice, three times and more.
In the process he addresses a number of issues that this blog has embraced over the years, including: a pursuit of the truth — transparency — Jon Corzine’s misappropriation of funds from customer accounts — the redistribution of wealth from those on fixed incomes into our banking system, and more.
Some may view this clip strictly through a political prism. That would be a shame. I encourage you to view it through a lens of looking for the truth so that our country can be strengthened and that our children may benefit.
Real patriots are not aligned with one political party or another.
Take the 5-minutes and watch this video. If you think it is worthy of sharing, please do so.
I welcome inducting Steve Pearce into the Sense on Cents Hall of Fame.
for those receiving this commentary via e-mail, you can access this video here.
I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
by ilene - May 24th, 2013 2:07 pm
Courtesy of Mish.
Some common sense discussion is taking place in Spain regarding the necessity of Spain exiting the eurozone.
For example, please consider Opposition to the euro breaks: first manifesto to leave the single currency as translated from El Economista.
The political opposition that Spain remains part of the euro begins to crystallize. And the tool to achieve that end-Spain output of the single currency is again signing a manifest public that, for the moment, has already been signed by around 1,000 professionals convinced “the risks of deterioration and degradation that there are the enormous social suffering caused by the persistence of adjustment policies, austerity and privatization of the public “.
Among the signatories are former general coordinator of United Left (IU) Julio Anguita or economists Juan Francisco Martín Seco and Pedro Montes, Manuel Monereo addition, Manuel Muela and Carlos Martinez, president of Attac Spain, or exsindicalista Agustin Moreno. Written Signatories to the start for a first finding analysis: the level of unemployment is “catastrophic “the indebtedness of the Spanish economy to the outside is” unable to cope “and the evolution of public accounts leads inexorably to the” economic collapse of the state “.
Specifically, they say, more than six million unemployed, more than 2.3 billion euros of gross liabilities from the outside and a public debt of almost a billion euros, growing and already close to 100% of GDP, “are data defining an unmanageable mess, endanger destroy coexistence and social rights. ”
“Spain Must Have a Plan to Exit the Euro”
Also note an article on El Econimista Jose Carlos Diez: “Spain Must Have a Plan to Exit the Euro”
Jose Carlos Diez, chief economist at Intermoney, feels Spain should not be the first country to leave but “should have a plan to do it.” This was pointed out in a meeting he had with el Economista.
Spain should never be forced out. We are a big country in Europe, and we must enforce our political weight, seeking alliances to solve the crisis. But if Portugal or Italy decide to leave the euro, we must have a plan to get out that day, “he answered a question from a reader. “I hope that there is intelligent life in Europe and that day may never
by ilene - May 24th, 2013 2:00 pm
Courtesy of Jesse's Americain Cafe
I think you will find this to be thought provoking, even though you may not agree with all which they say.
Keep in mind that in the US currently there is a record disparity between the haves and the 'have enough to just get by.'
So when one talks about economic states and statistics, and they are naturally referring to the familiar averages and norms, in fact there may be much fewer people there at the average than usual.