Obama Is Right: Wall Street's Big Bonus Pool Is "Shameful"
Without mincing words, President Obama strongly condemned Wall Street's $18.4 billion bonus pool for 2008, calling it "the height of irresponsibility" and "shameful." The issue is not that Obama is trying to dictate how financial services companies run their business, or what level of compensation executives make, as his critics claim. The issue is that Wall Street firms ran themselves into the ground and came to the government hat in hand. Once your firm is on the government dole, it's outrageous for taxpayer money to be used to pay bonuses, which aren't guaranteed annually, contrary to the popular view on Wall Street.
P/E ratios (finally) nearing acceptable levels. By some measures, P/E ratios are near lows, though it depends how you slice it (Source MarketWatch) "There's no doubt that people can look at market valuations and determine that stocks are relatively inexpensive -- but that doesn't mean they're going to quit going down," said Michael Gibbs, director of equity strategy at Morgan Keegan & Co. in Memphis, Tenn. The price-to-earnings ratio of stocks in the S&P 500 has sunk to 10.6 from nearly 17 at the end of 2007, says FactSet Research. That's based on the Thursday close of the S&P 500 compared to index members' past four quarters of operating earnings, or net income excluding what analysts consider to be extraordinary charges and gains. Thomson Reuters, which publishes similar analysis, estimates the trailing P/E ratio for the S&P 500 is around 11. Those numbers are well below the valuations reached during the market low of the 2001 recession, when the ratio stopped at 19. They're also lower than the P/E ratio of 13 touched at the market bottom during the 1990-1991 recession, says Morgan Keegan, which used data compiled by Yale University's Robert Shiller for its historical research. But widen out the lens, and P/E ratios have dropped even further in some earlier recessions. During the market low of the early 1980s recession, for example, stocks in the index were trading at a mere 8 times earnings. Read Article...
Caveat investor Commentary: Consumers more at risk from financial scams as stocks slump By Chuck Jaffe, MarketWatch - Last update: 4:26 p.m. EDT June 25, 2008 BOSTON (MarketWatch) -- Summertime, and the scamming is easy. The North American Securities Administrators Association issued a warning last week about summer scams, suggesting that investors protect themselves against "hot energy-related tips, speculative real estate promotions, unsolicited invitations from new online 'friends,' and complex, opaque investment products that fail to offer clear disclosures of their risks and costs." What the group failed to say -- but clearly implied -- is that the nauseating ride of the stock market and the flagging confidence of investors has made consumers more vulnerable to financial scams than at any time in memory.
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SAN FRANCISCO (MarketWatch) -- What was expected to be a stormy season for U.S. corporate earnings has turned into a blizzard, at least as far as financials are concerned. Fourth-quarter earnings for companies in the Standard & Poor's 500 (.SPX: ) are on track to fall 20.5% from the same quarter last year, the most severe drop since the fourth quarter of 2001. By contrast, analysts were expecting a 9.8% drop in profits heading into this month's round of earnings reports, according to Thomson Financial. There are still about 340 companies in the S&P that have yet to report, and analysts said the overall picture could improve as a broader range of companies, particularly technology firms, announce their earnings. But with financials, materials firms and consumer discretionary companies all set to report profit declines for the period, actual earnings growth for the quarter seems out of reach.
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The coming Chinese stock market meltdown - Khaleej Times>> Columnist >> MATEIN KHALID - January 22 2007 - Chinese equities now boast a market cap of $1 trillion, after the wild bull market in Shanghai / Shenzhen and the Chinese H shares last year. The December rally in Chinese state megabanks seemed unreal, with a bunch of Marxist — Leninist command and control banking bureaucracies worth more than any real bank in the world, more than UBS, Deutsche and Bank Arm, even Dosa Idli Sambar (DIS) Bank.
What You Can Do About the Stock Market Plunge Ouch! Not since the horrors of Sept. 11 have stocks suffered such a one-day loss with the Dow off some 416 points or 3.3 percent. The Nasdaq and the S&P 500 followed suit with their own plunges of 3.9 percent and 3.5 percent respectively. A plunging stock market in China along with falling markets in Japan and Europe were the initial forces behind the fall, but the drop gain momentum by a number of other converging factors.
The Yen Bubble - Giant credit bubble behind yen slide: analysts TOKYO (AFP) - The recent sharp depreciation of the yen is believed by economists to be the result of a giant credit bubble which, if it bursts, could destabilise the global financial system.
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News Analysis - Crisis Looms in Market for Mortgages By GRETCHEN MORGENSON - Published: March 11, 2007 For investors who watched the technology bubble burst, the problems in the mortgage securities market have a familiar ring.
US Stock Market Crash: Implications on Economy US stocks slumped once again spreading ripples of uncertainty across the financial markets worldwide. This stumble as recorded on 29th February 2008 marked a resultant drop in business activity, which reached a record low since 2001. The credit market losses are estimated at over $600 billion as per UBS AG. American International Group Inc., the largest global insurance company, posted its highest quarterly deficit in 89 years. The following two weeks saw a landslide decline in its stocks. Sprint Nextel Corp. the third largest US wireless carrier also recorded a decline. The figure was very near to the six-year low attained by the company. All the ten industries listed in the Standard & Poor's 500 Index marched a retreat. The axe fell mainly on the banks and the phone companies
