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Guess this new CFO has not committed himself in order to supervise a continued process of death spiral financing,
he may have a reason for being a believer; obviously he knows something we don't know (yet)
go to 0.0012
we are watching a historic event of the Fed
overcoming a historic economic crisis by even more historic deficit spending approach, never happened before, just madness
Can't believe this works and leads to anything useful because otherwise any economic crisis could be resolved easily and would not be even possible
we will regret this clueless action soon and I don't mean the stock market alone
this whole process illustrates how dominant Wall Street has become, ironically even more dominant by this 2007-2008 credit crunch
amazing, makes me believe that the next crash will be even bigger
phony economy grows and grows, just madness
who bought AIG, C throughout this week ??? simply insolvent companies
just for a promised outlook of a CEO
Pandit as saviour how ridicolous he created this mess and is still in place and people buy this nonsense now again
however, very overbought everything, irrational mood is best sign for imminent huge leg down
so manipulated by cheap money, ridicolous
Today's the day
What's the story here ?
Anything substantial going on again ?
just a healthy setback, keep buying
Dollar's Hit a "Major Bottom," Prechter Says: Why That's Not Such Good News
Posted Aug 11, 2009 07:44am EDT by Peter Gorenstein in Newsmakers, Commodities
http://finance.yahoo.com/tech-ticker/article/298957/Dollar%27s-Hit-a-%22Major-Bottom%22-Prechter-Says-Why-That%27s-Not-Such-Good-News?tickers=^DJI,^GSPC,UUP,UDN,TBT,GLD,SLV&sec=topStories&pos=9&asset=&ccode=
Forget all the talk about the dollar being in terminal decline. The recent rally in the greenback is for real, says Robert Prechter, president of Elliott Wave International. The man who correctly predicted the 1987 crash and last year's peak in oil prices now says we're "going to be up for a year or two in the dollar."
Reuters and other mainstream news outlets attribute the recent uptick in the dollar versus other major currencies to an improving economy signaled by Friday's "stronger-than-expected U.S. jobs numbers." Prechter, ever the contrarian, says the U.S. dollar has put in a major bottom but not for the reasons everyone else is pointing to.
Prechter points to three factors:
* The Elliott Wave Pattern: Without getting too technical (for your sake and mine) Elliott Wave Theory looks at markets cycles in terms of wave structures that come in five parts. Five waves up followed by five waves down. Well, according to Prechter's research the pattern confirms we recently hit the fifth wave down. Next stop: up.
* Sentiment has reached an extreme: "The Dollar Sentiment Index for the Dollar Index reports just 3% bulls among traders, an extreme level only five times in the past 20 years, usually near an important low," Prechter wrote on Aug. 5. "The last time we saw readings like this was March-July 2008, just before the dollar soared." In other words, the "short the dollar" trade is overly crowded.
* The biggest risk to the economy is deflation not inflation: As he lays out in his book, Conquer the Crash, Prechter thinks the bursting of the latest bubble will lead to a major economic depression.
As we discuss in forthcoming segments, this good news for the dollar spells bad news for most other asset classes including stocks, commodities and real estate.
Why are company insiders selling?
Company Focus 8/5/2009 12:01 AM ET
The recovery is supposed to be under way, right? But insider sales are at levels not seen in almost 2 years, which suggests there's still a bear out there.
By Michael Brush
MSN Money
A few tidbits of good economic data and generally better-than-expected profit reports have heated up the market once again on speculation the worst is really over.
Company insiders may be telling us the opposite.
While investors have lifted stocks even higher off the March lows, insiders have been quietly selling lots of shares of their own companies into the strength in the past month.
Ominously, insider sales now stand at levels not seen since late 2007, right before the current bear market began. And history shows that insiders are worth paying attention to, because they're the ones on the front lines.
The good news is that inside selling hasn't yet reached levels that portend a prolonged bear market. Instead, they could be signaling pullbacks that give you a chance to put money into stocks at lower prices.
But several sectors do appear destined for serious trouble, including consumer-oriented stocks and technology. Specifically, negative trends combined with insider selling suggest to me that First Solar (FSLR, news, msgs), J.M. Smucker (SJM, news, msgs), Moody's (MCO, news, msgs), Pulte Homes (PHM, news, msgs), Riverbed Technology (RVBD, news, msgs), CKE Restaurants (CKR, news, msgs) and Texas Roadhouse (TXRH, news, msgs) are particularly vulnerable.
The inside story
First, here's the big picture:
* An insider gauge tracked by Market Profile Theorems, a Seattle research shop, moved into bearish territory July 31 for the first time since November 2007.
* An insider sell-buy ratio tracked by Thomson Reuters has been hovering around bearish levels not seen since November 2006. It recently registered 53, meaning insiders pulled $53 out of the market for every $1 in stock they purchased.
* Another insider sell-buy ratio, tracked by Vickers Stock Research, is now "well within the bearish range," says David Coleman, who analyzes insider activity for Vickers. It hasn't been so high since November 2007.
Absolutely, the system has been saved at a very critical point of time. I agree.
However, what they have effectively done is only buying some more time until all this debt must be finally paid off.
The system almost collapsed under all this debt and the governemnt effectively refinanced this ocean of private and corporate debt by federal debt for the moment.
However, it is not paid off yet and the ugly thing is that the ordinary citizen is paying for it by losing his job now and paying higher taxes for years although most of the ordinary citizens have not been directly responsible for this mess. Those (Wall Street) who caused it were bailed out and get even richer right now.
Possibly temporary nationalization of banks would have been the better and quicker approach for the real economy and the tax payer. In the past Japan required almost a decade to recover from a similar national crisis of the finacial system by leaving the banks essentially untouched. So it still not clear right now if we will completely recover soon from this mess. Recovery of the banks is only the first part of the whole solution.
Actually I didn't suggest to short
I rather commented on the fundamental situation (which often does not help to make profits but should be kept in mind at least in the long run).
Foreclosures still rise and will experience a second wave by unemployed people and people hurt by credit card debt.
Stock markets have only been artifically pumped by floating the markets with cheap money. Stock markets have also benefited by the "good" old financial system still in place which forces every fund manager to follow the trend no matter if this is reasonable or not, it is simply another bubble created by the FED and a big bear market rallye.
The real economy has not recovered yet, numbers are still bad generally, only analyst expectations have been reduced in order to bring more fuel to this fire. Cost cutting kept the corporate results partially in control but real growth based on better products and increasing demand is a whole different story.
The consumer is critical and will still have to pay off all this accumulated private and government debt for the next couple of years by saving instead of spending, by higher taxes and possibly also inflation.
The system has not healed yet at all.
There are still a couple of trillion $$$ of toxic waste floating around. It is still there according to IMF.
imo a larger setback is coming now,
probably we have even seen recently the high for a very long time.
The US consumer will seal the fate for the next couple of years, fiscal stimulus can not be maintained endlessly and replace consumption in order to articially keep this system running. The time to tighten the belts has finally come.
At least the government has saved the system as such (and made some more bankers rich one more time).
we need another stress test to "fix" this
Dick Bove: Next Week’s Bank Earnings Will Be ‘Terrible’
Published: Friday, 17 Jul 2009 | 2:20 PM ET
By: JeeYeon Park
The quarterly reports for the big banks were terrible across the board, but stocks are up because the psychology and the method of valuing bank stocks have changed, said Richard Bove, financial strategist at Rochdale Securities.
“Goldman Sachs had real earnings; JPMorgan had no earnings,” Bove told CNBC.
“JPMorgan saw its deposits, loans go down. It saw its margins go down, it saw its trading go down, it had big capital gains it had pulled out from somewhere to come up with a positive number.”
Bove said although he is also unsatisfied with Citigroup and Bank of America’s results, the markets are willing to accept the numbers because the method of valuing bank stocks has changed.
“So I’d still buy the stocks I have mentioned,” said Bove, “But you’re going to see terrible earnings out of every bank that reports because most of these banks do not have the benefit of capital markets activities. I’d say 50 percent of them are going to lose money.”
The problem will be that the next bubbles (credit card, commercial real estate, etc.) meet historically high unemployment and "consumers", who will literally not be consumers anymore for years to come but only debtors, welfare recipients or savers at best.
Fed already feels the pressure to stop the dollar press and this endless bailout action. The next waves cannot be resolved anymore by government bailouts as it was possible with the banks recently. Not too much dry powder is left for bailouts, California is a good example, it rather needs a bailout too. Several European countries have already received bailouts.
This is not over until all bills are finally paid. And even the banks have not paid yet.
This crisis is a once-in-a-lifetime event. And such historical crises cause much more pain than the pain we suffered from so far.
This rallye is only another Greenspan-like bubble produced by money for free and a financial industry who has not changed a bit yet.
Greenspan: US economy improved, banks need funds
"There is still a very large unfunded capital requirement in the commercial banking system in the United States and that's got to be funded," he added.
http://www.reuters.com/article/marketsNews/idINSP1641120090521?rpc=44
What is the number behind "very large" ?
Definitely much more than the numbers raised recently by the banks.
Deutsche Bank senior execs cash in shares
12.05.2009 19:19
FRANKFURT, May 12 (Reuters) - Top managers at Deutsche Bank (News/Aktienkurs) have sold shares in the Frankfurt-based lender, regulatory filings published on Tuesday show.
Pierre de Weck, head of private wealth management, sold more than 66,000 shares for 2.74 million euros, filings show.
The sale, which happened in stages between May 6 and May 8, was made for an average price of around 41 euros a share.
Only three months ago, de Weck bought 30,000 shares for 22 euros each, director's dealings show.
Seth Waugh, chief executive for the Americas, sold 22,000 shares at an average price of $55.5 a share, worth $1.26 million, according to the filings.
(Reporting by Edward Taylor; editing by David Cowell)
((edward.taylor@thomsonreuters.com, Reuters Messaging: edward.taylor.reuters.com@reuters.net;
U.S. banking crisis may last until 2013: S&P
By Jonathan Stempel
NEW YORK (Reuters) - A day after saying big U.S. banks probably needed to raise only one-fourth the capital demanded by the government, Standard & Poor's said the nation's banking crisis has "merely entered a new phase" and might not end before 2013.
The credit rating agency said the industry is being propped up by hundreds of billions of dollars of government support, especially for lenders considered too important to the financial system to fail.
While efforts to spur lending, take bad assets off banks' balance sheets, and restart the market for packaging and selling securities may help the sector, S&P said banks will have a tough time surviving absent a bigger capital cushion than regulators require.
"There's nothing to say that this banking crisis can't go on for another three or four years," S&P Managing Director Tanya Azarchs said.
S&P did not immediately return a request for comment.
On Tuesday, S&P said major U.S. banks need to raise about $18 billion of capital to protect themselves from the economic downturn, though this amount could grow if conditions worsen.
The amount is well below the $74.6 billion that the government last week ordered 10 of the largest U.S. banks, led by Bank of America Corp (NYSE:BAC - News) and Wells Fargo & Co (NYSE:WFC - News), to plug potential capital shortfalls.
These 10 banks were among 19 subjected to government "stress tests" to gauge their readiness to withstand a particularly severe recession in 2009 and 2010.
The other nine, including JPMorgan Chase & Co (NYSE:JPM - News) and Goldman Sachs Group Inc (NYSE:GS - News), got clean bills of health when stress test results were released on May 7.
S&P on May 4 said it may lower its ratings for 23 U.S. banks and thrifts, including 10 that underwent stress tests, citing concern about the industry's capitalization.
It said the 23 companies had at least a 50 percent chance of being downgraded within 90 days.
(Reporting by Jonathan Stempel; Editing by Richard Chang)
Fed Cut Size of Banks' Deficits After Haggling: Report
By: Reuters | 09 May 2009 | 01:03 PM ET
The Federal Reserve reduced the size of capital deficits facing several banks before releasing the results of "stress tests" on the financial institutions, the Wall Street Journal said Saturday.
The changes came after days of negotiations with the banks, it said.
The Federal Reserve used a different method than analysts and investors had expected to calculate the required capital levels.
U.S. regulators told top banks Thursday to raise $74.6 billion to build a capital cushion officials hope will restore faith in financial companies and set a course out of the deepest recession in decades.
The results of the tests — which involved more than 150 regulatory officials poring over the books of the 19 largest companies — effectively drew a line between healthy and weak, and quantified exactly how much those institutions struggling under the weight of souring loans must raise.
At least half of the banks pushed back against the preliminary findings of the tests, the Wall Street Journal said, citing people with direct knowledge of the process.
Citigroup's [C 4.02 0.21 (+5.51%) ] capital shortfall was reduced to $5.5 billion from about $35 billion after bank executives persuaded the Fed to include future capital-boosting impacts of pending transactions, the paper said.
Wells Fargo's [WFC 28.18 3.42 (+13.81%) ] shortfall was cut to $13.7 billion from from $17.3 billion and Fifth Third's [FITB 8.49 3.144 (+58.81%) ] was reduced to $1.1 billion from $2.6 billion.
Copyright 2009 Reuters.
Fed Cut Size of Banks' Deficits After Haggling: Report
By: Reuters | 09 May 2009 | 01:03 PM ET
The Federal Reserve reduced the size of capital deficits facing several banks before releasing the results of "stress tests" on the financial institutions, the Wall Street Journal said Saturday.
The changes came after days of negotiations with the banks, it said.
The Federal Reserve used a different method than analysts and investors had expected to calculate the required capital levels.
U.S. regulators told top banks Thursday to raise $74.6 billion to build a capital cushion officials hope will restore faith in financial companies and set a course out of the deepest recession in decades.
The results of the tests — which involved more than 150 regulatory officials poring over the books of the 19 largest companies — effectively drew a line between healthy and weak, and quantified exactly how much those institutions struggling under the weight of souring loans must raise.
At least half of the banks pushed back against the preliminary findings of the tests, the Wall Street Journal said, citing people with direct knowledge of the process.
Citigroup's [C 4.02 0.21 (+5.51%) ] capital shortfall was reduced to $5.5 billion from about $35 billion after bank executives persuaded the Fed to include future capital-boosting impacts of pending transactions, the paper said.
Wells Fargo's [WFC 28.18 3.42 (+13.81%) ] shortfall was cut to $13.7 billion from from $17.3 billion and Fifth Third's [FITB 8.49 3.144 (+58.81%) ] was reduced to $1.1 billion from $2.6 billion.
Copyright 2009 Reuters.
Banks Won Concessions on Tests
Fed Cut Billions Off Some Initial Capital-Shortfall Estimates; Tempers Flare at Wells
By DAVID ENRICH, DAN FITZPATRICK and MARSHALL ECKBLAD
The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.
In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.
The overall reaction to the stress tests, announced Thursday, has been generally positive. But the haggling between the government and the banks shows the sometimes-tense nature of the negotiations that occurred before the final results were made public.
Government officials defended their handling of the stress tests, saying they were responsive to industry feedback while maintaining the tests' rigor.
Interactives: Compare Banks Tested
When the Fed last month informed banks of its preliminary stress-test findings, executives at corporations including Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were furious with what they viewed as the Fed's exaggerated capital holes. A senior executive at one bank fumed that the Fed's initial estimate was "mind-numbingly" large. Bank of America was "shocked" when it saw its initial figure, which was more than $50 billion, according to a person familiar with the negotiations.
At least half of the banks pushed back, according to people with direct knowledge of the process. Some argued the Fed was underestimating the banks' ability to cover anticipated losses with revenue growth and aggressive cost-cutting. Others urged regulators to give them more credit for pending transactions that would thicken their capital cushions.
At times, frustrations boiled over. Negotiations with Wells Fargo, where Chairman Richard Kovacevich had publicly derided the stress tests as "asinine," were particularly heated, according to people familiar with the matter. Government officials worried San Francisco-based Wells might file a lawsuit contesting the Fed's findings.
The Fed ultimately accepted some of the banks' pleas, but rejected others. Shortly before the test results were unveiled Thursday, the capital shortfalls at some banks shrank, in some cases dramatically, according to people familiar with the matter.
[fed changed estimates]
Bank of America's final gap was $33.9 billion, down from an earlier estimate of more than $50 billion, according to a person familiar with the negotiations.
A Bank of America spokesman wouldn't comment on how much the previous gap was reduced, though he said it resulted from an adjustment for first-quarter results and errors made by regulators in their analysis. "It wasn't lobbying," he said.
Wells Fargo's capital hole shrank to $13.7 billion, according to people familiar with the matter. Before adjusting for first-quarter results and other factors, the figure was $17.3 billion, according to a federal document.
"In the end we agreed with the number. We didn't necessarily like the number," said Wells Fargo Chief Financial Officer Howard Atkins. He said the company was particularly unhappy with the Fed's assumptions about Wells Fargo's revenue outlook.
At Fifth Third Bancorp, the Fed was preparing to tell the Cincinnati-based bank to find $2.6 billion in capital, but the final tally dropped to $1.1 billion. Fifth Third said the decline stemmed in part from regulators giving it credit for selling a part of a business line.
Citigroup's capital shortfall was initially pegged at roughly $35 billion, according to people familiar with the matter. The ultimate number was $5.5 billion. Executives persuaded the Fed to include the future capital-boosting impacts of pending transactions.
SunTrust Banks Inc. also persuaded the Fed to significantly reduce the size of its estimated capital gap to $2.2 billion, after identifying mathematical errors in the Fed's earlier calculations, according to a person familiar with the matter.
PNC Financial Services Group Inc., saw a capital hole materialize at the last minute. As recently as Wednesday, PNC executives were under the impression they wouldn't need to find any new capital, according to people familiar with the matter. Thursday morning, the Fed informed PNC that it had a $600 million shortfall.
Regulators said other banks also were told they needed more capital than initially projected.
The Fed's findings were less severe than some experts had been bracing for. A weeklong rally in bank stocks continued Friday, with the KBW Bank Stocks index surging 10%. Investors were especially relieved by the relatively small capital holes at regional banks. Shares of Fifth Third soared 59%, while Regions Financial Corp.'s $2.5 billion deficit led to a 25% leap in its stock.
With the stress tests, government officials were walking a fine line. If the regulators were too tough on banks, they risked angering their constituents and spooking markets. But if they were too soft, the tests could have lost credibility, defeating their basic confidence-building purpose.
All the back-and-forth is typical of the way regulators traditionally wrap up their examinations of banks: Regulators often present preliminary findings to lenders and then give them time to respond. The process can result in changes to the regulators' initial conclusions. Some of the stress-test revisions, for instance, were made to account for the beneficial impact of the industry's strong first-quarter profits.
On Friday, some analysts questioned the yardstick, known as Tier 1 common capital, that regulators chose to assess capital levels. Many experts had assumed the Fed would use a better-known metric called tangible common equity.
According to Gerard Cassidy, an analyst with RBC Capital Markets, the 19 banks' cumulative shortfall would have been more than $68 billion deeper if the government had used the latter metric, which accounts for unrealized losses.
Federal officials said their projections reflected the most comprehensive analysis ever conducted of the industry.
The test results showed that the 19 banks faced a total of $599 billion in losses over the next two years under the government's worst-case, Depression-like scenario. The Fed directed 10 banks to add a total of nearly $75 billion to their capital buffers to insulate themselves from potential losses.
Banks pressed ahead on Friday with plans to fill their capital holes by tapping public markets. Wells Fargo raised $7.5 billion in stock through a public offering. The bank originally planned to raise $6 billion, but expanded the offering, which was valued at $22 a share, due to robust demand. Shares of Wells Fargo rallied $3.42, or 14% to $28.18.
Morgan Stanley, which is facing a $1.8 billion capital hole, raised $4 billion by selling stock. Shares of Morgan rose $1.06, or 4%, to $28.20.
—Robin Sidel and Maurice Tamman contributed to this article.>
I'm too big to fail my 500,000 lol
must be some kind of bonus deal, right ?
you have just shown a too-big-to-fail mentality
lol
that's another bottom
AIG hopes to get ignored for the moment,
dump all the bad news now, confidence's for free right now
owned by the Chinese
any date for stress test 2.0 set already ?
in case another dose of confidence is needed, for instance in 2010 ?
Hands up! Who feels confident now ?
So what's the real number under realistic stress ?
AIG bonuses not bottoming out yet
Great this will install more confidence
(according to the pattern of the last couple of days)
AIG is bottoming out as well
lol, wrong board, I thought pinkies are not discussed on this board, I guess I got stressed a bit by those stress tests
Great, finally we learn where those few trillion $$$ of rotten debt (IWF) still floating around in the financial system have gone in the meantime (just kidding)
btw, I have not understood yet how conversion of preferred to common shares helps to fill in holes in the balance sheets, it does not generate one single extra dollar, does it ?
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message of today:
Consumer Credit Falls a Record $11.1 Billion in March
By: Reuters | 07 May 2009 | 03:20 PM ET
U.S. consumer borrowing fell more than expected in March, plunging a record $11.1 billion, a Federal Reserve report showed on Thursday.
March consumer credit fell at an annual rate of 5.2 percent to a total of $2.55 trillion. This was the biggest percentage drop since December 1990.
Sure, but then, stock should sink
Don't get it
$34 billion free taxpayer injection isn't a bad thing?!
On planned layoffs, the Challenger report showed this was the lowest monthly total since 112,884 cuts were announced last October, but still up 47 percent from the 90,015 job cuts announced in the same month of 2008.
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I think unemployment numbers in general need to be seasonally adjusted, i.e. one have to compare April with April and not April with preceeding March. From this perspective, the numbers are still very bad, not good.
Today: BofA may need $35 billion