The Fed is actively working to reduce the cost of borrowing by reducing risk premiums with direct purchase of mortgage-backed securities.
These direct purchases reducing risk premiums will directly influence mortgage rates from 5.500% last week to a target of 4.500% before long. New mortgages will drive up earnings across the board. It will also encourage the reflation of housing with new purchases, which will help homebuilders (the stimulus will also likely include a backdating of tax credits which will help earnings fpr homebuilders also). Speculation is also out on a housing b
Although banks will continue to face earnings pressure for the next 3 to 5 quarters, the proposed Wells Fargo merger with Wachovia will prove to be a positive transaction for Wells and Wachovia shareholders. Wells does not anticipate the transaction to be accretive to earnings until late 2010 or early 2011. Ultimately, the combined firm will have a massive breadth of products and services to offer its customers which will improve revenues. Furthermore, Wells will be able to bolster its securities business as well as improve it wealth management business with the aquisition of Wachovia's
The accompanying table presents a 20-stock defensive growth portfolio which I believe will outperform the overall market as measured by the S&P 500 Index as the current panic trade comes to an end and investors stop selling stocks regardless of their fundamentals. The average PEG ratio for this group of stocks is below one and the average dividend yield of 4.4% is nearly two times the S&P 500 ETF (SPY) yield of 2.4%. All of the stocks have a market cap over $1B with an average of just under $75B and the indust
Wachovia was once a > $100bn company. Wells is currently over $100bn. If they can survive the downturn, out the other side is a behemoth. Wachovia has some beautiful bank branches, and very attractive deposits. This is much better than the CitiGroup acq'n, for frightened Wachovia depositors. WAMU depositors are likely to move to Wells anyway, so Wachovia is a much better geographic expansion for them.
ISM non-manufacturing and housing numbers were reported today and they remained weak, but the weakness was arguably not as bad as many were bracing for. Shares stayed up most of the day, although feelings were mixed despite the FOMC minutes showing something worse than a normal recession.
Toyota Motor Corp. (NYSE: TM) said it is suspending production at all 12 of its Japan plants for 11 days over February and March. The once believed to be superior auto manufacturer and company has not been immune to the global economic slowdown that has caused such a deterioration in demand for cars, especially int he U.S. The stoppage is said to be of unprecedented scale for Toyota, which hasn't halted production at all its Japan...
TheStreet.com's Jim Cramer says we need the private sector to get involved.
We got out of the 1989-1990 S&L debacle -- which, we often forget, wiped out almost every savings and loan besides Golden West and Washington Mutual (and we know how those played out this cycle) -- by gigantic government giveaways that mad...
Citigroup prolonged legal battle
- New York Times:
Citigroup fired the first shot in what could be a prolonged legal battle, persuading a New York judge to temporarily block Wells Fargo...
Early Options Activity
- Taking an early look at the options market, we found the following names that may be worth watching throughout the day for further indication of invest...
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ISM non-manufacturing and housing numbers were reported today and they remained weak, but the weakness was arguably not as bad as many were bracing for. Shares stayed up most of the day, although feelings were mixed despite the FOMC minutes showing something 
