Here is today's quiz. If you were given $1,000,000 to spend each day, how many days would it take you to spend $12.2 trillion dollars? You are probably wondering where the number $12.2 trillion came from? Well, this is the amount of money the government has committed for economic recovery.

Some of the monies can be accounted for but its still a big mystery where the rest went. So far we know this:

Continue reading $12.9 trillion for economic recovery. Where is it?

$12.9 trillion for economic recovery. Where is it? originally appeared on BloggingStocks on Fri, 19 Jun 2009 18:00:00 EST. Please see our terms for use of feeds.

Continue reading Financial media mourns its Pulitzer

Financial media mourns its Pulitzer originally appeared on BloggingStocks on Wed, 22 Apr 2009 17:15:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Analogic Corp. (NASDAQ: ALOG) beat estimates and announced an acquisition.
• AnnTaylor Stores Corp. (NYSE: ANN) swung to a loss in the fourth quarter on restructuring costs.
• Big Lots Inc. (NYSE: BIG) beat fourth-quarter earinings estimates and offered revised guidance.
• Bon-Ton Stores Inc. (NASDAQ: BONT) posted disappointing fourth-quarter and full-year results.
• Carrols Restaurant Group (NASDAQ: TAST) posted solid results on same-store sales for certain chains.
• Ferrellgas Partners (NYSE: FGP) saw profit fall in what should have been its strongest quarter.
• Foot Locker Inc. (NYSE: FL) fourth-quarter profit fell on weaker same-store sales.
• Humana Inc. (NYSE: HUM) cut its first-quarter and full-year forecasts on higher expenses.
• Imax Corp. (NASDAQ: IMAX) widened its losses for the fourth quarter and the full year.
• Jones Soda Co. (NASDAQ: JSDA) swung to a loss due to costs related to distributing in product in cans.
• K-Tron International Inc. (NASDAQ: KTII) said fourth-quarter and full-year earnings soared.
• Liz Claiborne Inc. (NYSE: LIZ) posted disappointing fourth-quarter and full-year results.
• Six Flags Inc. (NYSE: SIX) narrowed its fourth-quarter and full-year losses.
• Texas Instruments Inc. (NYSE: TXN) lowered its forecast on fewer orders from a key client.
• United Parcel Service (NYSE: UPS) warned it may miss first quarter estimates due to the slowing economy.
• Vail Resorts Inc. (NYSE: MTN) second-quarter profit slipped due to lack of snow early in the season.

Continue reading Earnings highlights: Humana, Texas Instruments, UPS, Liz Clairborne, and others

Earnings highlights: Humana, Texas Instruments, UPS, Liz Clairborne, and others originally appeared on BloggingStocks on Sat, 15 Mar 2008 15:40:00 EST. Please see our terms for use of feeds.

The subprime mortgage mess took yet another victim as Bear Steams (NYSE: BSC) reported its first loss as a public company when it was forced to write down $1.9 billion dollars in investments related to subprime mortgages, according to Bloomberg. Analysts expected a much lighter hit. This loss is $1.2 billion more in write-downs than predicted.

Bear Steams also was hit harder than its chief rivals Citigroup (NYSE: C), Morgan Stanley (NYSE: MS) and Merrill Lynch (NYSE: MER) on the trading side so overall revenue for the fourth quarter resulted in a net loss of $854 million or $6.91 per share. A year earlier fourth quarter results were a net income of $563 million, or $4 per share. Bear Stearns is the second-largest underwriter of U.S. mortgage bonds and it paid dearly for that lead role.

Bloomberg said the firm underwrote $7.3 billion of U.S. bonds, which was 17% less than last year and it managed just $1.18 billion in equity offerings, a 28% decrease. Yet Sanford Bernstein analyst Brad Hintz does see a rainbow at the end of this cloud. He told Bloomberg that he believes that we're heading into a recession and that's when traditional investment banking activities, such as mergers and acquisitions slow, while cuts in interest rates can help Bear's bond business. So Bear could benefit from the recession that's now looking more and more likely.

Since the loss was much greater than anyone predicted, expect the stock to fall today, but early trading made the stock price look like a yo-yo going up and down.

Bear Stearns falls into subprime trap originally appeared on BloggingStocks on Thu, 20 Dec 2007 09:28:00 EST. Please see our terms for use of feeds.

Whether what a CEO does in his spare time is important or not, The Wall Street Journal gives the impression that Bear Stearns (NYSE: BSC) chief James Cayne spent too many hours golfing and play bridge when two of the firms hedge funds were in trouble this summer.

The news about Mr. Cayne spending hours out of the office during the problem period in July is already well-known. But in the lead story at the paper's online edition, reporters for the paper write about Cayne's schedule, his habit of not having his cellphone with him at certain times, and rumors that he smokes marijuana to relax.

The paper also reports that when the hedge fund crisis was at its worst "Mr. Cayne left for Nashville to play in the bridge tournament, accompanied by his wife, Patricia, who is a neuropsychologist and another avid bridge player." He stayed in the city for most of the next ten days.

The WSJ wants to make a virtue out of playing detective, which is fine, but whether it helps shareholders in Bear Stearns is another question.

CEOs of large companies often leave the management of problems in the hands of other senior executives. There is too much activity and too many problems to go around for one person to spend close to full-time on any one. Whether Mr. Cayne did or did not allocate his time correctly during the failure of two of the investment bank's hedge funds will always be a matter of conjecture.

What is certain now is that history will re-write the roles of people like Cayne and Merrill Lynch (NYSE: MER)'s Stan O'Neal. They will be cast as villains. And perhaps they should be. But playing bridge during a crisis is never going to look good.

Douglas A. McIntyre is an editor at 247wallst.com.

Wall Street Journal makes an issue of Bear Stearns CEO habits originally appeared on BloggingStocks on Thu, 01 Nov 2007 04:19:00 EST. Please see our terms for use of feeds.

Chinese investors feel that they got burned when they took a stake in big private equity firm Blackstone (NYSE: BX). That IPO did not do well, so the disappointment is understandable.

But the Chinese may be back. According to a report in the FT, the China Social Security fund, which manages over $62 billion in assets, has its eyes on KKR, Carlyle, and TPG. The fund is interested in a stake of 9.9% in at least one of the companies. The British newspaper quoted one analyst on the potential investment: "'China's interest in buying into overseas financial intermediaries is clearly part of a deliberate strategy,' said Isaac Meng, an analyst with BNP Paribas in Beijing. 'The government is hoping to do a better job in exporting its capital than the Japanese did in the 1980s.'"

That may all be well and good, but members of the US Congress are already concerned about the investment of China's Citic Securities in Bear Stearns (NYSE: BSC). It is unclear how such an investment would compromise US interests, but Congress could try to block these deals on the grounds that large investment and LBO firms control a huge portion of the investment capital in the US. They would not want any Chinese influence in the process.

The Congressional posturing on the matter is a red herring, but meddling by the federal government could simply make the Chinese wary of moving capital into the US. If Congress leaves the matter alone, Wall Street firms are likely to have Chinese shareholders.

Douglas A. McIntyre is an editor at 247wallst.com.

China has more interest in US private equity firms originally appeared on BloggingStocks on Tue, 30 Oct 2007 09:30:00 EST. Please see our terms for use of feeds.

The New York Times reports that Merrill Lynch & Co. (NYSE: MER) CEO Stan O'Neal is out. The company has not picked a replacement, but O'Neal will not keep his job, after the brokerage took an $8.4 billion charge for failed credit and mortgage-related investments in the third quarter.

But one has to wonder why he should be the one to take the fall. His peers at Citigroup Inc. (NYSE: C) and Bear Stearns Cos. (NYSE: BSC), both of which also took huge write-downs, are still employed.

O'Neal was a product of his times. He saw that Merrill did not make as much money as it could, so he pressed the firm more deeply into investment banking and underwriting debt for LBOs. The firm began to invest more for its own account and some of those investments were risky.

O'Neal was a brutal cost-cutter and was willing to fire those closest to him if it suited him. His strategy improved the firm's profits and share price, but he cared nothing for what it cost in morale. He most likely ended up with few allies within his own company. Being a friend was too dangerous.

Merrill's stock price was $35 in early 2003. In January of this year it traded near $100. Even after all the earning trouble, the share price has doubled in under five years.

Last year, Merrill had net income of $7.5 billion, well above the $4.4 billion in 2004.

But, losing $8.4 billion is unpopular, so whatever O'Neal had done for the firm in the past has been forgotten.

Douglas A. McIntyre is a partner at 247wallst.com.

Merrill Lynch: A requiem for Stan O'Neal originally appeared on BloggingStocks on Sun, 28 Oct 2007 17:40:00 EST. Please see our terms for use of feeds.

Chuck Prince, CEO of Citigroup (NYSE: C), needs a few friends. Not the kind he can go fishing with.

Prince's job may be on the line now that Citi has announced that its Q3 profits will drop 60% from last year. According to MarketWatch, the bank blamed "dislocations in the mortgage-backed-securities and credit markets, and deterioration in the consumer-credit environment."

Prince finds himself in a position not unlike that of James Cayne, the head of Bear Stearns (NYSE: BSC). Both financial institutions now have taken very big hits on their watches. Both can blame subordinates, but that may not cut it with their boards or public shareholders.

What saves them? For starters, UBS (NYSE: UBS). The Swiss bank has just reported similar problems in its fixed income portfolio. If the bad news spreads to Bank of America (NYSE: BAC), Lehman (NYSE: LEH) and other global money center banks and investment firms, Prince may be viewed as a victim of a train wreck that almost none of the large firms could avoid. He will, in essence, look as stupid as all of his peers.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Will Citi (C) earnings hit send Chuck Prince out the door? originally appeared on BloggingStocks on Mon, 01 Oct 2007 10:10:00 EST. Please see our terms for use of feeds.

• What All Women Should Know About Retirement
• Top Rocket Stocks for the Week of Oct. 1

Cramer on BloggingStocks: The cost of the redemption panic originally appeared on BloggingStocks on Mon, 01 Oct 2007 08:45:00 EST. Please see our terms for use of feeds.

• Jim Cramer's Portfolios of the Week
• Cramer: Ignore Wal-Mart's Drug Press, Buy CVS

Cramer on BloggingStocks: A slumping dollar will make earnings pop originally appeared on BloggingStocks on Fri, 28 Sep 2007 08:47:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: When stocks run up, scale your way in

Cramer on BloggingStocks: When stocks run up, scale your way in originally appeared on BloggingStocks on Fri, 21 Sep 2007 09:05:00 EST. Please see our terms for use of feeds.

Next week is an important week as Lehman Brothers (NYSE: LEH), Goldman Sachs (NYSE: GS), Bear Stearns (NYSE: BSC) and Morgan Stanley (NYSE: MS) all report the results of their respective August 31 quarter end. Giant Merrill Lynch (NYSE: MER) reports later in October as its quarter ends September 30, but signaled today that sub-prime credit issues would obviously weigh down the financial results. The reason Merrill Lynch "spoke up" about the issue now is that it is about to close on the First Republic Bank acquisition.

The issue for these five major brokerage firms is not the condition of the August 31 quarter and Merrill's September 30 quarter. Consensus thinking is the results will be lousy at best. The principal issue will be to look at balance sheet damage and more importantly, guidance going forward.

The five big firms will survive this crisis as they have historically survived other crises. The point investors want to draw from hard, real numbers will be the outlook for these credit market obligations. Is the bleeding finished with? Is there more to come? One has to be careful not to confuse adjustable mortgages that are re-setting over the next 18 months with the underlying credit obligations supporting those loans. Two different issues.

Continue reading The financial stocks: Time to buy?

The financial stocks: Time to buy? originally appeared on BloggingStocks on Fri, 14 Sep 2007 15:00:00 EST. Please see our terms for use of feeds.

Intel (NASDAQ: INTC) volatility at 31into increase of third quarter revenue guidance.

• INTC is recently trading up $0.25 to $25.72 (12:32 p.m.).
  
• INTC says, "as a result of stronger than expected worldwide demand for its computing products, INTC now expects revenue for the third quarter to be between $9.4 billion and $9.8 billion as compared to the previous rang of $9 billion to $9.6 billion."
• INTC will report EPS on 10/16.
  
• INTC October option implied volatility of 31 is above its 26-week average of 28 according to Track Data, suggesting slightly larger risk.

Bear Stearns (NYSE: BSC) volatility Elevated prior to Aquarian announcing 6.97% positions.

• BSC is recently flat but originally was up $3.05 to $108.16 when the Dow Jones reported that Aquarian Investments is holding a 6.97% stake in BSC for investment purposes.
  
• BSC overall option implied volatility of 59 is above its 26-week average of 42 according to Track Data, suggesting large price movement.

Volatility Index S&P 500 Options-VIX up 0.46 to 26.69; 10-day moving average is 23.95.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: INTC volatility elevated into positive Q3 guidance originally appeared on BloggingStocks on Mon, 10 Sep 2007 13:20:00 EST. Please see our terms for use of feeds.

Goldman Sachs (NYSE: GS) volatility trending lower after last week's spike. GS closed at $177.89. GS September option implied volatility of 40 is below of level of 60 from last week but still above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Bear Stearns (NYSE: BSC) volatility trending lower after last week's spike. BSC closed at of $114.75. BSC September option implied volatility of 59 is below a level of 72 from last week and still above its 26-week average of 40 according to Track Data, suggesting large price movement.

Lehman Brothers (NYSE: LEH) volatility trending lower after last week's spike. LEH closed at $58.54. LEH announced the closure of its subprime brokerage unit, BNC Mortgage, on 8/22. LEH September option implied volatility of 54 is below a level of 75 from last week and still above its 26-week average of 38 according to Track Data, suggesting large risk.

Volatility Index S&P 500 Options-VIX at 22.88; 10-day moving average is 27.49.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Financial companies' (GS, BSC, LEH) volatility trending lower originally appeared on BloggingStocks on Thu, 23 Aug 2007 10:06:00 EST. Please see our terms for use of feeds.

Wednesday the market spiked 150 points at the end of trading. Thursday, it rose 100 right before trading closed. But today that trick didn't work -- instead the Dow fell about 281 points, according to AP.

AP's explanation is that S&P downgraded the debt of The Bear Stearns Companies, Inc. (NYSE: BSC) because of its exposure to the distressed mortgage and corporate buyout markets. And its Chief Financial Officer Sam Molinaro, described conditions in the credit market as the worst he'd seen in more than two decades.

Similarly bad credit news has been around the markets for weeks. But earlier in the week the market spiked at day's end, as I noted above. Today, not so much. Nobody really knows, except the traders, but my guess is that hedge funds have expected this bad credit market news to tank the market so they shorted it. When the market did not drop as much as expected, they decided to cover their short positions before the close of trading. This last minute buying drove up prices.

Maybe today the hedge fund managers left for their 5,000 acre Hampton estates early. So there was no short covering at the end of the day to give the market a pick me up. Something to think about as you cut your grass this weekend.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Bear Stearns.

Why the hedge funds didn't save today's market originally appeared on BloggingStocks on Fri, 03 Aug 2007 17:30:00 EST. Please see our terms for use of feeds.

Everything's big in Texas. Look at the state's Teacher Retirement System (TRS). In all, it has about $112 billion in assets.

Interestingly enough, the pension fund wants to devote about a third of its assets to alternatives, such as hedge funds and private equity funds. This is according to a story in the Wall Street Journal [a paid service].

Yes, when you take a look a the SEC filings of the Blackstone Group (NYSE: BX), Fortress (NYSE: FIG), and KKR, you will see that alternative investment can post strong returns.

Despite this, the TRS strategy is certainly gutsy. Keep in mind that alternative investments can be fairly illiquid. What if it gets tougher to do IPOs or get sound exits on these investments?

Or, what if there is a meltdown, as seen with the subprime hedge funds at Bear Stearns (NYSE: BSC)?

Even the pros can make big blunders. And it could be bad news for pensioners.

On the other hand, TRS's move is certainly good news for the private equity world. Simply put, there's likely to be many more assets under management -- and that means lots of juicy fees.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Teacher Retirement System doubles down on private equity originally appeared on BloggingStocks on Sun, 15 Jul 2007 11:10:00 EST. Please see our terms for use of feeds.

Bear Stearns Companies, Inc. (NYSE:BSC) has jumped on the exchange traded funds (ETF) bandwagon, and will be launching its own actively-managed fund, the Current Yield Fund. If approved, the fund will invest in money market and short-term debt, including US bonds, foreign debt, and corporate bonds. According to the prospectus field with the SEC, "Unlike an 'index fund' which seeks to achieve, as closely as practicable, the total return of the securities comprising a specified market index, the Fund will be actively managed by its portfolio manager. In other words, the portfolio manager will have discretion to choose securities for the Fund's portfolio consistent with the Fund's investment objective."

Analysts predict that if this fund launch is successful, Bear Stearns will move to launch other actively-managed ETFs. Should you take a look at the Current Yield Fund? Probably not. Actively managed funds are nearly always inferior to passive index funds (especially bond funds), and ETFs will always be most attractive in their original form: as passively managed index funds that are easy to trade.

Bear Stearns launches ETF originally appeared on BloggingStocks on Thu, 22 Mar 2007 18:35:00 EST. Please see our terms for use of feeds.

Goldman Sachs Group Inc. (NYSE:GS) reported a 29% gain in first-quarter profit, handily beating analysts' forecasts and investors probably could care less. Wall Street is waiting on pins and needles to find out whether the largest securities firm escaped the black hole engulfing suprime lenders.

As Bloomberg News notes, Goldman Sachs is a lender to New Century Financial Corp. (NYSE:NEW), the suprime lender that can't pay its creditors. Shares of the Goldman have slumped 8.3% since February 20 amid concerns that the real estate market will fall because of higher interest rates resulting in a slowdown of the economy, Bloomberg said.

Not suprisingly, New Century shares were halted yesterday after plunging nearly 90% last week. Another subprime lender Accredited Home Lenders Co. (NASDAQ:LEND) plumetted 27% yesterday and plunged another 43% in pre-market trading.

Suprime lending is bound to come up over the next two weeks when Bear Stearns Cos. (NYSE:BSC), Lehman Brothers Holdings Inc. (NYSE:LEH) and Morgan Stanley (NYSE:MS) report earnings.

Did the subprime tsunami spare Goldman Sachs? originally appeared on BloggingStocks on Tue, 13 Mar 2007 09:10:00 EST. Please see our terms for use of feeds.