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Retail Sales to Surprise to the Upside, Don’t Buy Into It

The calendar for the week has a key piece of data that you’ll want to watch out for. We have August Retail Sales data to be released on Wednesday morning. The consensus among a survey of economists conducted by Bloomberg suggests that this figure will decline by 2.1% after having surged 2.7% in the month prior. This may be overly pessimistic as a reading of -2.1% on the sales side would imply that spending among the US public was at its worst since last December, when it tanked 3.2%. Keep in mind that since the start of the year, Retail Sales have only shrunk in two of the months. Such a swing to the downside would be a sharp change in the public’s mindset.

Note that when excluding automobiles from the metric, the consensus forecast is set for an increase of 0.2%. This leads one to believe that automobile sales plummeted throughout the month, causing the broader metric to sink as well. This might not necessarily true. The popular “Cash for Clunkers” program was extended during this period and saw car purchases soar. In fact, there was a 25% jump in the number of autos sold. So there is little reason to believe that August saw such a pathetic performance in Retail Sales.

What to take away from this: Retail traders may splurge on stocks when they see that this number is surprisingly high. But one must ask themselves if this high figure is surely sustainable. Keep in mind that this data is for August and not for September – that’s five weeks back. Cash for Clunkers is over with and there is now little incentive to keep car purchases up. Just moments ago, Philips released it’s Q3 earnings report. In it, they said that the structural recovery in their primary end-markets has been absent. This speaks contrary to that which has been heard from the popular media and other pundits.

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Filed under: Economics, Global Economics, , , , , , , , , , , , , , , ,

Poll of Change: Obama’s Approval Slips Below 50%

POLL: Under our long-standing measure of job performance (excellent, good, fair, poor), Obama’s positive ratings have dipped just below 50%. Likely voters choosing excellent or good fell three points from another Zogby Interactive poll concluded on March 5, going from 52% to 49% excellent or good; while 11% said fair and 38% poor…

Filed under: Obama, , , , , , , , , , , , , , , , , , ,

Obama Admin. Set to Propose Largest Expansion of Government Tomorrow

REGULATE

PAPER: The Obama administration’s plan, described by several sources, would extend federal regulation for the first time to all trading in financial derivatives and to companies including large hedge funds and major insurers such as American International Group. The administration also will seek to impose uniform standards on all large financial firms, including banks, an unprecedented step that would place significant limits on the scope and risk of their activities…

Filed under: Economics, Politics, , , , , , , , , , , , , , , , , , , , ,

Obama to Meet With Heads of Goldman Sachs, JPMorgan, Citi and Other Bank Leaders

PAPER: President Barack Obama will meet with about a dozen U.S. bank leaders on Friday to talk about his administration’s plans to put the sector on a sounder footing, The Wall Street Journal reported late Tuesday on its Web site. Invitees include Goldman Sachs Group Inc. , J.P. Morgan Chase & Co. and Citigroup Inc. The meeting follows more than a week of controversy over large bonuses paid at American International Group Inc. , after the insurer received billions in federal aid…

Filed under: Economics, Obama, , , , , , , , , , , , , , , ,

Stocks Surge After Geithner Unveils Taxpayer Guaranteed Toxic-Asset Plan

US Session Key Developments

  • Treasury Announces $1 Trillion Toxic Asset Purchase Plan
  • S&P Surges 7.1%, Most Since Oct. 28, Biggest 10-Day Gain Since 1938
  • February Home Resales Rise 5.1%

Stocks Surge After Geithner Unveils Taxpayer Guaranteed Toxic-Asset Plan

Stocks surged 7.1% with the S&P 500 advancing by the most since Oct. 28 after U.S. Treasury Secretary Geithner’s toxic-asset plan jolted Wall Street. The sharp move ushered in the largest 10-day gain since 1938. Geithner’s plan will use $1 trillion to incentivize private investors to purchase many illiquid assets including mortgage securities and agency debt. The deal will employ 10% of this money to work as a taxpayer subsidy to many of these investors while also providing government guarantees in case the securities continue to falter. Not surpassingly, financials in the blue-chip index bulled-ahead 22.91%, marking a 50.1% advance in the sector over the last two weeks. JPMorgan and Wells Fargo performed the strongest gaining on average of 24% with Citigroup seeing its shares traded the most of any company in the index. But this rally may be short-lived. If the real economy continues to falter, the consumption habits of the public may continue to be dwarfed, disabling much wealth creation that would truly enlighten the banking sector.

Dow 30            7775.86                +497.48                  +6.84%
Financials in the blue-chip index rose surged 22.91%, led by JPMorgan’s 25% move. Industrials were the second-best performing sector with Caterpillar advancing 9.46%.

NASDAQ        1555.77                 +98.50                      +6.76%

Information Technology advanced 6.38% with leading names such as Microsoft and Cisco jumping 7.44% and 6.73%, respectively. Sun Microsystems was one of the few stocks that slipped, as investors took some of the profits earned from the IBM take-over news.

S&P 500         822.92                   +54.38                       +7.08%

Consumer Staples was the worst performing sector in the Standard and Poor’s index, managing to gain a still impressive 3.77%. Only seven stocks slipped on the day. Implied volatility on the index fell 2.66 points, or 5.8%.

Filed under: Stocks, , , , , , , , , , , , , , , , , ,

Sell Financial Stocks, Says Bank of America Analyst and Hedge Fund After Historic Rally

WIRE: “The history of bubbles shows quite well that financial sector consolidation is inevitable,” Bernstein, Bank of America’s chief investment strategist, wrote in a research note. “Financial stocks will be attractive when the government tries to speed up that inevitable process. However, to the contrary, the government continues to attempt to stymie that inevitable consolidation…”

WIRE: BlackRock Inc.’s global macro fund, the world’s second-best performer over two years among hedge funds that invest based on economic trends, is betting against this month’s equities rally and buying bonds as a recovery from the worst credit crisis since the Great Depression falters…

Filed under: Stocks, , , , , , , , , , , , , , , , , ,

Stock Bargains Everywhere as ‘Bull-Market’ Begins, Says Analyst

WIRE: The next “bull-market” rally has begun and there are bargains in every emerging market, Templeton Asset Management Ltd.’s Mark Mobius said, refuting predictions that the equities meltdown will continue.

“You have to be careful not to miss the opportunity,” said Mobius, who helps oversee about $20 billion of emerging- market assets at San Mateo, California-based Templeton. “With all the negative news, there is a tendency to hold back…”

Filed under: Economics, Stocks, , , , , , , , , , , , , , , , ,

Centrally Planned Bonus System, Geithner Contrives

Politico: Treasury Secretary Tim Geithner will try to cut down on risky behavior by financial institutions by asking them to tie bonuses to the long-term health of the company rather than short-term gains, according to people briefed on his plans…

Filed under: Economics, Politics, , , , , , , , , , , , , , ,

BREAKING NEWS: OBAMA TO OVERHAUL EXEC. PAY AND FINANCIAL REGULATION

YOU’RE NEXT

“The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said…”

Filed under: Economics, Obama, , , , , , , , , , , , , , , , ,

Sen. Dodd ADMITS He Inserted Loophole Allowing AIG Bonuses, On Obama’s Request (Video)

DODD: “We wrote the language in the bill, the deal with bonuses, golden parachutes, excessive executive compensation that was adopted unanimously by the United States Senate in the stimulus bill…”

dodd

Filed under: Politics, , , , , , , , , , , , , , , ,

Obama Admin Knew About AIG Bonuses Long Before ‘Anger’ Came

“U.S. Treasury Secretary Timothy Geithner found out about the impending bonuses to executives at insurer AIG last Tuesday and alerted the White House on Thursday. The furor over $165 million in bonuses paid out to staff at AIG even as the company was accepting up to $180 billion in taxpayer funds has focused attention on who in the administration knew what about the bonuses and when they knew it. And it has raised questions about Geithner’s handling of the affair…”

Filed under: Obama, , , , , , , , , , , , ,

Stocks Fail to Rally a Fifth Day After Profit Taking Brings Indices Down

US Session Key Developments

  • Bernanke: No More Bank Failures Under My Watch
  • American Express Reports Rising Credit-Card Defaults
  • Citigroup Surges 30.9% to $2.33

Stocks Fail to Rally a Fifth Day After Profit Taking Pushes Indices Down

Wall Street traded most of the day in positive territory with the Dow and S&P 500 rising as much as 2.34% before finally slipping into the red the session’s final hour. The early advance came after Federal Reserve Chairman Ben Bernanke said that he would not allow any banks from hereon to fail, in a 60 Minutes interview yesterday. Mid-day trading revealed bad financial news that seemed to have forced some of the selling. American Express erased an 8.1% advance after reporting rising credit-card defaults. Despite this, Citigroup surged 30.90% to $2.33 after having traded at $0.96 two weeks ago. Bank of America also rose, by 7.29% to $6.18. The session’s day was filled with mixed performance. In fact, only 210 stocks in the S&P 500 finished up while 286 ended down.

Dow 30                    7216.97                  -7.01                      -0.10%
The Dow opened the day and traded most of the day in positive territory, rising as much as 2.34% before profit-takers forced the index down into the red in the final hour of trading. Basic Materials outperformed, rising 3.60% while Health Care plummeted 1.26%. Citigroup was the most active stock after seeing 287.02 million shares of its stock traded through the New York Stock Exchange.

NASDAQ                 1404.02                  -27.48                   -1.92%
The NASDAQ performed the worst of three indices, spending most of the day in the red and rising by as much as only 0.96% but closing near the day’s lows. SanDisk may have led the slide in tech-stocks after a Bank of America analyst report downgraded the stock’s performance to ‘underperform.’

S&P 500                  753.89                     -29.38                   -0.35%
The S&P 500 had a mixed day, with only 210 stocks rising and 286 ending the day below par. The fear gauge, which shows the implied volatility of call options on the S&P 500, rose for a second straight day, by 3.25% to 43.74.

Filed under: Stocks, , , , , , , , , , , , , , , ,

Stocks Have Biggest 3-Day Gain Since Nov. On Bank of America Profit Outlook

US Session Key Developments

  • Bank of America’s Chief Says Company Profitable First Two Months
  • Retail Sales Better Than Expected
  • General Electric Rating Cut to AA+

Stocks Have Biggest 3-Day Gain Since Nov. On Bank of America Profit Outlook

Stocks in the S&P 500 posted the largest 3-day gain since November with a 10.96% surge since Tuesday after Bank Of America Chief Executive Officer Ken Lewis followed the footsteps of his counterparts at Citigroup and JPMorgan. Indeed, Lewis announced that his bank was profitable in the first two months of the year to reporters after a speech given in Boston. The recent trend of CEO profit announcements has allowed Financials in the S&P to rise 33% on the week. General Electric added 13% after losing its AAA credit rating by less than expected. The conglomerate slashed its dividend for the first time since the 1930s two weeks ago in an effort to save the company billions of dollars so that it could prevent its own credit deterioration. Wal-Market advanced 3.1% after government Retail Sales estimated that purchases from such stores had done better than economists had anticipated. The figure for February fell -0.1% while forecasts called for a -0.5% decline.

Dow 30                     7170.06                 +239.66                    +3.46%
Financials pummeled through the remaining short-sellers, surging ahead 13.07%. Even the worst performing sector in the index, Technology, moved up 2.0%. JPMorgan saw 31.73 million shares traded to end the day up $2.80 or 13.73% at $22.30.

NASDAQ                  1426.10                  +54.46                        +3.97%
Technology stocks have become a smaller portion of index after being one of the worst performing sectors in composite. Nonetheless, the industry rallied 2.85% with Apple and Intel jumping about 4.0%.

S&P 500                  750.74                    +29.38                        +4.07%

The S&P 500 had its biggest 3-day again since November, rallying 10.96% since the surge began. Every sector in the index shared the sentiment with Financials rushing ahead 9.94%. Implied volatility on the index dropped 5.57% or 2.43 points to 41.18, leaving the fear gauge under 50 for the fifth straight trading session.

Filed under: Economics, Stocks, , , , , , , , , , , , , ,

Congresswoman Maxine Waters Caught Doing Shady Business With Bank Her Husband Directed

waters1

Source: NYT

Filed under: Uncategorized, , , , , , , , , , , , , , , ,

Stocks Surge Most Since late November, S&P Ahead 6.1% on Citi Optimism, ‘Uptick Rule’

US Session Key Developments

  • Citigroup to Have Best Performance Since 2007, Says Pandit
  • Sen. Barney Frank to Reinstate ‘Uptick Rule’
  • Financial Shares Surge 15.58%
  • Dow and S&P Stocks Best Performance Since November


Stocks Surge Most Since Late Nov., S&P Ahead 6.1% on Citi Optimisim

U.S. stocks surged by the most since late November after an internal memo from Citigroup’s Chief Executive Officer Vikram Pandit stated that his bank would be having the best quarter since 2007. The memo stated that the company realized a substantial gain in profits in the first two months of the quarter/year. Indeed, Financials bulldozed through any pessimism to finish the day up 15.58%. Citigroup shares showed the strongest performance, racing ahead by 38.10% to finish the day at $1.45. JPMorgan and Bank of America basked in the glory, rising 22.64% and 27.73%. General Electric also rose 20.0% on improved credit outlook. Surprisingly, comments by Senator Barney Frank of Massachusetts helped sustain the rally. During questioning of Federal Reserve Chairman Ben Bernanke, he stated that the “uptick rule” would be reinstated after having been removed in July 2007. The uptick rule requires that a stock rise in price before it can be sold short. Reinstating this rule would make the practice of borrowing and selling a stock, (short-selling) in order to profit from the fall in share prices, less accessible.

Dow 30                        6926.49               +379.44                  +5.80%
The Dow had its best day since Nov. 21st with financial shares jumping 20.96% ahead. Even the worst performing sector, Consumer Staples, rallied by 2.06%. All 30 stocks in the index finished the day in the green, with Citigroup, Bank of America, and JPMorgan performing the best.

NASDAQ                     1358.28                +89.64                     +7.07%
The NASDAQ performed the best of the three major U.S. equity indices. Information Technology also surged despite being hardest hit throughout yesterday’s trading session. Intel and Microsoft rose 10.92% and 9.70%, respectively.

S&P 500                     719.60                    +43.07                        +6.37%
The S&P 500 had its best day since November 21st. It surged ahead with only 13 stocks finishing the day in the red; only five of those lost more than 1.0%. The VIX volatility index plummeted, by 5.31 points or 10.70% to finish the day at 44.27. Short interest on the S&P

Filed under: Economics, Stocks, , , , , , , , , , , , , , ,

China’s Deflation Has Officially Arrived As Prices Fall 1.6%

China’s Consumer Prices declined by -1.6% in February from the year prior as the global economic contraction reduced demand for the Asian giant’s good. This is the first time since Dec. 2002 that prices in the world’s third-largest economy decline. Producer Prices led the decline; the cost of manufacturing products has been falling consistently since August, ultimately plummeting by -4.5% in January. The last time wholesale prices fell by this much was in Mar. 1999.

It was reported earlier today that China plans to reduce export taxes to zero. Such a move would allow supply pressures to ease domestic prices upward. As export taxes are reduced, the price for such goods decreases to those living abroad. When prices decrease, they tend to consumer more. While this is happening, those living in China see less supply of these products on their store shelves. And as supply decreases, prices increase.

On a similar note, Home Prices fell by 1.2% in February, marking it the steepest decline since the Chinese government began keeping track of the data in Aug. 2005. This is the third straight month that housing prices fall.

– LG

China's CPI Since 1999; Source: Bloomberg; Prepared by Luis Gil

China's CPI Since 2000; Source: Bloomberg; Prepared by Luis Gil

China's CPI Since 1999; Source: Bloomberg; Prepared by Luis Gil

China's PPI Since 1999; Source: Bloomberg; Prepared by Luis Gil

Filed under: Global Economics, World, , , , , , , , , , ,

Banking Shares Surge on FDIC Power Expansion

US Session Key Developments

  • Bernanke, Geithner Ask Congress to Ease FDIC Borrowing Limits
  • Bank of America, Wells Fargo Surge Over 15.80%

Banking Shares Surge on FDIC Power Expansion

Banking shares jumped today despite an overall down day after Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner asked Congress to expand the Federal Deposit Insurance Corp.’s borrowing power. Last week, FDIC head Sheila Bair announced that the consumer bank insurer would possibly run out of funds, sending financials tumbling down. The requested legal authority would allow the FDIC to borrow as much as $100 billion from the Treasury, up from $30 billion as of February. Banks as a sector surged ahead by 10.72%. Bank of America and Wells Fargo were two of the greatest beneficiaries of the positive sentiment as the stocks rallied $0.61 or 19.43% and $1.36 or 15.80%, respectively. Warren Buffet also stated that in 3 years the San Francisco based Wells Fargo will have prospects “better than ever.”

Dow 30                6547.05                 -79.89                    -1.21 %
The Dow had a mixed day with four sectors actually finishing the day in the green. Financials jumped 3.23% with Bank of America leading the pact. Health Care and Telecommunication Services tumbled nearly -4.0% each as risk appetite saw money shifting over to the riskier, banking, stocks.

NASDAQ              1268.64                  -25.21                     -1.95%
The NASDAQ saw every sector in the index sell off today. Information Technology was the hardest hit, finishing down -2.39%.

S&P 500                676.53                   -6.85                       -1.00%
The S&P 500 also saw a mixed day with Financials and Energy being the only two sectors to finish the day ahead. The VIX volatility index rose slightly, by 0.35 points to finish at 49.68.

Filed under: Economics, Stocks, , , , , , , , , , , , , , ,

Merrill Lynch Racks Up $400 Million FOREX Loss, Trader Investigated

“A Merrill Lynch currency trader has been suspended after racking up more than $400m in undisclosed losses in recent months, raising further questions about the financial health of the investment bank bought by Bank of America last September.

Merrill is poring over the books of Alexis Stenfors, a London currency trader, who was suspended after Norwegian and Swedish currency trades went wrong, according to people familiar with the situation. Merrill is in talks with UK regulators after uncovering what it called a trading “irregularity” in London.”

Filed under: Economics, , , , , , , , , , , , , ,

Another U.S. Bank Seized; 17th Failure in 2009

“March 7 (Bloomberg) — Freedom Bank of Georgia was seized by regulators, the 17th bank closed this year, as the recession persists and a jump in unemployment pushed more borrowers behind on home loan payments.

Freedom Bank, in Commerce, Georgia, with $173 million in assets and $161 million in deposits, was shut by the state’s Department of Banking and Finance and the Federal Deposit Insurance Corp. was named receiver. Northeast Georgia Bank of Lavonia, Georgia, will assume deposits, the FDIC said.”

Filed under: Economics, , , , , , , , , , , , ,

MARKETS RUN RED WITH FEAR, CITI BECOMES A PENNY STOCK

MARKETS BLEED, BANKING SHARES COLLAPSE

sharescollapse

CITI WORTH LESS THAN A DOLLAR…

ONCE THE WORLD’S MOST VALUABLE STOCK…

FDIC COULD BECOME INSOLVENT THIS YEAR…

MORE THAN 11% OF MORTGAGES ARE TROUBLED…

JPMORGAN RATING OUTLOOK TURNED NEGATIVE…

OBAMA MORTGAGE PLAN TO BLAME…?

Filed under: Economics, Obama, , , , , , , , , , , , , , , , ,

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