Archive for the ‘Financial News’ Category

Is this really news?

Government efforts to prop up U.S. banks and savings institutions have only partly cushioned the blow from what may have been the industry’s worst three-month period since 1990.

“Credit trends are going to be bad,” said Gary Townsend, co-founder of Hill-Townsend Capital in Chevy Chase, Maryland. “No one is immune. If you are a bank, and have loans, you will suffer your share.”

The banks are already hurting because of the mortgage fiasco. Why wouldn’t they hurt more when the recession causes more people to get later with their bills?

I hope you all had a very Merry Christmas, now back to reality. It seems everyone is making predictions these days.

The US economy shrank in the third quarter, official data confirmed Tuesday, as the IMF’s top economist warned of a second Great Depression offering no respite from relentless gloom ahead of Christmas.

The abrupt 0.5-percent contraction of gross domestic product (GDP) in the world’s largest economy was seen as marking the start of a steep downturn for the United States after GPD growth of 2.8 percent in the second quarter.

I guess it comes as no surprise that once we dipped our toes in the pool, that the Canadians would do the same thing.

Canada will follow the United States by providing C$4 billion ($3.3 billion) in emergency loans to the Canadian arms of Detroit’s ailing automakers to keep them operating while they restructure their businesses, Prime Minister Stephen Harper said on Saturday.

The package, announced by Harper and Ontario Premier Dalton McGuinty, comes a day after the White House unveiled a $17.4 billion package to shore up Detroit’s auto industry.

For once, I wish they weren’t following our lead.

It’s a shame so many people are losing money on their homes.

With 2008 on track to be the worst year in decades for the housing market, a new report shows that American homeowners collectively will lose more than $2 trillion in home value this year. And much of that loss is in Northern California.

The real estate Web site Zillow.com calculated that home values have dropped 8.4 percent year-over-year during the first three quarters of 2008, compared with the same period last year. On top of that, some 11.7 million Americans are “underwater,” owing more on their mortgage balances than their homes are worth.

Part of the problem is the panic. People see they owe more than the house is worth and try to get out as quick as possible. Why not buckle up and enjoy the ride? Sure, it’s not worth as much as it was right now, but you have no idea what’s going to happen in 1, 5, or 10 years.

I was shocked to find out that Apple has locked up 30% market share. I knew they would have a huge increase this year, but 30%? Wow.

The Apple iPhone now has a 30 percent market share in the U.S. smartphone market and 16.6 percent of the worldwide smartphone market, Needham analyst Charlie Wolf wrote in a research note this week. Apple is now second only to Nokia, which, while still very strong, saw its share plummet from 63.3 to 43.6 percent year over year. Most of that loss went directly to Apple.

It really isn’t surprising that they have climbed so rapidly though, the hype about the iPhone was stronger than for any other product that I can think of (other than Tickle Me Elmo). Combine that hype with Apple’s excellent reputation and you have a surefire success on your hands.

First we hear that Wal-Mart may be selling the iPhone for $99, then we hear that AT&T is cutting jobs.

AT&T Inc. on Thursday said it would cut 12,000 jobs, or 4% of its workforce, and spend less on new equipment in 2009 in response to a weakening economy.

The Dallas-based phone giant, which had 303,000 employees at the end of the third quarter, becomes the latest corporate bellwether to announce major layoffs. Also on Thursday, DuPont, Viacom and Credit Suisse said they would cull jobs.

If Wal-Mart carries the iPhone for $99, AT&T might need some of those people.

Haven’t we all known for years that bank overdraft fees are unfair to consumers?

Overdraft fees are boosting banks’ profits at the expense of consumers, especially young and low-income people, finds a new Federal Deposit Insurance Corp. study.

The 18-month survey found that most banks automatically enroll consumers in overdraft programs — some don’t allow them to opt out — and then cover overdrawn transactions for a per-item fee of up to $38.

So what will come of this survey? Yeah, I figure silence and inaction.

Isn’t it amazing how this report makes it sound like Fuld is an upstanding, wonderful CEO who is stepping down with no “bonus or severance”? What a nice guy…

Richard Fuld, the chief executive of Lehman Brothers Holdings Inc, will step down by year’s end, and not receive any bonus or severance when he leaves, a company spokesman said on Wednesday.

Fuld, awarded $22 million in compensation in fiscal 2007, has been widely criticized for having done little to save the company from collapse.

I’m not saying Richard Fuld is responsible for any wrongdoing, but ethically, I think he has some serious issues he needs to deal with.

At the end of 2007, he accepted $22 million in compensation. Did he accept that compensation before, or after, he found out that Lehman Brothers was going to be circling the drain in no time?

Now, don’t get me wrong either, I think he should be compensated for the job he did. I just think $22 million in compensation when the company is facing certain bankruptcy is just asinine.

Don’t worry about Richard, his golden parachute isn’t taking him too far. he’ll still be serving as non-management chairman of the board.

What? Good news without a negative? This just doesn’t sound right.

U.S. mortgage finance company Freddie Mac (FRE.N) easily sold $2 billion of short-term debt on Monday, helping to reassure investors that both Freddie Mac and Fannie Mae (FNM.N) can fund operations without a government bailout.

If there is anymore positive news on the housing front, heads are going to explode. How will anything ‘change’ if everything gets better before the election?

Is Bill Gates getting trashy? Well, sort of… In a way, he has been trashy for a long time.

Bill Gates’s investment arm has waded into a brewing takeover battle between Waste Management Inc (WMI.N) and Republic Services Inc (RSG.N), asking Waste Management to walk away.

Just over a month after he left Microsoft Corp (MSFT.O), Gates’s BGI is lobbying the largest U.S. trash hauler to drop the unsolicited $6.2 billion bid it made this month for Republic, the third largest.

While his investment vehicles have stakes in dozens of companies, they have kept low profiles over the years and Gates has not traditionally been known as an activist investor.

It’s weird watching Bill Gates flexing his monetary muscles outside of the Microsoft arena. While this situation is causing quite a stink, I wonder if all his investments will get the same amount of attention now that he doesn’t have to go into the office each day?