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Posted
Jan 07 2008, 11:18 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
No, seriously, the American Dialect Society annually anoints one word as the word of the year based on a vote from the members of the organization, and "subprime" took the trophy this year. The ADS defined subprime as "an adjective used to describe a risky or less than ideal loan, mortgage, or investment."
Professor Wayne Glowka, a member of the society, was quoted as saying: "When you have investment companies losing billions of dollars over something like bundled subprime loans, then you have to consider whether it's important." Amen to that
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Posted
Jan 16 2008, 03:50 PM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
During times of great volatility in the stock market, a lot of people will turn to high-yielding money market funds to stash their funds. Yet late last month, I wrote a column – “Your safe money might not be so safe” -- observing that in some cases, money market funds might not be so worry-free themselves.
I highlighted one money market fund at brokerage Charles Schwab -- Schwab Value Advantage Money Fund -- as an example of the type of fund that has in the past obtained a significant amount of its yield from investments in commercial paper issued by troubled banks’ structured investment vehicles.
Schwab spokesperson Sarah Bulgatz disagreed with my assessment of the fund. Here is her response:
“It is a mistake to imply that all structured investment vehicles (SIVs) have subprime mortgage exposure. In Schwab's case, our money market funds have no direct investment in subprime mortgages or collateralized debt obligations. We do hold a small percentage of highly-rated SIVs, but these SIVs themselves have very limited exposure to subprime. As of January 2008, Schwab’s taxable, non-government money market funds have less than 3.7% of their funds invested in SIVs, and these SIVs themselves have on average less than 1% of their investments in subprime. That translates into less than 0.04% of Schwab’s money market portfolios indirectly exposed to subprime. Since our money market funds are all managed similarly, the percentage of SIV holdings within each fund are close to the average. To say, as the column does, that "If you … keep cash in the Schwab Value Advantage Money Fund you have had a sub-prime time bomb ticking away in your brokerage account," is simply not true.
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Posted
Mar 16 2008, 07:37 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
The proposed sale of Bear Stearns on Sunday to JPMorgan Chase for $2 a share, or $236 million, will keep litigation lawyers busy for years as enraged shareholders seek to recover anything from the disaster.
The losses from Bear Stearns' demise are shocking, so shocking that Asian and Australian stocks tumbled on the news. The dollar was fallling. Crude oil jumped over $111 a barrel, and European shares were expected to open lower as was the U.S. stock market.
From a peak price of $171.52 in January 2007, Bear Stearns managed to lose 98.8% of its peak market value of $20.2 billion in less than 15 months, all because the company bet everything that the housing market and the markets for securities backed by subprime mortgages wouldn't break. It did
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Posted
Mar 17 2008, 11:00 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Billionaire Joe Lewis invested in Bear Stearns, buying as much as 10% of the brokerage firm.
Now, he may be out over $1 billion. On Sunday, the Times wrote that Lewis has lost about $800 million on his investment. That was before Bear Stearns accepted a $2 per share offer from JP Morgan.
Lewis's holding company Tavistock Group owns the Isleworth golf course in Windermere, Florida, and has stakes in companies including sporting-goods maker Puma AG, luxury-car maker Bristol Cars Ltd. and Ambrx Inc., a genetics-engineering firm. Tavistock is also developing real estate in Orlando, Florida, and the Bahamas, according to the Sydney Morning Herald.
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Posted
Apr 04 2008, 07:55 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
There are enormous amounts of chatter about whether the markets have bottomed.
So, what's the evidence?
The market itself. Down as much as 18% in January from its Oct. 9, 2007 all-time closing high, the Dow Jones Industrial Average's loss has been trimmed to 11%. The Standard & Poor's 500 Index, briefly down 20% on March 17 from October in the turmoil over Bear Stearns, is now off 12.4% from its October peak. And the Nasdaq Composite Index's loss from a peak on Oct. 31 has shrunk from 25% on March 17 to 17% on Friday. OK, let's turn the thought around. The Dow is up 8% from its lows in January. The S&P 500 and the Nasdaq are both up 9% and 10% off their lows on March 17. Lastly, the S&P 500 moved above its 50-day moving average on March 24, briefly dipped under it and has moved above it again. Moreover, the moving average has started to rise for the first time since November.
The Federal Reserve. Ben Bernanke & Gang have made it clear they won't allow the financial system to collapse. That was the result the Fed and many on Wall Street had feared would happen if Bear Stearns had been forced to file for bankruptcy protection. Instead, Bear Stearns has agreed to be acquired by JPMorgan Chase
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Posted
May 12 2008, 07:12 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Based on the figures from the Bureau of Labor Statistics, U.S. unemployment was 5% in April. Those figures showed that 146.3 million Americans were employed in the civilian work-force and 7.6 million Americans were unemployed.
It should not come as a surprise to economists that the weakest parts of the economy last month were construction, manufacturing, and retail. The segments with some growth were healthcare and professional services. (For a complete list of jobs by sector visit 24/7 Wall St.)
The economy may be in a recession now. Some experts believe that growth will only slow modestly over 2008. Warren Buffett and George Soros have said that they think the downturn will be long and deep.
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Posted
Jun 24 2008, 01:05 AM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
If you're a GE shareholder, you've probably been pondering the idea since April 11, when the company shocked investors around the world by reporting a first-quarter profit decline that absolutely no one expected.
Since then, there's been chatter in blogs (See this from George Yared) and message boards about whether Immelt's tenure should end. Some posts are on MSN Money.
The New York Times noted on Sunday that Wall Street seems to have fallen out of love with GE. Douglas McIntyre, a Top Stocks partner blogger, says the company is in need of a major change in direction. "It's a dog of a stock," he wrote this week.
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Posted
Aug 08 2008, 08:34 AM
by
Minyanville
Money Blog: Top Stocks Blog - MSN Money
This morning, Fannie Mae joined its smaller cousin Freddie Mac in announcing losses that exceeded Wall Street's already dour expectations.
The company lost $2.3 billion in the second quarter and plans to slash its dividend to a paltry $0.05 per share, down from $0.25, according to Bloomberg.
All eyes now turn to Paulson, who just weeks ago asked for -- and received -- a blank check from Congress to support the beleaguered government sponsored enterprises, should the need arise. He had hoped the mere existence of the backstop would calm Investors' nerves such that he wouldn't need to step in.
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Posted
Sep 08 2008, 03:55 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Fannie Mae and Freddie Mac had their CEOs pushed out by the government over the weekend. They will get fat pay packages and can go on to live in massive homes and become high-paid consultants. The head of Washington Mutual was keelhauled Sunday. He was replaced by the head of commercial mortgage broker Meridian Capital Group.
The board and CEO of Wachovia are about to bring in a new CFO, hoping to get Carlyle Group's David Zwiener to take the job. He is likely to get a nifty pay package for signing on to a sinking ship.
The parade of comings and goings of executives at banks, mortgage companies, brokerages, and insurance firms does not appear to have had the intended effect.
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Posted
Sep 22 2008, 01:51 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
Watching Treasury Secretary Henry Paulson make the rounds of Sunday morning television shows to make his case for applying a trillion dollars' worth of CPR to the U.S. banking system, I was struck by the prosaic quality of his argument. You sure didn’t have the sense that he thought this was any big deal. I mean, it was almost the same tone as you’d hear on a recorded message of the day’s surf forecasts. Wake me when we’ve spent all our money.
The humdrum quality of technocrats like the former Goldman Sachs chief makes me wistful for the days of Franklin Delano Roosevelt. Now there was a guy who was mad as hell about the state of the banking system, and wasn’t going to take it anymore. And could he ever deliver a speech.
FDR’s Inaugural Address in 1933 – in which he excoriated bankers for their greed, selfishness and incompetence -- was his most famous, and you may be amazed to discover how relevant it sounds today. "There must be an end to speculation with other people's money!" he said.
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