The War Industry, maybe... Here is a wonderful article about our wonderful defense contractors... Money... Money... Money...
General Dynamics, Harris, L-3 Lead Gains From 5-Year Iraq War
By Edmond Lococo
March 25 (Bloomberg) -- General Dynamics Corp., Harris Corp. and L-3 Communications Holdings Inc. benefited most among the Pentagon's 25 largest military suppliers from five years of conflict in Iraq, based on a combination of war-related sales and stock gains.
General Dynamics and Harris, the Melbourne, Florida-based maker of combat radios, both tripled in stock price in the five years ended March 20, the anniversary of the war's start. L-3, which provides translators, rose 164 percent. Their gains beat the Standard & Poor's 500 Stock Index, which rose 52 percent, and the S&P Aerospace and Defense Index, which more than doubled.
The U.S. has begun reducing troops in Iraq, a process that may accelerate next year and threaten revenue of companies that gained the most from the war. Heavy combat use of vehicles and equipment still will trigger years of replacement sales. War costs are about $12 billion a month, the Pentagon said Jan. 28.
``The war has been a huge benefit to almost all contractors,'' said William Hartung, director of the arms and security initiative at the New America Foundation in New York. ``Ammunition, armor, vehicles, communications are places where there's a lot of spending now, and they will have to repair or replace much of it when the war ends.''
Congress has approved about $700 billion for conflicts in Iraq and Afghanistan since the 2001 terror attacks, the Congressional Research Service says. That's on top of the regular defense budget, which is $480 billion this year.
The U.S. is pulling five of 20 combat brigades out of Iraq through July. The pace next year may be set by the winner of November's U.S. presidential election, a showdown between presumptive Republican nominee John McCain, an Arizona senator, and either Senate colleague Barack Obama of Illinois or Hillary Clinton of New York for the Democrats.
General Dynamics
General Dynamics benefited from funding to buy and support Abrams tanks and Stryker troop transports, as well as ammunition sales. The company had about $2.35 billion in war revenue last year, the most among U.S. defense companies, based on estimates by Joseph Nadol, an analyst with JP Morgan Securities Inc. in New York. At about 9 percent of sales, it was second to Harris by percentage.
Spokesman Robert Doolittle of Falls Church, Virginia-based General Dynamics declined to confirm the data. ``We don't track orders, revenue or income based on where it's going,'' he said.
General Dynamics rose to fourth on the Pentagon's list of prime contractors in 2006, with $10.5 billion in work, from fifth in 2002 at $6.96 billion. The list excludes money received as a subcontractor. The Defense Department hasn't released 2007 data.
``General Dynamics' business would not be nearly as robust without the war,'' Cai Von Rumohr, a Boston-based analyst with Cowen & Co., said in an interview.
Harris
Harris received an estimated $600 million of war-related sales last year, or about 13 percent of its total, Nadol said. That was the largest proportion among major defense companies.
Harris became the Pentagon's 25th-largest supplier in 2006, with $1.34 billion in prime contracts, from 48th in 2002.
``There has been some benefit from Iraq, but our future is not tied to Iraq or levels of troop deployment, or whether the war is coming to an end,'' Chief Financial Officer Gary McArthur said in an interview. He said he was unable to provide a figure for how much annual revenue Harris has received from the war.
Harris makes Falcon II radios, which can be mounted in vehicles or carried by soldiers. The radios also can carry data and video as part of an upgrade program that may cost as much as $30 billion, McArthur said.
``The whole need to modernize is not dependent on levels of troops in, or not in, Iraq,'' the executive said.
Analyst Nadol has doubts. ``A combat-vehicle maker like General Dynamics is less exposed than an equipment provider such as Harris'' to a drop in revenue, he said.
L-3
New York-based L-3 benefited through its role as the largest supplier of translation services for the Army in Iraq. L-3 lost the translation contract to a DynCorp International Inc. joint venture and became a subcontractor to the new team March 14.
L-3 had $1.1 billion of war revenue last year, or about 8 percent of its total, Nadol calculated. L-3 estimates Iraq- related revenue at about $1 billion last year and this year, spokeswoman Jennifer Barton said.
The Pentagon's five largest suppliers are Bethesda, Maryland-based Lockheed Martin Corp.; Chicago-based Boeing Co.; Northrop Grumman Corp. in Los Angeles; General Dynamics; and Waltham, Massachusetts-based Raytheon Co. Aside from General Dynamics, Nadol estimates they got 1 percent to 4 percent of 2007 sales from the war.
Northrop, the builder of aircraft carriers, won the least: about $300 million, or 1 percent of 2007 revenue, Nadol said.
``Northrop Grumman would be relatively unaffected by a reduction in supplemental funding for Iraq and Afghanistan or a rapid withdrawal from Iraq because our exposure to the supplemental war funding is small,'' Dan McClain, a Northrop spokesman, said in an e-mail.
To contact the reporters on this story: Edmond Lococo in Boston at elococo@bloomberg.net.
It is very true that war can be profitable for some. But it is also true that it is deadly for others. Who will win, nobody knows...
Wednesday, March 26, 2008
Where is the FDIC during this credit crisis?
Little has been said about the Federal Deposit Insurance Corporation (FDIC) during this credit crisis. Bailouts, rescues, propups, thief... But what about the other side of the coin. Well I found this article and thought I would share it with you. If we can believe 10% of what we read, we are in for some deep do-do!!! Enjoy!
F.D.I.C. Prepares for Higher Bank Failures
By THE ASSOCIATED PRESS
WASHINGTON (AP) — Federal bank regulators plan to increase the size of its staff by 60 percent to handle an anticipated surge in troubled financial institutions.
The Federal Deposit Insurance Corporation wants to add 140 workers to bring staff levels to 360 workers in the division that handles bank failures, the agency’s chief operating officer, John Bovenzi, said Tuesday.
“We want to make sure that we’re prepared,” Mr. Bovenzi said, adding that most of the new employees will be temporary and based in Dallas.
There have been five bank failures since February 2007 after an uneventful stretch of more than two years. The last time the agency was hit hard with failures was in the 1990-1991 recession, when 502 banks failed in three years.
Analysts see casualties rising, but do not believe they will reach early-1990s levels.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration in states like California and Florida.
To cushion against losses from bad loans, banks will probably raise additional capital and cut dividends this year, said Tony Davis, a senior bank analyst with Stifel Nicolaus. However, he said, “we’re not looking at a massive number of bank failures.”
The F.D.I.C. provides insurance for deposits up to $100,000. While depositors typically have quick access to their bank accounts on the next business day after a bank goes out of business, winding down a failed bank’s operations can take years to finish. That process can include selling real estate and investments and dealing with lawsuits.
There are 76 banks on the F.D.I.C.’s “problem institutions” list, - which would equate to about 10 expected bank failures this year, though F.D.I.C. officials declined to make projections. Historically, about six banks fail each year on average.
There have been two failures in 2008 — both involving small Missouri-based banks. By far the largest recent failure was last September, when NetBank, a Georgia-based on-line bank with $2.5 billion in assets, NetBank’s insured deposits — held by more than 100,000 customers — were assumed by ING Bank, part of the Dutch financial giant ING Groep.
F.D.I.C. officials said last month they planned to bring back about 25 retirees to the agency, adding that those workers will train new employees.
F.D.I.C. Prepares for Higher Bank Failures
By THE ASSOCIATED PRESS
WASHINGTON (AP) — Federal bank regulators plan to increase the size of its staff by 60 percent to handle an anticipated surge in troubled financial institutions.
The Federal Deposit Insurance Corporation wants to add 140 workers to bring staff levels to 360 workers in the division that handles bank failures, the agency’s chief operating officer, John Bovenzi, said Tuesday.
“We want to make sure that we’re prepared,” Mr. Bovenzi said, adding that most of the new employees will be temporary and based in Dallas.
There have been five bank failures since February 2007 after an uneventful stretch of more than two years. The last time the agency was hit hard with failures was in the 1990-1991 recession, when 502 banks failed in three years.
Analysts see casualties rising, but do not believe they will reach early-1990s levels.
Gerard Cassidy, managing director of bank equity research at RBC Capital Markets, projects 150 bank failures over the next three years, with the highest concentration in states like California and Florida.
To cushion against losses from bad loans, banks will probably raise additional capital and cut dividends this year, said Tony Davis, a senior bank analyst with Stifel Nicolaus. However, he said, “we’re not looking at a massive number of bank failures.”
The F.D.I.C. provides insurance for deposits up to $100,000. While depositors typically have quick access to their bank accounts on the next business day after a bank goes out of business, winding down a failed bank’s operations can take years to finish. That process can include selling real estate and investments and dealing with lawsuits.
There are 76 banks on the F.D.I.C.’s “problem institutions” list, - which would equate to about 10 expected bank failures this year, though F.D.I.C. officials declined to make projections. Historically, about six banks fail each year on average.
There have been two failures in 2008 — both involving small Missouri-based banks. By far the largest recent failure was last September, when NetBank, a Georgia-based on-line bank with $2.5 billion in assets, NetBank’s insured deposits — held by more than 100,000 customers — were assumed by ING Bank, part of the Dutch financial giant ING Groep.
F.D.I.C. officials said last month they planned to bring back about 25 retirees to the agency, adding that those workers will train new employees.
Tuesday, March 11, 2008
Whose money is it anyway?
This just in: the Fed is injecting liquidity into the market to the tune of $400 billion from last week until the end of the month... Whose money are they playing with? They will accept as collateral those securities backed by those worthless home loans - imagine that- securities that no one else will touch!!!
Don't believe me? Here is the article... Enjoy!!!
Fed to Lend $200 Billion, Take on Mortgage Securities (Update3)
By Scott Lanman
March 11 (Bloomberg) -- The Federal Reserve, struggling to contain a crisis of confidence in credit markets, plans to lend up to $200 billion in exchange for mortgage-backed securities.
The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems. The Fed said in a statement it will hold auctions of Treasuries in exchange for debt including AAA rated mortgage securities sold by Fannie Mae, Freddie Mac and by banks.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. While they fall short of the calls by some analysts for the Fed to make outright purchases of mortgage debt, the central bank left the door open to expanding the effort.
``This is the most significant step the Fed has taken so far,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. ``This relieves some of the pressure'' in the credit markets, he said.
Today's steps are the latest in Chairman Ben S. Bernanke's effort to alleviate increasing strains in financial markets that are curtailing credit to homeowners and companies, even after the Fed lowered its main interest rate by 2.25 percentage points.
Last week, the Fed said it would make up to $200 billion available to banks in a separate initiative to help boost liquidity.
New Tool
The Fed today set up a new tool, the Term Securities Lending Facility, to lend Treasuries to primary dealers for 28- day periods through weekly auctions. The Fed also said it's increasing the amount of dollars available to European central banks through swap lines.
The Federal Open Market Committee authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion. The Fed extended the swaps through Sept. 30.
The ECB announced it will lend banks in Europe up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three-month loans on March 18 and hold another auction on April 15. The Bank of Canada announced plans to purchase $4 billion of securities for 28 days.
Treasuries slid after the announcement, with yields on 10- year notes rising to 3.60 percent at 10:32 a.m. in New York, from 3.46 percent late yesterday.
Rate Expectations
Traders removed bets on the Fed to lower its benchmark rate by a full percentage point, to 2 percent, by the end of the next meeting on March 18, futures showed. The contracts indicate a 60 percent chance of a 0.75 percentage-point reduction.
The Fed's auctions of Treasuries, which will begin March 27, may be secured by collateral including agency and private residential mortgage-backed securities, the Fed said. The central bank ``will consult with primary dealers on technical design features'' of the new tool.
Primary dealers are a group of 20 banks and securities firms that trade Treasuries directly with the Fed Bank of New York.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net
Last Updated: March 11, 2008 10:33 EDT
Its crap... Pure crap... Good luck, America!!! Good luck to us all!!!
Don't believe me? Here is the article... Enjoy!!!
Fed to Lend $200 Billion, Take on Mortgage Securities (Update3)
By Scott Lanman
March 11 (Bloomberg) -- The Federal Reserve, struggling to contain a crisis of confidence in credit markets, plans to lend up to $200 billion in exchange for mortgage-backed securities.
The Fed coordinated the effort with central banks in Europe and Canada, which plan to inject up to $45 billion into their banking systems. The Fed said in a statement it will hold auctions of Treasuries in exchange for debt including AAA rated mortgage securities sold by Fannie Mae, Freddie Mac and by banks.
Today's steps indicate the Fed is increasingly concerned about the investor exodus from mortgage debt, which threatens to deepen the housing contraction and the economic slowdown. While they fall short of the calls by some analysts for the Fed to make outright purchases of mortgage debt, the central bank left the door open to expanding the effort.
``This is the most significant step the Fed has taken so far,'' said David Resler, chief economist at Nomura Securities International Inc. in New York. ``This relieves some of the pressure'' in the credit markets, he said.
Today's steps are the latest in Chairman Ben S. Bernanke's effort to alleviate increasing strains in financial markets that are curtailing credit to homeowners and companies, even after the Fed lowered its main interest rate by 2.25 percentage points.
Last week, the Fed said it would make up to $200 billion available to banks in a separate initiative to help boost liquidity.
New Tool
The Fed today set up a new tool, the Term Securities Lending Facility, to lend Treasuries to primary dealers for 28- day periods through weekly auctions. The Fed also said it's increasing the amount of dollars available to European central banks through swap lines.
The Federal Open Market Committee authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion. The Fed extended the swaps through Sept. 30.
The ECB announced it will lend banks in Europe up to $15 billion for 28 days and the SNB announced a similar auction of up to $6 billion. The Bank of England will offer $20 billion of three-month loans on March 18 and hold another auction on April 15. The Bank of Canada announced plans to purchase $4 billion of securities for 28 days.
Treasuries slid after the announcement, with yields on 10- year notes rising to 3.60 percent at 10:32 a.m. in New York, from 3.46 percent late yesterday.
Rate Expectations
Traders removed bets on the Fed to lower its benchmark rate by a full percentage point, to 2 percent, by the end of the next meeting on March 18, futures showed. The contracts indicate a 60 percent chance of a 0.75 percentage-point reduction.
The Fed's auctions of Treasuries, which will begin March 27, may be secured by collateral including agency and private residential mortgage-backed securities, the Fed said. The central bank ``will consult with primary dealers on technical design features'' of the new tool.
Primary dealers are a group of 20 banks and securities firms that trade Treasuries directly with the Fed Bank of New York.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net
Last Updated: March 11, 2008 10:33 EDT
Its crap... Pure crap... Good luck, America!!! Good luck to us all!!!
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