World economy talk

[uls]

And regular buy-and-hold investors are not that nimble

the rally is being driven by fast money

maybe by funds that use program trading (quant funds)

check this out --

NYSE chief cautious over March rally
http://www.ft.com/cms/s/0/ae73a390-2...44feabdc0.html

The March stock market rally that fuelled hopes of a broader economic recovery was deceptive because “real money” investors remained on the sidelines, according to the chief executive of NYSE Euronext, the world’s largest stock exchange.

In rare comments about market movements, Duncan Niederauer said in an interview with the Financial Times that the rally was driven by short-term traders trying to take advantage of high volatility and not by large institutional or other long-term investors.

[tidus1203]

As expected both Citigroup and General Electric (and its finance unit) beat all their expectations and the stocks are higher. Citi is trading at $4.60/share in the pre-market trading and Gen. Electric about $.40 higher in the pre-market.

Citigroup: http://finance.yahoo.com/news/Citigr...&asset=&ccode=

GE: http://finance.yahoo.com/news/GE-ear...-14954863.html

[Monseratto]

Maraming question marks...???

Citigroup Profit Exceeds Estimates on Trading, Accounting Rule

Citigroup posted a $2.5 billion gain because of an accounting change adopted in 2007. Under the rule, companies are allowed to record any declines in the market value of their own debt as an unrealized gain. The rule reflects the possibility that a company could buy back its own debt at a discount, which under traditional accounting methods would result in a profit.

The bank still faces speculation about its survival prospects, as reflected in the elevated prices for its credit- default swaps, a type of instrument that investors use to insure against a debt default.

Citigroup’s credit-default swaps as of yesterday were trading at 557, up from 193 at the end of last year. By comparison, rival New York-based bank JPMorgan Chase & Co.’s swaps are trading at 174. Lehman Brothers Holdings Inc.’s swaps were at 322 a week before the U.S. securities firm filed for bankruptcy last September.

[uls]

hahaha

amazing

wala na...

i believe in Santa Claus na

they want everyone to believe things are getting better

they want stock prices to go up up up

that's the trend

don't fight the trend

if they say the sky is orange, then orange it is

orange is the new blue

[tidus1203]

And the fairytale ends in just an hour. Now both C and GE are in the red after they were bidded up initially. Hahaha daming napaso in just one hour biting that head fake

[uls]

Citi's accounting trick:

http://www.bloomberg.com/apps/news?p...H40&refer=home

Citigroup posted a $2.5 billion gain because of an accounting change adopted in 2007. Under the rule, companies are allowed to record any declines in the market value of their own debt as an unrealized gain.

The rule reflects the possibility that a company could buy back its own debt at a discount, which under traditional accounting methods would result in a profit.

Citi can buy back its bonds

Since its bonds are trading at distressed levels (way below face value), Citi can buy them really cheap

That results in a balance sheet gain coz Citi reduces its liabilities

[uls]

+++++++++++++++++++++++++

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the casinos, i mean the banks are reporting profits

their paid analysts come out with research notes saying the worst is over... the recession has hit bottom... on the way to recovery

the financial media (CNBC anchors, their guests) is cheerleading the market... saying stocks are cheap, better buy now... chance of a lifetime

They want you to break open your piggy banks, take out the cash you're hiding underneath the mattress, and throw it into the stock market

THE CASINOS WANT YOUR MONEY

Pigs are fattened up before getting slaughtered

they are pumping up sentiment

making stocks rally (only some big players are buying, but making it look like a lot of people are buying)

they are trying to convince you to go back into stocks

then when you're all in, stock prices all pumped up...

they slaughter you

an excerpt from something i got from email (sorry no link)

And you are still thinking rally? The only way there could be a rally, and the only reason why there would be, lies in the potential for the largest investors which have an incestuous bloodline to Wall Street banks which have an incestuous bloodline to Washington, to make a large profit. And the only way that could possibly happen would be for you and your pension funds to aggressively buy into the stock markets. They won't make a killing off each other, they're coming for your reserves.

And you are still thinking rally? Feeling lucky today? Don’t. The deck is stacked against you in more ways than you care to know. It doesn't matter how smart you think you are, or how lucky. Just get out of the game. Sure, it may take another two weeks or two months, or even five, but this baby's going to blow you all the way to kingdom come.

[tidus1203]

Busy busy Monday trading day!

BOA makes profit and surpassing estimates, Pepsi buys 2 of its bottlers and the Goliath news definitely Oracle buying Sun Microsystems for $9.50/share...

[uls]

yep

di natuloy IBM Sun

Sun approached Oracle

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B of A joins the Happy Bank Club

Already members: Wells Fargo, Goldman Sachs, JP Morgan, Citigroup (?)

--

the big banks are lending even less

Bank Lending Keeps Dropping
http://online.wsj.com/article/SB124019360346233883.html

According to a Wall Street Journal analysis of Treasury Department data, the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program.

The total dollar amount of new loans declined in three of the four months the government has reported this data. All but three of the 19 largest TARP recipients with comparable data originated fewer loans in February than they did at the time they received federal infusions.

The Journal's analysis paints a starker picture of the lending environment than the monthly snapshots released by the government and is a reminder of the severity of the credit contraction. One reason for the disparity: The Treasury crunches the data in a way that some experts say understates the lending decline.

the banks are hoarding capital in anticipation of more loans turning bad

[tidus1203]

Oracle talaga lakas. All cash deal sya! The tech sector is piling with cash, I guess they are still conservatively runned in the grand scheme of things. If stock prices go low enough takeovers are inevitable.

[tidus1203]

By the way even with the good BOA results, the stocks is getting hammered...

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a not so very reliable source claims that it has obtained results of the bank stress test

according to the source, the results are very very bad

the supposed leak is making rounds

[tidus1203]

Well at least Citigroup and gang are getting back to reality after the pumping sessions of the past 3 weeks... Citigroup at $4.70 and everyone is partying, give me a break!

[uls]

things spooking the market tonight:

the USG says the TARP funds it lent to banks can be converted to equity... so that can make the USG majority owner of a number of big banks (that's nationalization)

a Goldman Sachs analyst calls Citi's numbers bullsh*t

Citigroup Credit Losses Rising Rapidly, Goldman Says

April 20 (Bloomberg) -- Citigroup Inc.’s credit losses are growing at a “rapid rate,” undermining Chief Executive Officer Vikram Pandit’s efforts to stabilize the U.S. bank, according to Goldman Sachs Group Inc.

While Citigroup posted first-quarter net income of $1.6 billion last week, the New York-based bank suffered an “underlying” loss of 38 cents a share, Richard Ramsden, a Goldman Sachs analyst, wrote in a research note dated yesterday. He repeated a “sell” rating on the stock.

Despite B of A's profit report, it is setting aside $6.4B as loan loss reserves


WSJ reports the big banks are lending even less


U.S. Leading Economic Indicators Index Fell in March (Update1)

April 20 (Bloomberg) -- The index of U.S. leading economic indicators in March fell more than forecast, indicating any recovery from what may be the longest recession in the postwar era is still many months away.

and the stress test leak

[uls]

reality check tonight

too much hype

fundamentals finally catch up

[uls]

the stress test leak is definitely having a negative impact on the market

it just came out tonight and spread like wildfire

the US Treasury even had to come out with a denial, saying they don't even have the results yet


Blog Sparks Worries that Banks Will Fail Stress Test
http://www.cnbc.com/id/30307192

The U.S. Treasury Department has not yet received the results of "stress tests" on the health of the nation's 19 top banks, spokesman Andrew Williams said Monday, after a blog said it had obtained the test results and some U.S. bank shares moved lower.

Williams made the comments after banks added to losses before the market open following a "free speech" blog, called the Turner Radio Network, said 16 of the 19 are "technically insolvent."

The post cited what it said was a U.S. government report.

"There is no basis for that report, we do not even have results yet," Williams said.

The Obama administration has said the results would be released on May 4.

[tidus1203]

Basta ingat lang sa mga propaganda ng media and politicians and politicians trying to be bankers (aka central bankers)... They are trying to brainwash people to believe everything is fine and when you believe them you just end up losing money.

[uls]

This is what a central bank can do to force money out of savings...

to force lending and spending

It May Be Time for the Fed to Go Negative
http://www.nytimes.com/2009/04/19/bu...3&ref=business

Why not lower the target interest rate to, say, negative 3 percent?

At that interest rate, you could borrow and spend $100 and repay $97 next year. This opportunity would surely generate more borrowing and aggregate demand.

that's great for a borrower

but why would a lender lend $100 and just get $97 back?

itatago nalang ng lender pera nya diba?

The problem with negative interest rates, however, is quickly apparent: nobody would lend on those terms. Rather than giving your money to a borrower who promises a negative return, it would be better to stick the cash in your mattress. Because holding money promises a return of exactly zero, lenders cannot offer less.

so how does a central bank encourage lending when there's negative interest rate?

Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.

That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 percent is better than losing 10.

Of course, some people might decide that at those rates, they would rather spend the money — for example, by buying a new car. But because expanding aggregate demand is precisely the goal of the interest rate cut, such an incentive isn’t a flaw — it’s a benefit.

amazing

PUNISH THE SAVERS

make saving money a disincentive

they want to discourage saving

they want everyone to borrow and spend