I’ve seen a lot of crazy things in my investment career, but I struggle to think of anything that tops this: Berkshire Hathaway’s (BRK.A) five-year credit-default swap spreads have more than tripled in the past two months and now stand at 475 basis points (all quotes in this article are as of the end of day 11/19/08), as this chart indicates (click charts to enlarge):
Microsoft (MSFT) on Thursday announced a new music subscription model for its Zune music player and the big question in the back of the room is this: Will subscription music services ever become dominant?
Sure, there are a few folks that subscribe to their music. And Microsoft has signed agreements with EMI Music, Sony BMG Music, Universal Music Group and Warner Music Group in addition to a bunch of independent labels (Techmeme, statement). The deal: You pay $14.99 a month, you keep 10 tracks a month for your permanent collection and Zune customers keep the DRM free music.
Without further ado, below we highlight the absolute atrocities that are global equity market indices. The one thing to make note of in these charts is whether the country has broken below its prior bear market lows. Ones that haven't still have a chance to try and form new uptrends, while ones that have face a bottomless pit given the amount of fear that is out there.
Brazil, China, Hong Kong, Germany, India, Italy, Japan, the UK, Mexico, Sweden, Russia, South Korea, and Spain remain above their lows, while Australia, Canada, France, Taiwan, Singapore, South Africa, and Switzerland have broken their lows.
It took a bit of hunting, but I finally found someone who knows all there is to know about TIPS strips. Mike Pond is an Inflation-Linked Strategist at Barclays Capital (yes, that's really a job, and yes, it still exists) -- the bank which, as far as anybody can tell, is the only institution ever to have stripped TIPS. They even branded their stripped TIPS, as iStrips, not that it did any good: There was no demand for the iStrips product, and they haven't been stripping TIPS for a while.
My conversation with Pond was fascinating, in a nerdy way, and I think I now have some very good answers to the question of why TIPS strips don't exist, and also which TIPS to buy if you're thinking of investing in them. (Answer: Buy the TIPS with the highest real yield, which tend to be off-the-run bonds issued a long time ago.)
Suntech (STP) shares are trading dramatically lower -- and dragging down the rest of the already battered solar sector -- on an extremely weak outlook for Q4 results.
For Q3, the company posted revenue of $594.4 million and non-GAAP profits of 36 cents a share. That beat the Street estimate of $571.7 million at the top-line, but fell short of the Street estimate of 42 cents at the bottom line.
AnnTaylor Stores (ANN) is expected to report Q3 earnings before market open Friday, November 21, with a conference call scheduled for 8:30 am ET.
Guidance
Analysts are looking for a profit of 1c on revenue of $531.92M. The consensus range is (1c) to 4c for EPS, and revenue of $526.57M to $596M, according to First Call. On November 6, the company said that Q3 results were "tracking well below expectations," as the dramatic deterioration in both the financial markets and the macroeconomic environment in September and October has put additional pressure on the retail industry, particularly the women's apparel sector.
Nektar Therapeutics (NKTR) has been struggling since 2007, when Pfizer (PFE) discontinued selling Nektar's Exubera inhaled insulin because of disappointing sales. Then Novartis (NVS) stepped in and bought Nektar’s pulmonary medicine delivery systems. It clearly sees profit where Pfizer didn’t. Nektar jettisoned its insulin inhaler, but still happily reported on its Q308 conference call that it had
Deflation may or may not be coming, but the Treasury market's forecast is clear.
After yesterday's news of a sharp drop in consumer prices, which came on the heels of something similar in wholesale prices the day before, traders in government securities took the hint. Yesterday's closing yield of 3.391% for the benchmark 10-year Treasury isn't the lowest we've seen, but it's getting close.
Salesforce.com (CRM) is expected to report Q3 earnings after market close Thursday, November 20, with a conference call scheduled for 5:00 pm ET.
Guidance
The consensus estimate is 7c for EPS and $273.56M for revenue, according to First Call. Guidance from management on the last earnings call was for Q3 EPS of 8c to 9c and revenue of $273M to $274M. The company has also raised its FY09 guidance to 34c to 35c on revenue of $1.07B to $1.075B. On Sept. 4, at the Citigroup global Tech conference, the CFO said he had a "high degree" of confidence in prior FY revenue view. He also said he was comfortable with current deals, and saw no skewing up or down. The company was hiring aggressively, to meet internal goals. Lastly, the CFO said bookings are to be slightly more skewed towards Q4 and that Salesforce will see a big spike in deferred revenue in Q4.
Dell (DELL) is expected to report Q3 earnings after market close Thursday, November 20, with a conference call scheduled for 5:00 pm ET.
Guidance
The consensus estimate is 31c for EPS and $16.22B for revenue, down from the July quarter mark of $16.4B, according to First Call. Dell is widely expected to post lower earnings for Q3 as PC shipments slow due to worldwide declines in IT spending. Personal computer shipments from Dell missed analyst expectations for the quarter. To save cash, Dell has instituted a hiring freeze and offered buyouts to employees. The only real question on analyst and investor minds is where Dell's quarter falls on the "ugly" scale.
While the stock is well off its lows of the day, as of mid-day Berkshire Hathaway (BRK.A) remains down 3% and is poised for its ninth negative day in a row. While nine straight days of negative returns are not too rare for Berkshire (red dots in chart below), the magnitude of the drop is notable. Since November 7th, which was the last day Berkshire finished up on the day, the stock has declined by 29%. This is by far its largest percentage decline over a nine day period.
The S&P 500 has now erased 100% of the bull market from 2002 to 2007. Like the lost city of Atlantis, the bull market we enjoyed from 2002 to 2007 has now been relegated to the status of legends. People may talk about it for generations, but looking at the levels of the major indices, there is no longer any proof that it ever existed.
lnitial Jobless Claims in the most recent week hit their highest level since July 1992 with a reading of 542,000. For those interested in looking at a depressing chart, below we highlight historical Initial Jobless Claims and compare it to the S&P 500 (logarithmic). While 542,000 is very high, it still has a ways to go to top the highest level of 695,000 seen in October 1982.
China and Peru signed a free trade agreement Wednesday that will pave the way for further cooperation between the two countries and broaden China’s influence in Latin America.
Markets closed well below the dotted line on account of persistent selling across the board till the final hour of trade. While selling pressure was witnessed across sectors, stocks from the realty, banking and energy sectors were worst hit. As regards global markets, while the Asian indices closed in the red, the European markets are also trading in the negative zone currently.
The BSE Sensex closed 322 points lower, while the NSE Nifty closed lower by 65 points. The BSE Midcap and Smallcap indices closed in the red, each down 3%. The rupee was trading at 50.38 to the dollar.
Larry Dignan (
Hickey and Walters (
AnnTaylor Stores
Salesforce.com 
Dell