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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ChanceIs who wrote (168632)	12/3/2008 11:25:34 AM
From: John Koligman	Read Replies (1) \| Respond to of 306849

Freeport-McMoRan suspends dividend, cuts output Wednesday December 3, 8:06 am ET By Euan Rocha NEW YORK (Reuters) - Freeport-McMoRan Copper & Gold Inc (NYSE:FCX - News) suspended dividend payments, slashed its 2009 capital expenditure budget and lowered copper output on Wednesday due to a slump in metal prices and its shares fell 13 percent. The collapse in the U.S. housing market triggered a freeze in global credit markets, leading to a recession in many developed economies and a sharp slowdown in developing regions. This has hurt metal demand and prices that were at record levels in mid-2008. "The suspension of our dividend reflects the sharp and rapid decline in copper and molybdenum prices, the dislocation of capital markets and the uncertain economic outlook," Chief Executive Richard Adkerson said in a statement. Freeport will reduce copper production by about 200 million pounds in 2009 and by about 500 million pounds in 2010 from October estimates. Copper prices on the London Metals Exchange averaged $3.61 per pound in the nine-month period ending September 30. The price of copper has since fallen and averaged $2.23 per pound in October 2008 and declined further to average $1.69 per pound in November 2008. Freeport is reviewing its copper mining operations to identify potential further reductions in costs. The company plans to more than halve its 2009 capital expenditure budget to $1.1 billion from a prior estimate of $2.3 billion. The move to suspend the annual dividend of $2 per share will save the company about $755 million on an annual basis, it said. The latest cost cutting measures come a just a few weeks after the company, the world's largest publicly traded copper producer, said it was delaying the restart of its Climax molybdenum mine and cutting production by 25 percent at the Henderson molybdenum mine. Both mines are in Colorado. Freeport also said it would delay expansions at the Sierrita and Bagdad copper mines in Arizona and push back the restart of its Miami mine in the state, cutting about $370 million in planned capital costs. Last month, the company also said it would cut more than 600 jobs at its U.S. mining operations to lower costs. Freeport expects 2008 operating cash flow of about $3.4 billion, which include about $900 million in working capital requirements. The company estimates its cash flow from operations, before working capital changes, will be about $2 billion in 2009. It currently expects working capital requirements of about $750 million in 2009. Phoenix, Arizona-based Freeport has a $1.5 billion revolving credit facility which matures in March 2012. As of September 30, no amounts were drawn and availability totaled about $1.4 billion after considering outstanding letters of credit, the company said. Freeport plans to use the revolving facility from time to time for working capital and short term funding requirements but does not intend to use the facility for long-term funding items. Shares of Freeport were down 13 percent to $19.04 in trade before the morning bell.

To: ChanceIs who wrote (168632)	12/3/2008 12:06:20 PM
From: Smiling Bob	Read Replies (1) \| Respond to of 306849

The automobile was only made affordable for most by the inroduction of leasing about 20 years ago. Another way for Detroit to generate cash faster and defer their pension and medical obligations. By increasing the turnover cycle, they were selling and producing more cars than we needed- replace every 36 months- and putting off the day of reckoning they're now facing. An auto bubble- much like the housing bubble.

To: ChanceIs who wrote (168632)	12/3/2008 12:13:47 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

i think you covered her presentation well... as to the 'stag-deflation' and forced selling, i see that point as well, but i would add the 'forced selling' seems to be extended to just about everything, not just financial assets...so another word for that is deflation<g> the price cuts i'm seeing on everything from computers to cell phones to clothes to energy efficient bulbs (you know the ones they were selling for $5 apiece? just saw a 4pack of them for $2.44 at home depot) and even food (my grocery store hasn't technically lowered prices from last summer's runnup, but i see 'specials' on the products all the time, and the mother of all deflationary prices on consumables is of course energy..... warren's point about the squeeze on the middle class, documented over the past 30 years ended with a RE bubble that they thought would save them, affording them discretionary purchases that the inflation in health care, education, taxes, otherwise would have precluded,since wages weren't keeping up....and as we all know, that bubble has blown up in their faces and they're back to living week to week within their means (understanding that CC lines are being pulled back hard as well).... this certainly does not bode well for business in this country, china, or any place else on the planet that relies on discretionary consumer spending i think we do need a stimulus, but my idea of stimulus is enabling the solvent to refi their loans at 3 or 4 percent, and then perhaps some investment tax credit for small business, new SBA programs that allow business access to capital at cheap interest, very good terms, but ONLY to the businesses that are solvent.....throwing money at the insolvent is simply taking money out of the hands of the people who could be most productive and create jobs, i agree with denninger, we have to let the insolvent default, and concentrate our efforts on easing the financial strain on the rest of the 90% who continue to pay their bills under very adverse economic conditions

To: ChanceIs who wrote (168632)	12/3/2008 12:16:38 PM
From: TheStockFairy	Read Replies (2) \| Respond to of 306849

"5) Jimmy Rogers says that the current apparent deflation isn't deflation at all - rather a forced sell-off." I agree but I don't understand how commod prices are going to go back up if 1) demand for building products is down. 2) demand for products in general are down. 3) credit is unavailable to margin the accounts of the speculators (so they can pump the price up)

To: ChanceIs who wrote (168632)	12/3/2008 12:21:24 PM
From: Jim McMannis	Respond to of 306849

Roubini talks "Stag-Deflation." Roubini is no dummy.