Morgan Stanley (MS) reported third-quarter 2009 income of $498 million this morning or 38 cents per share, compared with a loss of $159 million or $1.37 per share in the prior quarter and an income of $7.7 billion, or $7.38 per share a year ago. The results were much ahead of the Zacks Consensus Estimate of 30 cents per share. The results marked the first quarter of income in a year’s time. Results were aided by robust underwriting revenues in the investment banking operation resulting from higher levels of market activity, strong growth in fixed income sales and trading, commodities, prime brokerage and wealth management business, which offset losses in commercial real estate. Unlike the preceding qaurters, the results were in line with strong results from competitors like Goldman Sachs (GS) and JPMorgan Chase & Co. (JPM), which has been grabbing market share after ...

Goldman Targeting PE With Another Fund; Current Media Unplugs IPO Plans; Tech Mahindra Taking Majority of Satyam; Victims Push For Madoff Bankruptcy; Express Scripts Buys WellPoint Unit; Citi May Sell More Japan Assets; Oil Drops on Energy Agency Forecast

Goldman Sachs Group Inc. (GS) created a $5.5 billion fund to purchase private-equity assets on the secondary market, Bloomberg reported. The GS Vintage Fund V - Goldman’s fifth private-equity-targeting fund - will acquire portfolios ranging from $1 million to $1 billion. Citing “current market conditions,” Current Media Inc., owner of youth-focused network Current TV, has withdrawn its plans for a $100 million initial public offering. “It’s ...

Dollar Cost Averaging

Alexander Wissel, Editor in Chief, Investment U

We get many interesting reader comments here at Investment U. We see our fair share of positive and not-so-positive comments.

Recently our article on dollar cost averaging elicited a host of responses that questioned why we are favoring using this strategy…

“Dollar averaging is a technique promoted by institutions to keep people invested long-term without deliberately managing their investment.”

And the reader is absolutely right about that. Mutual fund companies would love nothing more for investors to invest blindly – either through retail brokerage or their 401ks – their goal is for investors to keep their money with them as long as possible.

More than a few of use have sat behind the “mutual fund service desk” giving the company line to a customer who’s lost a substantial sum in their mutual funds. If it’s

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By revamping the banking sector’s compensation system, and creating a salary cap of $500,000 for the top executives at institutions that accepted federal bailout money, new U.S. President Barack Obama could be launching a reform movement that helps make the American financial system worthwhile to invest in again.

For the last 30 years, Wall Street has had a problem with its remuneration system. Base pay was only around $150,000 even for a partner/managing director – not enough to live on for senior Wall Street bankers with a Manhattan lifestyle – while bonuses were 10, 20 or even 100 times that amount.

This promoted a culture in which risk-seeking behavior was encouraged – even rewarded – which is why the notorious office politics and 1egendary 100-hour workweeks became the Wall Street norm. Needless to say, shareholders in such institutions got a …

Indexes drop 3 percent; All 30 Dow stocks lower… Financials lead slide on outlook concerns… Dec retail sales fall signals spending contraction

U.S. stocks tumbled on Wednesday as investors feared more credit losses in the banking sector, while bleak December retail sales compounded worries about the toll on consumers from the deepening recession.

Citigroup , down more than 15 percent to $4.98, was a standout drag on the financial sector, while shares of JPMorgan and Bank of America fell 5 percent and 3.5 percent respectively.

The fall in Citigroup, a Dow component, followed a deal by the embattled bank to sell a controlling stake in its crown jewel unit, the Smith Barney retail brokerage, to Morgan Stanley for $2.7 billion.

Analysts reckon the Smith Barney sale was a precursor to a break-up of Citigroup and that the bank must

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President-elect Barack Obama said Saturday that an analysis of his stimulus proposal found that the capital infusion could save or create as many as 4 million U.S. jobs by 2010, nearly 90% of them in the private sector.

Obama previously estimated that his estimated $800 billion strategy for winching the American economy out of its year-long recession could save or create 3 million jobs, but the new study has found that the actual number would range between 3 million and 4 million.

The analysis was submitted by Christina Romer, head of Obama’s council of economic advisors, and Jared Bernstein, the economic advisor to Vice President-elect Joe Biden. The analysis directly follows an official government report showing that U.S. employers slashed more than half a million jobs in December, pushing the unemployment rate to 7.2% and bringing the number of jobs lost last year to 2.6 million — the worst showing since

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The U.S. financial-services sector is undergoing the broadest restructuring of a single industry in the history of Corporate America, and Bank of America Corp. (NYSE: BAC) has positioned itself to emerge as one of three clear frontrunners. Indeed, along with Citigroup Inc. (NYSE: C) and JPMorgan Chase & Co. (NYSE: JPM), Bank of America could well emerge from this financial maelstrom as one of the premier players on the global stage: All three will benefit from increasing market share and increased financial intermediation margins as their weaker rivals have failed and/or been taken over in part or in total by a stronger industry player. During the many financial crises that I have analyzed around the world, the result has always been the same: The prudently managed, under-levered institutions that did not overstretch their capital bases and that were ...

Tough as it may be to make sense of the level of heat Wall Street is taking currently – as it seems the mortgage and credit crisis is now sounding five alarms – we sat down recently with Director of Zacks Equity Research Dirk van Dijk, CFA. He was able to offer a realistic perspective for us, even if he can’t sugar-coat all the bitterness from the pill.

Can you give us some perspective on the seismic shifts we’ve already seen in trading this week?

Lehman Brothers (LEH), a firm dating back to before the Civil War is gone, bankrupt, kaput. Merrill Lynch (MER) was pressured by the Fed to put it up for sale to Bank of America (BAC), but was able to negotiate an extremely generous price of $29 a share, a huge premium from the $17.05 price they closed at on Friday. ...

Two hurricanes hit America this weekend - one in Galveston and the other in lower Manhattan - both of which have caused billions of dollars in damage.  The financial landscape has been rearranged as much as the sandbars in the gulf have been.  Lehman Brothers (LEH), a firm dating back to before the Civil War is gone, bankrupt, kaput.  Merrill Lynch (MER) was pressured by the Fed to put it up for sale to Bank of America (BAC), but was able to negotiate an extremely generous price of $29 a share, a huge premium from the $17.05 price they closed at on Friday. 

While the strategic rationale for BAC to buy MER is pretty obvious - it weds the biggest retail bank to the biggest retail brokerage firm - what possessed BAC to pony up that sort of price is far from obvious.  They could have had

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