• Dealing with $13 billion in debt and declining revenues, media and sports conglomerate Tribune Co. filed for bankruptcy protection yesterday (Monday). The company – which owns the Chicago Cubs and newspapers The Chicago Tribune, Los Angeles Times and Baltimore Sun – was famously taken private last year by real estate mogul Sam Zell, The Associated Press reported.

• Dow Chemical Co. (DOW) said it will divest several business, close 20 facilities and cut about 5,000 jobs, or about 11% of its workforce. The announcement comes less than a week after rival DuPont Co. (DD) announced cutbacks that it said would save $700 million annually by 2010, Reuters reported.

• Morgan Stanley’s (MS) top executives – CEO John Mack and Co-Presidents Walid Chammah and James Gorman – won’t receive bonuses this year, Bloomberg reported. In addition, the company is lowering compensation for its operating committee 14 members by an average of 75%.

• Sen. Harry Reid (D-Nev.) yesterday (Monday) urged Merrill Lynch & Co. Inc. (MER) to reject its CEO John Thain’s request for a $10 million bonus since Merrill was the recipient of millions of taxpayer money, Dow Jones reported. “While American families struggle to keep their jobs and their homes, I question the chutzpah of asking for a $10 million taxpayer-subsidized bonus,” Reid said.

• After earlier assuring the public that no U.S. jobs would be jeopardized by a merger, Anheuser-Busch InBev NV announced yesterday (Monday) that it would cut 1,400 U.S. jobs — about 6% of its U.S. work force. The move is expected to help save the world’s largest brewer at least $1.5 billion a year.

• Brazil’s Mines and Energy Minister, Edison Lobao, said yesterday (Monday) that China wants to lend Petroleo Brasileiro SA, Brazil’s state oil company, $10 billion to help develop massive new oil fields in deep water off the coast of Rio de Janeiro, The Associated Press reported.

• McDonald Corp.’s (MCD) global same-store sales rose 7.7% in November and U.S. sales climbed 4.5% the company said yesterday in a statement. “I think what you’re seeing is that McDonald’s has so far been relatively immune to the recession,” David Morris, senior analyst at consumer research firm Mintel told The Associated Press.

Source: Global Investing Roundups Tuesday, December 9th, 2008

Good day… And a Wonderful Wednesday to you! OK… Are you up on these “pirates” stories going on right now? That’s pretty unbelievable, eh? And… We are all fans of “pirates” here on the Currency Trading Desk, but these guys now are giving “our pirates” a black eye!

The currencies range traded yesterday in a very tight range, as Treasury Sec. Paulson, didn’t give in to the lawmakers and allocate $25 Billion of the TARP (Troubled Asset Relief Program) funds to automakers. King Henry said, “The rescue (read bailout!) package was not intended to be an economic stimulus or an economic recovery package. The $700 Billion TARP was designed to stabilize financial markets and the flow of credit, and it not a panacea for all our economic difficulties.”

Well… For once, I’m not going to take King Henry to the woodshed… The lawmakers were banging on him and Fed Chairman Big Ben to dole out funds to anyone that was in dire straits… But they held their ground… And therefore did not cast any “unknown” shadows over the markets. But U.S. stocks didn’t like it, and sold off after the testimony and questions on Capitol Hill.

The thing to think about with these automakers is the fact that they have become such HUGE finance companies, which is where, I believe I read, they “really make the money”… Shutting them down because they haven’t run their businesses correctly over the years isn’t the issue… It’s what to do with those financing companies… I could be totally wrong here, off base and picked off by a wily veteran lefty, but it’s the way I see it…

OK, well, for the currencies… Like I said above, they were stuck in the mud, in a tight range, with no where to go and no one to see. I was reading a note from well respected and famous analyst, Richard Russell yesterday… Let’s listen in to see what Mr. Russell had to say…

“Please remember, all these billions of dollars that the government is throwing at entities – all this money represents additional DEBT.

How the US dollar will hold up against this building-tower of debt is the question.

Ultimately, the trillions of newly-created dollars could lead to hyper-inflation.”

Yes… But the question that I keep getting asked, and I would ask of anyone that makes a statement like that is “when?” When do the markets wake up and smell the coffee? When do the markets realize that they’re on the wrong side of the road? I keep saying that it will all happen when the credit markets get unlocked… But that certainly doesn’t look like it’s going to happen any time soon… I just getting frustrated by all this… The signs are there for dollar weakness… It’s like they are glowing neon signs in bright colors, pointing to the dollar with exclamations like “should be weak”…

Remember when I used to write about how the debt level in New Zealand would come into focus once the hype over the high interest rates and Carry Trades were history? And for years people would write me and cuss at me about how they sold their kiwi because I said it would be in trouble when the interest rates and Carry Trades were history… But I held my ground, then… And I’ll hold it now… In fact, I’ve got company… By good friends over at Casey Research, including the guy that inspired me to write more and more, David Galland, had this to say yesterday….

“The foreign debt of New Zealand, which includes private debt, is a serious problem for them and is why their currency has fallen from NZD 0.80 to NZD 0.60 to the USD.

What will happen when the world finally realizes that the U.S. government debt (that is not even accounting for private debt) is already in excess of $10 trillion and well on its way to exceed $12 trillion in 2009? This is at a time when our $13 trillion GDP is sure to contract by a couple trillion. I am afraid the U.S. chart next year will not be that different, which bodes well for gold as the only real substitute to the fiat currency that will be created to cover the deficits.”

OK… Let’s talk about what’s going on in the markets right now… Not the future, which is unknown to all of us… We can only speculate about the future based on the data we have now, and the knowledge of history… What’s going on, as Marvin Gaye used to sing, is simply that the sentiment in the markets right now is so terrible and fragile, which is keeping the risk takers on the sidelines and investments centered around risk aversion on the burners. Any time the risk takers go out on the limb, another deep, dark, dangerous piece of data prints, or our “leaders” (read Paulson and Bernanke) make some stupid comment, which leads to a dollar rally, and the risk takers get squeezed.

Speaking of deep, dark, dangerous data prints… How about the news that Citigroup is liquidating its CSO hedge fund after it lost 53% of its value last month? This news won’t be looked at as anything but deep, dark and dangerous!

Speaking of data… Today, we’ll see the stupid CPI (consumer inflation), some Housing data, and the last FOMC meeting minutes… I would think the Fed Heads wouldn’t have any surprises in their minutes, like the Bank of England (BOE) did in theirs… The BOE’s minutes showed that the 150 BPS rate cut that was delivered earlier this month (which also begs the question as to why the BOE can issue their minutes within two weeks, while it takes the Fed over a month?) Anyway, the BOE minutes showed the 150 BPS rate cut was unanimous… Plus… There were quite a few calls to go to 200 BPS! WOW!

So… Ok, the stupid CPI, I’ve beaten this horse to death (no animals were hurt!) here with why I feel that CPI is stupid… And when those that have payments tied to CPI see today’s print they will fully agree with me. CPI is expected to have fallen .9% YOY… To 4%… Of course you and I, and those on the payments ties to CPI believe that inflation is really around 10% or more!

The Housing data today is the October Housing Starts, and Building Permits, of which both are expected to be weaker than September’s data…

I met Dan Ferris a year or so ago… A quiet, soft spoken guy, that when you look at him you just know he’s got a lot of brain matter… Real intelligent! I follow his writing from time to time, and Ty Keough sent me a note from Dan… This was in the Stansberry Research letter… “The money we use every day in the U.S. is debt. It is lent into existence. This record level of Treasury borrowing is the inflation engine itself, tank filled with gas, hood popped up, revving into the red zone right before your eyes.”

OK… I just saw / read a story that came across the Bloomie, that Bank of America (BOA) and Barclays Capital, are calling for a Aussie dollar rally next year, as they believe Australia will skirt a recession, that Europe, Japan and the U.S. are mired in. They even called for a rise to 70-cents in the next 6 months. Hmmm… I guess they’re of the opinion that the Carry Trade unwinding is coming to an end.

I, on the other hand, don’t believe that the Carry Trade is anywhere near an end… So, do with this information in your individualistic manner!

The data yesterday, saw PPI fall -2.8% in October… Which was mainly made up by the fall in oil prices… The TIC Flows showed the improvement I said we would see in this data, as the October flows showed an positive balance of $66 Billion, VS the $21 Billion in Sept. This still does not cover what’s needed to finance the Current Account Deficit, and Federal Direct Investment. And should have been expected to be so robust, given the flight to safe haven Treasuries…

Currencies today 11/19/08: A$ .6480, kiwi .5495, C$ .8115, euro 1.2650, sterling 1.5080, Swiss .83, ISK 182, rand 10.38, krone 7, SEK 8.02, forint 214.75, zloty 3.0425, koruna 20.3390, yen 96.80, baht 35, sing 1.5280, HKD 7.75, INR 49.99, China 6.83, pesos 13.19, BRL 2.3590, dollar index 86.98, Silver $9.45, and Gold… $738.30

That’s it for today… Well… Anheuser Busch is no longer, as the InBev deal closed yesterday… I was so focused on getting the Pfennig out yesterday that I totally forgot to send some love and congratulations toward Albert Pujols, the National League MVP for 2008! Way to go Albert! And… Hey! This IS HUGE NEWS! The good folks at Agora sent me the news yesterday that the movie I.O.U.S.A. has made the cut from 94 Documentaries to the final 15 that will be voted on for an Oscar! WOW! And to think I was interviewed for that movie, but was left on the cutting room floor! Congratulations to my good friend Addison Wiggin, and the other folks at Agora that had the idea to put this together in the first place! No improvement in the eye yet, still some pain to deal with, but I have to believe it will get better! Thanks so much, once again, to all of you dear readers that sent along good wishes and prayers for me. I feel bad that I have to keep announcing this stuff, but it is what it is, and life goes on. God willing… OK… Time to go… I hope your Wednesday is Wonderful!

Chuck Butler

Source: King Henry Keeps His Cash!

• Hewlett-Packard Co. (HPQ), the world’s largest maker of personal computers, offered a preview of its fiscal fourth-quarter profits – reporting that it will beat market expectations and raise its fiscal 2009 outlook. “HP is gaining market share in an extremely strong competitive position. They’ve got share gains, combined with very aggressive cost reduction,” Shannon Cross of Cross Research told Reuters.

• Lars Olofsson, Executive Vice President of Nestle SA, has been named Chief Executive Officer of Carrefour S.A., the world’s second-largest retailer. He’ll join the company in at the Carrefour’s next shareholder meeting in January, MarketWatch reported.

• Belgium’s InBev NV officially completed its $52 billion, or $70 a share, acquisition of Anheuser-Busch Cos., Inc. (BUD), as it won its last regulatory approval from China. The combined company will be based in St. Louis and named Anheuser-Busch InBev, Dow Jones reported.

• The Home Depot, Inc. (HD) reported a 31% decline in earnings during its fiscal third quarter ended Nov. 2. Profit declined 31% as well, but the home retailer expected steeper loses in the face of the U.S. housing crisis, Reuters reported.

• Kuwait’s Gulf Bank – the country’s second-largest lender – said Monday that it had lost $1.4 billion (375 million dinars) as a result of trading in derivatives and other financial instruments for customers who subsequently defaulted. The bank also said its board had resigned. To allay investor fears, Gulf Bank announced a plan to double its capital base by issuing 1.25 billion new shares. Investors knew there were losses. But the amount was nearly double the original estimate of $750 million. Trading in Gulf Bank shares remains suspended for their fourth week, Forbes.com reported.

• Mexican retail and media tycoon Ricardo Salinas Pliego could be building a controlling stake in bankrupt electronics retailer Circuit City Stores Inc. (OTC: CCTYQ), Reuters reported. Salinas already owns 28% of the company, having accumulated stock in the open market before and after the retail chain went bankrupt.

• Wholesale prices experienced the biggest one-month drop in more than 60 years in October, The Associated Press reported. Wholesale prices dropped by a record 2.8% last month, as the cost of oil and other raw materials declined.

Source: Global Investing Roundups Wednesday, November 19th, 2008

• General Growth Properties Inc. (GGP) warned it is on the brink of bankruptcy, as slow retail sales have forced many of its mall vendors to close their doors, CNNMoney.com reported. The nation’s second-largest shopping mall operator said in a SEC filing that it has more than $950 million in property and corporate debt, and is facing another $3.07 billion in debt that matures in 2009.

• Sales fell 7% in the third quarter for Macy’s Inc. (M), leading to a $44 million loss, or 10 cents a share. As a result, the Cincinnati-based retailer said it is cutting capital spending by as much as 45% in 2009, MarketWatch reported.

• Oil continued falling faster than it rose, as December futures for light sweet crude slid $3.08 overnight to $59.01 a barrel in electronic trading on the New York Mercantile Exchange. The sharp fall is blamed on concerns that global growth next year will clock in slower than expected, the Associated Press reported.

• October retail sales in China rose a robust 22%, sending a strong signal that its powerhouse economy could stand tall amidst global recession. The sales growth is nearly its fastest pace in nine years, Bloomberg reported.

• Yum Brands Inc. (YUM) said yesterday (Wednesday) that it would cut “several hundred” jobs as it restructures its U.S. business. The company plans to reduce the percentage of Pizza Hut and KFC restaurants it owns to from 20% to 10% by selling units to franchisees. The company will continue to own 20% of all Taco Bell restaurants.

• Anheuser-Busch Cos Inc. (BUD) shareholders yesterday (Wednesday) approved the $52 billion takeover offer from Belgian rival InBev NV. More than two-thirds of the Budweiser brewer’s shareholders voted, with 96% voting in favor of the deal. Anheuser-Busch and InBev will form the world’s largest brewer if and when federal regulators clear the deal.

Source: Global Investing Roundups Thursday, November 13th, 2008

Not even Warren Buffett was immune to the stock market’s rampant first-half gyrations, as Berkshire Hathaway Inc. notched its worst first half in 18 years, with the shares skidding more than 16%. But only a fool would count out the great Oracle of Omaha, who has spent the past several months restructuring his company’s portfolio and is now ready to come out swinging for the year’s second half.

As Money Morning’s Horacio Marquez noted in his most recent “Buy, Sell, or Hold” feature, Berkshire Hathaway has had a tough start for the year.

The company’s net earnings for the first half were $3.8 billion – a 33% decline from the $5.7 billion reported for the same period last year. But even though the second quarter was weak – especially by Buffett’s standards – it showed marked improvement from the first three months of the year.

Berkshire reported about $1.6 billion in unrealized losses from derivatives in the first quarter. But after warning that derivatives contracts will often “swing wildly,” the company posted $689 million in derivatives gains in the second quarter.

Berkshire’s revenue actually rose 10% to $30.09 billion for the quarter.

But that’s not enough for Buffett, who has set about restructuring his company’s holdings. In the past few months, Berkshire has reduced its investments in Anheuser Busch Cos. (NYSE:BUD) and Trane Inc., and added positions in NRG Energy Inc. (NYSE:NRG), Ingersoll-Rand Co. Ltd (NYSE:IR), and Sanofi-Aventis (ADR:SNY).

According to filings with the U.S. Securities Exchange Commission (SEC), Berkshire in June reduced its stake in Anheuser Busch to 13.85 million shares, less than half the 35.56 million shares it held as of March 31. It’s likely the company received a tidy sum for its shares, as earlier that month InBev SA (PINK: INBVF) offered $65 a share for the American icon. Buffett admits to bailing on the Bud brand before InBev raised its offer to $70 a share, but AB was trading at close to $62 a share on June 30, much higher than the $47 a share the company was valued at in late March.

Also in March, Berkshire dumped its 10.9 million shares of Trane Inc. That stake was valued at more than $500 million as of March 31.

After unloading in the spring, Buffett treated Berkshire Hathaway to a $4-billion shopping spree over the next several months. By the end of the second quarter, Berkshire’s stake in French drug maker Sanofi Aventis had shot up 317,200 shares to reach 3.9 million. Berkshire also added 5 million shares of Ingersoll-Rand, and announced new holdings in NRG Energy, the second-biggest power producer in Texas. Berkshire had 3.24 million NRG shares as of June 30.

Even more interesting, in a move that highlighted Buffett’s bullishness on railroad stocks, Berkshire doubled its stake in Union Pacific Corp. (NYSE:UNP), taking its holdings from 4.45 million shares at the end of March to 8.91 million shares as of June 30.

Last year, Buffett and Berkshire road the rails hard. Buffett made his first move on Burlington Northern Santa Fe Corp. (NYSE:BNI) last April, acquiring nearly 40 million shares – or close to 11% – of the railroad. He then moved on to snap up 10.5 million shares of Union Pacific Corp., and 6.4 million shares of Norfolk Southern Corp. (NYSE:NSC).

Later in August, Berkshire went shopping again, loading on an additional 3.3 million shares of Burlington and another 6,000 in September. But Buffett didn’t stop there: He added yet another 10,300 shares of Burlington over the two-week period ending Jan. 22, bringing Berkshire’s total stake in the company to 18.2%.

Berkshire’s second-quarter acquisitions, which were disclosed in an SEC filing last week, are only a fraction of the $3.98 billion Berkshire spent on stocks in the April-June period.

Even if Buffett bought the shares at their highest second-quarter prices, which he almost certainly did not, the total cost would only have been about $260 million. That means more than $3.5 billion went into smaller amounts of unnamed stocks the company was not required to disclose.

Where that money went is anybody’s guess, but Buffett indicated in a recent interview with CNBC that a portion of it went into one of two stocks: Wells Fargo & Co. (NYSE:WFC) or American Express Co. (NYSE:AXP).

Wells Fargo stock has plummeted 22% in the past year, while American Express is down more than 37% in that time. However there may be some clues as to which stock Buffett really believes will rebound in some earlier comments he made.

“We’ll say at American Express… they are experiencing credit deterioration and they’re experiencing it sort of in all segments,” Buffett said earlier on CNBC’s Squawk Box. “So they’re seeing the rich customers slow down in payments, slow down in purchases.

“And American Express can describe that rather than I,” he added, “but I pay a lot of attention to that sort of thing. And incidentally, it will get cured at some time in the future, but right now the situation is getting worse and I would say that I don’t see any early end to that.”

That assessment doesn’t seem particularly favorable, particularly compared with comments Buffett made with regards to Wells Fargo just a few months ago.

“Wells Fargo stock was down last year,” Buffett said, “I don’t think the intrinsic business value shrunk. In fact, I said I thought it probably increased a touch.”

Berkshire already owns considerable stakes in both companies.

Source: Buffett Reignites Berkshire Hathaway with a $4 Billion Spending Spree