QuickStockAnalysis.com

An accounting expert studied the earnings reports of financial firms and found that 45 posted higher earnings in the first quarter because of a recent change in accounting rules. Bank of New York Mellon and other large companies were able to post profits instead of losses because of the change. The Financial Accounting Standards Board (FASB) is considering another change that could force financial institutions to take paper losses, reversing the paper gains.

Accounting rulemakers are considering further changes that could drain the blood right back out of the industry, potentially forcing banks to acknowledge paper losses even larger than the new windfall of paper gains.  This is the tip for the 3Q 2009 release; stay out of the financial sector.

For more information, please contact us at info@quickstockanalysis.com

Questions arise as Wall Street profits from trading with Fed

The Federal Reserve has become one of the largest customers of Wall Street banks as it strives to stabilize markets by purchasing securities. The result has been huge profits for the banks, raising questions about how the U.S. government deals with private-sector counterparties. “You can make big money trading with the government,” said an executive at an investment-management firm. “The government is a huge buyer and seller, and Wall Street has all the pricing power”.

China broker Everbright Securities plans $1.6B IPO
China’s 10th-largest brokerage, Everbright Securities, said it expects to raise as much as $1.6 billion in an initial public offering in Shanghai. In the first half of the year, Everbright’s net profit exploded 20.2% on revenue that was up 16.5%, according to the firm’s prospectus for the offering. Some proceeds from the sale will fund an expansion into markets outside China, the company said.

Economists disagree on whether U.S. recession has ended
A slower decline of the U.S. economy was confirmed by a government report, but does that mean the recession has ended? “I’m pretty sure this was the bottom,” said Sung Won Sohn, professor of economics at California State University. “We’re right on the cusp,” said Kurt Karl, head of economic research at Swiss Re. Bob Brusca, an economist at FAO Economics, said “it’s crystal clear that there’s no recovery yet.”

Read the rest of this entry »

Tommorrow, the US Government will become Citigroup’s (stock quote: C) largest shareholder, with a 34% holding. This news had a impact on the market, since Citi´s shares are currently rising 4%.

Reuters informed that the U.S. government will officially take a 34 percent equity stake in Citigroup Inc on Thursday, becoming the bank’s largest shareholder in connection with a February bailout.

The change follows the completion of two exchange offers designed to bolster the capital position of the nation’s third-largest bank, widely considered the most troubled of the biggest U.S. lenders.

Investors have agreed to swap $32.8 billion of preferred securities for common stock, and the government will swap $25 billion, the New York-based bank has said.

Citigroup conducted the offers after heavy credit losses and writedowns prompted a series of bailouts, including a $45 billion injection of taxpayer funds from the Troubled Asset Relief Program (TARP).

Read the rest of this entry »

Canada declares end to its recession
The Bank of Canada announced that the country’s economy is expected to grow 1.3% this quarter, marking the end of its recession. The central bank said the nation’s economy likely will grow faster than most of the industrialized world next year. Bank Governor Mark Carney warned that the return to growth depends on the government continuing its stimulus programs and the central bank holding its interest rate at 0.25% until the middle of next year. 

Dow surges above 9000 on better than expected profit reports

Ford Motor, AT&T and eBay all recently posted profits that beat expectations, pushing the Dow Jones Industrial Average to 9069.29 points. The rally marks the first time since early January that the Dow has exceeded 9000. Since March 9, the blue chip average has advanced 38.5%, prompting concerns that shares are poised for a pullback. The Dow remains 36% lower than its 2007 record.

Unemployment claims reach 554,000 in United States

The number of initial claims for unemployment benefits in the U.S. climbed by 30,000 last week, bringing the total to a seasonally adjusted 554,000, the Labor Department reported. A government official said the increase was slightly exaggerated by an unusual pattern in auto-industry layoffs. 

Read the rest of this entry »