Posted Jul 2nd 2009 11:10AM by Connie Madon
Filed under: Bad news, Economic data, Federal Reserve, Recession
Bad news! Another 467,000 jobs were lost according to the latest report. This is much worse that last month's loss of 322,000, and brings into question whether the stimulus programs are working to jump-start the economy. Obviously they are not doing the job. The unemployment rate rose to 9.5% from 9.4%.
Analysts had expected a much better report. Alan Ruskin of RBS Greenwich Capital said: "if you were betting on the U.S. driving a vigorous recovery, think again. ... The unemployment report can largely be taken at face value, and the face value story is a labor market that is not improving nearly as rapidly as the May data suggested."
Continue reading Still gloomy -- another 467,000 jobs lost last month
Posted Jun 28th 2009 12:30PM by Trey Thoelcke
Filed under: Earnings reports, Forecasts, H and R Block (HRB), General Mills (GIS), Economic data, Federal Reserve
Things will be pretty quiet again on the earnings front during this holiday-shortened week, so not much chance of fireworks there.
The one report analysts surveyed by Thomson Reuters seem to have the highest hopes for is that from Apollo Group Inc. (NASDAQ: APOL), as people look to education to better position themselves to survive the economic slump. For its fiscal third quarter, during which a new co-CEO was named, the Phoenix, Ariz.-based educational services provider is expected to report a profit of $1.12 per share, which is 24.1% higher than a year ago. Revenue is expected to be 24.3% higher to $1.0 billion. The full-year forecast is currently for $3.97 per share (+28.5%) on sales of $3.9 billion (+24.4%). Earnings have topped expectations in the past four quarters, by as much as 13 cents per share. The long-term EPS growth forecast is 15.9%, which is double the industry average, and the forward PE ratio estimate is 15.0. The First Call consensus recommendation remains to buy APOL; InvestorPlace calls it a stock you can trust. At $68.50, shares are down 10.6% since the beginning of the year, but they peeked above the 100-day moving average at the end of this week for the first time since March.
Continue reading The week in preview: A few chances for pre-holiday fireworks
Posted Jun 24th 2009 7:42AM by Melly Alazraki
Filed under: Before the bell, International markets, Market matters, Economic data, Oil, Housing, Federal Reserve

U.S. stock futures advanced Wednesday morning, pointing to a higher open on Wall Street, but trading is expected to be cautious as investors await the Federal Reserve policy statement this afternoon, which would also give clues about the state of the economy. Meanwhile, another group said the global recession is near a bottom, but flared up concerns over banks again. More economic data due out later this morning could the market a better sense of direction.
The Organization for Economic Cooperation and Development (OECD) said Wednesday the deepest global recession in over 60 years is
close to bottoming out. While this view may be more optimistic than the World Bank's or the IMF recently, the OECD has similar projections regarding the recovery, which will be weak unless governments do more to remove uncertainty over banks' balance sheets.
Continue reading Before the bell: Stocks set to advance as OECD sees bottoming; investors await Fed statement
Posted Jun 23rd 2009 7:40AM by Melly Alazraki
Filed under: Before the bell, International markets, Market matters, Economic data, Oil, Housing, Federal Reserve

U.S. stock futures advanced Tuesday morning, pointing to a higher open on Wall Street, a day after markets sold off sharply. Today is the first day of the Federal Reserve policy meeting, but a statement is not expected until tomorrow. Meanwhile, investors will look at more housing data and focus on Moody's saying it will maintain the United States' credit rating at triple-A.
Moody's Investors Service said on Tuesday that the
U.S. government's triple-A credit rating was safe. But echoing financial markets concers, the credit rating agency said U.S.'s rating could be at risk if Washington were unable to bring its public debt back down.
Continue reading Before the bell: Stock futures advance as Moody's reiterates U.S. rating
Posted Jun 22nd 2009 7:37AM by Melly Alazraki
Filed under: Before the bell, International markets, Market matters, Economic data, Oil, Federal Reserve

U.S. stock futures were lower Monday morning, indicating stocks would begin the week on a down note as the World Bank predicted a deeper slump in 2009 and said a global recovery was 'unusually uncertain.' Meanwhile, the Federal Reserve policymakers are preparing to meet this week, but investors mostly expect no change in policy.
The World Bank has
cut its 2009 global growth forecast, saying the world economy will shrink by 2.9%, up from 1.7%. The bank also cut growth forecast for most countries and warned that economic damage to developing countries "has been much deeper and broader than previous crises."
Continue reading Before the bell: Stock futures lower after World Bank lowers forecast
Posted Jun 16th 2009 1:20PM by Connie Madon
Filed under: Federal Reserve, Financial Crisis
During the years leading up to the financial meltdown, banks primarily took mortgages and other loans and bundled them together. Rating agencies were called in to bless them -- we now know those ratings were bogus. No one bothered to ask what was in the packages and no one cared as long as the value kept rising. Then when the crash came, it was too late. Not knowing what was in the packages, investors could not sell because no one on the other side of the trade wanted to buy. The markets froze and the meltdown was on.
Now U.S. Treasury Geithner wants to change the rules and force lenders to retain at least 5% of the loans they generate. In a way, this is akin to a margin requirement for these securities. Obviously the banks oppose such a measure because it would tie up a portion of their capital.
Continue reading Treasury to impose the 5% rule on securitized securities
Posted Jun 16th 2009 9:30AM by Connie Madon
Filed under: International markets, China, Brazil, Russia, Economic data, Federal Reserve, Recession
There is a disturbing trend that is taking shape across the international financial markets. It involves primarily Russia, Brazil and China. Just what are these countries up to? They may be tipping the balance of international finance into uncharted waters.
Specifically, they are buying smaller quantities of U.S. treasuries and using their excess reserves to buy other non-dollar denominated assets. For example, in April total net purchases of long-term equities, notes and bonds rose a net $11.2 billion compared with a gain of $55.4 billion in March. International holdings increased $41.9 billion in April, compared with $55.3 billion in March.
Continue reading China, Russia, Brazil reducing their purchases of U.S. securities -- why?
Posted Jun 12th 2009 12:00PM by Connie Madon
Filed under: International markets, Federal Reserve, Financial Crisis
The numbers cited here for bank rescue costs are staggering -- way beyond our imagination. Keep in mind that we are talking trillions, not billions. You might want to etch these numbers in your memory to say that you have lived through perhaps the greatest financial crisis of our time.
- The U.S. government and the Federal Reserve have spent, lent, or committed $12.8 trillion to bank rescue, which amounts to about the value of everything produced in this country as of March 31.
- EU governments have approved $5.3 trillion of aid, more than the annual GDP of Germany.
- The UK pledged $1.1 trillion to restore confidence in its lenders, the most of any EU member.
- The top three EU states providing capital injections were the UK with $781.2 billion, Denmark with $593.9 billion and Germany with $554.2 billion.
Continue reading Bank rescue costs are staggering, and there's more to come
Posted Jun 11th 2009 11:40AM by Mark Fightmaster
Filed under: Economic data, Federal Reserve, Recession
Good news everyone! The Fed believes that the worst of the recession has passed. At least that is what its snapshot of economic conditions from yesterday showed. The data indicated that the "downward trend is showing signs of moderating" in five of the Fed's 12 regions.
Furthermore, "several" regions indicate that their expectations of future business activity have improved, but there will not be a "substantial increase" through the end of the year. In the last survey, "several regions" indicated signs of some stability at low levels. Taken in whole, the assessments of businesses on the "front lines" of the economy appear slightly better than in the last report, which was issued in mid-April.
Continue reading Fed data indicates the recession may be slowing
Posted Jun 11th 2009 9:45AM by Mark Fightmaster
Filed under: Deals, Bank of America (BAC), Federal Reserve
Bank of America (NYSE:
BA) CEO Ken Lewis threatened to use a "material adverse change" (MAC) clause to kill the agreement to buy Merrill Lynch because he wanted to get a
lower price, according to the
Financial Times. New e-mails reveal how he was then pressured to proceed with the deal.
A House committee on oversight and government reform is investigating whether or not undue pressure was put on Lewis in order to complete the deal to purchase Merrill Lynch. Reportedly, the Federal Reserve would not comply with the committee's request for documentation and e-mails regarding the accusations, but the committee issued a subpoena to the central bank on Tuesday. Lewis is set to testify about the matter today at a congressional hearing.
Continue reading Bank of America says it was pressured into Merrill Lynch deal
Posted Jun 9th 2009 10:10AM by Mark Fightmaster
Filed under: Economic data, Federal Reserve, Financial Crisis

The Congressional Oversight Panel announced in a report this morning that it feels
more bank stress tests are needed, especially if unemployment rates continue to rise. The group believes that the stress tests should be repeated periodically as long as banks continue to hold toxic assets.
The panel used a risk-modeling approach that is described as "reasonable and conservative," but added that it is impossible for an outside party to mirror the loss projections that form the core of the stress tests. The group noted that the "more adverse scenario" assumption for the U.S. unemployment rate in the tests has nearly been met in 2009. The yearly average for the unemployment rate stands at 8.5%, which isn't far from the 8.9% assumed in the first round of stress tests. The group recommended that the "Treasury publicly track the status of its stress test macro-economic assumptions (unemployment, GDP, and housing prices) and repeat the stress test if the adverse scenario assumptions have been exceeded."
Continue reading More bank stress tests needed?
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