Finance Matters

Archive for April 26th, 2010

it’s not just debt crises on the European periphery that the continent has to worry about.

The economy still really sucks.

This slide from Whirlpool’s (WHR) latest earnings presentation — the earnings report that pushed the stock to an all-time high — is rather telling.

Basically the world looks like: Asia and Latin America are hot. North America’s coming back modestly and Europe remains dormant.

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See Also:

• This Whirlpool Chart Is The Craziest "V" We’ve Seen Yet
• How Could This Be A Recovery With Caterpillar Sales Like These?
• Caterpillar: The Rest Of The World Is Coming Back Fast, But Boy, America Is Horrible

Peter Schiff and economist James Galbraith showed up on CNBC today for a somewhat maddening debate about the seriousness of the US deficit. We say maddening because the two are so far apart on the issue that debate is impossible, and both of them are largely informed by ideology rather than a rational debate about what’s happening right now.

Bottom line: Galbraith has absolutely no fear about the deficit because we can print, and he notes that long-term rates are low. Schiff says the US government is a subprime borrower.

What’s interesting is when they talk about Greece. Schiff says the US is the next Greece. Galbraith says the difference is that Greece is a member of the euro and doesn’t control its currency (it can’t print).

The key line though is when Schiff says: “The fact that Greece can’t print money is a good thing.”

This is the aha line that reveals Schiff’s true ideology. It’s better to have an inflexible currency where you’re forced to default, rather than have the ability to print and inflate. Essentially Greece is under a modern version of the gold standard — it doesn’t have a currency, it just has a supply of euros that it doesn’t control, much like any country would be if its currency were gold.

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Earlier today, we told you police busted into Gizmodo editor Jason Chen’s home and seized his property, arguing that evidence in Chen’s house might contain information about a felony pertaining to a “stolen” iPhone prototype.

According to California state law, Chen could be convicted of buying stolen property “if he knew the goods were stolen at the time of receipt.” According to Gizmodo, the seller of the iPhone “asked around” at the bar where he found it. When he realized it was an Apple prototype, he made several phone calls to the company.

If Chen (or anyone else) were convicted of a felony for receiving stolen property or aiding a thief, he could be sent to state prison or county jail for up to 1 year, according to this explanation from Stephen G. Rodriguez, a Los Angeles criminal attorney. The prison term is based on the severity of the crime: the value of the stolen property and his prior criminal record. It is also based on how vindictive the judge wants to be on behalf of the DA (and Apple) “in the interests of justice.”

If Chen was charged with a misdemeanor, which is charged when the property stolen is worth under $400, he might have only had to pay a fine. But of course, we all know an iPhone prototype is much more valuable to Apple (and Gizmodo) than $400.

Read more on the Gizmodo case:

How it all went down in Chen’s home

All the stuff cops took from his home

The shield law isn’t going to save Gawker

Explaining the shield law that Gizmodo’s lawyer is using

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See Also:

• Explaining The Shield Law Gizmodo Is Using In Their Search-And-Seize Case
• GIZMODO SEARCH WARRANT AMBIGUOUS: Police May Allege That GIZMODO Committed The Felony
• Here’s All The Stuff Cops Confiscated From Gizmodo Editor Jason Chen

A close read of the search warrant police used in the Gizmodo-iPhone search-and-seizure suggests that police are looking for information about BOTH the seller AND buyer of the “stolen iPhone prototype.” 

(See details below).

Now, it’s possible that the information the police recover may incriminate the SELLER of the allegedly stolen iPhone but not the BUYER (for example, if the SELLER knew the iPhone was stolen, but Gawker didn’t know it was an iPhone and/or didn’t believe it was stolen).

But it’s also possible that Gawker Media executives and/or Jason Chen may charged with crimes.

What seems increasingly unlikely is that the police just wantonly violated California’s journalist shield law in an attempt to uncover Gizmodo’s sources merely to determine the identity of the SELLER of the iPhone.  Given Gizmodo’s prominence as a news site, it seems unlikely that the police would expect to win an argument that Jason Chen was not a journalist.

(It does seem possible that the police are using Gizmodo’s potential culpability as a buyer of stolen goods as a Trojan Horse to learn the identity of the SELLER–but don’t actually expect to charge Gizmodo with anything.  Based on the legal TV shows we’ve watched, we imagine this is the sort of thing that would drive defense attorneys insane with rage.)

Here’s what police were looking for at Jason Chen’s house.  Note the multiple references to “stolen iPhone prototype” and “buyer” and “seller”:

 

Here’s All The Stuff Cops Confiscated From Gizmodo Editor Jason Chen

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See Also:

• GIZMODO SEARCH WARRANT AMBIGUOUS: Police May Allege That GIZMODO Committed The Felony
• Here’s All The Stuff Cops Confiscated From Gizmodo Editor Jason Chen
• Cops Bust Into Gizmodo Editor’s Home And Seize Computers, Documents In iPhone Probe

The feel-good March car sales won’t last says Emdunds.com:

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SANTA MONICA, Calif. — April 26, 2010 — This month’s new vehicle sales (including fleet sales) are expected to be 988,100 units, a 20.9 percent increase from April 2009 and a 7.1 percent decrease from March 2010, according to Edmunds.com, the premier online resource for automotive information.

“In March, incentives really helped boost car sales — especially since Toyota’s high-profile recalls led consumers to expect huge bargains,” observed Jessica Caldwell, Director of Industry Analysis for Edmunds.com. “In April incentives averaged nearly $200 less per vehicle industry-wide and sales fell along with incentives.”

“The economy is showing signs of recovery but consumers are still wary, so today car-shopping is largely about bargain-hunting,” commented Edmunds.com Chief Executive Officer Jeremy Anwyl. “Traditionally, summer discounts are worth waiting for but inventory may be spottier than usual this year. The next round of incentives may provide the best opportunity to pick up a great deal on a 2010 model.”

Edmunds.com analysts predict that April’s Seasonally Adjusted Annualized Rate (SAAR) will be 11.2 million, down from 11.8 in March 2010.

“April’s dip shows the auto industry’s recovery will be a slow and bumpy one,” noted Edmunds.com Senior Analyst Michelle Krebs in her report for AutoObserver.com. “Ultimately, though, car sales are significantly better than the 9.2 million SAAR of a year ago.”

April 2010 had 26 selling days, the same as last April 2009 (The chart below sets forth comparisons.)

The combined monthly U.S. market share for Chrysler, Ford and General Motors (GM) domestic nameplates is estimated to be 44.2 percent in April 2010, down from 46.6 percent in April 2009 and up from 43.5 percent in March 2010.

Edmunds.com predicts Chrysler will sell 90,800 units in April 2010, up 18.9 percent compared to April 2009 and down 1.7 percent from March 2010. This would result in a new car market share of 9.2 percent for Chrysler in April 2010, down from 9.3 percent in April 2009 and up from 8.7 percent as in March 2010.

Edmunds.com predicts Ford will sell 166,500 units in April 2010, up 25.9 percent compared to April 2009 and down 8.3 percent from March 2010. This would result in a new car market share of 16.8 percent of new car sales in April 2010 for Ford, up from 16.2 percent in April 2009 and down from 17.1 percent in March 2010.

Edmunds.com predicts GM will sell 179,200 units in April 2010, up 4.1 percent compared to April 2009 and down 4.7 percent from March 2010. GM’s market share is expected to be 18.1 percent of new vehicle sales in April 2010, down from 21.1 percent in April 2009 and up from 17.7 percent in March 2010.

Edmunds.com predicts Honda will sell 110,200 units in April 2010, up 9.1 percent from April 2009 and up 1.8 percent from March 2010. Honda’s market share is expected to be 11.2 percent in April 2010, down from 12.4 percent in April 2009 and up from 10.2 percent in March 2010.

Edmunds.com predicts Hyundai will sell 80,400 units in April 2010, up 35.1 percent from April 2009 and up 3.8 percent from March 2010. Hyundai’s market share is expected to be 8.1 percent in April 2010, up from 7.3 percent in April 2009 and up from 7.3 percent in March 2010.

Edmunds.com predicts Nissan will sell 71,400 units in April 2010, up 51.3 percent from April 2009 and down 25.2 percent from March 2010. Nissan’s market share is expected to be 7.2 percent in April 2010, up from 5.8 percent in April 2009 and down from 9.0 percent in March 2010.

Edmunds.com predicts Toyota will sell 167,800 units in April 2010, up 32.6 percent from April 2009 and down 10.2 percent from March 2010. Toyota’s market share is expected to be 17.0 percent in April 2010, up from 15.5 percent in April 2009 and down from 17.6 percent in March 2010.

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