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| Meridian Newsletter March 17, 2005 |
No trade will be recommended this week. In general trades are not selected during the week of options expiration.
Meridian TradeFolio TM
Next Trade Posting:
3/24/2005
Centium TradeFolio TM
Next Trade Posting:
3/22/2005
Optium TradeFolio TM
Next Trade Posting:
3/23/2005
Headlines
Housing
New housing starts were very strong in February increasing 0.5 percent.The rate of new housing starts is at a 21 year high.
Autos
General Motors reduced its earnings outlook for 2005.GM indicated slow sales in North America as the culprit. GM’s revised outlook for 2005 for may spell trouble for its bonds and bond ratings as well.
Japan
Japan’s economy appears to have pulled out of its recession with a 0.1 percent increase in GDP the last three months of 2004.Due Japan’s projected shrinking population, Yamatsuri, a small town in Japan has decided to give 1 million yen (about $9500 U.S) to residents for having a third baby.Japan’s population is expected to peak next year and fall rapidly over the next fifty years, causing concern how future generations will support Japan’s increasing numbers of elderly.
Look Where You’re Walking in China
Manhole covers in China have been disappearing, as they are stolen and sold for scrap for a few dollars.To ameliorate this problem, Beijing has developed and is testing non-metallic manhole covers with no recycle value.
Who Needs Plastic
A German supermarket chain is rolling out technology allowing customers to pay using their fingerprint.
Acquisitions
IBM is acquiring Ascential Software to bolster its data-integration business.
Mickey Mouse’s New Boss
Disney announced that President Robert Iger would succeed Michael Eisner as CEO, after eBay’s Meg Whitman declined to be considered for the position.
Blue-light Special Getting Dim
Over the next three years, 400 Kmart stores, more than a quarter of its total stores, will be converted to Sears.The Sears/Kmart plan is to use the combined scale of the two companies to squeeze savings from suppliers in order to compete with Wal-Mart.
It will be interesting to see if it is possible to generate a “champion breed” from a “half-breed”.
Battery Powered Pet Food?
Rayovac (batteries) is acquiring Tetra Holding (pet supplies) as part of its strategy to diversify its product offering."The combination of Tetra with our United Pet Group business means Rayovac becomes the world's largest manufacturer of pet supplies, a position with which we can leverage our company's world-wide," said Rayovac Chairman and Chief Executive David A. Jones.
U.S. Treasury’s
The yield on the10-year U.S. Treasury has been volatile lately following news the holdings of U.S. Treasuries by Asian banks had fallen from 81% to 67%.Foreign investors have been enabling the large U.S. trade deficit through their purchases of U.S. Treasuries and lately there has been some concern that foreign investors may be seeking to diversify their investments away from U.S. Treasuries, possibly leading to higher future interest rates.
U.S. Retail Sales
U.S. retail sales were strong in February with a 0.5 percent increase, aided by higher federal tax refunds.
Jobs
In a survey conducted by Manpower (temporary staffing), 30% of hiring managers indicated they plan to add employees.
Anthrax Detected in Pentagon Mail
Sensors in one of the Pentagon’s mail facilities indicated detection of anthrax and the Pentagon’s mail facilities were closed.However, follow-up tests were negative for detection of anthrax.
Don’t Do the Crime if You Can’t Do the Time
Bernard Ebbers, former CEO of WorldCom, was found guilty on all nine counts of participating in accounting fraud while CEO of WorldCom.Bernard Ebbers claimed he knew nothing of the accounting fraud and Scott Sullivan, WorldCom’s former chief financial officer, had implemented the fraud without his knowledge, but jurors disagreed.Ebbers faces up to 85 years in prison as a result of the verdict.
Greenspan
Alan Greenspan, Chairman of the Federal Reserve, again warned that increasing budget deficits and promises to future retires could have negative consequences for the future of the U.S. economy.
Current Account/U.S. Dollar
The U.S. is still buying a lot more foreign products than it is selling to its trading partners; the U.S. current account deficit was $187.9 billion in the fourth quarter of last year.The current account deficit is largely to blame for the decline of the dollar against foreign currencies.
Scott Peterson
Scott Peterson received the death sentence for killing his pregnant wife.
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