Financial News

[southsider2k5]

Anyway, more seriously...if SOX was the problem, and JPMorgan was just trying to live up to its SOX requirements, then wouldn't this lawsuit be groundless?

 

Not necessarily. All they have to do is justify their own numbers. They might not be right, but as long as they have a good basis for why they used them, the lawsuit won't win. The burden of proof is tough in this case.

[southsider2k5]

Not necessarily. All they have to do is justify their own numbers. They might not be right, but as long as they have a good basis for why they used them, the lawsuit won't win. The burden of proof is tough in this case.

 

And thinking back to the timing of the situation where there was literally banks going belly up because no one wanted to buy their assets, which by SOX standards makes them worthless, the defense seems like it would be pretty obvious to me.

[Balta1701]

And thinking back to the timing of the situation where there was literally banks going belly up because no one wanted to buy their assets, which by SOX standards makes them worthless, the defense seems like it would be pretty obvious to me.

So in other words...you can't be mad at SOX here because if JPM did everything that law required, then the lawsuit will be tossed out rapidly.

[southsider2k5]

So in other words...you can't be mad at SOX here because if JPM did everything that law required, then the lawsuit will be tossed out rapidly.

 

I can, because if it wasn't for SOX, AIG and LEH never happen.

[NorthSideSox72]

I can, because if it wasn't for SOX, AIG and LEH never happen.

Wait, what? No, not at all. AIG and LEH happened for many reasons but SOX is a lesser or non-existent consideration. They happened because of the choices they made in the swaps markets, and because of the capital requirements and valuation, and lack of oversight internally and externally - not because of SOX.

[kapkomet]

SS, you are confusing a couple of different things here, and that's what Jason got his panties bunched up in a wad about a month or six weeks ago. SOX isn't directly related to this, only secondarily so. However, the related accounting pronouncements after SOX were written in such a way so as to be SOX compliant. There is a distinct difference because the same rules can now exist without SOX.

 

I know that's a technicality but it is a valid one.

 

Now Gage can go get his panties bunched up at his wedding and not here...

 

[Cknolls]

When 1040 breaks, it should be a very quick move to 1019-1020.

[Rex Kickass]

I can, because if it wasn't for SOX, AIG and LEH never happen.

 

Actually if it wasn't for Glass Stegall repeal, AIG and LEH don't ever happen either, right?

[southsider2k5]

Actually if it wasn't for Glass Stegall repeal, AIG and LEH don't ever happen either, right?

Or any kind of regulatory effort what so ever...

[Balta1701]

Or any kind of regulatory effort what so ever...

Huh?

[Balta1701]

When 1040 breaks, it should be a very quick move to 1019-1020.

Did you suggest sometime like 2 months ago that it was a perfect time to buy BP?

[Balta1701]

The former Car Czar had an op-ed piece in the Washington Post earlier this week worth highlighting.

Two weeks ago, GM reported its first quarterly profit in nearly three years: net income of $865 million on $31.5 billion in sales. A month earlier, Chrysler's first-quarter report included the news that the company had turned cash-flow positive after nearly bleeding to death in 2008.

 

Both companies are also doing better in the marketplace. Market-share declines have been arrested. Bloated inventories on dealers' lots have been reduced dramatically. Use of sales incentives such as rebates and interest-free financing -- the cocaine of the auto industry -- has been substantially reduced.

 

And the prices that the cars are fetching have risen sharply since last year: by $2,500 for GM and $2,400 for Chrysler. That means that the companies' historically poor images -- brand equity, in industry parlance -- have begun to improve.

 

How did this happen? First, the bankruptcies -- terrifying to everyone -- succeeded in wiping vast liabilities from the companies' balance sheets, more than $65 billion in the case of GM. The government task force that evaluated the industry leaders -- of which I was a part -- also insisted on a cold-blooded look at operating costs. Tough, conservative projections replaced years of rosy-scenario forecasting. As a result, GM cut its North American expenses by $8 billion per year.

 

In overseeing the restructurings, we insisted that assumptions about sales be very conservative. We wanted GM, which used to need to sell 16 million vehicles a year in the United States just to break even, to be profitable at volumes as low as 10 million. Happily, annual sales are running above 11 million and are likely to keep climbing. Accordingly, what would have been losses at "old GM" are now profits at shiny new GM.

 

 

...

Consequently, the U.S. Treasury is well on its way to recovering most of the $81 billion that the government invested in the auto sector to prevent its collapse. (That includes money for other auto-related entities, such as the finance companies. Chrysler itself got around $8 billion from the Obama administration and $4 billion from the Bush administration.) Not surprisingly, partisans on both sides have elasticized the facts: GM has been proclaiming in ads that it has paid back the government loans "in full." While literally correct, this statement omits the fact that most of the government's investment in GM is in stock that it still holds.

 

Calculating the value of the Treasury's holdings is straightforward because bonds of old GM, which are entitled to a sliver of equity in new GM, continue to trade. By that measure, Treasury's total potential recovery from the GM investment currently hovers around $40 billion, compared to an investment by the Obama administration of $36.1 billion. (An additional $13.4 billion of bridge financing was provided by President George W. Bush in late 2008.)

[southsider2k5]

The former Car Czar had an op-ed piece in the Washington Post earlier this week worth highlighting.

 

Interesting how much credit Toyota gets in there...

[Balta1701]

Interesting how much credit Toyota gets in there...

Thanks in no small part to some heavy incentives, the dent in Toyota sales from the recalls as far as I can tell seems to have been surprisingly small; much smaller than the dent due to the economic collapse

[southsider2k5]

Thanks in no small part to some heavy incentives, the dent in Toyota sales from the recalls as far as I can tell seems to have been surprisingly small; much smaller than the dent due to the economic collapse

 

It is even funnier that they are now stealing credit for the bankruptcy idea when originally it was the worst thing ever because it was going to lead to the destruction of the entire industry and how many million jobs was it?

[Balta1701]

It is even funnier that they are now stealing credit for the bankruptcy idea when originally it was the worst thing ever because it was going to lead to the destruction of the entire industry and how many million jobs was it?

You're smart enough to know that there are different types of bankruptcies and that if GM had gone in there its doors would have closed. GMAFB.

[bigruss]

Any advice for a beginner investor? Im looking to invest about $1000-3000 this summer. Ive been using mint.com lately and Im thinking of using optionhouse.com for trades because it is really cheap and the first 100 trades are free..

 

Any stocks anyone would recommend? Any websites? Any general info?

 

Ive been trying to follow the stock market day to day more often to see whats doing well and what isnt, anything I should be looking for in particular?

[kapkomet]

You're smart enough to know that there are different types of bankruptcies and that if GM had gone in there its doors would have closed. GMAFB.

 

 

LMAO. Whatever.

[NorthSideSox72]

Any advice for a beginner investor? Im looking to invest about $1000-3000 this summer. Ive been using mint.com lately and Im thinking of using optionhouse.com for trades because it is really cheap and the first 100 trades are free..

 

Any stocks anyone would recommend? Any websites? Any general info?

 

Ive been trying to follow the stock market day to day more often to see whats doing well and what isnt, anything I should be looking for in particular?

optionshouse.com, I would highly recommend, when you do decide to open an account somewhere. Its a great site.

 

As to what to invest in, I will just say two things. One: diversify. Don't dump it all in on stock. Spread it out, or use ETF's or mutual funds. Two: decide your timeline and risk tolerance. If its money you just want to protect and have earn a little, then go lower risk stuff - value stocks with high dividends, or bond funds. If your timeline is longer, you can stomach more risk.

 

[Y2HH]

Any advice for a beginner investor? Im looking to invest about $1000-3000 this summer. Ive been using mint.com lately and Im thinking of using optionhouse.com for trades because it is really cheap and the first 100 trades are free..

 

Any stocks anyone would recommend? Any websites? Any general info?

 

Ive been trying to follow the stock market day to day more often to see whats doing well and what isnt, anything I should be looking for in particular?

 

Depends on what kind of investing you are looking to do. I'm a buy/hold long term dividend investor, as I don't expect to need this invested money anytime soon. The advantage here is that I can last through bad markets, such as the dip in 2007. During that dip, I just held everything without panic, understanding that I'm not concerned where my portfolio is today, but in 10-20 years. Needless to say, my portfolio was down 30%+ or so during the dip of 07-08, however, I continued to get paid dividends, and today it's all back to where it was, and in many cases way higher than it was.

 

In my 401k, through the company I work for, I put 100% into the S&P500 Index -- this is *always* the best option for 401k's no matter what anyone tells you. I'm sure many will argue against my opinion on this, but in the end, the S&P500 *WILL* beat whatever 401k decisions they made. Also, the S&P500 indexes usually have a cost basis of under 0.20%, meaning they're cheap to hold...whereas a lot of other mutual funds will charge 1%+ just to hold it.

 

For my personal investments, I choose individual stocks in a variety of sectors, mostly based on their fundamentals and future strength. Dividends are a big plus in my decision making, but only if they're sustainable dividends.

 

A few stocks I hold today:

 

Bank of America (BAC) ** Financial

Baldor Electric Comapny (BEZ) ** Industrial Utility

Bank of Hawaii (BOH) ** Financial

Bristol Meyers-Squibb (BMY) ** Pharma

Conagra (CAG) ** Food/Consumer Goods

Casey General Stores (CASY) ** Food/Gas/Consumer Goods

Cooper Tire/Battery (CTB) ** Automotive/Rubber

Ford (F) ** Automotive

First Energy Corp. (FE) ** Utility/Energy

General Electric (GE) ** Conglomerate

Coke-a-Cola (KO) ** Food/Consumer Goods

Merck (MRK) ** Pharma

Microsoft (MSFT) ** Tech

Motorola (MOT) ** Tech

Pfizer (PFE) ** Pharma

Tootsie Roll (TR) ** Food/Consumer Goods

Verizon (VZ) ** Utility/Telco

 

I've been investing since 1999 or so, which is why I own so many things. It's not like I picked everything up all at once. I wouldn't have had that kind of money.

Edited June 4, 2010 by Y2HH

[Rex Kickass]

I generally looked for good balance sheets, low debt load and some good avenue for growth in the future.

 

I really liked JetBlue when I played in the market in early 2008. Frankly, I still like it today.

[Y2HH]

I generally looked for good balance sheets, low debt load and some good avenue for growth in the future.

 

I really liked JetBlue when I played in the market in early 2008. Frankly, I still like it today.

 

The problem with Jetblue is they're unable to find a way to maximize profits. They're currently trading at $6.38, but they're P/E ratio is an astronomical 57.5.

 

While profitable, they're only taking in about 10-15 Million in clean profit per quarter over the last few years, which isn't enough considering they're carrying close to 3 billion dollars in debt. That'd only take them 500 years to pay off at the rate they're making money.

 

 

[Cknolls]

Market should test the 1074 level to see if it holds. The bears will try to run these levels, a break of which could lead to a cascade, either today or on a gap down on

Monday, on an ensuing break of 1065(flash dance crash low) and the Feb/May 1040ish double bottom. Would not worry about upside until they close above 1128.

[Cknolls]

China buying Eur based assets at the 120 level. Trying to stabilize the Euro decline. If 1.20 breaks look for 1.18, on the way to par. 1.23/1.25 should offer nice short entry point.

[Cknolls]

Austrian CDS are up 30bps today (40%) and its bonds are down 3 points in 8 days. I guess we know who owns the Hungarian Goulash aka Hungarian debt. The question is, will the EU bail out the Austrians? So mkt is weak but there is always the fear of a coordinated central rescue effort over the weekend. Eventually this will be sold into like nobody's business and the shananigans will stop.

Edited June 4, 2010 by Cknolls