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- Citigroup's Collapse Is Unthinkable, What Are The Other Options?
Citigroup (C) is one of the largest banks in the world. I don’t think that they will be allowed to fail. The counter-party exposure is too large. Let’s consider some of the facts:
Citigroup has raised about $50 billion of capital from sovereign wealth funds and $25 billion from the US Government in the past year. On Monday, it announced that it would cut 52,000 jobs, double the number previously indicated, to help to reduce costs. Those cuts will come on top of the 23,000 that … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. 
Переслать - U.S. Economic Outlook For 2009
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 we know. That period of darkness will be marked by a dramatic slowdown in economic activity, as well as by rising unemployment, … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Freddie, Citi Contribute To ETF, Market Stress
Mortgage lender Freddie Mac (FRE) could be de-listed from the NYSE, continuing the troubles that have plagued financial exchange traded funds (ETFs) for much of this year.
Since the company’s share price has been under $1 for more than 30 days, they have been warned of their possible removal. They have been given six months to rectify the situation. The NYSE requires that the average closing price of a stock remain above $1 per share.
Freddie Mac has six months from Nov. 17 to bring its … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Friday's Stock Market Recap: An Optimistic Finish To A Negative Week
Markets sprinted into the green after reacting to the news that President Elect Obama is planning to give the job of Treasury Secretary to New York Federal Reserve Bank chief Timothy Geithner. After a tumultuous week of heavy losses, markets seemed to take very nicely to the news. The Dow (^DJI) went up 6.54% during Friday’s trading session and finished off at 8,046 points. The Nasdaq (^IXIC) finished at 1,384 and rose by 5.18%. S&P (^GSPC) also traded positive closing at 800 … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Tax Hit Is Another Reason To Switch To ETFs
Exchange traded funds (ETFs) may snatch up investors from mutual funds as investors see unsatisfactory returns in their mutual funds being taxed. The insult to industry may exacerbate the exodus that mutual funds have been seeing this year as year-end tax bills are opened.
Investors have removed $70.7 billion from stock funds in October on top of $56 billion the prior month, reports Jeff Plungis and Sree Vidya Bhaktavatsalam for Bloomberg.
ETFs offer advantages that may help investors … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Yahoo Sells Kelkoo To Private Equity Firm
Yahoo (YHOO) has sold its wholly owned subsidiary Paris-based comparative shopping site, Kelkoo - to a U.K.-based equity firm named Jamplant Limited, a new investment unit created by the founders of price comparison site USwitch, which sold to E.W. Scripps (SSP) for 210 million pounds in fiscal '06. Kelkoo was sold for less than 100 million euros ($126 million), according to a TechCrunch report.
The Web Portal acquired the online comparison shopping service in March of 2004 for … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Good Earnings, Bad Guidance From Home Improvement Giants
Lowe’s (LOW), the world’s second largest home improvement retailer, reported better than expected numbers on Monday as the fall of the housing market continued to dampen sales for home construction and improvement products. Investors celebrated as diluted earnings per share came in 5 cents above analysts expectations at 33 cents per share, even though net income for the quarter was down 24 percent from the same period in 2007 to $488 million. Comparable store sales, another good gauge … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Market Reverses In Afternoon Trading: Possible Elliott Wave?
Wow - what another surprise today’s final hour of trading brought us. I’m sensing a pattern developing here. Let’s see the 15-minute chart structure and observe the divergence that preceded the action, and then see if we can count a completed 5 wave impulse - complete with mini-fractal waves - of the final potential wave of the devastating Wave 3 down we just experienced.
DIA (DIA) 15-min (divergence):
I didn’t want to spend too much time on this chart, other than to point … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Change Is In The Air
Those who believe - like I do - that the American era is drawing to a close are often labeled as permabears or troublemakers - or worse.
It doesn’t matter that the signs of waning U.S. economic, political, social and military influence are there for all to see. Or that the world’s longtime superpower is facing serious challenges - and aggressive challengers - on every front. Or that change is the only constant when it comes to the long-run fortunes of nations and … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Forex Trading Commentary: Traders Continue To Punish The US Dollar
Euro
The euro moved higher vis-à-vis the U.S. dollar today (Friday) as the single currency tested offers around the US$ 1.2635 level and was supported around the $1.2425 level. The common currency continued its ascent as traders continued to punish the greenback for a variety of factors. First, there is increasing talk about deflation hitting the U.S. economy. St. Louis Fed President Bullard last night said the Fed may need to rely on “quantitative easing” to fend … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - US Stock Market: Just How Low Can The Dow Go?
This trading week so far has been an absolute disaster for long-only investors. Let’s take a look at the current Dow Jones (^DJI) structure and see if we can pick up any clues on what might be in store next.
Dow Jones Monthly:
As of this writing, there’s still an hour left in this trading week but I wanted to give a quick update. It looks so far like we’ll get a higher close today but anything can happen in the final hour (UPDATE - should have waited that extra hour before … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Coachmen's RV Division Acquired By Berkshire Hathaway
Coachmen Industries Inc. (COA), a manufacturer of recreational vehicles and system-built housing in the U.S., agreed Friday to sell its RV division in northern Indiana to rival Forest River, a unit of Warren Buffett’s Berkshire Hathaway (BRK-A) Inc.
Elkhart, Ind.-based Forest River, a major producer of RVs, cargo trailers, buses and mobile offices, will acquire most of the assets of Coachmen’s RV Business, including the co.’s brands, product lines, its central manufacturing … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - BJ's Wholesale Fairly Discounted
BJ’s Wholesale Club Inc. (BJ) is the third largest warehouse club operator in the U.S. BJ’s reported better-than-expected results for the third-quarter, beating the EPS consensus by $0.03 and coming in at the high end of its most recent guidance. The upside was due to a boost in gasoline sales and profits. The company also upped its earnings guidance for fiscal 2008 from $2.10-$2.20 to $2.20-$2.30.
Even so, we are reducing our fiscal 2008 EPS estimate by $0.02 and our fiscal 2009 EPS … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Campbell's Soup Beats The Bear
Mmmm….Mmmm….Good.
That’s what Campbell’s (CPB) soup is these days as consumers every where struggle in a slowing economy.
Here’s the story from Bloomberg by Chris Burritt entitled: Campbell Beats Bear Market as Consumers Seek Out Soup.
“Judging by Dayna Neumann’s pantry, Campbell Soup Co. may turn the U.S. recession into rising sales, just as it did in the last two contractions.Neumann’s family in Louisville, Kentucky, is bracing “for a rough road ahead,” the 32-year-old … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - China, Iran, And The Perth Mint Tell You To Get Gold
China and Iran Switch to Gold — Will You?
Gold rallied sharply yesterday, and is rallying again at the time of this writing — it’s now broken above the significant resistance range of 740-750, and is currently testing the $800 level. While the technical outlook on the daily chart still looks a bit bearish for gold, some major fundamental news of late suggests the bull market may be ready to resume. Consider:
Iran recently switched to gold reserves, China is massively increasing its gold … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - International Securities Exchange Revamps Implied Volatility Charts
The International Securities Exchange (ISE), which publishes a superb implied volatility chart that I have featured on VIX and More on a number of occasions, has recently launched an enhanced version of their IV chart. The new version of this chart, which I have appended below, adds an “ISEE value” to the list of data. I have discussed the ISEE call to put ratio frequently in this space in the past. In this incarnation it is simply a ratio of call volume to put volume for the specified … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Forex Trading: GBP/USD Remains Volatile But Chooses The Downside
The GBPUSD chose the downside as it moved below the key 100 and 200 hour moving averages and retraced the overnight gains completely as stocks hit new lows. The pair did find support against yesterdays lows at the 1.4711 - taking it out briefly as it moved to lows at 1.4702. However, the sharp bounce back to over 1.4800 has taken some of the steam out of the sellers for now.
The market now moves into the afternoon period where positon squaring before the weekend will take … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Will The S&P 500 Fall Below 500?
The chart below says it all, folks. It’s a monthly chart of the S&P 500 (SPY), going all the way back to recession that ended around 1982.
As the chart illustrates, the S&P is approaching a trendline that has been in the making since 1982.
The market may bounce off this trendline, or trade in a range for some time. But consistent with the fundamentally bearish view I have over the long-term, I think this trendline is going to break, and I don’t think it will take too long — … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Panic-Crash Sentiment Causes Extreme Volatility
As fear stalked global equity markets over the past few days, volatility continued unabated and the CBOE Volatility Index (VIX) again scaled the panic levels of October 10. The following chart tells the story …
For some perspective on the current stock market correction, Chart of the Day provides the graph below, illustrating all major stock market corrections (15% loss or greater) of the Dow Jones Industrial Index over the last 108 years.
Each dot on the chart represents a … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Forex Trading: EUR/USD Tests Trendline Resistance
The EUR/USD bounced off the old resistance trendline that contained the market on the topside. If you recall, on November 19th the pair squeezed above this level, only to be hit hard by sharp selling from speculative accounts. The high today tested, but backed off. Watch this level … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Gold Is Experiencing Record Demand: So Why Have Prices Fallen?
Having spawned the worst market for stocks since the Great Depression, the global financial crisis is forcing investors to re-examine a number of long-held beliefs. Gold bugs, for instance, have been left to wonder just how gold prices could backpedal in the face of all-time-record demand.
Gold demand did increase - in fact, by a record 45% from the second quarter to the third.
Retail demand was the primary catalyst, spiking 121% to 232 tons. And because of it, bullion dealers … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - S&P 500 Stocks Trading Below Book Value
Highlighted stocks include Archer Daniels Midland Company (ADM), KB Home (KBH), Southwest Airlines Co. (LUV) and The New York Times Company (NYT).
Given yesterday’s multi-year closing low, I designed a screen to see what S&P 500 stocks were trading at or below book value. A P/B [price-to-book] multiple of 1.0 or lower is an important multiple because it means that investors are not giving the company any credit for its future earnings potential.
Since I also wanted to … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Will Citi Become RiyahdCiti Bank?
Does it really matter to the majority of stakeholders that Citi (C) may possibly be renamed RiyahdCiti Bank, controlled by the Kingdom Holding Company of Prince Al-Waleed? I think not.
Unlike an industrial corporation whose assets cannot be moved to another country without shutting down the fixed plant and permanently eliminating local jobs, often to the destruction of the regional economy as we are seeing with the so-called Big 3 automakers, a bank is unique.
Financial assets and … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Real Price Of Gas Continues To Drop Giving $300B Savings
The cheapest gas in the country can be found in Kansas City for as low as $1.39 per gallon, and the average retail price for gas is now down to $1.98 per gallon. Without the high-priced states of Alaska ($2.95) and Hawaii ($2.89), the national average for the other 48 states is down to $1.94 per gallon.
Using real gas prices from the EIA (in November 2008 dollars), the chart above (click to enlarge) shows how today’s gas prices compare to past prices.
The last time real gas … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - The One Global Market Where There Are Gains Behind The Gloom
It’s easy to be gloomy when it comes to the financial markets. It’s even easier to write off China. But China is much like America was at the dawn of the Industrial Revolution, and there’s still all kinds of potential, too. … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Why Companies Should Pay Dividends
In theory it makes sense for companies to reinvest all of their earnings straight back into the business, compounding the growth rate of the enterprise to achieve a higher asset base. If a company can put their earnings to good use, there is no reason for them to pay fat dividends.
In reality however the money is wasted away on failed acquisitions, taking on too much risk with new products. Companies that consistently not only pay but increase their dividends over time are more … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Global Investing Roundups: GMAC, Circuit City, JPM
GMAC Files to Become a Bank; Unemployment Nears 26-Year High; Mogul Signals Interest in Circuit City; Banco do Brasil Buying Out Rival; Crude Continues Slide; JPMorgan Cuts 3,000 jobs; Stock Market Craters;
Detroit-based finance company GMAC has filed to become a bank, a shot at getting a slice of the $700 billion Troubled Asset Relief Program bailout. Private equity firm Cerberus Capital Management LP owns 51% of GMAC. General Motors Corp. (GM) owns the other 49%, Reuters … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Gold Maintains Its Safe Haven Status
In an increasingly risk averse environment and in the wake of tumbling commodity markets, gold is maintaining a bid, albeit in a tight trading range with strong resistance at $777 , confirming its status as a safe haven asset. Gold is currently trading at $755 (12:15GMT).
Oil sinks below $50 a barrel
For the first time since 2005, oil dipped below $50 a barrel yesterday. Despite this, Nigeria said it did not want to decrease its oil production to try and stop the slide in prices … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - A Few Thoughts On Citi, Goldman, UBS
Just when you thought that Team 850 had managed to contain equity weakness, they pull their bid and stocks go down like a lead balloon. Yesterday’s price action was frankly farcical, as Spoos caught a bid on news of a bilateral deal for the automakers….only to get cratered when news subsequently emerged that no deal will be passed any time in the foreseeable future.
CORRECTION: Yesterday in this space, Macro Man made some non-negative comments about the US Congress. This should have … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Citigroup Board To Meet Today: Will The Bank Break-Up?
The board of directors of Citigroup Inc. (C) will meet today to look at beleaguered banking giant’s options after its shares hit a 15-year low, and speculation is escalating that it will have to look at a break-up, spin-off or sale of at least part of the bank.
Citi’s shares have plunged 50% this week - including 26.4% yesterday, when they dropped $1.69 each to close at $4.71. It’s the first time since 1994 that the shares closed below $5.
Citigroup, once the biggest U.S. bank with … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Avon's Successful Make-Over
Avon Products Inc. (AVP), headquartered in New York City, is benefiting from both the expansion into the developing and emerging markets and its emphasis on the Beauty products portfolio. CEO Andrea Jung has transformed the company over the last eight years. Management aims to achieve high single-digit local currency revenue growth supported by margin expansion over the long term.
Management instilled financial discipline in the company through the multi-year supply chain cost … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Forex Trading: USD/JPY Bounces Off Daily Resistance And Heads Further Down The Channel
USD/JPY has bounced off resistance on the daily chart around 96.50 and is heading down towards lows around 90.88 made a few months back on October 24th. Japan’s finance minister Nakagawa said Japan “will take measures to determine what they can do to curb equity weakness, as global stocks have dropped more than 5% and have impacted their economy” BOJ will cooperate with finance to prop up the economy in the … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Forex Trading: USD/CAD Spikes On Oil Freefall
With the price of oil breaking the $50 barrier and trading lower, the USD/CAD pair appropriately spiked up to the October closing levels. With clear pressure on the price of oil as world economies slow down and are predicted to continue down that path, we will look for USD/CAD to continue north and possibly test the May 2004 highs. The retracement analysis below is based on the May 2004 high and the November 2007 … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Forex Trading: AUD/NZD Holds 50% Retracement
Looking at the AUD/NZD retracement analysis from yesterday (7/24 - 10/10), we see the 50% retracement level has held and the pair has since traded lower. We will now look for the 38.2% retracement to provide some support on the downside. It is also important to note that the 100 day and 200 day moving averages are about to … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Citigroup Considers Merging Or Selling Itself
After another brutal day on Wall Street, Citigroup’s (C) board of directors frustrated and befuddled by bank’s 50% stock slide this week - is currently evaluating the firm’s shaky market position and weighing, according to The Wall Street Journal, the possibility of merging with another firm, auctioning off parts of the co. or selling it outright.
So far discussions regarding the firm’s options have been internal where a range of scenarios that were unthinkable only weeks ago are being … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Financial ETFs Walloped, And It Could Get Worse
Citigroup’s (C) descent to 13-year lows has only contributed to the woes that financial exchange trade funds (ETFs) have seen all year.
The banking giant’s stock is now trading around $5, and it may only be the beginning, reports CNBC. Since most institutional investors and pension funds are prohibited from owning stocks below $5, a selling wave could be triggered sending the share price even lower.
The stock doesn’t have to be sold immediately, but money managers would have to exit … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Looking Back Even Further
One reason why so many analysts failed to anticipate the worst financial crisis this century stems from their lack of historical perspective. Many believed that since the world had ”progressed,” there was little point in taking account of what had occurred in less sophisticated times.
That meant they generally ignored developments that took place more than a decade or two ago, or in the best case, prior to World War II. Of course, if they had not limited themselves in that way, … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - Target-Date ETFs Want A Slice Of 401(k) Pie
The exchange traded fund (ETF) industry is continuing to fight for the assets within the 401(k) retirement area, and the time is opportune as ever.
Barclays Globlal Investors has introduced a series of target-date funds, something that has become especially popular in retirement plans. John Spence for The Wall Street Journal explains these mutual funds are designed to manage portfolios by directing the allocations to stocks and bonds as workers approach retirement.
For example, if you … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать - More Evidence Of TARP Error
Day after day we get continued evidence of a major policy mistake that is costly for the average investor with a retirement account.
The Bush Administration, led by Hank Paulson, stepped in when faced with a crisis. It was courageous and correct, even if the plan was a bit sketchy.
When they finally got Congressional approval it included both additional powers and additional oversight. Paulson used the additional powers to make direct investments in financial firms, something … [visit site to read more]
Article Published On DailyMarkets.com - visit Daily Markets - Financial News & Opinions for more great content. Переслать
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