We think that the worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods -- there are still many significant challenges ahead. The banks are now able to tap the debt markets without FDICÕs support and also access the equity markets as the investor confidence returns in the stronger banks. Many banks have already repaid the TARP funds to the Treasury. Ê

While the bigger banks benefited greatly from the various programs launched by the Federal Reserve, the Treasury and the FDIC and are now in a much better shape, many smaller banks are still in a very weak financial state and the FDICÕs list of problem banks continues to grow. Further, the Government efforts have not succeeded in restoring the lending activity at the banks.ÊLower lending activity will continue to hurt the margins though the low interest rate environment should

...

We think that the worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods -- there are still many significant challenges ahead. The banks are now able to tap the debt markets without FDICÕs support and also access the equity markets as the investor confidence returns in the stronger banks. Many banks have already repaid the TARP funds to the Treasury. Ê

While the bigger banks benefited greatly from the various programs launched by the Federal Reserve, the Treasury and the FDIC and are now in a much better shape, many smaller banks are still in a very weak financial state and the FDICÕs list of problem banks continues to grow. Further, the Government efforts have not succeeded in restoring the lending activity at the banks.ÊLower lending activity will continue to hurt the margins though the low interest rate environment should

...

US stocks started the holiday-shortened trading week on a positive note as energy, technology and industrial shares pulled equity markets higher.  Although stocks seesawed in early trading, a gain in oil prices buoyed sentiments on the Street and investors raced to put money in the stock market. 

The Down Jones industrial average advanced 91 points or 1.1% and the S&P 500 increased 0.9%.  NASDAQ edged up 0.3%.  Volume on the NYSE was light with only 1.07 billion shares exchanging hands and advancing issues outpacing declining stocks by a three-to-two margin.  The measure of market volatility, the CBOE Vix, retreated 2.2% to 25.35%, its lowest level since mid-September.  Treasury prices jumped, with the yield on the benchmark 10-year note declining to 3.48%.  Crude prices jumped to more than $71 per barrel on higher demand expectations and reports that Nigerian militants partly shut down an offshore oil facility.    

Trading

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* JP Morgan (NYSE:JPM) upgraded shares of Sallie Mae (NYSE:SLM) to "overweight," citing improved earnings visibility from its transition to primarily a loan service providers, which will lower interest-rate and funding risks

* Quantas Airlines cancelled orders for 15 Boeing (NYSE:BA) 787 Dreamliners scheduled for 2014-2015 delivery, and deferred orders for 15 more, citing the tough economic environment

* Potash (NYSE:POT) lowered its earnings guidance for the second quarter from $1.10-$1.50 to 70 cents, citing substantially lower than expected potash sales volume on deferrals by its global customers and lower realized prices for phosphate fertilizers

* UBS (NYSE:UBS) warned of a second quarter net loss, announcing $3.48 billion in capital-raising with a 293.3 million share offering at $11.91, a 6.9% discount to yesterday's close

* Goldman Sachs (NYSE:GS) lowered its 2010 earnings estimate and price target on Monsanto (NYSE:MON), citing lower glyphosate profits and lower seed price gains. The 2010 estimate was cut 50

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The worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods, as there are still many significant challenges ahead.

Ten of the nation's largest banks have received the Treasury approval for TARP repayment, as they are now able to tap the debt markets without FDIC's support and also access the equity markets as the investor confidence returns in the stronger banks.

While the bigger banks have benefited a lot from the various programs launched by the Federal Reserve, the Treasury and the FDIC, and are now in a much better shape, many smaller banks are still in a very weak financial state, and the FDIC's list of problem banks continues to grow. Further, government efforts have not succeeded in restoring the lending activity at the banks. Lower lending activity will continue to hurt the margins, though the low interest rate environment

...

The worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods, as there are still many significant challenges ahead.

Ten of the nation's largest banks have received the Treasury approval for TARP repayment, as they are now able to tap the debt markets without FDIC's support and also access the equity markets as the investor confidence returns in the stronger banks.

While the bigger banks have benefited a lot from the various programs launched by the Federal Reserve, the Treasury and the FDIC, and are now in a much better shape, many smaller banks are still in a very weak financial state, and the FDIC's list of problem banks continues to grow. Further, government efforts have not succeeded in restoring the lending activity at the banks. Lower lending activity will continue to hurt the margins, though the low interest rate environment

...