Archive for the ‘stocks’ Category

Economic Abyss could deepen again

March 12, 2009

A deepening pessimism is taking root in the American economy as joblessness rises inexorably toward 9 percent, businesses are failing, U.S. exports have tanked and Wall Street is in a depression.

Obama: Playing not to lose

Billionaire investor Warren Buffet declares the economy has “fallen off a cliff,” and sees recovery further off than ever. Economists talk gloomily of a long recession followed by years of anemic growth as the once-mighty global economy shrinks for the first time since World War II.

Donald Lambro
The Washington Times

The administration’s plans to bail out failing banks, buy worthless toxic assets and “jump start” a listless economy now seem tame in the face of a dawning realization that the fierce financial infection is far more systemic than they had first imagined.

Global economic analysts here now talk of bank failures in the trillions of dollars, dwarfing the rapidly depleting $350 billion in TARP rescue funds that the Treasury has at its disposal. The Federal Deposit Insurance Corp. is raising its premiums on the nation’s banks to replenish its shrinking fund at a time when many banks are too weak to pony up more money.

President Obama‘s honeymoon, if he ever really had one, is being cut short by new criticism from Wall Street, Republicans and Democrats in Congress and, increasingly, the business community.

Read the rest:
http://www.washingtontimes.com/ne
ws/2009/mar/12/abyss-could-deepen-again/

Related:
Obama Wasting America’s Strategic World Power; China Surges Despite Economy

Obama’s three-pronged economic strategy: delay, delay and delay

China Buying Oil, Uranium, Gold, Other Products At Bargain Prices

Pelosi’s Stimulus II? Lawmakers Propose No Cost, High Employment Energy Package

China Buying Oil, Uranium, Gold, Other Products At Bargain Prices

Russia, “Desperate For Cash,” Sells Oil to China In “Very Bad Deal”
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Even Democrats Showing Signs Of Economic Despair, Worry at White House Inertia

Pelosi: Congress Needs to ‘Keep the Door Open’ to Second Stimulus Package

Obama, Socialism, Fear, Lack of Confidence: Tanking Stocks, Skyrocketing Debt, Recovery Doomed This Year

March 7, 2009
This has the feel of a full scale assault on capitalism….

Some investors and pundits blame Obama for the market’s dismal performance. He inherited a mess, but his rhetoric isn’t helping.
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Obama’s Radicalism Is Killing the Stock Market

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Tom Petruno, Market Beat
Los Angeles Times
March 7, 2009
The stock market is supposed to be a bet on the future.

The market’s verdict so far this year: There is no future.

The continuing meltdown in share prices, the worst since the Great Depression, now has become Exhibit A in the political battle between the Obama administration and its harshest critics.

Conservative pundits including Rush Limbaugh and CNBC-TV’s Larry Kudlow assert that the president is waging war against capitalism itself, with his tax-hike proposals, social programs and banker-bashing rhetoric. That has sent disillusioned investors fleeing, they contend.

Well, something has. After diving 38% last year, share prices are down 24% just since Jan. 1, as measured by the Standard & Poor’s index of 500 big-name issues.

Despite a slight uptick on Friday, stocks plummeted 7% this week alone.

An outside view of the New York Stock Exchange on Wall street. ...

The decline from the market’s peak in October 2007 now is 56.3% — the steepest drop since the plunge of 1938 to 1942, when no less than the future of democracy was at stake.

“I think everybody is afraid of Obama,” said Todd Leone, a veteran stock trader at Cowen & Co. in New York. “They’re afraid he’s a socialist.”

Yes, the S-word.

Others say the market is more upset with the administration’s failure to stabilize the ravaged banking system — a Herculean task that Wall Street had hoped would be the first major challenge the White House tackled.

“Every time Obama talks about something like healthcare, the market’s reaction is — ‘No, the banking crisis!’ ” said Jeffrey Schappe, investment chief at BB&T Asset Management in Raleigh, N.C.

Treasury Secretary Timothy F. Geithner still hasn’t provided specifics on his plan to get rotting loans off the balance sheets of major banks, a step seen as crucial to jump-starting new lending.

For his part, the president this week advised investors to look beyond what he called “day-to-day gyrations” in share prices.

He then ventured into territory where few other presidents have gone. Perhaps taking a cue from fellow Democrat Warren E. Buffett, Obama offered an opinion on whether stocks were bargains.

“What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it,” he said Tuesday.

He didn’t get the lingo right, assuming he meant to say “price-to-earnings ratios,” a measure of stock prices relative to earnings per share. That flub caused snickering among market pros.

Read the rest:
http://www.latimes.com/business/la-
fi-petruno7-2009mar07,0,869176.column

Related:
 Can Democracy Fail With Obama’s Socialist Help?

George W. Obama?

Related:
 Venezuela’s Chavez Urges Obama, U.S. Down Socialist Path

Obama’s Radicalism Is Killing the Stock Market

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Obama’s First Weeks: Economic Disaster, Socialist Agenda,

Just Do It, Barack

March 7, 2009

At least President Obama knows the economy has problems. He’s spoken of a “financial crisis,” a “housing crisis,” a “credit crisis” – you name it.

So he earns points for recognizing the ills that plague us. Too bad he isn’t doing much about them.

Editorial
NY post

Sure, the administration’s housing program promises to keep more Americans in their homes – but it cannibalizes the troubled financial industry to do so.

It’s clear that TARP won’t solve the toxic-assets problem. Maybe Team Obama just prefers to let the financial sector remain one big Superfund site?

No strategy has emerged to bring financial regulations into the 21st century.

And the plan for recidivist beggars like AIG and General Motors is to throw more of your tax money at them.

All this as reports surface that Treasury Secretary Tim Geithner has yet to hire a single deputy – leaving Treasury virtually paralyzed during a major recession.

But instead of cleaning up the mess, Obama has wholly invested himself in a massive scheme to remake the Republic. In the name of “economic recovery,” he’s laboring to nationalize health care and education, and plowing megabillions into the flimsy promise of “green” energy.

Now, if the evaporation of trillions of dollars of wealth had been caused by a shortage of solar panels, or lack of a universal-health-care card, he might be right to do so.

So let’s be clear: His priorities are seriously misplaced – an observation that’s starting to get some traction.

Clearly that was the verdict yesterday from columnists Paul Krugman, Steve Forbes and Charles Krauthammer. When those three agree, it’s time to pay heed.

And pay attention Obama should.

One wake-up call came yesterday, as the government announced that more than 650,000 jobs disappeared in February – the first full month of the age of Obama.

And the Dow has made like an Acapulco cliff diver since Inauguration Day, plummeting more than 1,650 points – nearly 650 of them since the president unveiled the budget he says will solve everything.

This week, a share of Citigroup – worth $55 just 22 months ago – was a better fit for the McDonald’s Dollar Menu than the New York Stock Exchange.

The fact that no one’s buying up these deals means investors are weighing rock-bottom stock prices against the next few years’ economic prospects – and still aren’t convinced they can turn a profit.

Not exactly a stunning endorsement of Obama’s long-term plans for recovery.

Obama is famous for his discipline – and it’s time for him to show some.

Sure, the opportunity to turn America into Europe is appealing enough to put dollar signs in the eyes of any Democrat. But the president needs to ignore the distractions, and start making the fixes America’s economy really needs.

After all, Obama was one of the few Americans to get a new job in recent months. Those who hired him expect him to buckle down and do it.

Related:
Can Democracy Fail With Obama’s Socialist Help?

Stock Markets: When Will the Bull Return?

March 6, 2009

The stock market is crashing — slowly, and in plain view of the people who count on it most. The 53% plunge in the Dow Jones industrials since October 2007 has wrecked the college- and retirement-savings plans of millions of investors. It has permanently lowered the long-term investment projections of private endowments and pension funds. It has sent corporate compensation experts scrambling to figure out how to reward top employees. All told, more than $10 trillion of stock market wealth has vanished, and with it the confidence that springs from financial security.

By David Henry
Business Week
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While 17 months may feel like an eternity, it could turn out merely to be a prequel. The questions on the minds of investors, money managers, and corporate executives are threefold: How much longer will the bear market last? How low will the averages go? And when might investors get their money back?

As Warren E. Buffett has said: “Beware of geeks bearing formulas.” It’s especially difficult to predict the direction of the markets these days because the most popular gauges, from price-earnings ratios to measures of investor “capitulation,” have stopped working. The peculiar nature of this bear market limits the kit of useful tools to just a handful of bond market and business confidence indicators.

Those signals, along with interviews with financial historians, market strategists, and economists, point mostly to painful scenarios. Stocks don’t seem likely to fall much more from here — but market turmoil could continue for months or even years. Worse, by the time the market revisits its highs, so many years are likely to have passed that many older people will have gotten out of stocks, missing out on the rebound. The flip side is that new money put into the stock market now will likely do comparatively well over the long term. That’s welcome news for twentysomethings and executive compensation consultants, but perhaps not for soon-to-be retirees.

Read the rest:
http://news.yahoo.com/s/bw/200
90306/bs_bw/0911b4123026586146

Related:
http://throwingstones.wordpress.com/2009/0
3/05/moderates-uneasy-with-obama-plan-ma
nu-raju-politicocom/

Obama Urged Investors to “Buy,” But Stocks Dive Again Thursday

March 5, 2009

Trying to pump up the nation’s confidence, President Barack Obama said Tuesday that Wall Street has been hammered so hard that “buying stocks is a potentially good deal,” and he dispatched top aides to Capitol Hill to defend his plans for pulling the economy out of its deep recession. But the stock market slipped ever lower, as investors exhibited a total lack of confidence….

*****

NEW YORK (AP) — March 5: Investors fled Wall Street as fear grew about the stability of the nation’s largest banks and worries mounted about General Motors Corp. The major market indicators resumed their slide Thursday after a one-day rally, falling to levels not seen in more than a decade as investors contended with more disheartening economic data, new concerns about the stability of GM and ongoing uncertainty about the financial system.

Read the rest:
http://finance.yahoo.com/news/S
tocks-tumble-as-investors-apf-145
57845.html

Worst U.S. Stocks Slide in Inauguration Day History

January 21, 2009

U.S. stocks sank, sending the Dow Jones Industrial Average to its worst Inauguration Day decline, as speculation banks must raise more capital sent financial shares to an almost 14-year low.

State Street Corp., the largest money manager for institutions, tumbled 59 percent after unrealized bond losses almost doubled. Wells Fargo & Co. and Bank of America Corp. slumped more than 23 percent on an analyst’s prediction that they’ll need to take steps to shore up their balance sheets. The Dow’s 4 percent slide was the most on an Inauguration Day in the measure’s 112-year history, according to data compiled by Bloomberg and the Stock Trader’s Almanac.

“All the banks are going to have to recapitalize,” said Greg Woodard, portfolio strategist at Manning & Napier Advisors Inc., which manages $16 billion in Fairport, New York. “That’s not done. That’s in front of them, and we don’t want to try to get in front of that trade.”

The S&P 500 plunged 5.3 percent to 805.22. The S&P 500 Financials Index fell 17 percent to below its lowest closing level since March 1995 as concern European banks need more capital also weighed on the group. The Dow average slid 332.13 points to 7,949.09. Both the Dow and S&P 500 retreated to two- month lows.

The S&P 500 is off to its worst start to a year, shattering the biggest rally since World War II, as analysts cut earnings estimates by a record 83 percentage points and companies signal worse to come.

Bloomberg

A paedestrian passes before a share prices board which has news ... 
A paedestrian passes before a share prices board which has news pictures of new US President Barack Obama in Tokyo on January 21. Asian stocks fell Wednesday after a plunge on Wall Street, where financial fears eclipsed hope that US President Barack Obama will move quickly to resuscitate the stricken economy.(AFP/Yoshikazu Tsuno)

The S&P 500 is down 11 percent in the first 12 trading days of 2009, exceeding last year’s 9.2 percent drop, according to data compiled by Bloomberg going back to 1928. The decline helped erase more than two-thirds of a 24 percent rally since Nov. 20 as optimism that government spending would revive the economy evaporated.

‘Effectively Insolvent’

U.S. financial losses from the credit crisis may reach $3.6 trillion, according to New York University Professor Nouriel Roubini, who predicted last year’s economic and stock-market meltdowns.

“If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion,” Roubini said at a conference in Dubai today. “This is a systemic banking crisis.”

Europe’s Dow Jones Stoxx 600 Index retreated 2.1 percent today, led by banks and technology companies. It fell almost 2 percent yesterday after Royal Bank of Scotland Group Plc forecast the biggest-ever loss by a U.K. company. The MSCI Asia Pacific Index retreated 2.1 percent today.

Obama Sworn In

Barack Obama became the 44th U.S. president today, inheriting the most severe economic crisis since Franklin D. Roosevelt was sworn in 76 years ago. The turmoil has dragged the world’s largest economies into recession, caused more than $1 trillion of losses at financial institutions and prompted a sell-off in global stock markets.

Treasuries fell for a second day on speculation Obama will sell record amounts of debt to battle the recession. The dollar strengthened for a second day against the euro.

State Street lost $21.46 to $14.89 for the biggest drop in the S&P 500 and the stock’s steepest tumble since at least 1984. Unrealized losses on fixed-income investments rose to $6.3 billion at Dec. 31 from $3.3 billion at Sept. 30, the company said. Unrealized losses on assets held in conduits increased to $3.6 billion from $2.2 billion.

Bank of New York Mellon Corp., the world’s largest custodian of financial assets, fell 17 percent to $19, its lowest closing price since 1997.

Financials Tumble

Financial companies posted the biggest drop among the S&P 500’s 10 main industry groups as all 81 shares fell.

Wells Fargo, the largest bank on the U.S. West Coast, slid 24 percent to $14.23. Friedman Billings Ramsey Group Inc. analyst Paul Miller lowered his earnings estimates and price target, in addition to predicting a dividend cut.

Bank of America, the biggest U.S. lender by assets, fell the most in the Dow average, sliding 29 percent to $5.10. FBR’s Miller estimated Bank of America needs at least $80 billion of additional capital.

Read the rest from Bloomberg:
http://www.bloomberg.com/apps/news?
pid=20601087&sid=aOYw.awwsNSg&r
efer=worldwide

The Bank of America building in Washington, The bank will receive ... 
The Bank of America building in Washington, The bank will receive 20 billion dollars in fresh capital to help shore it up after acquiring Merrill Lynch, the US Treasury Department announced(AFP/File/Karen Bleier)