If You Thought the Housing Meltdown Was Bad… Doug Hornig, Senior Editor, (Casey Research):

…wait until you see what’s in the cards for commercial real estate.

That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.

Every part of the sector – from multifamily apartment buildings to retail shopping centers, suburban office buildings, industrial facilities, and hotels – has accumulated a huge amount of defaulted or nonperforming paper. It’s an impossible, swaying structure that cannot long stand.

Just ask Andy Miller.

Andy

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In the wake of steep stock market declines in 2008, American workers have begun to doubt whether their tax-deferred retirement plans will be able to generate the income they will need during their retirement years. In fact, only 42% of participants in a 2009 survey still expect their 401(k), IRA, and other retirement savings plans to be a major source of retirement income — the lowest measure since the annual survey began.

If you are concerned about having a stable source of retirement income, a fixed annuity may just fit the bill.

Income Now or Later

A fixed annuity is a contract with an insurance company that guarantees a fixed rate of return during the life of the contract. Payouts can be structured to provide a guaranteed income that will last for a specific period or for life. There are two basic types of fixed annuities from which to choose.

An immediate fixed annuity

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Prudential Financial Inc.’s (PRU) third-quarter earnings of $1.59 per share was well ahead of the Zacks Consensus Estimate of $1.33. Results also topped prior-year period’s earnings of $1.02 per share. The upside was driven primarily by strong annuity sales and market appreciation.   Prudential raised its guidance for the full fiscal 2009, based on its earning’s strength and current financial market conditions, including equity market levels, interest rates and credit spread. The company now expects earnings of $5.40 to $5.60 per share, elevated from the earlier range of $5.00 to $5.20 per share.   Net income for the Financial Services Businesses attributable to Prudential Financial Inc. was $1.09 billion or $2.35 per common share, compared to a net loss of $118 million 25 cents a share in the year-ago quarter. The company’s outstanding shares increased 9% year over year due to its stock offering in June.   Prudential’s ...

Recently, Rep. Alan Grayson (D-FL) quipped on the floor of the House that the GOP health care plan amounted to: "1) Don’t get sick, and 2) If you do get sick, die quickly." Yesterday, John Boehner (R-OH), the top GOP man in the House, finally unveiled the official GOP plan...and did little to disprove Rep. Grayson. The GOP plan would allow firms like WellPoint (WLP) and Aetna (AET) to continue to deny coverage based on pre-existing conditions. It would not offer any subsidies to the working poor to help them get covered, and would not require people to buy health insurance, or for employers to offer it. It would make it harder for people to sue if they are injured by medical malpractice. The use of contingency fees by lawyers in malpractice suits would be strictly limited. Thus, for example, if the doctor misread your ...

Yesterday, the Bank of New York Mellon Corporation (BK) completed two acquisitions - Insight Investment Management Limited and Pinnacle Arbitrage Compliance. It acquired Insight Investment Management Limited from Lloyds Banking Group plc (LYG) Insight Investment specializes in Liability Driven Investment (LDI) solutions, active Fixed Income and Absolute Return and is based in London. Its clients include some of the UK's largest pension schemes, corporations, insurance companies and local authorities, along with a growing number of non-UK clients and some of the best known financial services and intermediary companies. BNY Mellon also completed its previously announced acquisition of Pinnacle Arbitrage Compliance, one of the largest independent U.S. firms devoted exclusively to compliance services for tax-exempt bond issuers and conduit borrowers. Terms of the agreement were not disclosed. With these acquisitions, BNY Mellon will have more than $1 trillion in assets under ...

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Vito Racanelli (Barron’s): The easy money has been made, November 2, 2009. The choppy action last week suggests the going gets much tougher from here. In a year in which the market has jumped far off its lows, the bull has so far talked the talk of earnings growth. It’s time to walk the walk.

• Edward Harrison (Credit Writedowns): Bullish data, recoveries, crashes and the psychology of forecasting redux, November 2, 2009. Is a double dip or crash a baseline scenario? No, not necessarily - but it is increasingly likely. So, as bullish as I believe the data are, I am more worried about a bad outcome, not less.

• Andy Kessler (The Wall Street Journal):

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Vito Racanelli (Barron’s): The easy money has been made, November 2, 2009. The choppy action last week suggests the going gets much tougher from here. In a year in which the market has jumped far off its lows, the bull has so far talked the talk of earnings growth. It’s time to walk the walk.

• Edward Harrison (Credit Writedowns): Bullish data, recoveries, crashes and the psychology of forecasting redux, November 2, 2009. Is a double dip or crash a baseline scenario? No, not necessarily - but it is increasingly likely. So, as bullish as I believe the data are, I am more worried about a bad outcome, not less.

• Andy Kessler (The Wall Street Journal):

...

Magellan Health Services Inc. (MGLN) reported third quarter results last Friday. The company posted a 31.9% growth in net income to $31.0 million or 88 cents per share, compared to $23.5 million or 58 cents per share in the year-ago period, and easily surpassed the Zacks Consensus Estimate by 21 cents. The strong result was primarily driven by the acquisition of First Health coupled with the solid performance of the Specialty Pharmacy segment. Magellan Health offers managed behavioral healthcare, radiology benefits management and pharmaceutical management services to health plans, insurance companies, corporations, labor unions and various governmental agencies in the U.S. During July this year, the company completed the acquisition of First Health Services Corp., a subsidiary of Coventry Health Care Inc. (CVH). First Health provides pharmacy benefits administration, health care management and IT services to state Medicaid programs. The company said net revenues recorded ...

Claimsnet.com reported revenues of $565,000 in its third quarter, up 7% on a year over year basis. The company’s net loss for the quarter was $69,000, or $0.00 per share. During the same quarter in 2008, the company lost $161,000 or $0.01 per share.

Claimsnet.com cut its selling, general and administrative expenses by $45,000 from the third quarter of 2008, and boosted its gross profit by $20,000.

Don Crosbie, the CEO of Claimsnet.com, said “these third quarter results were achieved in a relatively challenging economic environment where many companies are still delaying decisions or putting new contracts on hold.” Crosbie was optimistic about the last quarter of 2009 and 2010, citing the company’s pipeline and said “we do see the beginning of a positive change in the environment.”

Claimsnet.com provides services and software to the healthcare industry that allows the submission and processing of healthcare claims and other data over the Internet. Its

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StanCorp Financial Group Inc.’s (SFG) third quarter earnings of $1.21 per share were just a penny ahead of the Zacks Consensus Estimate of $1.20 per share. The company had earned $1.46 per share in the year-ago quarter. High unemployment rate and rising joblessness continue to impact the company’s earnings. Quarterly results reflect higher-than-expected claims activity and reduced premiums in the group insurance business. However, the company benefited from the expense reduction initiatives. Insurance Services segment reported income before income taxes of $84.3 million compared to $103.4 million in the year-ago quarter. The decrease was driven by unfavorable claims experience and a drop in premiums in the group insurance business, partially offset by comparatively favorable claims experience in the individual disability insurance business. Results for this segment were also hurt by a 50 basis point reduction in the discount rate to 4.75% for the newly established disability ...