nah the small government libertarian streak will only grow stronger after 4 years of hillary
the moonbats will be around for a while this is only the beginning :scared1:
we aren't flower power anti-war peace and love hippies
you don't grow out of your small government ways willie, if anything it grows as it ages I know it has for me at least, in my teenage years I woulda considered myself liberal for sure...
you yourself are a conservative but not in a "radical" a way like ron paul, we youngins want a chance at change right now. Not 10 years for now after the empire implodes cause we put all the domestic problems we are facing were put on the backburner and just allowed them to balloon even larger.
he's the top choice in this field to have the highest chance of bringing back some sanity and small government ways, and if for some reason he does make it changing the mindset of many nanny state americans.
In the end as well, I'm with ron paul more for what I know he WON'T DO (add more government and go through gobs of veto stamps) than for what he will do.
likely 3rd party
since rudy vs. hillary looks good right about now
www.unity08.com might be an option
since rudy vs. hillary looks good right about now
www.unity08.com might be an option
I want A. an attempt right here or now to bring back sanity
or B. someone to mess crap up so bad that it'll happen now rather than 10 year from now when the fallout will be so much worse
so i guess hillary would be B. but no way in hell i vote for her
what the hell does ron paul have to do with hillary anyway
I wouldn't be active politically if not for ron paul
with no ron paul this would be me
in october of 2008, "goddamit!! i gotta vote for one of these jokers", umm... think i'll look 3rd party or just take a guess which one is less evil
most ron paul supporters are pissed off independents that really doesn't have any affect on the overall race one way or the other
and if anything those that got moonbatted will side more in the GOP side than the libby side (if the decide to not go 3rd party) then they might have otherwise done without ron paul.
Willie is the guy who deep down knows he's wrong but will never admit it because it would hurt his pride. I still don't really know what his point is. I don't think we are in recession, I think the market will go higher. That seems to be his main points....We aren't going into recession with the printing presses going. He just doesn't seem to understand inflation and I for one have never seen anything like the decline in the dollar and the speed at which it is happening. But again, he will trot out some happy econ stats not understanding the underlying long term implications of commodities going through the roof and our savings being eroded. Much easier to bury his head in the sand.
This emergency meeting is probably to be sure they have the same story they are going to tell Willie and all his sheep friends so they believe the economy is doing great.
Maybe they will figure out before Sunday night how to get dollar to have a short term rally to break the backs of late-comers with that now very crowded (dollar short) trade.
Willie will then tell us to look at how much the dollar is rallying.
Maybe they can knock down oil to 85 or so and gold to 750 and then tell willie and all his friends how much better economy is since oil prices have fallen and gold bugs are just kooks who believe 9-11 was an inside job.
Actually, this willie guy is ok in my book. He follows wall street, the white house, and cnbc word for word, but WTF...this place would be boring if we all agreed about everything.
:drink:
Citigroup is in serious shit. As I posted weeks ago, you can't even understand their balance sheet. No one fucking knows where the losses are and how much they are. I'm not saying we are looking at an Enron situation here, but I can see them cut in half real quick if they come clean. Come clean now Citi.
Its the off balance sheet finance stuff.
It was meant to end after Enron but the big Banks managed to lobby themselves a few loopholes.
http://www.bloggingstocks.com/2007/10/16/are-off-balance-sheet-disclosures-still-inadequate/
I looked at this a couple of years ago but didn't post it because I reckoned that only anoraks would be interested...never thought I would be posting this shit in here...
Simply put, the big Banks got immunity from the legislation that resulted from Enron.
It was meant to end after Enron but the big Banks managed to lobby themselves a few loopholes.
http://www.bloggingstocks.com/2007/10/16/are-off-balance-sheet-disclosures-still-inadequate/
I looked at this a couple of years ago but didn't post it because I reckoned that only anoraks would be interested...never thought I would be posting this shit in here...
Simply put, the big Banks got immunity from the legislation that resulted from Enron.
:aktion033:aktion033:aktion033:aktion033
"new definition of inflation and economics" :missingte:missingte:missingte
what are the old one's I'm missing again?
growth? jobs? spending money? increasing tax revenues? decreasing deficit? decreasing trade deficit?
VT, my arguments go so far beyond the DOW that it shows how serious your comprehension weaknesses are. I use the DOW mostly to mock some of the wisdom on these boards.
Are things perfect? of course not. Never were, never will be. There will always be some variable doing poorly that bears and wackos will use to predict their next doomsday. And eventually, they'll be right, just like a broken clock, we'll have another recession.
Of course, we most recently had recessions in 2001, the early 90's & the early 80's. We had a housing, banking & credit crunch in the late 80's. We had a stock market crash of 20% in one day in 1987.
What did all that mean again? CONTINUED LONG TERM GROWTH.
Someday, I hope y'all figure it out. In the meantime, thanks for keeping me entertained.
Despite the Gloom, More Bush Boom
by Lawrence Kudlow (more by this author)
Posted 11/01/2007 ET
If things are so bad, why are they so good?
With all the gloom coming out of Wall Street, the Democrats on the campaign trail and the mainstream media, a remarkable thing just happened: Real gross domestic product, the best summary report of the American economy, came in at a breathtaking 3.9 percent annual rate for the third quarter. In fact, following the 3.8 percent growth rate for the second quarter, the U.S. economy has posted its strongest quarterly growth in four years. The economy actually appears to be speeding up, following the relatively sluggish performance of the prior 18 months.
On top of this, the inflation rate is actually slowing down. The consumer spending deflator is reading 2.1 percent for the past year, compared to over 3 percent six quarters ago. The core inflation rate is down to 1.9 percent, below the Fed's 2 percent target.
Even employment is holding its own. According to Automatic Data Processing's private employment survey, which showed its strongest gain in four months, October looks like it will produce about 125,000 new jobs.
Meanwhile, rising exports of American goods and services are booming to such an extent that the deep housing recession is being cancelled out. And while many continue to predict a consumer collapse because of falling home prices and tighter credit, after-tax inflation-adjusted income is 4.1 percent ahead of last year, for a $344 billion gain, while the purchase cost of energy prices are flat. The little noticed factoid is that consumer energy use per unit of GDP has actually fallen by more than 50 percent in recent decades.
Again: If things are so bad, why are they so good?
The stock market roared after the Federal Reserve cut its target rate on Wednesday by 25 basis points to 4.5 percent. The rate cut was a small insurance policy, just in case the subprime credit crunch and the housing downturn take a larger toll on the economy.
But listening to the Democratic presidential debate on Tuesday, you'd think it was 1929 all over again. The litany of scare-talk complaints includes China trade unfairness, globalization, immigration, income inequality, stagnant wages, a shrinking middle class, the sinking dollar and high oil prices.
Yes, there is home deflation on Main Street and loan deflation on Wall Street. It will continue. But what about the rest of the story? When you listen to the hedge-fund short-sellers and the liberal politicians as they attempt to discredit the Bush economic boom, you could almost fall for their bear-market seduction. But the seductress turns out to be an economic harlot -- not a beautiful woman.
The true message of the strong economy is that we're virtually guaranteed of a Goldilocks soft landing or better -- and certainly not a recession.
It's interesting that while the Bush tax cuts of 2003 continue to encourage investment and entrepreneurship, expanding national income and higher tax collections have brought the big bad budget deficit down to $160 billion, or roughly 1 percent of GDP. Using something called the primary deficit -- which extracts net interest on the debt and can be used to measure fiscal stimulus on the economy -- we actually have a 70 billion surplus.
These are all reasons why it would be foolhardy to embrace large-scale tax-hikes to allegedly fight the budget gap.
House tax chief Charlie Rangel's great idea to reduce the corporate income tax is the first pro-growth tax-cut measure from a Democrat in many years, and hopefully his effort will spur a discussion of full-scale tax reform by the Republican and Democratic candidates. But looking to the rest of Rangel's plan, there are ways to eliminate the alternative minimum tax that do not require big tax hikes on the most successful earners and investors.
For example, the Bush administration's tax-reform panel, chaired by former Sens. Connie Mack and John Breaux, proposed a growth-and-investment plan with only three income-tax brackets of 15, 25 and 30 percent. They would repeal the AMT and reduce the corporate tax to 30 percent. Capital gains and dividends would remain at 15 percent.
Or there's the new plan from Wisconsin House member Paul Ryan, which would move to a 10 percent and 25 percent tax system while also eliminating the dreaded AMT.
In other words, there are a lot of ways to gently nudge tax rates lower while broadening the tax base that would keep the Bush boom going well into the future.
The print and broadcast media do not give President Bush much credit for his economic policies. But somehow I have to wonder whether low unemployment, strong growth, negligible inflation and record stock markets do not deserve just a bit of praise.
It is still the greatest story never told.
-------------------------------------------------------------------------
Doom and gloom has never felt so good.
Too bad Paulestinians and Hildabeastians are teaming up determined to destroy it all.
hno:
by Lawrence Kudlow (more by this author)
Posted 11/01/2007 ET
If things are so bad, why are they so good?
With all the gloom coming out of Wall Street, the Democrats on the campaign trail and the mainstream media, a remarkable thing just happened: Real gross domestic product, the best summary report of the American economy, came in at a breathtaking 3.9 percent annual rate for the third quarter. In fact, following the 3.8 percent growth rate for the second quarter, the U.S. economy has posted its strongest quarterly growth in four years. The economy actually appears to be speeding up, following the relatively sluggish performance of the prior 18 months.
On top of this, the inflation rate is actually slowing down. The consumer spending deflator is reading 2.1 percent for the past year, compared to over 3 percent six quarters ago. The core inflation rate is down to 1.9 percent, below the Fed's 2 percent target.
Even employment is holding its own. According to Automatic Data Processing's private employment survey, which showed its strongest gain in four months, October looks like it will produce about 125,000 new jobs.
Meanwhile, rising exports of American goods and services are booming to such an extent that the deep housing recession is being cancelled out. And while many continue to predict a consumer collapse because of falling home prices and tighter credit, after-tax inflation-adjusted income is 4.1 percent ahead of last year, for a $344 billion gain, while the purchase cost of energy prices are flat. The little noticed factoid is that consumer energy use per unit of GDP has actually fallen by more than 50 percent in recent decades.
Again: If things are so bad, why are they so good?
The stock market roared after the Federal Reserve cut its target rate on Wednesday by 25 basis points to 4.5 percent. The rate cut was a small insurance policy, just in case the subprime credit crunch and the housing downturn take a larger toll on the economy.
But listening to the Democratic presidential debate on Tuesday, you'd think it was 1929 all over again. The litany of scare-talk complaints includes China trade unfairness, globalization, immigration, income inequality, stagnant wages, a shrinking middle class, the sinking dollar and high oil prices.
Yes, there is home deflation on Main Street and loan deflation on Wall Street. It will continue. But what about the rest of the story? When you listen to the hedge-fund short-sellers and the liberal politicians as they attempt to discredit the Bush economic boom, you could almost fall for their bear-market seduction. But the seductress turns out to be an economic harlot -- not a beautiful woman.
The true message of the strong economy is that we're virtually guaranteed of a Goldilocks soft landing or better -- and certainly not a recession.
It's interesting that while the Bush tax cuts of 2003 continue to encourage investment and entrepreneurship, expanding national income and higher tax collections have brought the big bad budget deficit down to $160 billion, or roughly 1 percent of GDP. Using something called the primary deficit -- which extracts net interest on the debt and can be used to measure fiscal stimulus on the economy -- we actually have a 70 billion surplus.
These are all reasons why it would be foolhardy to embrace large-scale tax-hikes to allegedly fight the budget gap.
House tax chief Charlie Rangel's great idea to reduce the corporate income tax is the first pro-growth tax-cut measure from a Democrat in many years, and hopefully his effort will spur a discussion of full-scale tax reform by the Republican and Democratic candidates. But looking to the rest of Rangel's plan, there are ways to eliminate the alternative minimum tax that do not require big tax hikes on the most successful earners and investors.
For example, the Bush administration's tax-reform panel, chaired by former Sens. Connie Mack and John Breaux, proposed a growth-and-investment plan with only three income-tax brackets of 15, 25 and 30 percent. They would repeal the AMT and reduce the corporate tax to 30 percent. Capital gains and dividends would remain at 15 percent.
Or there's the new plan from Wisconsin House member Paul Ryan, which would move to a 10 percent and 25 percent tax system while also eliminating the dreaded AMT.
In other words, there are a lot of ways to gently nudge tax rates lower while broadening the tax base that would keep the Bush boom going well into the future.
The print and broadcast media do not give President Bush much credit for his economic policies. But somehow I have to wonder whether low unemployment, strong growth, negligible inflation and record stock markets do not deserve just a bit of praise.
It is still the greatest story never told.
-------------------------------------------------------------------------
Doom and gloom has never felt so good.
Too bad Paulestinians and Hildabeastians are teaming up determined to destroy it all.
hno:You actually believe all this bullshit?
:monsters-
:monsters-
Despite the Gloom, More Bush Boom
by Lawrence Kudlow (more by this author)
Posted 11/01/2007 ET
If things are so bad, why are they so good?
With all the gloom coming out of Wall Street, the Democrats on the campaign trail and the mainstream media, a remarkable thing just happened: Real gross domestic product, the best summary report of the American economy, came in at a breathtaking 3.9 percent annual rate for the third quarter. In fact, following the 3.8 percent growth rate for the second quarter, the U.S. economy has posted its strongest quarterly growth in four years. The economy actually appears to be speeding up, following the relatively sluggish performance of the prior 18 months.
On top of this, the inflation rate is actually slowing down. The consumer spending deflator is reading 2.1 percent for the past year, compared to over 3 percent six quarters ago. The core inflation rate is down to 1.9 percent, below the Fed's 2 percent target.
Even employment is holding its own. According to Automatic Data Processing's private employment survey, which showed its strongest gain in four months, October looks like it will produce about 125,000 new jobs.
Meanwhile, rising exports of American goods and services are booming to such an extent that the deep housing recession is being cancelled out. And while many continue to predict a consumer collapse because of falling home prices and tighter credit, after-tax inflation-adjusted income is 4.1 percent ahead of last year, for a $344 billion gain, while the purchase cost of energy prices are flat. The little noticed factoid is that consumer energy use per unit of GDP has actually fallen by more than 50 percent in recent decades.
Again: If things are so bad, why are they so good?
The stock market roared after the Federal Reserve cut its target rate on Wednesday by 25 basis points to 4.5 percent. The rate cut was a small insurance policy, just in case the subprime credit crunch and the housing downturn take a larger toll on the economy.
But listening to the Democratic presidential debate on Tuesday, you'd think it was 1929 all over again. The litany of scare-talk complaints includes China trade unfairness, globalization, immigration, income inequality, stagnant wages, a shrinking middle class, the sinking dollar and high oil prices.
Yes, there is home deflation on Main Street and loan deflation on Wall Street. It will continue. But what about the rest of the story? When you listen to the hedge-fund short-sellers and the liberal politicians as they attempt to discredit the Bush economic boom, you could almost fall for their bear-market seduction. But the seductress turns out to be an economic harlot -- not a beautiful woman.
The true message of the strong economy is that we're virtually guaranteed of a Goldilocks soft landing or better -- and certainly not a recession.
It's interesting that while the Bush tax cuts of 2003 continue to encourage investment and entrepreneurship, expanding national income and higher tax collections have brought the big bad budget deficit down to $160 billion, or roughly 1 percent of GDP. Using something called the primary deficit -- which extracts net interest on the debt and can be used to measure fiscal stimulus on the economy -- we actually have a 70 billion surplus.
These are all reasons why it would be foolhardy to embrace large-scale tax-hikes to allegedly fight the budget gap.
House tax chief Charlie Rangel's great idea to reduce the corporate income tax is the first pro-growth tax-cut measure from a Democrat in many years, and hopefully his effort will spur a discussion of full-scale tax reform by the Republican and Democratic candidates. But looking to the rest of Rangel's plan, there are ways to eliminate the alternative minimum tax that do not require big tax hikes on the most successful earners and investors.
For example, the Bush administration's tax-reform panel, chaired by former Sens. Connie Mack and John Breaux, proposed a growth-and-investment plan with only three income-tax brackets of 15, 25 and 30 percent. They would repeal the AMT and reduce the corporate tax to 30 percent. Capital gains and dividends would remain at 15 percent.
Or there's the new plan from Wisconsin House member Paul Ryan, which would move to a 10 percent and 25 percent tax system while also eliminating the dreaded AMT.
In other words, there are a lot of ways to gently nudge tax rates lower while broadening the tax base that would keep the Bush boom going well into the future.
The print and broadcast media do not give President Bush much credit for his economic policies. But somehow I have to wonder whether low unemployment, strong growth, negligible inflation and record stock markets do not deserve just a bit of praise.
It is still the greatest story never told.
-------------------------------------------------------------------------
Doom and gloom has never felt so good.
Too bad Paulestinians and Hildabeastians are teaming up determined to destroy it all.
Of course.
Unlike you Hildabeastians and Paulestinians, I don't grab one negative and push it like it is the great depression. It's called critical thinking capability, something you Chicken Littles zeroed in one or two 'theories' without factoring the myriad of variables, obviously do not possess.
:aktion033:aktion033:aktion033:aktion033
"new definition of inflation and economics" :missingte:missingte:missingte
what are the old one's I'm missing again?
growth? jobs? spending money? increasing tax revenues? decreasing deficit? decreasing trade deficit?
VT, my arguments go so far beyond the DOW that it shows how serious your comprehension weaknesses are. I use the DOW mostly to mock some of the wisdom on these boards.
Are things perfect? of course not. Never were, never will be. There will always be some variable doing poorly that bears and wackos will use to predict their next doomsday. And eventually, they'll be right, just like a broken clock, we'll have another recession.
Of course, we most recently had recessions in 2001, the early 90's & the early 80's. We had a housing, banking & credit crunch in the late 80's. We had a stock market crash of 20% in one day in 1987.
What did all that mean again? CONTINUED LONG TERM GROWTH.
Someday, I hope y'all figure it out. In the meantime, thanks for keeping me entertained.
still not sure why I am repeatedly called a bear....not that I give a fuck....probably the most bullish short term person on this board
perhaps It is because I had the fore site long ago stock up on precious metals and get out of the US Dollar....which of course goes against everything wall street/the media/the gov't is selling. Turned out to be a pretty sharp move
Also, recessions are a GOOD thing and a natural part of economics
JOEC you need to change your screen name, You are the farthest thing from a "contrarian":missingte
2 big bank CEO's gone who's next in line?
-----------------------------------------------------------------------------------------------
Citigroup's Prince Steps Down, Rubin Named Chairman (Update1)
By Yalman Onaran and Hugh Son
Nov. 4 (Bloomberg) -- Citigroup Inc. Chairman and Chief Executive Officer Charles Prince resigned after $6.5 billion of writedowns and losses from the credit markets and shares of the biggest U.S. bank slumped to a four-year
low
.
Sir Win Bischoff, chairman of Citi Europe, is interim chief executive until Prince's replacement is found and former Treasury Secretary Robert E. Rubin has been named chairman, New York-based Citigroup said in a statement today. Citigroup also said it will take an additional $8 billion to $11 billion in writedowns related to mortgage-related securities.
``It is my judgment that given the size of the recent losses in our mortgage-backed securities business, the only honorable course for me to take as chief executive officer is to step down,'' Prince said in the
statement.
Rubin, along with Alcoa Inc. Chief Executive Officer Alain J.P. Belda, Time Warner Inc. Chief Richard D. Parsons and Franklin A. Thomas have been named to a special committee to find Citigroup's next chief executive officer.
Citigroup, which has 327,000 employees, offices in more than 100 countries and $2.2 trillion in assets, has foundered since Prince succeeded his mentor, Sanford Weill, in October 2003. The credit turmoil that began in the subprime mortgage market sent Citigroup's quarterly profit to its lowest level in three years and the company's stock has plunged 32 percent in 2007, twice as much as Bank of America Corp. and JPMorgan Chase & Co.
Analysts' Questions
The 57-year-old Prince is leaving as analysts questioned whether Citigroup will have to cut its dividend because of a shortage of capital and the U.S. Securities and Exchange Commission scrutinizes the company's accounting for structured investment vehicles that hold mortgage-backed securities. The company has said its SIV accounting complies with ``all applicable rules and regulations.''
Citigroup said in the statement today that it has no plan to cut its dividend.
``While significant uncertainty continues to prevail in financial makets,'' Citigroup expects that capital ratios ``will return within the range of targeted levels by the end of the second quarter of 2008,'' while maintaining the current dividend, the company said.
Fallout
Analysts at CIBC World Markets and Morgan Stanley told clients last week to get rid of Citigroup shares. CIBC's Meredith Whitney said Citigroup may have to sell assets because it needs to raise $30 billion of capital. The combination of $25 billion of acquisitions in the past 19 months and the lowest cushion for losses ``in decades'' increases the risk of owning the stock, she said. Deutsche Bank AG analyst Michael Mayo said last month that Prince should be replaced.
Prince joins a growing list of executives who have lost their jobs in fallout
from losses in the fixed-income markets. He departs less than a week after Merrill Lynch & Co., the world's biggest brokerage, ousted Stan O'Neal after the New York-based firm disclosed $8.4 billion of writedowns.
UBS AG, the biggest Swiss bank, dismissed CEO Peter Wuffli in July and said earlier this month that finance chief Clive Standish and investment-banking head Huw Jenkins were stepping down. Others ousted include Bear Stearns Co-President Warren Spector and Citigroup Inc. trading head Thomas Maheras.
Writedowns
The world's largest financial institutions have disclosed more than $30 billion of writedowns as the worst housing slump in 16 years has led to record U.S. foreclosures and losses in the subprime market. Analysts have said Citigroup may have to take more writedowns in the fourth quarter to reflect the decreasing value of mortgage-related securities.
Just four months ago Prince said he ``felt good'' about Citigroup's direction. He said on Oct. 15 when the company reported the 57 percent drop in third-quarter earnings that momentum ``continues very strong'' in most of the company's businesses. Citigroup's return on equity, a gauge of how effectively the company reinvests earnings, fell to 7.4 percent from 18.9 percent a year earlier, making it the second-lowest among Wall Street firms after Bear Stearns Cos.' 5.3 percent.
Since Prince became CEO in 2003, Citigroup shares have declined almost 3 percent, compared with the 14 percent advance by Bank of America Corp., the second-biggest U.S. bank by assets. Bank of America is larger by market value at $200 billion, topping Citigroup's $188 billion.
Prince's Career
Prince became one of Weill's top deputies in 1986. An attorney with a law degree from the University of Southern California, Prince spent most of his career as Weill's top lawyer, advising on the acquisitions that made Citigroup the nation's biggest financial-services company.
Prince then spent his first few years as CEO cleaning up regulatory missteps by Citigroup. In the U.S., Prince spent $4.7 billion to settle suits alleging Citigroup helped defraud investors of Enron Corp. and WorldCom Inc. The company has denied wrongdoing.
In Japan, he bowed in apology before regulators after authorities shut Citigroup's private bank for failing to prevent customers from laundering money. In Europe, he settled investigations into suspicious bond trades his employees had dubbed ``Dr. Evil.'' On orders from the U.S. Federal Reserve, Prince has tightened internal controls in an effort to keep the bank out of future trouble.
Folding the Umbrella
Prince also has dismantled parts of Citigroup that Weill took three decades to build. The company sold Travelers Life & Annuity Co. to MetLife Inc. for $11.5 billion in 2005. Prince even folded Weill's trademark red umbrella by selling the 137- year-old emblem to St. Paul Travelers Cos., which had merged with Travelers Property in 2004, for an undisclosed sum. The St. Paul, Minnesota-based insurance company now calls itself Travelers Cos.
``What burns inside of me is the notion of the best, the most important, the most influential, the most comprehensive international bank,'' Prince said in an interview conducted this year. ``We have got to race ahead.''
In the U.S., where revenue rose 4 percent in 2006, Prince added 1,000 bank branches in the past year and hired traders and investment bankers overseas, where growth has been faster.
After limiting acquisitions, Prince has made a string of purchases this year. Citigroup bought the Old Lane Partners LP hedge fund in April for about $800 million. That same month, Citigroup purchased 61 percent of
Tokyo-based brokerage Nikko Cordial Corp. for $7.7 billion in an effort to stage a comeback in Japan. Last month, Citigroup agreed to buy the rest of Nikko Cordial for about $4.6 billion. Prince has also made purchases in China, Turkey, the U.K. and the U.S.
Under pressure last year from Saudi billionaire Prince Alwaleed bin Talal, Citigroup's largest individual shareholder, Prince appointed Robert Druskin, CEO of global corporate and investment banking, as chief operating officer and ordered him to slash costs.
Druskin, 60, eventually drafted two plans, one to cull jobs and another to streamline computer systems. Together, those efforts will trim $4.6 billion from Citigroup's $50 billion-plus annual budget by 2009, according to the company.
here's a great example of the hilarous crap going on in china land....gonna get messy once the bubble goes pop
--------------------------------------------------------------
PetroChina Passes Exxon's Market Value as Shanghai Shares Surge
By Ying Lou
Nov. 5 (Bloomberg) -- PetroChina Co. passed Exxon Mobil Corp. as the world's largest company by market value as it started trading in Shanghai for the first time.
PetroChina's Class-A shares more than doubled, advancing as high as 48.62 yuan ($6.52) from their sale price of 16.7 yuan. They reached 45.03 yuan at 9:44 a.m., valuing the company at $1.03 trillion. Exxon is worth $488 billion on the New York Stock Exchange.
China's largest oil and gas producer has been listed since 2000 in Hong Kong where it advanced 78 percent this year as investors sought to profit from the world's fastest-growing major economy. The Beijing-based company's shares soared as the Hang Seng Index in Hong Kong rose 53 percent and the CSI 300 Index of shares listed on the Shanghai and Shenzhen exchanges increased 168 percent.
''Local investors might have a different risk tolerance level to global investors, so we may see PetroChina's A-shares trading at a premium'' to its Hong Kong stock, said Lei Wang, a co-manager of Thornburg International Value Fund in Santa Fe, New Mexico, which oversees $16 billion.
PetroChina trades at 24 times earnings in Hong Kong, compared with Exxon's valuation of 13 times. The Chinese oil producer's market value is higher than Russia's gross domestic product.
The company had 20.5 billion barrels of oil and gas reserves in 2006, compared with 22.1 billion for Irving, Texas- based Exxon, data compiled by Bloomberg show. PetroChina has been adding new reserves at an average annual rate of 5 percent for the past three years, a faster pace than Exxon, Royal Dutch Shell Plc and BP Plc, the world's largest oil companies by sales.
Surpassing Shenhua
The sale, the world's biggest this year, surpassed the 66.6 billion yuan generated by China Shenhua Energy Co. in September. Mainland Chinese investors have until now been prevented from directly buying PetroChina stock, missing out on a 15-fold surge as economic growth turned the nation into the largest oil consumer after the U.S. and as crude prices reached a record $96.24 a barrel in New York.
Investors applied for more than 3.3 trillion yuan of stock, almost 50 times the amount PetroChina sold. Chinese companies now represent five of the world's 10 largest by market value, raising investor concerns that the market is too expensive.
Billionaire investor Warren Buffett's Berkshire Hathaway Inc. sold its stake in PetroChina this year, reaping an eightfold gain that contributed to a 64 percent increase in third-quarter profits for the Omaha-based company. Berkshire had 2.34 billion shares as of the end of 2006, the largest holding after state-owned China National Petroleum Corp.
Buffett said on Oct. 24 that Chinese share prices have risen too fast.
'Carried Away'
''It's easy to be carried away in the stock market when things are going very well,'' he said in the northern Chinese city of Dalian. ''We at Berkshire never buy stocks when we see prices soaring.''
Gains in PetroChina's Class-A stock in Shanghai may have more to do with Chinese investors seeking returns from their $2.3 trillion in savings than the outlook for the company's exploration and production operations, or its refining business, known as downstream, said Larry Grace, an oil analyst at Kim Eng Securities Co. in Hong Kong.
''Production is static with limited upside for the next three to four years,'' Grace said. ''As for the downstream, the price controls and overall regulatory trend limit the company's earnings.''
China controls fuel prices to shield consumers in the world's most-populous nation from accelerating inflation. The policy limits the ability of PetroChina and China Petroleum & Chemical Corp. to pass on the burden of higher crude oil costs.
UBS AG's China venture, UBS Securities Co., Citic Securities Co. and China International Capital Corp. arranged PetroChina's Shanghai share sale.
--------------------------------------------------------------
PetroChina Passes Exxon's Market Value as Shanghai Shares Surge
By Ying Lou
Nov. 5 (Bloomberg) -- PetroChina Co. passed Exxon Mobil Corp. as the world's largest company by market value as it started trading in Shanghai for the first time.
PetroChina's Class-A shares more than doubled, advancing as high as 48.62 yuan ($6.52) from their sale price of 16.7 yuan. They reached 45.03 yuan at 9:44 a.m., valuing the company at $1.03 trillion. Exxon is worth $488 billion on the New York Stock Exchange.
China's largest oil and gas producer has been listed since 2000 in Hong Kong where it advanced 78 percent this year as investors sought to profit from the world's fastest-growing major economy. The Beijing-based company's shares soared as the Hang Seng Index in Hong Kong rose 53 percent and the CSI 300 Index of shares listed on the Shanghai and Shenzhen exchanges increased 168 percent.
''Local investors might have a different risk tolerance level to global investors, so we may see PetroChina's A-shares trading at a premium'' to its Hong Kong stock, said Lei Wang, a co-manager of Thornburg International Value Fund in Santa Fe, New Mexico, which oversees $16 billion.
PetroChina trades at 24 times earnings in Hong Kong, compared with Exxon's valuation of 13 times. The Chinese oil producer's market value is higher than Russia's gross domestic product.
The company had 20.5 billion barrels of oil and gas reserves in 2006, compared with 22.1 billion for Irving, Texas- based Exxon, data compiled by Bloomberg show. PetroChina has been adding new reserves at an average annual rate of 5 percent for the past three years, a faster pace than Exxon, Royal Dutch Shell Plc and BP Plc, the world's largest oil companies by sales.
Surpassing Shenhua
The sale, the world's biggest this year, surpassed the 66.6 billion yuan generated by China Shenhua Energy Co. in September. Mainland Chinese investors have until now been prevented from directly buying PetroChina stock, missing out on a 15-fold surge as economic growth turned the nation into the largest oil consumer after the U.S. and as crude prices reached a record $96.24 a barrel in New York.
Investors applied for more than 3.3 trillion yuan of stock, almost 50 times the amount PetroChina sold. Chinese companies now represent five of the world's 10 largest by market value, raising investor concerns that the market is too expensive.
Billionaire investor Warren Buffett's Berkshire Hathaway Inc. sold its stake in PetroChina this year, reaping an eightfold gain that contributed to a 64 percent increase in third-quarter profits for the Omaha-based company. Berkshire had 2.34 billion shares as of the end of 2006, the largest holding after state-owned China National Petroleum Corp.
Buffett said on Oct. 24 that Chinese share prices have risen too fast.
'Carried Away'
''It's easy to be carried away in the stock market when things are going very well,'' he said in the northern Chinese city of Dalian. ''We at Berkshire never buy stocks when we see prices soaring.''
Gains in PetroChina's Class-A stock in Shanghai may have more to do with Chinese investors seeking returns from their $2.3 trillion in savings than the outlook for the company's exploration and production operations, or its refining business, known as downstream, said Larry Grace, an oil analyst at Kim Eng Securities Co. in Hong Kong.
''Production is static with limited upside for the next three to four years,'' Grace said. ''As for the downstream, the price controls and overall regulatory trend limit the company's earnings.''
China controls fuel prices to shield consumers in the world's most-populous nation from accelerating inflation. The policy limits the ability of PetroChina and China Petroleum & Chemical Corp. to pass on the burden of higher crude oil costs.
UBS AG's China venture, UBS Securities Co., Citic Securities Co. and China International Capital Corp. arranged PetroChina's Shanghai share sale.
