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• Damaging the market by curbing short-selling

  Posted Jul 16 2008, 05:35 AM by Douglas McIntyre
  Filed under: Merrill Lynch, Morgan Stanley, Goldman Sachs, Lehman Bros

  Newly-minted legend says that short-selling put Bear Stearns out of business and has swamped the stock prices of Lehman , Fannie Mae , and Freddie Mac. To keep evil from further invading the stock markets, short-selling should be put to sleep.

  According to The Wall Street Journal, "In a dramatic emergency order, the SEC said it would immediately move to curb improper short selling in the stocks of struggling mortgage giants Fannie Mae and Freddie Mac, as well as those of 17 financial firms, including Goldman Sachs Group, Lehman Brothers Holdings, Morgan Stanley and Merrill Lynch."   Read More...

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• Surprising stocks top best of 2008 list

  Posted Jun 26 2008, 01:18 AM by Jon Markman
  Filed under: Investing, Merrill Lynch, Investment Banking, Motorola, Morgan Stanley, Lehman Bros, Valero, stocks, economy, Jon Markman
  Rating:

  

  It’s easy to imagine that the 25 best-performing stocks in the S&P 500 Index this year are all oil and gas producers, and the 25 worst-performing stocks are all banks and brokers. Yet as we near the halfway mark in 2008, it turns out that there are quite a few surprises in the mix of best and worst.

  For instance, the No. 1 stock in the benchmark index this year isn’t an oil producer, but a coal miner, Massey Energy.  It’s up 155% so far, rising to $89 from $35 as coal prices have soared in the wake of booming demand in China and India. The No. 2 stock is actually a discount retailer, Big Lots. It’s up 100%, from $15 to $30, as investors speculate it will get a big share of tax-rebate money from low-income Americans.

  Most of the rest of the next best 15 gainers   Read More...

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• Waddle be next for the Financials?

  Posted Jun 02 2008, 04:32 PM by Andrew Horowitz
  Filed under: Merrill Lynch, Morgan Stanley, Lehman Bros, JPMorgan, Credit Crisis, Andrew Horowitz
  Rating:

  What took them so long? S&P finally trimmed their outlook on Lehman Brothers Corp and other key financials today. It has become clear that the problems facing the financial sector is far from over. Financial stocks and the markets in general were hit hard as investors were spooked after S&P announced that they would be lowering ratings and their outlook on these companies. Is this any surprise to anyone?

  So now, the long term ratings on these three went from A+ to A and the short term rating went to A-1. The concerns seem to be focussing in on residential mortgage loans and residential construction slow downs. Timely, hey?

  According to the S&P release shown below, “The downgrade primarily reflects our concern that the pace and extent of earnings improvement could be considerably more muted than we previously assumed.” And "muted" is codeword for....?   Read More...

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• Bank and brokerage stocks could fall 20%

  Posted Apr 14 2008, 02:58 PM by Douglas McIntyre
  Filed under: Merrill Lynch, Morgan Stanley, Lehman Bros, Citigroup, GE, JPMorgan, Wachovia, Wells Fargo
  Rating:

  Early indications from companies like Wachovia and General Electric show that the last half of March may have been tougher on bank earnings than Wall Street expects. Bloomberg recently reported that Citigroup, JP Morgan, and Wells Fargo could all miss consensus estimates. But by how much?

  A look at the spread of Q1 estimates gives some hint about how far off actual numbers could be compared with investor expectations. At Citigroup, among 15 analysts polled by First Call the average EPS estimate is a loss of $.95. But, the lowest estimate is a loss of $2.24. At JP Morgan, the average figure from fourteen analysts is $.66, but the worst case is a loss of $.11. For Wells Fargo, twenty-three analysts have an average forecast of Q1 EPS at $.57, but the low number is $.45.

  The huge discrepancy among the numbers should be troubling to shareholders because recent information would argue that share prices for most banks and brokerages may still be way too high.   Read More...

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