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The New York Stock Exchange (NYSE) has been suffering a big decline this year, and the multinacional conglomerate General Electric (stock ticker: GE) is falling hard in spite of being classified as a conservative stock.

GE has a PER (price over earnings per share) of 7.75, quite an attractive figure for such an important company. Good margins, constant growth and tremendous background are some facts that makes GE a quite stable and trustworthy investment. Dividend yield of 8,1% is quite high for a big firm.

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Some months ago, most bullish investors believed that the financial sector is the one that offers a more attractive opportunity to make money; or at least they thought so.

Financials were recovering from its momentary low values; particularlly, Citigroup (stock ticker: C), recovered since the March low of $17.99 to $29, but fell hardly to $6.08 today.

The high of $55.55, almost 12 months ago, shows as that depresion fears aren´t a joke; the world´s largest  financial company lost almost 90% of its market value.

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AIG is a member of the Dow Jones Index, and therefore a very representative company of the US economy as a whole. We can see in the above chart, that its current moment is quite difficult:

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Rescue of Citigroup comes with strings attached

The International Herald Tribune informed that Citigroup (stock ticker: C) will halt dividend payments for the next three years and agree to restrictions on executive compensation under terms of the U.S. government rescue of the struggling bank, it was revealed Monday.

Citigroup had to make the concessions in return for the U.S. government’s direct investment of about $20 billion in the bank and an agreement to back about $306 billion in loans and securities.

Investors reacted positively to the rescue, sending stocks higher on Wall Street and the big European exchanges. The Dow Jones industrial average was 280 points higher in midafternoon trading, extending its 300-point rally Friday as financial shares began to recover. The Standard & Poor’s 500-stock index rose 4.7 percent. The Dow Jones Euro Stoxx 50, an index of blue-chip shares, closed up 9.9 percent, as did the FTSE 100 in London.

Shares of Citigroup - perhaps the market gauge most widely watched Monday morning - were 53 percent higher and traded above $6 a share for the first time since Thursday. A year ago, the shares were trading at about $30. Read the rest of this entry »

As the week begins, industry watchers are playing close attention to how markets will react to the government’s third try at rescuing the financial system. The latest plan involves an injection of $20 billion into Citigroup (stock ticker: C) and backstopping a large portfolio of assets. Whether the move will produce lasting gains for Citi and the broader stock market remains to be seen.

In a last-minute deal, the U.S. government agreed to inject $20 billion in capital into Citigroup as well as backstop as much as $306 billion in toxic assets. The agreement requires Citi to absorb the first losses it sustains from residential mortgages, leveraged loans, collateralized debt obligations and other assets, up to $29 billion. For the injection, the government will receive preferred shares in the bank. If needed, the arrangement will be extended to other financial institutions that pose a risk to the stability of the financial system.

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Citigroup’s board to meet to weigh options, including possible sale

Citigroup’s directors plan to meet Friday to consider strategic options, including selling part or even all of the company, according to the Wall Street Journal. Citi’s preference is to remain independent. Prince Alwaleed Bin Talal, Citi’s largest individual investor, plans to increase his investment by roughly $250 million, but the show of confidence failed to stop the bank’s shares from falling.

Fannie, Freddie to suspend foreclosures during holidays

Fannie Mae (stock ticker: FNM) and Freddie Mac (FRE)will suspend foreclosures and evictions on delinquent mortgages from Wednesday through Jan. 9. The mortgage giants said the move is intended to make it possible to include more struggling homeowners in a program that changes mortgage terms to make them more affordable.

Cash becomes king as financial crisis spreads

What started as a subprime-mortgage meltdown has evolved into a global financial crisis that is forcing companies of all shapes and sizes to cut their work forces. Businesses are seeking a resolution to their problems, and the most attractive fix appears to be cash. Those with cash may not only survive the economic downturn but could also thrive, if they are able to use that cash wisely. Read the rest of this entry »

The German economy, Europe’s largest, contracted more than economists expected in the third quarter, pushing the nation into the worst recession in at least 12 years.

Gross domestic product dropped a seasonally adjusted 0.5 percent from the second quarter, when it fell 0.4 percent, the Federal Statistics Office in Wiesbaden said today. Economists expected a 0.2 percent decline, the median of 40 forecasts in a Bloomberg News survey showed. The economy last contracted this much over two consecutive quarters — the technical definition of a recession — in 1996.

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