Stock Preacher

As regular readers would know DRYS is has been one of my favorites for some time, both myself and Paul have published a number of research articles on this one including a report on how DRYS was trading well behind the Baltic Index. DRYS and GE marked our financial services divisions first “house trades” over the last few months and Buzz Inc has good sized positions in both.

DryShips Inc reported better than expected quarterly earnings, helped by the recent rise in spot charter rates that the Baltic Index indicated 2 months ago. Drys also seen an increased contribution from its offshore drilling segment. Read more

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As US health care costs rise, so do insurance premiums and the amount of money employers spend on them, from 1996 to 2005, the average contribution rose by 5 % a year in real terms, to $5,068. Some employers are rescinding health care benefits altogether, while others are limiting the number of eligible employees, so enrollment in employer-paid schemes is stagnating or declining, according to a McKinsey Global Institute study. This research also reveals growing disparities in the % of employees at different income levels receiving employer-paid health benefits: only 22 % of employees in the lowest income group (earning an average of US$14,800 a year), but 56 %, 81 %, and 89 % of those in the lower-middle, upper-middle, and top income groups, respectively.

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Global wind capacity grew by 29 % in 2008 with the United States surpassing Germany to become the world’s leading wind power generator, Worldwatch Institute said. The Washington-based research organization said last Thursday that global wind capacity rose by over 27,000 megawatts (MW), or enough to power around 27MM homes, to some 120,798 MW last year. Wind now provides 1.5 % of the world’s energy demand, up from 0.1 percent in 1997. US wind capacity increased by 50 % or 5,170 MW, or 21% of world capacity. In Europe, wind represented the leading source of new power capacity, with 8,877 MW installed in 2008. This was 28% more than new natural gas capacity and over 10 times more than new coal, Worldwatch said. Europe now generates 65,946 MW of wind power, or 55% of global capacity, Germany still leads the region, generating 23,903 MW of wind power, but it saw new installations drop slightly in 2008.

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Industry managers anticipate the performance of their businesses in a recession. The research shows us that during the 1990–91 and 2001–02 downturns the U.S. consumer prioritized spending instead of actually cutting it in all sectors. Consumer spending did drop in discretionary areas, i.e., dining out, personal care products, and charitable donations, but spending on groceries, reading materials, and other options that substitute for more expensive ones rose, as did spending on insurance, health care, and education. Most analysts do not believe that this world recession will last long time because the financial system is much stronger, and globally linked. The majority view is that the recovery will begin in Q-2/Q-3 2009 and will be well underway by Year End 2009. Note: the classic definition of recession as identified by the National Bureau of Economic Research is two consecutive periods of negative economic growth.

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Goldman Sachs’ energy equity research team, which predicted a crude oil spike to $200 a barrel earlier this year, slashed on Friday its 2009 forecast to just $45 as demand deteriorates.

In a separate report, Goldman’s commodities research team also cut its 2009 forecast to an average $45 and predicted world oil demand would fall by 1.7MM bpd and help drive Crude Oil prices down to $30 a barrel in Q1 2009.

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