Posts Tagged jp-morgan-chase

Treasury Makes Changes to TARP

Posted by admin in Uncategorized on June 8th, 2010

On October 14, 2008, Treasury Secretary Paulson announced that the Treasury will purchase in nine top using the first $250 Billion that has been allocated to the TARP Program (See What is the TARP? And, why does it cost $700 Billion?) The nine banks agreeing to these investments by the Treasury are: Goldman Sachs, Morgan Stanley, JP Morgan Chase, Bank of America (including Merill Lynch), Citigroup, Wells Fargo, , and State Street Corp. These banks represent the most financially in the country as determined by the Treasury.

Why are they buying in the banks instead of purchasing the of the banks?

The econmic crisis has affected thebanking industry so adversely that many people have lost faith in the banks. In order to protect the banks, and restore confidence in the banking system, the government felt it had to make an equity investment in these banks.

The Bush adminstration is greatly conflicted by this decision. President Bush said that this sort of intervention (not seen in this country since the great depression) was “not intended to take over the free market but to preserve it.” Treasury Secretary added, “We regret having to take these actions. Today’s actions are not what we ever wanted to do — but today’s actions are what we must do to restore confidence to our financial system.”

At a news conference President Bush said, “I’m sure there are some of my friends out there saying, I thought this guy was a market guy; what happened to him? Well, my first instinct wasn’t to lay out a huge government plan. My first instinct was to let the market work until I realized, upon being briefed by the experts, of how significant this problem became.” Paulson added, “Government owning a stake in any private U.S. company is objectionable to most Americans — me included. Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

The Treasury will also invest on other banks besides the original nine banks mentioned above. These banks will apply to the Treasury and will be picked based on a ratings system that will determine the strength and viability of these banks. The strongest and most viable banks will be the most likely recipients of these investments and weaker banks will be least likely. This may lead to these stronger banks purchasing the weaker banks which will also help the banking system by reducing the number of potential bank failures.

The Treasury has invested $125 Billion in the first nine banks listed above and will use the remaining $125 Billion to invest in the other banks.

Treasury Secretary Paulson believes the government will profit

On October 20, 2008, Paulson said, “This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything, This program is designed to attract broad participation by healthy institutions and to do so in a way that attracts private capital to them as well.”

Paulson added that this program was designed to increase the investors’ confidence in these banks and will also increase the confidence of the banks to start lending their money instead of hoarding it for reserves. This boost in investor confidence and increase in lending will increase the value of the banks and the equity stake help by the government.

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Morning Report: Wall Street Prepares Guillotine for Bernanke

Posted by admin in Uncategorized on April 15th, 2010

wall+street+prepares+guillotine+for+Bernanke Morning Report: Wall Street Prepares Guillotine for Bernanke
If doesn’t act, and act aggressively soon, Wall Street will have his head. Also, constitutional rights are in question as Michigan Democrats are ruled irrelevant by party bigwigs.

(Stocks in this article: NYSE: SPY, NYSE: DIA, Nasdaq: QQQQ, NYSE: , Nasdaq: INTC, Nasdaq: ASML, NYSE: JPM, NYSE: , NYSE: DAL, NYSE: NWA, Nasdaq: , NYSE: , NYSE: BA)

The fear of spreading wildfire has investors heading for the hills globally today. The theoretical disconnect between U.S. and global markets was not supported overnight as markets from Hong Kong to London moved sharply lower. News from Intel (Nasdaq: INTC) and JP Morgan Chase (NYSE: JPM) helped momentum build on the recession slide.

Here at The Greek, we may have taken our ear off the heart of the market with it plugged to the rail for the next significant move. Our forward looking, mostly prescient effort, sometimes underestimates the late to the game momentum investing that still pervades the market. It’s why we were early to predict recession. This recent weakness is hard to bear, but the more the pain, the more strong the medicine should be from the Fed and the government. The Fed had better move 50 points at least, and that may not even be enough now to sooth this market. We want to see the ’s theoretical “big one” play out. The medicine the Fed can administer to sooth the market is a 75 to 100 point cut at this point. Anything less is just going to temporarily ease the migraine pressure.

The president might actually be willing to bear some pain here in order to see oil prices ease. If George plans to wage war against Iran, or more likely put down Iranian rebuttal after Israel bombs away at Iranian facilities, then he might like to see oil prices ease to a lower starting point from which they would rocket. What’s more important to the president, seeing Republican succession or completing his legacy as the post-911 dismantler of the “Axis of Evil?” Americans rally in the event of war, so both may in fact result from the same path. One thing is certain to us, Israel will not risk a Democrat in office and an Iran with ongoing nuclear development. So, Israel’s timeline sticks well-within Bush’s tenure.

At the same time, the president’s last State of the Union Address should offer viable stimulus, and ’s meeting the day after should also offer an injection of confidence, IF Ben doesn’t act sooner. There is need for emergency meeting, as the U.S. walks the ledge of market crash. Wall Street will have Ben’s head if he fails now.

Consumer Price Index (December)

As oil prices eased a bit in December, headline CPI rose 0.3%, still a tenth more than consensus estimates were pointing toward. Core CPI, which excludes food and energy, climbed 0.3% and is disconcerting to us and should be to you as well. CNBC’s Rick Santelli is again spot on regarding this one, and the Bloomberg article linked here is off. The Fed needs to react strongly here, not to stave off recession, but to help speed the clean up process. It’s too late now to head off recession in our view as well, and I am again growing tired with . Look for to replace him soon, or Kohn. The market will have nothing less than his head.

Year-over-year, Core CPI rose 2.4%, which is above the target range for inflation growth in the Fed’s dream world. We reiterate that in the Fed’s own words, inflation targeting should not preclude short-term emergency actions. Quoting The Who, “Let’s see action!” Headline CPI growth reached 4.1% in 2007, and that is scary. If food and energy matter, as we believe here at The Greek, inflation should spread further into broader goods and services soon.

The Bloomberg article speculates that easing consumer demand will limit corporation opportunity to pass on rising costs, but my friends, the danger of global economy presents. With the dollar weak overseas, U.S. firms might not cut prices in the states and instead just boost sales overseas, while also cutting employment here. Yikes! That has the taste of stagflation to it, and I’m not feeling well.

Mortgage Refinancings Take Off

A rare helpful result of flailing economic health, and a late, but still cutting Fed, is mortgage rates testing 2005 levels. This past week’s Mortgage Applications Survey from the MBA showed a 43% increase in the Refinance Index. As we said, lower rates treat the illness, which is better than treating the symptoms if you want cure. Let’s get these bad loans refinanced, strengthen the underlying paper. Do that and the derivatives become more viable as well. Problem solved. Can it really be that simple? Love to hear your comments. Please see the comment link below the article to let WSG’s many readers gain exposure to your wise opinion.

Romney Wins Michigan & State Dems Muted by Bigwigs

The Greek is open-minded and shares views from both parties, while leaning Republican. The only reason I choose a party at all is because it allows me to play a greater role in the selection of our leadership. The pro-life issue, however, is critical in my belief structure, and while I believe free choice exists, and man can commit his own sins and be judged by the only judge that matters, I also see sin in helping others commit sin. So, that’s why I have to stand for pro-life and the main reason I’m Republican, outside of my capitalistic tendencies.

When I see dirty tricks on either side of the table, I have to point them out. The Democratic Party’s decision to penalize Michigan with no delegates for its early primary choice is illogical, unfair to the citizens of Michigan and unconstitutional. The party should face the court system for this. It’s purpose is purely selfish, to best elect the candidate its party leadership chooses, and take that choice away from Democrats. At the same time, I believe it is also intended to disrupt the Republican primary, by attempting to offer Democrat votes for non-viable Republican candidates in open primaries. The purpose here is purely disruption.

Why was Hillary still on the ballot, and Edwards and Obama off? We believe Hillary is the party choice, and Edwards and Obama were duped into taking their names off-ballot. Meanwhile, some Democrats went to the polls attempting to disrupt the Republican race, but the effort seems futile. With the party so dispersed this year, Democrats chose either to vote for Hillary, to vote against Hillary, or not to vote.

In aiding McCain to win a few years ago, nothing was gained. Also, it’s entirely possible voters were unsure who would be disruptive to the Republican election this time around, and Romney may have thus garnered some Dem votes, considering he won so handily. We still believe Romney is the best candidate to lead America in the years ahead, and we expect he will be the nominee and president. So, nothing is gained by taking the voting rights of Michigan Democrats away except violation of their constitutional right. If I were a Michigan Democrat, I would be fuming today that my American right to vote was muted by some bigwigs who think they can choose for me and rule me irrelevant! I say that as an American.

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