Tag: Monday Morning Business Update

Monday Morning Business Update

Monday Morning Business Update is an Open Thread

From Yahoo News Business

1 Wall Street may brake for housing, Home Depot

By Ellis Mnyandu, Reuters

Sun May 17, 7:46 pm ET

NEW YORK (Reuters) – Stocks are likely to hit more speed bumps this week as investors become more wary of Wall Street’s ability to rally further and housing starts, jobless claims and other indicators are in the spotlight.

With first-quarter earnings reports winding down and recent optimism about economic stabilization already factored into stock prices, analysts said there appears to be very little on the horizon to help extend the recent run-up.

Quarterly earnings from rival home-improvement chains Home Depot Inc (HD.N) and Lowe’s Cos Inc (LOW.N) may shed some light on the consumer’s ability and inclination to spend. The numbers may also give a hint of any further fallout from the housing slump.

Monday Morning Business Update

Old News


Stress Tests

1 Improving markets helped banks pass stress test

By Mark Felsenthal, Reuters

21 mins ago

WASHINGTON (Reuters) – U.S. bank regulators breathed a huge sigh of relief in early April when improving financial markets looked set to push the nation’s 19 largest banks through the gauntlet of tough “stress tests” in reasonably good shape.

In early March, a month after Treasury Secretary Timothy Geithner announced the tests on February 10 to help restore investor confidence in the major banks, the scene was much bleaker: major stock indexes had slumped to 12-year lows on persistent fears about the financial weakness. It looked possible that a major bank might need an emergency government rescue even before the stress test results could be announced.

But since the trough, markets improved steadily with rising share prices and volumes, better liquidity and other signs of stabilization, and regulators gained comfort that capital markets would be willing to fill any holes the stress tests unearthed at banks.

Monday Morning Business Update

Old News


1 U.S. offers strong backing for IMF governance overhaul

By Glenn Somerville, Reuters

2 hrs 46 mins ago

WASHINGTON (Reuters) – The United States on Saturday pledged robust support for an overhaul of governing power within the International Monetary Fund so key emerging-market nations get more say in how the lender operates.

In a speech to the IMF’s steering committee, U.S. Treasury Secretary Timothy Geithner also called on the Fund to be prepared to offer loans to recapitalize banks or to aid developing countries in rolling over corporate debt.

Geithner’s proposals, delivered in a strongly worded address at the IMF’s semiannual meeting, are likely to provoke some controversy among the other industrialized countries who, with the United States, have long dominated the global lender.

Monday Morning Business Update

Old News


1 AP IMPACT: Chinese drywall poses potential risks

By BRIAN SKOLOFF and CAIN BURDEAU, Associated Press Writers

1 hr 39 mins ago

PARKLAND, Fla. – At the height of the U.S. housing boom, when building materials were in short supply, American construction companies used millions of pounds of Chinese-made drywall because it was abundant and cheap.

Now that decision is haunting hundreds of homeowners and apartment dwellers who are concerned that the wallboard gives off fumes that can corrode copper pipes, blacken jewelry and silverware, and possibly sicken people.

Shipping records reviewed by The Associated Press indicate that imports of potentially tainted Chinese building materials exceeded 500 million pounds during a four-year period of soaring home prices. The drywall may have been used in more than 100,000 homes, according to some estimates, including houses rebuilt after Hurricane Katrina.

Monday Morning Business Update

New News

1 Bankers rage at G20 ‘witch hunt’ against bonuses and buccaneers

Basic pay bumped up as City tries to retain risk-taking ‘talent’, warning it may go abroad

Elena Moya

The Guardian, Saturday 4 April 2009

Bankers and hedge fund managers were furious yesterday at attempts by the G20 to cap their pay and regulate them for the first time, calling it a “witch hunt” by world leaders.

“Regulation is generally bad. You should let the market decide what the people will get paid,” said Matthew Prest, managing director at Close Brothers investment bank. “Sometimes regulation has the opposite effect of what you want and I think bankers’ salaries regulation would fall under that category. I don’t hear anybody calling for Hollywood star salary caps. This is a trendy, fashionable thing to do, it will have bad consequences.”

The end of light-touch regulation heralded by the G20 summit will lead to far-reaching changes to the conduct of business in the City of London.

Monday Morning Business Update

Old News


1 Bank execs vow to work with Obama on recovery plan

By DARLENE SUPERVILLE, Associated Press Writer

Sat Mar 28, 1:42 am ET

WASHINGTON – Top executives of the nation’s biggest banks said Friday after meeting with President Barack Obama that they will work with the administration on its economic recovery plans, but want more specifics from the White House. In an interview with CBS News, Obama said his overarching message was this: “Show some restraint. Show that you get that this is a crisis and everybody has to make sacrifices. They agreed and they recognized it. Now, the proof in the pudding is in the eating.”

Bankers said an administration proposal to jump-start lending, a problem at the heart of the industry’s crisis, is encouraging.

“People are looking at that. It’s positive,” Morgan Stanley’s John Mack told The Associated Press in an interview. “We think it’s the right thing to do and now we just need to get the details.”

Monday Morning Business Update

And Late Breaking News

“Political Will”

“Political Will”, when uttered by a Villager, means the ability to ignore the opinion of the American people.

The Iron Triangle of Institutional Washington, the lawyers and lobbyists and media mouthpieces are hoping Obama has the “political will” to stand up to us, to the face of our anger at the elites.

Their vanity doesn’t quite grasp the nature of their epic failure to deceive.

The preposterous Randian “entitlement” of these Massive Failure Masters is exposed.  Cadillac Wall Street Welfare Queens they know nothing.

I expect the market to rise tomorrow on the expectation that another Bailout is in the offing.

On the other hand at least the House has blinked, though they may count it a free vote; and I don’t think anyone on “Main St.” or the rest of the 95% of us is going to be fooled by the smoke and mirrors.

To say Obama’s presidency hangs by a thread is an understatement.  The housing market has another 20% to drop to historic average.  Anyone who thinks that the economy is going to turn around by June (I’m looking at you Cramer) is a cockeyed optimist.

We have to stop paying off Credit Default Swaps that are not asset backed.  Sorry if you bet on black time to rake the chips in.

The market rate for toxic assets is 30% but banks don’t want to let them go for less than 60%.  Geithner wants to form a partnership with private capital where they put up less than 10% of the money and get 80% of the profits (if any).

Of course if there aren’t any profits (20% drop in housing prices to historic average) we guarantee the entire loss.

What a pathetic sucker bet.

And it’s not like they’re going to buy all asset backed crap either.  This stuff includes all those worthless chips on black.

This is going to be a tough sell.  I don’t think they have the “political will” to do it.

Monday Morning Business Update

And Late Breaking Open Thread

First Some Old Business

From Yahoo News

AIG Bonuses

1 Insurance giant AIG to pay $165 million in bonuses


Sun Mar 15, 7:55 am E

WASHINGTON – American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.

AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Monday Morning Business Update

And Late Breaking News.

From Yahoo News Business

1 Source: AIG to get up to $30B more in Fed aid

By IEVA M. AUGSTUMS, AP Business Writer

1 hr 11 mins ago

CHARLOTTE, N.C. – Struggling insurer American International Group Inc. will receive up to $30 billion in additional federal assistance in the fourth government rescue of the company, a person familiar with the matter told The Associated Press on Sunday.

The new infusion is intended to prop up AIG – once the world’s largest insurer – as it is expected to announce $60 billion in quarterly losses early Monday, the source said on the condition of anonymity because the discussions are still ongoing.

The company, which is considered too large to fail, previously received about $150 billion in loans from the government, which now has an 80 percent stake in the company.

Monday Morning Business Update

From Yahoo News Business

1 U.S. seeking up to 40 percent stake in Citigroup: report


19 mins ago

HONG KONG (Reuters) – The U.S. government may end up holding as much as 40 percent of Citigroup’s common stock, the Wall Street Journal reported on its website, citing sources familiar with the plans.

But Citigroup executives hope the talks with U.S. federal officials will result in a stake closer to 25 percent, the Journal reported.

The lender is discussing with U.S. officials a scenario in which a substantial portion of the $45 billion in preferred shares held by the U.S. government, amounting to a 7.8 percent stake in Citigroup, would convert into common stock, the newspaper said.

With Bonus Late Breaking News.

Monday Morning Business Update

Well I told you it would be after 8.

Japan economy shrinks at fastest pace in 35 years

By TOMOKO A. HOSAKA, Associated Press Writer

22 mins ago

TOKYO – Japan’s economy contracted in the fourth quarter at the fastest pace in 35 years as a collapse in global demand battered the world’s second-largest economy.

Japan’s gross domestic product, or the total value of the nation’s goods and services, dropped at an annual pace of 12.7 percent in the October-December period, the government said Monday.

That’s the steepest drop for Japan since the oil shock of 1974. It far outpaces declines of 3.8 percent in the U.S. and 1.2 percent in the euro zone.