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Posted
Oct 31 2008, 04:30 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
 As if the economic bailout by U.S. taxpayers isn't enough to make you sick to your stomach, new information has come to light that several banks are planning to pay billions of dollars in year-end bonuses from the bailout funds they received. Investigations are beginning into the nine banks that took in the first $125 billion -- the same $125 billion that was supposed to be used to unclog the credit system which was preventing banks from providing much needed funds for individuals and businesses.
There are many feathers in a ruffle over this and New York Attorney General Andrew Cuomo and several congressmen are furious that over $20 billion has already been earmarked as bonus funds for management and employees. Unbelievably, that is just the estimates from Goldman Sachs, Morgan Stanley and Merrill Lynch. There are six more banks that are also working on similar heists.
Here is their rationale for using that money:
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Posted
Sep 16 2008, 03:15 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
Since when do we rely on government to intervene in every case of a failing business? If anyone wonders why we have such a mess on our hands, look no further than our boneheaded government that has obviously forgotten its way. Think of this week's action within the financial markets as a result, not the cause of our problems.
AIG is in a battle for its very existence, Merrill has been absorbed and Lehman is bankrupt. And we're only part way through the week. What's next?
These days, many people are wondering what our government will do to stop the insanity. Yet, in a capitalistic society that relies on a free market system, we should only look to the government to guide and regulate against fraud and the manipulation of the system. Sometimes known as a laissez-faire philosophy, the government has a role, but it
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Posted
Nov 19 2008, 02:30 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
General Motors and Ford have their backs against the wall as they wait for a government handout. But without proper strings and a plan that will help awaken management to the need for a material change, more zombie companies will be on life support funded by taxpayer money.
For decades, it was obvious that Asian auto manufacturers were stealing a significant portion of domestic sales right under the noses of management who apparently did not think it a problem. Maybe it was the long lunches, fat salaries or bloated benefit packages that obscured their outlook and now has them begging.
Even if $25, $50 or $100 billion is approved by Congress, the massive legacy costs for multiple layers of expenses including the high cost for employee benefits, retirement plan obligations and the incremental expense for unions doesn’t help or encourage investor optimism. They need something more than a simple cash infusion. Here’s my ideas to help fix this industry:
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Posted
May 15 2009, 12:20 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
 With General Motors (GM) trading at approximately $1, it is ever more apparent that a restructuring deal is necessary and imminent. There are currently two parties involved in the negotiations, with the U.S. Government/UAW Retired Workers on one side and individual/institutional investors on the other. The major discrepancy is who will have control of the company in the future and who will get paid off as a result of GM's delinquencies.
Under the current deal set out by the Obama administration, the government would control 50% of the company, 39% would be controlled by the UAW, 10% by the bondholders and the remaining 1% would go to existing shareholders. Current shareholders and bondholders are not exactly ecstatic about this current deal and are working to structure another negotiation outside of bankruptcy court.
If, however. this deal were to stand, American taxpayers would be the majority stakeholder in General Motors, which in the future may be more appropriately referred to as "Government Motors." Ford (F) will more than likely have a difficult time competing against a government-owned GM. With the government taking control, it is likely that it will do whatever it to revive GM, no matter how much money it takes
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Posted
Mar 10 2009, 11:55 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
Over the past several weeks, there has been a growing chorus of negativity coming from all directions. It always concerns me when I hear everyone singing the same tune. For instance, investing in gold recently was said to be the only way to protect your portfolio from this economic calamity. Hard assets were on everyone's minds and pundits were suggesting to buy until it hurt. Well, that was $80 an ounce or so ago and now gold seems to have lost its shine.
So, how can you tell when we are seeing a market top or bottom? That is next to impossible, but one way is to separate emotions from rationale and consider objectively how many are calling for a top or a bottom. If you recall, the ideas of a bottom have been all but squashed in favor of a Dow 5,000 or an S&P 500 at 500. But just last weekend, it was clear that the level of bearishness hit a high chord. Here is why...
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Posted
Dec 02 2008, 03:26 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
The headlines are all a bustle over the drama as the Beggars of Detroit visit the Interrogators of D.C. But the most concerning thing is that the facts keep changing. The latest reports show that the original $2 billion monthly burn rate estimate for General Motors has increased to $5 billion per month. It is frightening to learn now that the estimate is already outdated. In fact, MSNBC reports that if GM is to survive 2008, they will need an initial $4 billion and another estimated, $18 billion in total assistance.
In what appears to be a virtual checkmate, auto companies are posturing between being politically correct and satisfying the outcrys of Americans to win over billions of dollars. It is quite clear that most Americans are reluctant to give another cent to zombie companies
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Posted
Oct 24 2008, 03:15 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
How much confidence do you have in your mutual funds? If you are like most, you are looking at your statements - at least the ones that you dare to open - differently than ever before. That is probably because you thought that you had a good level of diversification and had some built-in protection since a professional and experienced manager was watching over your portfolio. That has all changed now and most investors are totally disgusted and thoroughly dissatisfied with the returns their hard working managers have provided. The problem is now more evident than ever for many of these fund companies and may deserve to be shorted. Here is why..
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Posted
Sep 16 2008, 05:01 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
Brokers' phones are ringing with the questions from concerned clients looking for direction. Now, more than ever, everyone wants to know: "What do I do now?" The trouble is that most stockbrokers are not in the business of providing ongoing advice because their job is really all about asset gathering.
Think about it. How many times have you been called during a market top and told that it may be a good time to sell? More often than not, selling is frowned upon as there is always a reason to be optimistic. While we are at it, how many times were you called and told that hedging your portfolio with ETFs and options could be beneficial to help offset equity risk
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Posted
Sep 22 2008, 07:30 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
Reckless, gluttonous, disgusting and shocking are only a few of the words used over the weekend to describe the amazing bailout of the financial sector. A "mere" $700 billion is what we're told is needed to stabilize the sector. Unfortunately, it does not end there. Ponder the number again for a moment: $700,000,000,000.
Anyway you look at it, it is an enormous sum of money and the problem is that you and I will ultimately be responsible for the repayment. Of course this is on top of an already stretched deficit that will very soon balloon to at least $11.3 trillion if the bailout package is passed into law.
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Posted
Sep 11 2008, 09:01 AM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
I have written on this topic several times before, but I would like you to take extra care and really absorb this today as I can't help to feel that between the energy fiasco and Fannie/Freddie, we have been ripped off. Later this week we will find out just how bad as the Commodity Futures Trading Commission (CTFC) will be releasing a report on oil market speculation.
If you have been a regular reader of MSN TopStocks over the past several months, I have been talking, writing, yelling and ranting about the obvious and rather incredible speculation that has occurred within the energy futures markets. It is remarkable how during that time, there has been a never ending stream of naysayers who have been confident that supply and demand is the only rationale for the parabolic rise of crude oil.
Now mind you, this comes from some pretty smart people who have been certain that in the short span of only a few months the world's supply was being outstripped due to the massive industrialized growth within China and India. Then, just as fast, that all changed because (as the tale goes) the price escalation actually dampened global consumption. Come on fellas, do we really look that stupid
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