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Friday October 30, 2009

DrStockPick.com Article

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Too big to fail, is still heavy in the derivative market, and primed for a gigantic collapse.

Congress needs a chimney sweep to clean the soot from the smoke they’ve been blowing. Our do nothing congress; well we can’t really say do nothing, they did bail out the banks, and they have raised more money for themselves this session from Insurance, health care and bank lobbyists than in any other one year period, and the year isn’t even over. Now they are spreading the word, the gospel of Obama, it’s time to

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This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Michael Milken & Jonathan Simons (The Wall Street Journal): Illness as economic metaphor, June 20, 2009. Our economic doctors should permit America’s uniquely effective immune system to take over as companies and financial institutions deleverage their balance sheets. With people and with capitalism, the tincture of time is often the best medicine.

• Christina Romer (The Economist): The lessons of 1937, June 18, 2009. As someone who has written somewhat critically of the short-sightedness of policymakers in the late 1930s, I feel new humility. I can see that the pressures they were under were probably enormous. Policymakers today need to learn from their experiences and respond to the same pressures constructively, without derailing the recovery before it

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This morning, the Obama Administration outlined its proposals for tightening financial regulations in an Op-Ed article by Tim Geithner and Larry Summers in The Washington Post. The key sections of it are below, and I have interspersed my reaction and commentary:"This current financial crisis had many causes. It had its roots in the global imbalance in saving and consumption, in the widespread use of poorly understood financial instruments, in shortsightedness and excessive leverage at financial institutions. But it was also the product of basic failures in financial supervision and regulation."Put another way, the U.S. consumed too much and saved too little, and it stopped innovating to the extent it had in the past, with the exception of financial innovations. The vast majority of those innovations had no real social utility, they just served to make transactions more opaque and complicated. Investors bought into them ...

Highlights include JP Morgan Chase & Co. (JPM), Citigroup Inc. (C) and Bank of America Corp. (BAC).Apparently there is no limit to the arrogance and sense of entitlement at the nation's largest banks. From today's Wall Street Journal we get this:"Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves. Banking trade groups are lobbying the Federal Deposit Insurance Corp. (FDIC) for permission to bid on the same assets that the banks would put up for sale as part of the government's Public Private Investment Program (PPIP). PPIP was hatched by the Obama Administration as a way for banks to sell hard-to-value loans and securities to private investors, who would get financial aid as an enticement to help them unclog bank balance sheets."Let's recap a bit. Banks make a ton ...

For Immediate Release

Chicago, IL - May 4, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: General Motors Corp. (GM), Evergreen Solar, Inc. (ESLR), AMAG Pharmaceuticals, Inc. (AMAG), The Boeing Company (BA) and Micros Inc. (MCRS).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Friday's Analyst Blog:

On Bankruptcy & Banking

With the bankruptcy of Chrysler, and the potential bankruptcy of General Motors Corp. (GM) the bankruptcy code is very much in the news. Imagine for a minute, though, what would happen if the biggest single liability

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With the bankruptcy of Chrysler, and the potential bankruptcy of General Motors Corp. (GM) the bankruptcy code is very much in the news. Imagine for a minute, though, what would happen if the biggest single liability for these firms -- say, their legacy Pension and Health Care liabilities -- were by law not allowed to be touched by the courts. How much good could it really do?Well that is the way it should be according to every single Republican and twelve Democrats in the U.S. Senate. No, not for big firms like GM, but for individuals.The same day that Chrysler went "Tango Uniform," the U.S. Senate bowed to the pressure of the bankers' lobbyists and refused to allow mortgage cram-downs is bankruptcy courts. As Sen. Richard Durbin (D- IL) put it, referring to the bank lobbyists, "They own this place."When an individual ...

Highlights include Fannie Mae (FNM), Freddie Mac (FRE), General Motors Corp. (GM), Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM).The Obama Plan to help homeowners hold onto their houses by refinancing their mortgages is getting underway today. There are three core elements to the program.  All the details are available at: http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf.  To understand the program, it is important to conceptually separate homeowners into 4 categories. First are people who own their houses free and clear. This group accounts for 31% of all homeowners, and a somewhat lower total value of all housing -- about 25%. These folks are obviously not in trouble.This leaves about 51 million houses with mortgages on them. The 2nd group is those where the current loan-to-value (LTV) is under 80%. These people have the ability to refinance now, and ...