Profits Up But Stock Price Moves Down

Profits Up But Stock Price Moves Down

http://news.yahoo.com/s/ap/20090420/ap_on_bi_ge/earns_bank_of_america

Bank of America reported better than expected results but it looked like that wasn’t enough to make Wall Street happy. Despite earnings of 44 cents per share as against 23 cents a year ago, and much above analysts’ expectations of 4 cents per share, the stocks market unlike its treatment of the bank’s peers which have reported their first quarter results over the past two weeks, gave a thumbs down to Bank of America.

Why did the markets react this way? That is because Bank of America also gave a realistic and grim picture of what the banking industry anticipates in the coming months, that is, increasing loan defaults. One would think that the market’s reaction to Bank of America’s results is more realistic.

China Seeks Stronger Position In Global Affairs

China Seeks Stronger Position In Global Affairs

http://online.wsj.com/article/SB123837953546968375.html?mod=article-outset-box

With the backing of its vast financial resources, China wishes to hold a stronger position and say in international affairs. The Asian giant has even offered to aid organizations such as the International Monetary Fund. But this may not be acceptable to European nations and the US, who have so far dominated the decision making at international forums. Beijing officials have announced China was willing to spend some part of its $2 trillion Forex reserves to add funding to the IMF which is seeking help to boost its kitty. The additional funding is, however, likely to come in exchange for more voting rights in the IMF and that is only possible at the cost of small European nations. China’s motive appears to be redirecting the IMF’s functioning in such a way that it does not totally rely on the US and Europe and thus keep a check on their financial and economic policies.

The Biggest Jump In Stock Markets Since November ‘08

The Biggest Jump In Stock Markets Since November ‘08

http://news.yahoo.com/s/ap/20090312/ap_on_bi_st_ma_re/wall_street

The Dow Jones Index was up by 240 points on Thursday, a remarkable achievement, in tough times. It gained an amazing 622 points over the past three days, which was the index’s biggest three-day jump since November ’08. Though the investors are breathing a sigh of relief, it is too early to tell if the upswing is temporary or the beginning of a bull phase. This leap was witnessed, due to positive signals from various industries, especially banks. A change in the financial reporting rules for banks will enable banks to mark their “bad assets” differently.

Apart from banks, a rise in the retail sales figures and positive news from four Dow companies has also contributed to the good news. There is growing optimism amongst investors, so let’s hope for the best.

How About A Wal-Mart At Florence-Firestone?

How About A Wal-Mart At Florence-Firestone?

http://www.latimes.com/business/smallbusiness/la-me-outthere27-2009feb27,0,5939822.story

A big box store like Wal-Mart in Florence-Firestone, Los Angeles could mean more jobs and lower prices. But it could also backfire! It could also result in the small businesses at Florence Firestone, closing shop.

Florence Firestone is a small place, always buzzing with activity with people happy leading simple lives, using the services and products of the numerous small businesses in the area. The proposal of opening a Wal-Mart in the neighborhood is really a collective decision of the people of Florence-Firestone. They are the ones who should weight the pros and cons!

The ones who are against the proposal are already calling the plan as ‘dealing with the devil.’ What do you have to say?

Banking Stocks Fall Amidst Fear Of Nationalization

http://news.yahoo.com/i/749;_ylt=Ajl5tqUahwl.V9ZnifKKRrVH2ocA;_ylu=X3oDMTBwdWlhdjVyBHBvcwMzBHNlYwN0bgRzbGsDYnVzaW5lc3M-

The White House on Friday insisted that it had no plans to take over or nationalize Citigroup Inc., and Bank of America Corp. The rumors had an already jittery market, still licking wounds from the earlier bankruptcy declarations of global giants, tumbling further.

While Citigroup fell by 20 percent, the Bank of America’s stock plummeted 12 percent. The US financial sector has been troubled by shrinking credit and bad assets. This is both a result and a cause of the falling confidence of investors in the US banks.

While a privately held system with ‘sufficient government regulation’ is what the Obama administration is vouching for (going by the statement of Robert Gibbs, Press Secretary), one cannot ignore that the Government cannot and should not step in to make decisions made by financial planners of individual corporations. This is contrary to the philosophy of free market economics.

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