January 31, 2012
Stock Drops 8% After Hours
Amazon has just released fourth quarter 2011 earnings, missing sales expectations but beating earnings estimates. Net income decreased 58% to $177 million in the fourth quarter, or $0.38 per diluted share, compared with net income of $416 million, or $0.91 per diluted share, in fourth quarter 2010. Net sales increased 35% to $17.43 billion in the fourth quarter, compared with $12.95 billion in fourth quarter 2010. Analysts are expecting earnings of $0.17 cents a share on revenue of about $18.3 billion.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Amazon CEO and founder Jeff Bezos. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”
Operating income was $260 million in the fourth quarter, compared with $474 million in fourth quarter 2010. Operating cash flow increased 12% to $3.9 billion for 2011 compared with $3.5 billion in 2010. Free cash flow decreased 17% to $2.09 billion in 2011, compared with $2.52 billion in 2010.
Full year 2011 sales increased 41% to $48.08 billion, compared with $34.20 billion in 2010.
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January 31, 2012
All That Gains, Falls — The monster January 2012 rally comes to a halt.
U.S. consumer confidence as measured by the Conference Board declined to 61.1 in January, missing economist projections for a gain.
Economists polled by Bloomberg were expecting the figure to rise to 68.0, from an upwardly revised reading of 64.8 in December.
Retreat — Instead, it fell 3.7 points, as both future and present confidence indexes descended.
“Consumer Confidence retreated in January, after large back-to-back gains in the final two months of 2011,” Director of the Conference Board Lynn Franco said. “Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels. Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects.”
The number of consumers who said that business conditions were good, declined to 13.3 percent from 16.3 percent. At the same time, Americans said it was harder to get a job in January.
January 31, 2012
It’s how Communist deal with markets, remind you of anyone?
Chinese asset values have not yet crashed across the board, but the buying of gold—a leading indicator of panic—is an especially troubling sign that they will. Therefore, it is not surprising that gold purchases by Chinese citizens and investors are frightening Beijing’s technocrats. At the end of last month, December, they shotdown all of the countries gold exchanges other than two of them in Shanghai.
China to ban unauthorized gold exchanges:
HONG KONG (MarketWatch) — China’s central bank has ordered all gold exchanges, apart from the official exchange in Shanghai, to cease operations, according to a statement Tuesday. Unauthorized gold exchanges and related trading platforms have sprung up around the country as bullion prices soared, often operated by institutions or individuals, according to the state-run Xinhua news agency, which cited a statement posted on the People’s Bank of China website. The statement cited inadequate management, irregular activities and evidence of illegal activity as risks that were behind its decision to impose the ban. The Pboc reportedly said it plans to work with the Shanghai Gold Exchange and the Shanghai Futures Exchange to help foster the development of the nation’s gold market…
January 31, 2012
Makes you want to go hmmmm….
This month, the Hong Kong Census and Statistics Department reportedthat China imported 102,779 kilograms of gold from Hong Kong in November, an increase from October’s 86,299 kilograms. Beijing does not release gold trade figures, so for this and other reasons the Hong Kong numbers are considered the best indication of China’s gold imports.
Analysts believe China bought as much as 490 tons of gold in 2011, double the estimated 245 tons in 2010. “The thing that’s caught people’s minds is the massive increase in Chinese buying,” remarked Ross Norman of Sharps Pixley, a London gold brokerage, this month.
So who in China is buying all this gold?
The People’s Bank of China, the central bank, has been hinting that it is purchasing. “No asset is safe now,” said the PBOC’s Zhang Jianhua at the end of last month. “The only choice to hedge risks is to hold hard currency—gold.” He also said it was smart strategy to buy on market dips. Analysts naturally jumped on his comment as proof that China, the world’s fifth-largest holder of the metal, is in the market for more.
There are a few problems with this conclusion. First, the Chinese government rarely benefits others—and hurts itself—by telegraphing its short-term investment strategies.
Second, the central bank has less purchasing power these days. China’s foreign reserves declined in Q4 2011, falling $20.6 billion from Q3. The first quarterly outflow since 1998 was not large, but the trend was troubling. The reserves declined a stunning $92.7 billion in November and December.
Third, the purchase of gold would be especially risky for the central bank, which is already insolvent from a balance sheet point of view. The PBOC needs income-producing assets in order to meet its obligations on the debt incurred to buy foreign exchange, so the holding of gold only complicates its funding operations. This is not to say the bank never buys gold—it obviously does—but there are real constraints on its ability to purchase assets that do not provide current income.
Apart from China’s central bank, there is not much demand from the country’s institutional investors for gold. There are industrial users, of course, but their demand is filled from domestic production—China is the world’s largest gold producer. Most of China’s gold demand from foreign sources, therefore, is from individuals.
January 31, 2012
Euro-Youth unemployment ... 18-24
As for overall unemployment…
The euro area1 (EA17) seasonally-adjusted2 unemployment rate3 was 10.4% in December 2011, unchanged compared with November4. It was 10.0% in December 2010. The EU271 unemployment rate was 9.9% in December 2011, also unchanged compared with November4. It was 9.5% in December 2010.
Eurostat estimates that 23.816 million men and women in the EU27, of whom 16.469 million were in the euro area, were unemployed in December 2011. Compared with November 2011, the number of persons unemployed increased by 24 000 in the EU27 and by 20 000 in the euro area. Compared with December 2010, unemployment rose by 923 000 in the EU27 and by 751 000 in the euro area.
These figures are published by Eurostat, the statistical office of the European Union.
Among the Member States, the lowest unemployment rates were recorded in Austria (4.1%), the Netherlands (4.9%) and Luxembourg (5.2%), and the highest in Spain (22.9%), Greece (19.2% in October 2011) and Lithuania (15.3% in the third quarter of 2011). Compared with a year ago, the unemployment rate fell in fourteen Member States, remained unchanged in Ireland and rose in twelve Member States.
The largest falls were observed in Estonia (16.1% to 11.3% between the third quarters of 2010 and 2011), Latvia (18.2% to 14.8% between the third quarters of 2010 and 2011) and Lithuania
(18.3% to 15.3% between the third quarters of 2010 and 2011). The highest increases were registered in Greece (13.9% to 19.2% between October 2010 and October 2011), Cyprus (6.1% to 9.3%) and Spain (20.4% to 22.9%).
January 31, 2012
Oh wait, that’s not the Zombies, That’s Obama being fingered … hope it’s not loaded.
Oba-won-kanobie being fingered
President Barack Obama touched down on the tarmac on Wednesday, and no sooner than he stepped off Air Force One into the warm embrace of the Arizona sun did Gov. Jan Brewer get in his face.
Here’s what we know: Brewer reportedly handed Obama a letter requesting an official meeting about his administration’s handling of illegal immigration. The president then informed her that the last time they met in the Oval Office she had improperly recounted the story in her book, “Scorpions for Breakfast,” in which she criticized Obama for opposing her state’s controversial “Show Me Your Papers” law. Brewer then launched into a bit of a tirade and wagged her finger at the president.
Ahh .. Here is the Zombies