Wednesday, October 14, 2009

Wednesday Morning

Us stocks opened higher by almost a percent, as earnings are generally coming in ahead of expectations.

JPMorgan earned 82cents per share for the 3rd quarter, way ahead of the consensus estimate of 52cents. They still had to add $2billion to reserve against consumer credit losses. JPM +3.4%.

Intel beat handily last night, and raised guidance for the 4th quarter. INTC +3.3%.

Carlyle's David Rubenstein wants to rename "private equity." He thinks it should be called "change capital," or "value-added equity." Lauren Silva Laughlin prefers "underwater equity."

WSJ's Jenkins points out some serious worries about web "capacity."
Consider: A single YouTube viewing consumes nearly 100 times as much cellular bandwidth as a voice call. In Asia, some 200 million people already watch video on their smartphones. No wonder Google (whose YouTube unit serves up one billion videos a day) is an investor in a new undersea fiber line connecting North America to the Far East. More omens: Data collector AdMob reports that mobile Web page requests grew 9% from July to August—a 180% annual growth rate. And Motorola recently went public with worries that a handful of mobile Slingbox users (a video streaming device) could wipe out cell service in a whole neighborhood.

Hybrid cars, too quiet to be heard by pedestrians, are given fake "vroom"
safety experts, worried that hybrids pose a threat if pedestrians, children and others can’t hear them approaching, want automakers to supply some digitally enhanced vroom. Indeed, just as cellphones have ring tones, “car tones” may not be far behind — an option for owners of electric vehicles to choose the sound their cars emit.

As his fun performance recovers, former star Bill Miller of Legg Mason lures some clients back who'd left to find better performance.
Legg Mason is trying to reverse seven straight quarters of net redemptions after its funds lagged behind peers during the biggest market losses since the Great Depression. The pace of withdrawals at the Baltimore-based company slowed to $30 billion in the quarter ended June 30 from a peak of $77 billion in the last three months of 2008. Chief Executive Officer Mark Fetting said last month the firm was seeing an “exciting turnaround.”

David Reilly tells you what to watch for when banks play games with loan loss reserves.
Under regulatory filing rules, banks must wait six months before they stop carrying as a non- performing asset most loans they modify, Miller said. Under generally accepted accounting principles, non-performing assets aren’t defined. That gives banks more leeway in how they treat modified loans and when they stop including them in non- performing asset totals. As mortgage modifications pick up pace, this may become more of a concern, since banks can help earnings if they tamp down non-performing asset figures. “Banks have got themselves in a corner by talking up stabilization of the housing market, but when you go into the trenches nothing is stabilizing,” Miller said.

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