The pattern of two steps forward and one step back in the economic data took a big step back today with the release of the personal income and spending numbers. Personal income fell by 1.3% for the month, reversing a 1.3% increase in May, and a 0.2% gain in April. Disposable Personal income suffered a 1.3% decline following increases of 1.6% in May and 0.8% in April. The reason for the swing was the timing of some of the Stimulus Act spending. In May, Social Security recipients got an extra one-time $250 payment, which increased personal transfer income by $166.1 billion and caused the May increase. In June, the absence of these one-time payments caused transfer income to fall by $131.7 billion. If one strips out this effect, personal income fell by 0.1% in June after being unchanged in May. Private wages fell by 28.6 billion in June ...

Obama's Healthcare Plan Is Big Bark, Small Bite by Jason Napodano, CFA

When President Obama's administration released the proposed budget for the upcoming fiscal year, drug stocks quickly dropped. Fears of socialized medicine, or "Hillary-Care 2.0" turned investors away from the sector.

Was the drop warranted?

There are 6 key components to healthcare reform that could have a meaningful impact on pharmaceutical and biotechnology companies in the near future.Four of these are potentially negative, whereas the other 2 are potentially positive.

First Potential Negative: Increasing Pricing Rebates

The new proposal calls for an increase in Medicaid rebates from the current level of 15% to 21%. This equates to a 6% decrease in pricing power by all the companies in our universe into the Medicaid market. If we delve deeper into the ramification of this

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OPPORTUNITIES

The industry is very concentrated, with the top 8 global auto companies having more than 90% of global revenues and the top 50 global auto parts companies having 80% of global revenues (the top 4 US tire producers have 75% of the US market).

There is a focus on automation and simplifying product lines to lower costs and benefit from economies of scale. The average car now needs only 15-25 man-hours per vehicle and this drops 2% annually.

Hybrid/alternative cars represent a source of growth in the future. Market share gains by hybrids/alternatives will be slow, and they are now only 4% of cars on the road.

Back in December of 2008, President Bush approved an emergency bailout of the U.S. auto industry, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers. The government will have the option of becoming a stockholder in

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OPPORTUNITIES

The industry is very concentrated, with the top 8 global auto companies having more than 90% of global revenues and the top 50 global auto parts companies having 80% of global revenues (the top 4 US tire producers have 75% of the US market).

There is a focus on automation and simplifying product lines to lower costs and benefit from economies of scale. The average car now needs only 15-25 man-hours per vehicle and this drops 2% annually.

Hybrid/alternative cars represent a source of growth in the future. Market share gains by hybrids/alternatives will be slow, and they are now only 4% of cars on the road.

Back in December of 2008, President Bush approved an emergency bailout of the U.S. auto industry, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers. The government

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Alex’s Notes: Hat tip to Simon Heapes who pointed this article out to me this morning.

I certainly found the amazing drop in oil price strange when it occurred. When I see an amazing rise or drop, I have learned (ok call it being cynical) that many times it might just be someone tinkering in the markets.

I have seen far too much evidence of this kind of tinkering PERSONALLY to just dismiss it anymore. So when a massive shift occurs, not only do I look at market fundamentals, what the technical traders are saying, but also I look for motive and manipulation.

To assume we trade in “free markets” any more is simply naive.

Does this mean I think every move in the markets are contrived?

No, that is not what I am saying.

What I am saying is, that markets have been manipulated for far smaller incentive than the sovereignty and or control of

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We cite these companies: General Motors (GM), Ford (F), Toyota (TM), Nissan (NSANY), Honda (HMC) and Daimler (DAI).

Today, President Bush approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for tough concessions from the deeply troubled carmakers and their workers. The government will have the option of becoming a stockholder in the companies, in effect partially nationalizing the industry.

If the carmakers fail to prove viability by March 31, 2009, they will be required to repay the loans, which they would find all but impossible. A firm will be deemed viable only if it can show positive cash flow and can fully repay the government loans.

Under terms of the loan, General Motors (GM) and Chrysler must provide the government with stock warrants giving it the option to buy GM and Chrysler stock at a specific

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President-elect Barack Obama has made no bones about wanting to jump-start the renewable energy markets – pledging $150 billion for the development of biofuels, solar and wind power, other alternative energy sources during his first term.

But what might the new administration mean for more traditional – and more reliable –energy sources?

Oil is always the first energy source to spring to mind. But it’s hardly a solo act – coal and nuclear make up the other two-thirds of the top fuel trio. Coal delivers 50% of U.S. electricity needs, and nuclear power brings another 20% to the table.

The cold truth is that demand for energy of all types – and especially electricity – is going to keep advancing, domestically and worldwide. And developing alternatives to coal and nuclear will take time. For instance, tying wind and solar into the existing power grid will be enormously expensive and is likely

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The Wall Street Journal reported that the CPI in China jumped 5.6% for the month of July. Food prices are mostly to blame with meat products rising 45%. China’s Central Bank has been attempting to head-off inflationary pressures by raising short-term rates for the forth time this year. On August 22nd, the one-year rate banks pay on deposits increased 27bps to 3.60%. The one-year benchmark lending rate was lifted 18bps to 7.02%.

The People’s Bank of China wants to encourage its citizens to park more of their money in deposit savings accounts which has been a tough sell due to negative real deposit rates (stated interest – inflation). Inflation fears prompt citizens to increase present spending because postponement leads to a loss of purchase power.