Chicago, IL – October 9, 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: Target Corporation (TGT), Wal-Mart Stores Inc. (WMT), Hasbro Inc. (HAS), Mattel Inc. (MAT) and Citigroup Inc. (C).

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Here are highlights from Thursday’s Analyst Blog:

Target Lowers Toy Prices

In order to woo customers this holiday season, major discount retailer Target Corporation (TGT) recently announced an aggressive price cut on toys. The announcement came on the back of the Wal-Mart Stores Inc. (WMT) news on offering 100 toys for $10 each through the Christmas holiday, up from 10 toys offered last year.

Target slashed the price of selective toys by up to 50%, which include the Barbie Fashion Doll ($5), GI Joe Tough Troopers Figure ($14.99), and the Fisher-Price Little People Play 'N Go Farm Set 50th Anniversary edition ($11).

The holiday seasons are generally important for toymakers and retailers, who expect an uptick in demand with more children splurging in toy stores. However, toy companies did not reap any benefit in the 2008 holiday sales season due to recessionary effects, as consumers cut back their spending and prioritized their purchases.

Realizing the fact that customers may be reluctant to shell out more for toys, toy companies like Hasbro Inc. (HAS) and Mattel Inc. (MAT) are introducing new items at lower prices, and retailers are offering discounts to offset the impact of economic headwinds.

Citi's External Review - A Positive

The management team of Citigroup Inc. (C) received a positive review in an outside appraisal but some shuffling of senior executives could be on the anvil.

The review was conducted this summer for Citi's board by recruiting and consulting firm Egon Zehnder International. It was triggered by the government's stress tests on top banks. Companies found to be in need of additional capital were required to conduct assessments of their management and report the findings to federal regulators. The Federal Deposit Insurance Corp. (FDIC), which had concerns about the qualifications of Chief Executive Vikram Pandit and his top management team, required Citigroup to hire an outside firm to perform the review.

The report, delivered to Citigroup's board on last Friday, gave strong overall marks to Citigroup's management team and to CEO Vikram Pandit in particular.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Chicago, IL – August 14, 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: International Business Machines (IBM), Cisco (CSCO), Hewlett Packard (HPQ), Dell Inc. (VZ) and Citigroup Inc. (C).

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Here are highlights from Thursday’s Analyst Blog:

IBM Set to Outperform

The drivers behind our Outperform rating on International Business Machines (IBM) are the company’s strong fundamentals, substantial free cash flow, strong earnings momentum, improving operating performance, effective restructuring initiatives and new growth opportunities.

IBM is the leader in software, services and storage business. Its second-quarter results beat the Zacks Consensus, fueled by higher gross margins and cost controls. With continued cost-cutting efforts, the company raised its 2009 profit guidance by 50 cents to $9.70 per share. Despite falling sales, IBM’s efforts to generate earnings through a combination of margin expansion, growth initiatives, acquisitions, expected benefits from retirement-related costs and effective capital deployment are commendable.

IBM has been better insulated from the recent weakness in the U.S. economy than many of its peers owing to a large international revenue base. Moreover, management returns value to customers through regular share repurchases and dividend payouts. We believe that with a strong liquidity position, operational efficiency and improving profitability, IBM is well positioned to benefit from the market recovery.

We also believe the company’s strong position in the Services and Storage business, growth in Analytics solution revenue and focus on investments in diverse technologies with high growth potential further add to its prospects.

However, we are cautious of currency fluctuations which are hurting sales and may be critical to earnings growth. Apart from this, increasing competition from Cisco (CSCO), Hewlett Packard (HPQ) and Dell Inc. (VZ) threaten IBM’s market share.

Consultants Review Citi Management

U.S. regulators have forced Citigroup Inc. (C) to hire external consultants who will analyze whether the company's current management has the caliber to lead it out of the ongoing financial crisis.

Citigroup has entered an agreement with the Federal Deposit Insurance Corp. (FDIC) that requires increased scrutiny of the bank and also requires it to fix financial, managerial and governance issues. Recruitment firm Egon Zehnder has been retained by Citigroup to carry out a comprehensive, in-depth management review as requested by the U.S. government following the stress tests conducted in May 2009.

Citigroup is required to submit a plan of action about possible managerial changes to its board and regulators by the time it reports its third quarter results in October 2009.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Contact:
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Chase, the US consumer and commercial banking brand of JPMorgan Chase & Co., now has a total of 239 branches and 1,025 ATMs in Florida.

Chase also upgraded products and technology to connect the former WaMu branches in Florida and six other states with its own network, giving customers full service at 4,200 Chase branches in 21 states.

So far this year, Chase has converted and rebranded 1,037 former WaMu branches in 11 states. By the end of 2009, about 1,800 former WaMu branches across the country will be operating under the Chase brand and on the Chase computer system, allowing customers to conduct their business at more than 5,100 Chase branches in 23 states.

After Washington Mutual was declared bankrupt last September, JP Morgan acquired its banking operations (minus unsecured debt or equity claims) from the Federal Deposit Insurance Corp. (FDIC) for $1.9 billion.

The results were negatively affected by expenses related to the acquisition of Provident Bankshares Corp., a special assessment levied by the Federal Deposit Insurance Corp. and by impairment charges associated with investment securities.

The bank, which received $600 million from the Treasury under the Troubled Asset Relief Program (TARP), said net interest income grew 3% to $501.6 million.

M&T's provisions for credit losses increased 47% to $147 million. The bank's net charge-offs also increased to $138 million, against $99 million in the year-ago quarter.

MTB, a Zacks #3 Rank ("Hold") stock, has gained 4% today on heavier-than-usual volume of approximately 2.3 million, against the average daily volume of about 1.0 million.

The regional bank's net income available to common shareholders slumped to $121 million, compared to $428 million in the same period last year.

BB&T stated that results were affected by a special assessment from the Federal Deposit Insurance Corp totaling 7 cents per share, coupled with an 8-cent charge related to accelerated amortization on the preferred stock repaid to the Treasury.

The bank last month paid back the $3.1 billion received under the Troubled Asset Relief Program (TARP). BB&T also announced an agreement with the Treasury for the repurchase of warrants issued in connection with the TARP investment for $67 million.

Meanwhile, quarterly net interest income grew 7% to $1.14 billion, while non-interest income posted a growth of 20% to 993 million. However, provisions for loan losses surged to $701 million, an increase of $371 million, compared to the year-ago period.

Three out of 23 covering analysts lowered full-year expectations over the past week, sending the consensus estimate down by 4 cents, or 3.1%, to $1.27 per share.

BBT, a Zacks #3 Rank ("Hold") stock, has dipped more than 6% so far today on higher-than-usual volume of approximately 16 million, compared to the average daily volume of about 6.5 million.

Chicago, IL - July 7, 2009 - Zacks Equity Research highlights Sohu.com, Inc. (SOHU) as the Bull of the Day and Cousins Properties (CUZ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase (JPM), Wells Fargo & Company (WFC) and Zions Bancorporation Pharmaceuticals (ZION).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

Sohu.com, Inc. (SOHU) is the second-largest Internet portal and one of the most well-known online brands in China. Sohu's pipeline for its new online games remains strong and is expected to drive meaningful growth in late 2009 and 2010.

The company spun-off part of its gaming division Changyou.com via an ADS offering, which is expected to increase user base and help gain shares in the MMORPG market. We are also encouraged by the company's growing cash balance as well as its debt free balance sheet.

We believe that the current stock price does not fully reflect the company's intrinsic value. Concerns are related to online ad spending, as consumers remain cautious in their spending. We maintain our Buy rating on the shares of SOHU with a six-month target price of $75.00.

Bear of the Day:

Cousins Properties (CUZ) reported 1Q FFO of $0.15 per share, $0.10 lower than our estimates due to higher expenses and lower top line revenue. CUZ has a concentration of assets in Atlanta and Dallas, two markets with increasing downtown and suburban office vacancies.

In addition, the company s retail portfolio continues to struggle. While the company's office portfolio performed relatively well in the 1st quarter, we think operations will deteriorate.

The dividend was cut 32% in an effort to conserve cash. Another cut could be coming in 2009 if conditions do not improve.

Latest Posts on the Zacks Analyst Blog:

Yet More Banks Recession Victims

The Federal Deposit Insurance Corp. (FDIC) was appointed receiver of the following 7 failed banks: The John Warner Bank of Clinton, First State Bank of Winchester, Rock River Bank of Oregon, Elizabeth State Bank, Founders Bank, First National Bank of Danville and Millennium State Bank of Texas. FDIC arranged for other institutions to assume all the deposits and branches of the failed banks.

The FDIC estimates total cost to the deposit insurance fund from the failure of these banks to be approximately $314 million. The deposit insurance fund now stands at its lowest level since 1993 - $13 billion as of the end of March 31, 2009.

The largest acquirers of U.S. bank failures during 2008 and 2009 include JPMorgan Chase (JPM) (acquired Washington Mutual), Wells Fargo & Company (WFC) (acquired Wachovia Bank) and Zions Bancorporation Pharmaceuticals (ZION) (acquired Alliance Bank).

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5508.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5509.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Chicago, IL - June 17, 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: Illinois Tool Works (ITW), Honeywell (HON), Ingersoll Rand (IR), American International Group (AIG) and Citigroup (C).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Tuesday's Analyst Blog:

Slack in the Industrials System

If one digs deeper and looks at Capacity Utilization (CU) by stage of production, it fell at all three levels. There is the least slack in the system at the Crude level at 77.7%, but it was down from 78.5% in April and 79.5% in March; a year ago it was at 88.6%. The intermediate stage of production has the most slack at 65.6%, down from 66.7% in April and 67.0% in March and 78.8% a year ago. Finished goods CU was 67.4% vs. 67.6% in April and 68.1% in March. A year ago it was at 75.0%.

Factories, of course, represent extremely large fixed costs to companies, and if they are sitting idle it is not a good thing for profitability. This level of slack in the system means that industrial companies are seeing the bad side of operational leverage, regardless of the financial leverage they have.

In particular, though, this data is very bad news for suppliers of industrial goods like Illinois Tool Works (ITW) and some of the divisions of firms like Honeywell (HON) and Ingersoll Rand (IR). If you have lots of equipment sitting idle, just what is the incentive for businesses to order more?

Will the Fed Get Too Much Power?

Currently the Fed is the country's central bank. However, if the Fed's focus was expanded to also supervise large financial institutions considered "too big to fail" (ala American International Group [AIG]) in order to prevent another financial meltdown, some assert that it might end up turning the Federal Reserve into an all-powerful entity that could in all eventuality slow down a major overhaul of banking and market regulations.

One that is opposed to the expansion of the Fed's focus is Senator Christopher Dodd, chairman of the Banking Committee. Mr. Dodd advocates an alternative plan to strip the Fed of its regulatory role entirely and create a new consolidated bank regulator that would assume the roles that the Fed and Federal Deposit Insurance Corp. which presently play in the role of helping to regulate state-chartered banks. The Fed would then focus on its existing mission as the nation's central bank -- setting monetary policy and acting as a "lender of last resort."

What also seems to concern Democrats and Republicans alike that expanding the Fed's responsibilities and increasing government spending pose a greater potential as a significant source of "systemic risk to our nation's economy than the failure of any specific financial institution."

We would expect some of the special interests and lobbyists for financial institutions such as Citigroup (C).

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/ZacksInvestment

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.

Here is a synopsis of all five stocks:

Bull of the Day:

Despite a tough operating environment, Equity Residential (EQR) reported 1Q09 FFO [funds from operations] of $0.57 per share vs. $0.58 in 1Q08.

As expected in a recession, operations are steadily declining for all apartment REITs. The company reported year-over-year SS [same-store] occupancy and rental rate declines in 1Q09. Massive job losses will continue to negatively affect results.

Despite the slowdown, we still rate EQR a Buy. The company's balance sheet is in relatively good shape; EQR has enough cash and debt availability to take care of maturing debt over the next couple of years. We think multi-family will be one of the better performing REIT sectors in 2009, largely due to continued problems in the for-sale housing market.

Bear of the Day:

Celanese (CE) is a global hybrid chemical company based in Dallas. The company produces chemical substances and materials, and concentrates on four different business segments targeting the consumer and industrial products market.

Weak market conditions drove a dramatic decline in overall global demand for many industries, which affected Celanese's operations. Recessionary trends, coupled with inventory destocking, resulted in sharp volume declines in the Advanced Engineered Materials and the Acetyl Intermediates businesses.

The company expects volumes to remain under pressure in 2009, even with the easing of inventory destocking. Thus, we rate the shares a Sell with a target of $16.00.

Latest Posts on the Zacks Analyst Blog:

First Wave of TARP Repays

The repayment of TARP funds obscures the problems within the broader banking industry -- large banks continue to hold the "toxic mortgage-backed assets" that created the financial crisis, and smaller institutions still have billions in risky commercial real estate loans.

While the government asserts that it should receive investment returns from the warrants attached to the preferred stock, which would allow it to buy shares of the banks at a set price over the next 10 years, three of the nation's biggest banks -- Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC) have not received permission to return funds yet.

Overall, even if there is repayment of TARP funds, these institutions still dependent on government support, such as debt guarantees from the Federal Deposit Insurance Corp. and credit lines from the Federal Reserve.

Considering that we have yet to see a bottom in the current banking crisis (unemployment continues to rise, which could result in more losses on loans and new bank failures), the rationale for letting these institutions return capital could wind up to be a short-sighted resolution, and could cause the need for the government to come to the rescue yet again.

But at least executive compensation schemes at these institutions can resume for the time being.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2677.

About Zacks 

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks InvestmentResearch is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Chicago, IL - April 29, 2009 - Zacks Equity Research picks Burger King (BKC) as Bull of the Day and Celanese Corp. (CE) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on AIG (AIG), Citigroup (C) and Bank of America (BAC).

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

Bull of the Day

In the midst of a turnaround, Burger King's (BKC) customer traffic is beginning to decline, as diners move to food prepared at home and to competitors value meals, some of which are more extensive than Burger King's. Though these increasing economic headwinds heighten the risk in the company's turnaround, we think the plan is still viable and the shares valuation is compelling, albeit with substantial risk.

Now back in positive unit growth mode after four years of negative or no growth, BKC is poised, in our opinion, to grow earnings at a mid to high-teens CAGR over the next five years by accelerating unit growth, improving average unit volumes through restaurant remodels and new product launches and by expanding restaurant margins closer to those of McDonald's, the category leader.

Moreover, we think BKC shares offer investors an opportunity to participate in the fast-growing economies of Asia and South America, which are central to BKC's expansion plans but where it has a very small presence relative to MCD and Yum! Brands.

Bear of the Day

Celanese Corp. (CE) is a global hybrid chemical company based in Dallas. The company produces chemical substances and materials. The company concentrates in four different business segments targeting the consumer and industrial products market.

Weak market conditions drove a dramatic decline in overall global demand for many industries which affected Celanese operations. Recessionary trends, coupled with inventory destocking, resulted in sharp volume declines in the Advanced Engineered Materials and the Acetyl Intermediates businesses.

The company expects volumes to remain under pressure in 2009, even with the easing of inventory destocking. Thus, we rate the shares a Sell with a target of $10.00.

Recent Analysis from the Analyst Blog

Will the FDIC Be Super-Regulator?

In a speech to the Economic Club of New York yesterday, the Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair suggested that her agency was best suited to handle broad new powers being considered by the government to seize and restructure impaired, systemically important financial institutions before they threaten the broader system.

Government bailouts of companies like AIG (AIG), Citigroup (C), Bank of America (BAC) and others involving billions of taxpayer dollars have brought into focus the need to better handle the problem of "too big to fail" financial institutions. Regulatory reforms currently being considered include close supervisory oversight of risk-taking, risk management and the financial condition of such institutions.

Regarding the mechanism for resolution, Ms. Bair suggested the "good bank-bad bank model," where viable parts can be placed into the "good bank" using a structure similar to the FDIC's bridge bank, and the nonviable parts can be placed in a "bad bank" until they can be unwound or sold.

She stated that there is no need for another government agency to run the resolution program since the FDIC already has many years of experience resolving banks and closing them.

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=2677.

About Zacks 

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks InvestmentResearch is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:Mark VickeryWeb Content Editor312-265-9380Visit: www.zacks.com

In a filing with the U.S. Securities and Exchange Commission late Friday, Lincoln said it no longer believed that it would qualify under the provisions of the Temporary Liquidity Guarantee Program to issue up to $793 million in FDIC-guaranteed debt.

LNC is currently a Zacks #4 Rank ("Sell") stock, but that could change in the coming months.

This from Money Morning:

The U.S. housing market is already being pounded by the “perfect storm.” And the outlook for the New Year is for the stormy weather to continue – and probably to get worse.

As if a locked-up credit market and tidal waves of foreclosures weren’t already enough, we’re now watching unemployment climb and consumer confidence plunge.

But even when the housing market is taking on water, there are ways to stay afloat. Indeed, investors nimble enough to maneuver can even make money.

The watchword on this…

This from Money Morning:

When federal banking regulators last week seized the Houston-based Franklin Bank SSB (FBTX), it became the 18th bank failure this year amid the ongoing credit crisis. With total assets of $5.1 billion and total deposits of $3.7 billion, Franklin wasn’t the largest bank failure this year – that honor belongs to IndyMac Bancorp Inc. (OTC: IDMCQ), which had more than $30 billion in estimated assets when it was seized by U.S. banking regulators in…

This from Money Morning:

When federal banking regulators last week seized the Houston-based Franklin Bank SSB (FBTX), it became the 18th bank failure this year amid the ongoing credit crisis. With total assets of $5.1 billion and total deposits of $3.7 billion, Franklin wasn’t the largest bank failure this year – that honor belongs to IndyMac Bancorp Inc. (OTC: IDMCQ), which had more than $30 billion in estimated assets when it was seized by U.S. banking regulators in…

This from Money Morning:

If there’s a proverb that captures the outlook for the U.S. economy in the New Year, it’s the one that says: “It’s always darkest before the dawn.”

Regardless of any formal announcement of whether or not the United States drops into an actual recession, the ongoing credit crisis guarantees a contraction of the American economy by virtually every measure…

R. Shah Gilani, a retired hedge-fund manager and Money Morning contributing editor who is emerging as an expert on the worldwide financial meltdown, noted that the plan was apparently still that – a plan. Even so, he said that “any bailout plan that directly addresses foreclosures is political posturing that will ultimately be overwhelmed by inevitable economic realities.”

The New York Times carried the first reports of the Bush Administration’s new housing rescue new proposal yesterday…

R. Shah Gilani, a retired hedge-fund manager and Money Morning contributing editor who is emerging as an expert on the worldwide financial meltdown, noted that the plan was apparently still that – a plan. Even so, he said that “any bailout plan that directly addresses foreclosures is political posturing that will ultimately be overwhelmed by inevitable economic realities.”

The New York Times carried the first reports of the Bush Administration’s new housing rescue new proposal yesterday…

According to the newspaper report, this program would be the most sweeping and direct government initiative aimed at home-loan borrowers since the financial crisis started last year. As proposed, the federal government would incur half the loss on a home loan if the mortgage company that controls the loan agrees to lower the borrower’s monthly payment for at least five years. On any given loan, the mortgage company would reduce the payment borne by the homeowner by writing off part of the loan balance, reducing the loan’s interest…

According to the newspaper report, this program would be the most sweeping and direct government initiative aimed at home-loan borrowers since the financial crisis started last year. As proposed, the federal government would incur half the loss on a home loan if the mortgage company that controls the loan agrees to lower the borrower’s monthly payment for at least five years. On any given loan, the mortgage company would reduce the payment borne by the homeowner by writing off part of the loan balance, reducing the loan’s interest…

According to the newspaper report, this program would be the most sweeping and direct government initiative aimed at home-loan borrowers since the financial crisis started last year. As proposed, the federal government would incur half the loss on a home loan if the mortgage company that controls the loan agrees to lower the borrower’s monthly payment for at least five years. On any given loan, the mortgage company would reduce the payment borne by the homeowner by writing off part of the loan balance, reducing the loan’s interest…

COMPANY NEWS

“Once the global economy emerges from the current financial crisis, which it will, the countries that do well on our index are those that are best prepared to bounce back and perform well in the longer term,” Jennifer Blanke, director of the WEF’s global competitiveness network told The Financial Times.

And the United States is at the top. That’s the good news.

The bad news is that the safety of U.S. banks dropped to 40th this…

Foreclosure activity saw a huge spike in the third quarter, as one in every 475 U.S. homes either received a default or auction sale notice, or was repossessed by a bank, according a report released yesterday (Thursday) by industry group RealtyTrac. It was a 71% jump over third quarter foreclosure activity in 2007 and a 3% increase from the second quarter of this year.

Foreclosure filings actually decreased 12% in September from August, but not due to an improving housing market.

“Much of the 12% decrease in September can be attributed to changes in…

Bear in mind that each new economic report, earnings statement, news report or trading session represents a new opportunity for fear and uncertainty to reemerge.

Fortunately, next week’s economic calendar remains quite light, although retailers may just weigh in with “doom-and-gloom” holiday predictions.  Earnings season may be weak as well (with even more pessimistic outlooks), so investors should not overreact even if Texas Instruments Inc. (TXN), Halliburton Inc. (HAL), Amazon.com Inc. (AMZN) and others fail to meet expectations.  Volatility should continue and…

"Government owning a stake in any private U.S. company is objectionable to most Americans - me included," U.S. Treasury Secretary Henry Paulson said announcing his decision to effectively nationalize the nation’s banking sector. “Yet, the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

A government investment of $250 billion amounts to about 25% to 30% of the market capitalization for publicly traded banks, Rajiv Sobti, chief investment officer at Nomura Global Alpha, a unit of Nomura Asset Management U.S.A. told BusinessWeek.

The $250 billion investment will be allocated as follows:

• Citigroup Inc. (C) JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) each get $25 billion.
• Wells Fargo & Co. (WFC) will receive between $20 billion and $25 billion.
• Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) each get $10 billion.
• The Bank of New York Mellon Corp. (BK) and State Street Corp. (STT) receive between $2 billion and $3 billion apiece.

The remainder, between $124 billion and $131 billion, will be dispersed among smaller banks and thrifts.

Each bank will issue preferred stock to the U.S. government that will pay special dividends at a 5% interest rate, which will increase to 9% after five years. Additionally, the government will receive warrants worth 15% of the face value of the preferred stock.

Participating banks will also have to accept limits on executive pay, the abolition of so-called golden parachutes and improper bonuses, and may be forced to reduce or eliminate dividends.

The government, so far, has insisted that the banks will not have to cut their dividends, nor will any executives be forced to resign. The chief executives of Royal Bank of Scotland Group PLC (ADR: RBS), HBOS PLC (OTC: HBOOY), and Lloyds TSB Group PLC (ADR: LYG) were all forced to resign Monday during the British government’s nationalization process.

While the original U.S. bailout plan indicated that banks would be encouraged to participate on a volunteer basis, the chief executives of the nine largest U.S. banks were summoned to Washington and convinced to take part in the recapitalization effort, as a way to avoid stigmatizing any one bank.

Had any one bank asked for help, it would have been a signal to the world that it couldn’t survive, said Daniel Clifton, an analyst for institutional broker Strategas Research Partners.

Therefore, the Treasury had little choice but to "jawbone them into taking the money in a coordinated fashion all at the same time.”

“These are healthy institutions, and they have taken this step for the good of the U.S. economy,” Paulson said of the financial firms.

Afterwards, Paulson further elaborated on the role these institutions must play in restoring liquidity to the market.

“The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it,” Paulson said.

In addition to $250 billion recapitalization effort, the U.S. Federal Reserve will start a program to become the buyer of last resort for commercial paper and the Federal Deposit Insurance Corp. (FDIC) will offer an unlimited guarantee on bank deposits in accounts that do not pay interest. The government will also expand deposit insurance to cover all small business deposits.

Over the past several months, small businesses, which typically maintain balances well above insurance limits, have been withdrawing their money in record amounts. The Fed initially tried to solve this problem by raising its deposit insurance limit from $100,000 to $250,000, but that only extended coverage to about 68% of all small business deposits, according to financial services consulting firm Oliver Wyman Group.

Abolishing deposit insurance limits for small businesses altogether would cover the remaining 32%, the New York Times reported.

“Imposing unlimited deposit insurance doesn’t fix the underlying problem, but it does reduce the threat of overnight failures,” Jaret Seiberg, a financial services policy analyst at the Stanford Group in Washington, told the NY Times. “If you reduce the threat of overnight failures, you start to encourage lending to each other overnight, which starts to restore the normal functioning of the credit markets.”

Source: Paulson Announces New Plans to Buy Equity Stakes in Banks and Revive Credit Markets

"Government owning a stake in any private U.S. company is objectionable to most Americans - me included," U.S. Treasury Secretary Henry Paulson said announcing his decision to effectively nationalize the nation’s banking sector. “Yet, the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

A government investment of $250 billion amounts to about 25% to 30% of the market capitalization for publicly traded banks, Rajiv Sobti, chief investment officer at Nomura Global Alpha, a unit of Nomura Asset Management U.S.A. told BusinessWeek.

The $250 billion investment will be allocated as follows:

• Citigroup Inc. (C) JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) each get $25 billion.
• Wells Fargo & Co. (WFC) will receive between $20 billion and $25 billion.
• Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) each get $10 billion.
• The Bank of New York Mellon Corp. (BK) and State Street Corp. (STT) receive between $2 billion and $3 billion apiece.

The remainder, between $124 billion and $131 billion, will be dispersed among smaller banks and thrifts.

Each bank will issue preferred stock to the U.S. government that will pay special dividends at a 5% interest rate, which will increase to 9% after five years. Additionally, the government will receive warrants worth 15% of the face value of the preferred stock.

Participating banks will also have to accept limits on executive pay, the abolition of so-called golden parachutes and improper bonuses, and may be forced to reduce or eliminate dividends.

The government, so far, has insisted that the banks will not have to cut their dividends, nor will any executives be forced to resign. The chief executives of Royal Bank of Scotland Group PLC (ADR: RBS), HBOS PLC (OTC: HBOOY), and Lloyds TSB Group PLC (ADR: LYG) were all forced to resign Monday during the British government’s nationalization process.

While the original U.S. bailout plan indicated that banks would be encouraged to participate on a volunteer basis, the chief executives of the nine largest U.S. banks were summoned to Washington and convinced to take part in the recapitalization effort, as a way to avoid stigmatizing any one bank.

Had any one bank asked for help, it would have been a signal to the world that it couldn’t survive, said Daniel Clifton, an analyst for institutional broker Strategas Research Partners.

Therefore, the Treasury had little choice but to "jawbone them into taking the money in a coordinated fashion all at the same time.”

“These are healthy institutions, and they have taken this step for the good of the U.S. economy,” Paulson said of the financial firms.

Afterwards, Paulson further elaborated on the role these institutions must play in restoring liquidity to the market.

“The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it,” Paulson said.

In addition to $250 billion recapitalization effort, the U.S. Federal Reserve will start a program to become the buyer of last resort for commercial paper and the Federal Deposit Insurance Corp. (FDIC) will offer an unlimited guarantee on bank deposits in accounts that do not pay interest. The government will also expand deposit insurance to cover all small business deposits.

Over the past several months, small businesses, which typically maintain balances well above insurance limits, have been withdrawing their money in record amounts. The Fed initially tried to solve this problem by raising its deposit insurance limit from $100,000 to $250,000, but that only extended coverage to about 68% of all small business deposits, according to financial services consulting firm Oliver Wyman Group.

Abolishing deposit insurance limits for small businesses altogether would cover the remaining 32%, the New York Times reported.

“Imposing unlimited deposit insurance doesn’t fix the underlying problem, but it does reduce the threat of overnight failures,” Jaret Seiberg, a financial services policy analyst at the Stanford Group in Washington, told the NY Times. “If you reduce the threat of overnight failures, you start to encourage lending to each other overnight, which starts to restore the normal functioning of the credit markets.”

Source: Paulson Announces New Plans to Buy Equity Stakes in Banks and Revive Credit Markets

The rally was sparked by commitments from the major financial nations to cooperate in getting the credit markets functioning again, and by news that U.S. officials were putting the finishing touches on Washington’s version of a rescue plan under which the U.S. Treasury Department will invest an estimated $125 billion in nine major U.S. banks, and another $125 billion in smaller financial institutions, Bloomberg News reported early this morning (Tuesday).

The White House announced that U.S. President George W. Bush would meet at 7:30 a.m. EDT today with members of his financial markets working group. He’ll make a statement about the plan at 8:05 a.m. U.S. Treasury Secretary Henry M. “Hank” Paulson Jr., U.S. Federal Reserve Chief Ben S. Bernanke and Federal Deposit Insurance Corp. Chair Sheila C. Bair will discuss the plan during an 8:30 a.m. news conference, MarketWatch.com and Bloomberg both reported.

“These are tough times for our economies, yet we can be confident that we can work our way through these challenges and America will continue to work closely with the other nations to coordinate our response to this global financial crisis,” President Bush told reporters yesterday following a meeting with Italy Prime Minister Silvio Berlusconi at the White House.

After an eight-day losing streak – the worst for the Standard & Poor’s 500 Index since 1996 – those dramatic worldwide developments were enough to spawn a rally of historic proportions in U.S. shares. The S&P 500 rebounded from its worst week in 75 years with an 11.6% advance, jumping 104.13 points to close at 1,003.35. The Dow zoomed 936.42 points, or 11%, to close at 9,387.61 – eviscerating the previous record of 499 points, set in March 2000, and posting its best percentage gain since 1933.

The Nasdaq Composite Index climbed 194.74, or 12%, to 1,844.25. Sixteen stocks gained for each that fell on the New York Stock Exchange.

Last week’s 18% declines pushed both the S&P 500 and Dow down more than 40% from their peaks last October.

The S&P 500 ended the trading day Friday at 17 times reported earnings of its companies, the cheapest valuation in more than a year. Yesterday’s really boosted the Price/Earnings ratio to 19.2. The S&P 500 is still down 32% this year, positioning it for its worst yearly loss since 1937.

“The worst of the immediate danger is past,” Bruce McCain, chief investment strategist at Key Private Bank (KEY) in Cleveland, which manages $30 billion, told Bloomberg, the well-known financial news service.“It’s always easier when you’ve got markets going up and you’re not having to talk clients back in off the ledge.”

Kevin Divney, chief investment officer at Putnam Investments in Boston, told Bloomberg Television that “the real catalyst is the levels of valuation.”

But not everyone was quite so sanguine. Money Morning Investment Director Keith Fitz-Gerald cautioned that one strong day in the markets – even a record one – doesn’t necessarily mean there’s a full-fledged rebound in store.

“The real economic growth rates in the financial sector are unclear,” Fitz-Gerald said in an interview. “To say that it’s an accounting nightmare is an insult to the Hollywood honchos who actually make their living transforming nightmares into movies. Fiction writers could not concocted a better horror story than the one that’s rocked world financial markets since last November. Despite all the mergers and acquisitions, and the emergency bailouts, that we’ve seen to date, Wall Street hasn’t even begun to address the underlying business prospects – on anything more than a superficial level – of the lion’s share of the companies that are being bailed out.” [For Fitz-Gerald’s full take on yesterday’s market action – including some insights on how he believes investors should navigate the uncertainty – check out his special market commentary that appears elsewhere in today’s issue.]

All 10 industries in the S&P 500 added more than 7%. Monday’s worldwide rally – which ranged from Tokyo to New York – sent the MSCI World Index up 9.5 %, the biggest gain since the gauge was created in 1970, MarketWatch reported.

The bond market was closed for the Columbus Day holiday. The dollar fell the most in three weeks against the euro.

Details of a Bailout/“Rescue” Plan

On Sunday, the major European Union nations committed more than $2.3 trillion to safeguard their banks and financial system, according to The Associated Press.  Global efforts to rescue the international banking system gathered force yesterday, with Europe leading the way to provide money to shore up its financial sector and calm traders, and the U.S. hinting it’s on board with its own rescue plan, MarketWatch reported. [For details of the sweeping European rescue plan, check out this related report elsewhere in today’s issue of Money Morning.]

U.S. bankers were summoned to the Treasury Department yesterday, as the U.S. government prepared additional measures to stabilize markets, reported the U.S. shortwave broadcasting service, The Voice of America.

Over the weekend, Treasury Secretary Paulson had called the heads of the five biggest U.S. banks to come to Washington for face-to-face talks about the rescue plan, according to people briefed on the matter. Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd C. Blankfein, Morgan Stanley (MS) CEO John J. Mack, Citigroup Inc. (C) CEO Vikram Pandit, JPMorgan Chase & Co. (JPM) CEO Jamie Dimon and Bank of America Corp. (BAC) CEO Kenneth D. Lewis were all asked to attend, according to The AP.

The CEOs had been in Washington this past weekend to meet with international finance officials at the annual meetings of the International Monetary Fund (IMF) and World Bank. This group of U.S. banking sector leaders met with Paulson and Fed Chairman Bernanke for about three hours yesterday, several news sources have said.

When asked for precise details about the plan that’s to be unveiled early today, U.S. Treasury officials remained mum. Indeed, sources would only say that it would include a “series of comprehensive actions to strengthen public confidence in our financial institutions and restore functioning of our credit markets.”

However, after the CEO meetings, some details began to leak out. Industry insiders speculated late yesterday that the Federal Reserve and Treasury Department had outlined a plan to inject as much as $250 billion of the $700 billion rescue plan into top U.S. banks.

In addition, to jumpstart “Interbank” lending, the FDIC would actually insure new senior preferred debt for three years.

The Treasury Department would take the equity stakes in banks using authority it was granted under the $700 billion bank rescue plan enacted two weeks ago.

“We’re talking about making investments in these banks in a way that doesn’t necessarily punish existing shareholders,” Charles Bobrinskoy, vice chairman of Ariel Investments LLC, which manages $13 billion, said on Bloomberg TV. “Most of the bank actions to date in the U.S. have been good for bondholders but terrible for common stockholders.”

Government actions this year to prevent bankruptcies at investment bank Bear Stearns Cos., mortgage lenders Fannie Mae (FNM) and Freddie Mac (FRE) and insurer American International Group Inc. (AIG) resulted in near-total losses for the firms’ shareholders.

The collapse of New York-based Lehman Brothers Holdings Inc. (LEHMQ) on Sept. 15 precipitated the latest chapter of the 14-month-old credit crisis, causing banks to stop lending to each other out of concern they may not get their money back.

Direct investments of this magnitude represent a new approach for Treasury Secretary Paulson, who initially advocated a bailout targeted at illiquid mortgage-related assets. When the markets didn’t respond positively to earlier plans, the Treasury Department shifted gears – in a big way.

“They’ve decided they need to do something drastic and this is drastic,” Gerard S. Cassidy, a bank analyst at RBC Capital Markets (RY) in Portland, Maine, told Bloomberg.

The proposed cash injections in exchange for preferred shares are said to be destined for Citigroup, Goldman Sachs, Wells Fargo & Co. (WFC), JP Morgan Chase & Co., Bank of America Corp., Merrill Lynch & Co. Inc. (MER), Morgan Stanley, State Street Corp. (STT), and Bank of New York Mellon Corp. (BK).

“The government has gone to ‘Plan B’ and it packs a big wallop,” Frederic Dickson who helps oversee $25 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, told the financial news service.

The Treasury plans to spend $25 billion each for stakes in Citigroup and JPMorgan, people said. Another $25 billion will be divided between Bank of America and Merrill, which agreed last month to be acquired by Bank of America. Wells Fargo is to get at least $20 billion, Goldman and Morgan Stanley will each get $10 billion, and State Street and Bank of New York will get about $3 billion each, people said.

The government will obtain its stakes with a type of security designed not to dilute the value of common shares.

None of the nine banks getting government money was given a choice about it, said people familiar with the plans. All of the banks involved will have to submit to compensation restrictions as mandated by Congress, people said.

The remaining $125 billion will be used to recapitalize other financial institutions around the country, the people said. Neel Kashkari, the U.S. Treasury official overseeing the rescue of the financial system, yesterday said the equity purchases would be aimed at “healthy” firms.

Source: Dow Zooms to Record Gain Yesterday on Reports The Government Will Reveal Banking Bailout Plan Details Early Today

The three banks jointly pledged to “cooperate in good faith to agree among themselves to secure orders where necessary in all applicable cases in all jurisdictions,” according to a statement from Wachovia.

The agreement was reached after consultations with the U.S. Federal Reserve, Bloomberg News reported. The “litigation standstill” will be in effect until noon EDT tomorrow (Wednesday).

Earlier in the day, Citigroup had filed suit against Wells Fargo and Wachovia for $60 billion in damages for breaching the exclusive negotiation period Wachovia had agreed to as part of Citigroup’s original offer for Wachovia’s retail banking operations.

It was the culmination of a day of legal wrangling, as Wachovia won an injunction in North Carolina state court to halt Citigroup from delaying the merger agreement with Wells Fargo.

Meanwhile, in New York, Citigroup’s court order, granted over the weekend to extend the exclusive negotiation period, was overturned in state appeals court. Citigroup promised to appeal the motion.

Wells Fargo’s $15 billion, or $7 a share, offer for all of Wachovia operations easily trumps Citigroup’s $2.16 billion, or $1 per share, offer for just Wachovia’s deposits, loan portfolio, and retail banking branches. The Citigroup offer did not include Wachovia’s A.G. Edwards brokerage unit or Evergreen Investment Management Co. LLC mutual fund family.

But as part of its agreement with Citigroup, Wachovia agreed to exclusive negotiation rights through Monday, Oct. 6. Wells Fargo’s offer was accepted on Friday, Oct. 3.

"We’re all working together with regulators… to come to a solution and outcome that serves the public interest, and I think we will have one today," Sheila Bair, head of Federal Deposit Insurance Corp., said at a banking economics conference yesterday, Reuters reported.

While the FDIC is not formally involved in the negotiations, it is working with all parties involved to reach a mutually beneficial agreement.

Hedge fund investor, William Ackman, who holds approximately 170 million shares of Wachovia, feels the Charlotte-based bank is more valuable if its retail banking business is sold separately from its asset management and brokerage divisions.

“This company is worth more, in our view, if it’s broken into pieces,” Ackman said, Bloomberg News reported. “It’s worth more because of the tax benefits created from the separation. It makes sense for Citi to continue buying the banking subsidiary and it makes sense for somebody else to buy the holding company.”

Another proposal divides Wachovia’s retail branches along geographic lines with a portion going to each San Francisco-based Wells Fargo and New York-based Citigroup.

Source: Temporary Litigation Halt as Citigroup and Wells Fargo Continue to Vie for Wachovia

This question becomes even more crucial now that, under the proposed banking-sector rescue legislation that was passed by the Senate Wednesday night, the individual cap on the level of government-guaranteed deposits would be raised from the current $100,000 to the new level of $250,000.

Let’s take a look at what the FDIC is and does, and outline how it’s supposed to function. There are also two steps folks can take to ensure the safety of their deposits.

The 4-1-1 on the FDIC

The FDIC is an independent government agency formed by Glass-Steagall Act of 1933, as a response to the runs on banks that took place during the Great Depression.

In 2005, the Federal Deposit Insurance Reform Act increased the amount of insurance coverage for an Individual Retirement Account (IRA).

Ostensibly, federal deposit insurance was created to protect depositors from the loss of deposits at FDIC-insured banks and savings associations. And the good news is that the FDIC has done so remarkably well over the last 75 years, that no depositor has lost a single penny of insured deposited assets.

FDIC insurance covers checking accounts, savings accounts, money market deposit accounts and certificates of deposit.

It does not, however, cover so-called "non-deposit products," such as stocks, bonds, mutual funds or life insurance, even though many of those products are offered through FDIC-insured banks.

As you might suspect, there are limits as to what is insured at any given institution. In general, deposit insurance covers:

• Single accounts owned by a single owner: $100,000
• Joint accounts with two or more owners: $100,000 per owner
• Revocable trusts: $100,000 per owner per qualifying beneficiary subject to specific limitations (check with your tax advisor or accountant)
• IRAs and select retirement accounts: $250,000

It’s important to note that the FDIC individual limit applies separately to different banks. That means if you have $100,000 in each of two separate accounts at different banks - one at each bank - you’re actually insured for the full $200,000.

Credit Crisis Safety Plays

As we mentioned, under the proposed banking-sector rescue legislation that was passed by the Senate Wednesday night, and which is supposed to head to the House of Representatives for a review and possible vote sometime today (Friday), the individual cap on the level of government-guaranteed deposits would be raised from the current $100,000 to the new level of $250,000. But that new coverage will not take effect until the bill passes the House and is then signed into law by U.S. President George W. Bush.

Until that happens, there are still a couple of "action items" worth pursuing to protect and help yourself. They are:

1. Call your bank and make sure it’s FDIC-insured. If it isn’t, consider switching to a bank that is.
2. If you’re unsure about your own assets, and whether or not they are covered, check out the FDIC’s electronic insurance estimator.

But do it sooner rather than later. There are a record 117 banks on the FDIC’s troubled list and our own estimates suggest that at present rates we could easily see that number rising to more than 200 in the next six months. That means the agency could be dumping dollars in the near term, so it’s only logical to make sure your money is covered.

[The first installment in an ongoing series detailing strategies that investors can use to insulate themselves and their finances from the ongoing credit crisis.]

Source: Credit Crisis Safety Plays: How to Make Sure That Your Bank Deposits are FDIC Insured

• Oil prices rallied yesterday (Tuesday) jumping $4.27 to settle at $100.64 a barrel on the New York Mercantile Exchange, after earlier rising as high as $101.40. On Monday, prices fell $10.52 to settle at $96.37 - the second largest drop ever in dollar terms.

• Barney Frank (D-MA), the chairman of the House Financial Services Committee, yesterday (Tuesday) told policymakers that Sheila Bair, chairman of the Federal Deposit Insurance Corp., would seek to increase the deposit insurance limit to a level above its current $100,000 level, Reuters reported. The agency’s insurance fund stood at about $45.2 billion at the end of the second quarter.

• Prices of U.S. single-family homes fell a record 16.3% in July from a year earlier, according to the Standard & Poor’s/Case-Shiller Home Price Indexes. The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9% in July from June. Since the peak of the housing boom in July 2006, the index has dropped 19.5% the group said.

• Shares of Sovereign Bancorp Inc. (SOV) yesterday (Tuesday) shot up 70% with a gain of $1.62 to $3.95 on analyst upgrades and a new chief executive officer. Sovereign announced Paul Perrault would replace Joseph Campanelli as CEO, a move met with enthusiasm by stock analysts, Bloomberg News reported.

• Chicago Mayor Richard M. Daley announced the city had selected a consortium of investors headed by Citigroup Inc. (C) to privatize Midway Airport for $2.52 billion. The deal, approved by both the Federal Aviation Administration and the Transportation Security Administration, represents the first privatization of a major U.S. airport, The Wall Street Journal reported.

• Pfizer Inc. (PFE), the world’s largest drugmaker, yesterday (Tuesday) announced a refocusing of its research and development budget. Pfizer is looking to cut costs and focus on areas with potential high profits as it faces increased competition from generic drug manufacturers, The Associated Press reported.

Source: Global Investing Roundups Wednesday, October 1st, 2008

The Dow gained back more than half its record Monday loss, climbing 485.21 points, or 4.68%, to close at 10,850.66. The broad Standard & Poor’s 500 Index gained 58.35 points (5.27%), to hit 1,164.74. And the tech-heavy Nasdaq Composite Index zoomed 98.60 points (4.97%), to close at 2,082.33.

"There are at least some hints of optimism that something will still happen soon with regards to the [bailout] bill," Jim Dunigan, managing executive of investments at PNC Wealth Management (PNC) in Philadelphia, told Reuters. "It’s not surprising with the washout [Monday] that you’d get some bounce-back [yesterday], both due to bargain hunters and some prospects of a resolution. All eyes are still on Washington."

In related developments yesterday:

• U.S. Senate leaders announced late Tuesday that their chamber plans to vote on a Wall Street bailout package tonight (Wednesday).  Any plan will include souped-up deposit coverage, which is already being sought by the Federal Deposit Insurance Corp. (FDIC).
• Earlier in the day, President George W. Bush and Senate leaders of both parties publicly vowed to push for a quick approval of a new financial bailout plan, despite the surprise Monday move by the House of Representatives to reject the pact that the Bush administration had negotiated with both parties in Congress. In a speech broadcast from the White House, President Bush urged lawmakers to avoid a potential economic crash, stating that "we are at a critical moment for our economy. Congress must act," the International Herald Tribune reported.
• Indeed, the Federal Deposit Insurance Corp. (FDIC) said it will ask Congress for permission to at least temporarily insure greater amounts of deposits for each depositor at member banks. The FDIC right now insurances individuals’ deposits of up to $100,000 and retirement accounts up to $250,000.
• The U.S. Securities and Exchange Commission probably will resist calls to suspend the fair-value accounting rules that some members of Congress blame for exacerbating the global financial crisis, sources familiar with the issue reported. Although the SEC and the Financial Accounting Standards Board (FASB) yesterday issued “clarifications” on how banks should interpret existing rules requiring them to review assets each quarter and report losses if values decline, an actual moratorium isn’t being considered.
• Presidential candidates John McCain and Barack Obama called upon Congress to keep working on a financial-markets rescue plan and also pushed for an increase in FDIC deposit insurance as a short-term step to restore consumer confidence in the U.S. financial markets.

Foreign Market Reaction

Although the House rejection of the bailout legislation led to the crash-like 777-point drop in the blue-chip Dow index on Monday, reactions in the global markets were mixed yesterday.

In Asia, Japan’s Nikkei 225 Index plunged more than 4% to a new three-year closing low after shedding 483.75 points to close at 11,259.90. But Hong Kong’s blue-chip Hang Seng Index inched up 0.8% as it gained 135.53 points, to close at 18,016.20. Even with the slight gain, yesterday marked the end of the worst quarter for Hong Kong shares since 2001.

"It looks like Congress is going to be up in arms about this for a while but there are hopes that there may be other moves from authorities such as a rate cut from the Fed," Yutaka Miura, deputy manager at Shinko Securities, told Reuters.

In Europe, bourses gained on the revived U.S. markets and government interventions into failing banks. The FTSEurofirst 300 index gained 1.6%, fueled by the strong early-morning gains in the United States. The Paris-based CAC40, London’s FTSE 100, Madrid’s IBEX 35 and the Frankfurt-based DAX all posted gains on hopes of a new bailout plan.

The London Interbank Offered Rate, or LIBOR, surged to a record high of 6.88% yesterday, the British Bankers’ Association said. LIBOR is the rate banks charge each other for overnight lending. Such a high rate - well above the Federal Funds rate of 2.0% - demonstrates the high level of risk-aversion currently in the market.

Central banks flooded the markets with short-term liquidity yesterday, but could do little to restore financial firms’ faith in lending.

"Come Thursday, when the package is presented again to the U.S. House, many of the same people who voted against it earlier today will change their minds because of the pressure coming from the markets," Stephen Roach, chairman of Morgan Stanley Asia Ltd. (MS) said at a seminar in Hong Kong Monday, Bloomberg News reported.

Continued Bailout Hopes

Both the U.S. House and Senate were adjourned yesterday for the Jewish New Year holiday. The Senate will reconvene today - with members intending to actually vote on a new package tonight - while the House will gather again tomorrow (Thursday).

Despite the legislative holiday break, the executive branch continued its full-court press to get the bailout legislation passed.

"I realize this is a difficult vote for members of Congress," President Bush said the White House address yesterday. "But the reality is that we’re in an urgent situation and the consequences will grow worse each day if we do not act."

U.S. Treasury Secretary Henry M. "Hank" Paulson Jr. also tried to underscore the benefit to the average American, and not just Wall Street bankers, as he lobbied politicians to move forward with the proposed bailout, Bloomberg reported.

"Markets around the world are under stress, and that reduces the availability of credit that businesses across America use to meet payroll and to purchase inventories," Paulson said to reporters gathered outside the White House. "Families, too, feel the credit crunch as it becomes more difficult to get car loans or student loans."

More Bank Bailouts

European governments stepped in again to aid more ailing financial institutions yesterday. In a united effort, Belgium, France and Luxemburg earmarked $9.2 billion (6.4 billion euros) in emergency cash for Dexia SA (PINK: DXBGF).

"Due to the significant deterioration in the business and market environment and the financial distress of a number of financial services companies, Dexia made a careful assessment of its situation and decided to take decisive action," the bank said in a statement, MarketWatch reported.

In Ireland yesterday, in a bid to stabilize sinking bank shares, the Irish Finance Ministry pledged to back deposits for two years with taxpayer funds if necessary. The move pushed Irish financial stocks higher.

Iceland nationalized its third-largest bank, Glitnir, on Monday, which sent the Icelandic crown diving to a new low against the euro. Also on Monday, banks in Belgium, Germany and Britain received government aid.

In the United States, Citigroup Inc. (C) purchased the retail banking assets of Wachovia Corp. (WB). The shares of both domestic banks enjoyed major gains yesterday, with Citi’s stock climbing 15.6% to close at $20.51, and Wachovia’s shares advancing 90.22% to close at $3.50.

Source: Credit Crisis Update: U.S. Stocks Notch Record Gains on Investor Hopes for a New Bailout Plan

By midnight, it was hard to tell who had suffered a worse evening, Bush or McCain. McCain, eager to shore up his image as a leader who rises above partisanship, was undercut by a fierce political squabble within his own party's ranks.

The consequences could be worse for Bush, and for millions of Americans if the impasse sends financial markets tumbling, as some officials fear. Closed-door negotiations were to resume Friday, but it was unclear whether House Republicans would attend.

Now that all five big investment banks -- Bear Stearns, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley -- have disappeared or morphed into regular banks, a question arises.

Is this bailout still necessary?

The point of the bailout is to buy assets that are illiquid but not worthless. But regular banks hold assets like that all the time. They're called "loans."

With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn't, the FDIC has the bridge bank facility to take care of that.

Next, put half a trillion dollars into the Federal Deposit Insurance Corp. fund -- a cosmetic gesture -- and as much money into that agency and the FBI as is needed for examiners, auditors and investigators. Keep $200 billion or more in reserve, so the Treasury can recapitalize banks by buying preferred shares if necessary -- as Warren Buffett did this week with Goldman Sachs. Review the situation in three months, when Congress comes back. Hedge funds should be left on their own. You can't save everyone, and those investors aren't poor.