Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

UK Stocks Tick Higher After Another Bank Bailout

Stock-Markets / Financial Markets 2009 Jan 19, 2009 - 04:34 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleEquities were becalmed Friday after a week in which Citigroup and Bank of America lost nearly half their market capitalistion. Size it seems isn't everything these days . As was the case in autumn 2008, it's very hard for indices to make much progress if financials remain a drag.


Today's Market Moving Stories

  • The UK ITEM club is forecasting the UK economy will contract by 2.7% in 2009 and 0.5% in 2010 with unemployment set to rise to 3.25 million by the end of 2010.
  • UK house prices fell 1.9% m/m in January according to Rightmove. The company's spokesman described the decline as “worrying”. Looks like more pressure on the British peso beckons.
  • In the US, 1 in 54 (1.84%) of “U.S. housing units” received “at least” one foreclosure notice during the year, which was up from 1.03% in 2007.
  • Germany's 20 biggest banks have accumulated about €300bn of so-called toxic assets, of which one-quarter have been written off. The amount of “risky assets” held by all of Germany's banks may be as high as €1 trillion . Yet Germany's Steinbrueck rejects a “ bad bank ” concept. Elsewhere we read that the German Government may buy 33% or more of Hypo Real Estate.
  • There are reports suggesting that China, Korea and Japan have created a $120bn pool of foreign exchange reserves in case they need to protect their currencies
  • Big government just keeps getting bigger. One wonders what J.M. Keynes or J.K. Galbraith would think. From Japan there is news of fresh measures to try and prop up the world's second largest economy. Possible measures include increasing the growth of the money supply, widening the range of assets the Central Bank accepts as collateral to include equities and setting up a separate standalone entity to purchase stocks in the open market.
  • It seems more financiers are trying the old Reggie Perrin trick of staging suicides .

UK Bailout Mark 2
Markets have been awaiting news on an expanded U.K. government rescue of its banking sector . The government, which in October launched a £500 billion bailout, now plans to take on the role of insuring banks against losses on loans that would be bundled into securities and sold to investors.

This is all very fine but it still seems to me like we are avoiding the BIG ISSUE. When are the powers that be going to MAKE the banks write down their loans / assets to something like a realistic market value? The longer we put off the evil day and keep putting this on the long finger, the more the crisis will linger. Officialdom is extending the crisis, not resolving it.

The U.K. plan may come just in the nick of time. The Daily Telegraph reported that Royal Bank of Scotland would unveil up to £25 billion of losses for 2008 from increasing bad debts and a vast goodwill write-off on its acquisition of Dutch bank ABN Amro. The stock is off 10% this morning. Taking this a step further, the Independent reports that British banks are technically insolvent!

What Next For The US TARP?
What should be done with the second tranche of the TARP - do they have a clue? Incoming US Treasury Secretary Tim Geithner is working on proposals for an American “ bad bank ” to remove the toxic assets from the balance sheets of major financial institutions. Fed's Lacker says arguments are “compelling” for lifting bad bank assets. Remember, that was the initial plan with the TARP - before Henry Paulson realised it would be less costly and more appropriate (due to leverage considerations) to inject capital. But what price for the bad assets? Either banks would have to declare more losses, or the governments would spend too much and take on yet more risks. Meanwhile Larry Summers, the president-elect's top economic adviser, says they will focus the second tranche of the TARP on getting credit consumers and businesses rather than helping banks.

The new Administration does not seem to be quite sure about what needs to be done. Indeed there are too many needs, and not enough money. Already the Treasury plans to issue $2.2trn this year, or 15% of GDP! How much more can they afford?

Equities

  • HSBC was a drag on the Hong Kong market this morning, falling 2.2%. Activist investment firm and shareholder Knight Vinke said HSBC may have to raise funds through a rights issue if its U.S. sub prime lending business was not restructured. Fitch revised its outlook on HSBC to negative, while affirming its AA rating.
  • Toshiba jumped 7.5% after reporting the company would receive orders worth Y600 -Y800 billion for equipment for two nuclear plants that U.S. NRG Energy was planning to construct in Texas.
  • KPMG is asking staff to take unpaid leave or face a significant redundancy programme.
  • Barclays has soared this morning on comments that earnings will be higher than estimates.
  • Lloyd's is also ahead after it said it has “traded satisfactorily” since their Dec 12th update.

Economic Data And Earnings
The U.S. is closed today for the Martin Luther King Day public holiday so there are no figures to fret over.

On the earnings side, the slew of reports will be coming thick and fast. Highlights early in the week are IBM (expected EPS $3.03), J&J ($0.92) and State St ($1.14) on Tuesday with Apple ($1.38), Ebay ($0.39), and Blackrock ($1.15) on Wednesday.

From Europe we get results from Burberry, Nokia and Fiat (where there is talk of a rights issue).

And Finally… Mission Accomplished By George W. Bush


Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2009 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules