Archive for June, 2008
June 30, 2008 4:39PM
By Cheryl Casone
Another theme park ride in Georgia. Another accident. This stock (SIX) is hardly a top performer, and it doesn’t help they’ve been given another dose of bad press. The stock closed above $1. Talk about life support for this company, they need help stat! They’ve been lowering tickets prices, in fact at Six Flags Hurricane Harbor in North Texas, it is $24.99 to get in. But any parent knows that you don’t pay that, you pay much much more.
Food, gasoline to get there, and of course all the toys and items the family wants. The average family, and that is their customer, is better off staying home in front of the television and the BBQ. And they will, mark my words.
Why is Six Flags not American? Because a foreign investor, and my money is on a group from Dubai, are going to sweep in and BUY this company. They can’t make it, and after they announce park closings, and layoffs, Six Flags next move will be to either sell a portion, or even all of themselves to another, and my money is on foreign capital.
I am not stock picking, I am just forecasting.
CC
June 27, 2008 7:57AM
By Cheryl Casone
Get ready, one report out this week warns of 7 bucks a gallon, with oil prices hitting 200 dollar by 2010. (I had to read the year twice, because I can’t believe it is already 2008, where does the time go.)
In the analysis done by CIBC World Markets they also talked about the “body blow” to the auto industry. When gas prices hit $7 per gallon that will make driving a car too expensive for millions of Americans, taking an unprecedented 10 million vehicles off U.S. roads over the next four years.
Jeff Rubin, chief economist and chief strategist at CIBC wrote “Many of those in the exit lane will be low income Americans from households earning less than $25,000 per year. At their current driving habits, filling up the tank will have risen from about seven per cent of their income to 20 per cent, an increase that will see many start taking the bus.”
They also said auto sales will hit their lowest level since the early 1980s. I would not want to be at GM, Ford, or Chrysler right now. You are already under pressure from the Japanese and to a lesser extent the Germans, and now another negative forecast from an analyst.
What can these guys do to turn things around? And do you believe 7 bucks is two years away…….or sooner? Just asking.
CC
June 24, 2008 6:29PM
By Cheryl Casone
Does anyone feel the need for a reality check? I am mostly a positive person, not to the point of Pollyanna, but I am positive. Turns out there are “a lot” of positive people out there. Scott Rasmussen was on today talking about his latest poll. Only 9 percent reported their home was worth less than they paid for it. I questioned him on it, and he said “look, they might have bought four years, seven years ago, and they are losing money.”
Reality bites doesn’t it? I don’t have much sympathy for home flippers, and I don’t feel too terrible for those that put zero down, and can’t pay their mortgage. But, I do feel sorry for folks that have not faced the reality that their home is not worth on paper what they think it is.
79% percent say buying home is still a good investment. 81% of homeowners are somewhat or very confident they know how much their home is worth in today’s market. BUT 80% SAY THEIR HOMES HAVE INCREASED IN VALUE.
Ok folks, you think you know what your home is worth? Reality is that it is worth less right now if you were to sell it than you think. Even in some of the stronger recession proof markets, prices are down according to real estate agents about 30%.
The market in New York City is under pressure. Real estate agents here are quoting prices in Euros, because the Europeans are the only ones who can afford NYC prices! We’ll have a guest on the show Thursday to talk about that angle of the story.
Feel free to disagree with me because I hope I am wrong on this one!
CC
June 19, 2008 3:37PM
By Cheryl Casone
We are going to see many more of them. Not the common thug or the drug lord, but Wall Street executives. This was my best guess on today’s 12pm show:
“Let the prosecutions begin……The public is thirsty for heads to roll and someone to blame for the credit crunch and the mortgage meltdown. Federal and state authorities are conducting independent investigations, and there will be a late summer rally in suits in handcuffs.”
If I could buy stock in SIH, I would pick up a hundred shares just to prove I’m right. I remember as a reporter covering Martha Stewart and Dennis Kozlowski. They were a little arrogant maybe, a little loose with their actions, or in Kozlowski’s case his company’s money, but this is going to an entire new level.
It was interesting reading the Bear indictment. They really thought they had gotten away with something. As in, they’d saved their own skins, while keeping their hedge fund afloat. Those one liners in that indictment are going to be quoted in every story, on the network newscasts tonight, and will get extra special attention when Lesley Stahl does the inevitable 60 Minutes piece a year from now, where she talks to the guys in jail, and asks them if they really said that, and what was going through their mind at the time.
Are they going to spend time behind bars? Probably. Email trails have undone the slickest CEO or stock analyst, and these guys will be no different.
Congress may get absolutely nowhere regulating investment banks and mortgage originators, but you can bet there will be some successful prosecutions out of the hundreds of indictments being handed out this week.
And yes, we’ll cover it. Perp walk and all.
CC
June 18, 2008 4:41PM
By Cheryl Casone
I’m sitting here watching the Dow, and trying to figure out if I actually care or not. Seriously. I don’t like seeing us so close to that level, the psychological level we talk about, but I am also looking at the volume. It is not heavy volume, and it hasn’t been since the summer began. I kind of felt we were going to have a “low volume, high volatility” summer, and well, I am being proven right today.
It is troubling hearing from the investment banks this week. Sheila Bair of the FDIC says we should regulate them like we regulate traditional banks. What do you guys think? This is when I really enjoy being a journalist, and hearing from all sides. I’m not sure how I feel. I understand the reason we need accountability, but I also worry that opening up the books at the investment banks plays their hand a little too well.
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June 17, 2008 7:56AM
By Cheryl Casone
If you shop often at the grocery store, you may have noticed prices are starting to go up. In fact, a friend of mine, who doesn’t shop that often, and had not been food shopping recently (we are New Yorkers, we eat out a lot) was shocked to see how much everything had gone up. Not just fruit, not just vegetables, but across the board price increases.
Welcome to high gas and diesel prices. You hear us talk about the gas price story, and assume we are talking about the cost to fill your tank. Think about small businesses in this country and what it is costing them to transport, ship, and stock their shelves.
Is there any good news? Well, possibly. I was looking at a report last week that made the argument we could see a return to “Made in America.” One of the frustrations, and causes of increased protectionism in this country, has been the loss of jobs to other countries. Now, American businesses are finding it is too costly to import toasters and tractor sets, and are looking for goods manufactured here.
That’s good right? Well, no it isn’t. Those goods are more expensive to produce here because of labor, taxes, and general overhead. So, get ready for not just a jump in prices for your apples and celery, get ready for the next wave of prices hikes, and I mean BIG price hikes, everywhere and for everything that we consume.
CC
June 13, 2008 11:45AM
By Cheryl Casone
A couple of Texas related things for you this week. First, I am featured in an article from my hometown, Dallas. Most of my family is still in Texas (in fact I am rushing to get to a flight at La Guardia to go see Dad for Father’s Day.) Yes, I am flying American, a full report on Monday.
My Mother and I moved to Phoenix when I was 10, so most of my education was there, but summers and holidays were always spent in Big D. Anyway, there is a profile in this month’s Southern Vanity I’d like to share with you:
http://www.southernvanity.com/coverStory.htm
Also, last night I hosted the American Business Awards at the Marriott Marquis. There were so many companies from Dallas and from Irving, it became a running joke. You can see a full list of winners here:
http://www.stevieawards.com/aba/
Have a Great Weekend. Be nice to Dad!
CC
June 13, 2008 11:12AM
By Cheryl Casone
This week at the WSJ Deals and Dealmakers Conference I had some very interesting conversations. One of the best interviews was my exclusive with Peter Fisher, Managing Director and Co-Head of Fixed Income at BlackRock. This is a firm that manages 1.3 trillion of assets, one of the largest money managers in the world.
Peter is someone who could have run the NYSE, he could have run the New York Fed, but instead he chose BlackRock. An interesting man, but a bearish one! He certainly with a pleasant smile was able to explain why there are road bumps, concerns, and much unknown when it comes to our markets.
Watch my exclusive with Peter Fisher here:
June 10, 2008 10:10PM
By Cheryl Casone
Talk about a late night blogging session, it is way past my bedtime but just wanted you to know I will be blogging tomorrow, Wednesday, from the WSJ Dealmakers Conference.
We spent the afternoon there today, and I have a couple of exclusive interviews I will be sharing with all of you tomorrow. What I found the most interesting was that still, even at this point in the game, the smartest guys in the room, and gals, still disagree on where we are with regards to the credit crisis. It is going to make some interesting television tomorrow, and later on I promise to post some of my interviews on the website for those of you that don’t yet get Fox Business in your area.
I can tell you this. My interview with Peter Fisher of BlackRock is “don’t miss television!” We covered it all from energy, to the financials, to housing, and the Federal Reserve. In particular his comments on where he thinks the financial sector is going are not to be missed. A somewhat dire prediction from a man who is respected and well-liked in the community.
See you early on Money for Breakfast.
CC
June 9, 2008 10:48PM
By Cheryl Casone
That might as well have been the phrase of the day! The world is ending as we know it, the markets are crashing, and you are destined to live in a dark empty hole past the age of 65. Depressed? You should be! Now look at the VOLUME. Folks, why are we not talking about this? I know a few of the gang here in New York, the folks that trade, or run companies, or analyze companies and write reports about it. I know them because they are talking about where they are spending the summer, and a big hint here……it isn’t at their desk.
We had this issue last summer, and while it was a sad omen to what has become known so fondly among the press as “the credit crunch”, it is not happening now. Why do I know? Because there is an odd calm, a strange and yes scary calm about this city and it’s financial folks. Go ahead, make the joke that they are calm and not in NYC because they are collecting their unemployment checks at their parents home in New Jersey. Sure, that is happening, and spending is down here like everywhere, and gas prices and food prices are higher here, like everywhere.
The difference I see now is the lack of panic, the absence of drama, the real belief that although (and read my dear friend Liz Macdonald’s blog for more) that Lehman is not Bear Stearns and that thanks to Mister Paulson and Mister Bernanke, the walls are not crashing in…….that all vacation plans are alive and well.
Yes, most people are going to have a “staycation”. What is wrong with that? Save your money, read a good book, get a tan, and sit on your investments. There really is no reason to trade or move anything around in this market.
You have my permission…..take the summer off.
CC
