Obamanomics and the End of “Too Big To Fail”

by Ross Raffin

Before Obamanomics, there was the Glass-Steagall Act. In the wake of the Great Depression, Congressional and Executive attempts at stemming financial crisis culminated in the Glass-Steagall Act of 1930s and creation of the Federal Deposit Insurance Corporation (FDIC). One of the FDIC's main tools to fight bank failures is Resolution Authority, the ability to temporarily take over failing banks and minimize harmful effects on the financial system. The FDIC assumes deposits and liabilities of the closed bank and makes sure that a bank free-fall doesn't bring the entire economy crashing down with it. However, the FDIC was created to operate in a financial world that is vastly different from the current one. The new regulatory framework of the Obama administration updates Resolution Authority so that it can handle modern market failures. This new form of Resolution Authority is accompanied by a systemic risk regulator which can enforce higher capital requirements and create oversight for the previously underground derivative markets. As FDIC Chairman Sheila Blair told Congress in March 2009 when describing the regulatory side of Obamanomics, “we need an end to too big to fail.”

in:
http://progressive.stanford.edu/cgi-bin/article.php?article_id=341

The spring of the zombies is here

By Joseph E Stiglitz/New York

As spring comes to America, optimists are seeing “green sprouts” of recovery from the financial crisis and recession. The world is far different from what it was last spring, when the Bush administration was once again claiming to see “light at the end of the tunnel”. The metaphors and the administrations have changed, but not, it seems, the optimism.

** Joseph E Stiglitz, Professor of Economics at Columbia University, chairs a Commission of Experts, appointed by the President of the UN General Assembly, on reforms of the international monetary and financial system. A new global reserve currency system is discussed in his 2006 book, Making Globalization Work.

in:
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=289621&version=1&template_id=46&parent_id=26

Para el economista que predijo la crisis, Argentina caerá

El economista que anticipó la crisis de Estados Unidos pronosticó que la economía argentina caerá 1,9 por ciento este año por la debacle mundial. Además alertó que el Gobierno Nacional no podrá frenar la fuga de capitales ni cumplir con su ambicioso plan de obras públicas por más de 100.000 millones de pesos.

por NA

El economista que anticipó la crisis de Estados Unidos, Nouriel Roubini, pronosticó que la economía argentina caerá 1,9 por ciento este año por la debacle mundial y alertó que el Gobierno no podrá frenar la fuga de capitales ni cumplir con su ambicioso plan de obras públicas por más de 100.000 millones de pesos.

De hecho, entre octubre de 2007 y marzo de este año se fueron de la Argentina 37.000 millones de dólares, según datos oficiales.

Además, Roubini dijo que el dólar llegará a 4 pesos y que no se prevén cambios para después del 28 de junio, cuando los argentinos elijan diputados y senadores nacionales.

in:
http://www.mdzol.com/mdz/nota/126456-Para-el-economista-que-predijo-la-crisis,-Argentina-caer%C3%A1/

Weekly Guru Bargains Highlights: Apollo Group, SLM, Time Warner Cable, Amgen and Pepco Holdings

Last week's top guru bargain highlights were Apollo Group Inc (APOL), SLM Corp (SLM), Time Warner Cable Inc (TWC), Amgen Inc (AMGN) and Pepco Holdings Inc. (POM). According to GuruFocus updates, these stocks have declined the most since Gurus have bought.

Apollo Group Inc. (APOL): Down 27% Since Kenneth Fisher Bought In the Quarter Ended on 2009-03-31

Kenneth Fisher initiated holdings in Specialized Consumer Services company Apollo Group Inc. during the quarter ended 03/31/2009. He owned 2,650 shares of as of 03/31/2009. Apollo Group Inc. has been providing higher education to working adults for over 25 years. The company has a market cap of $9.08 billion; its shares were traded at around $57.07 with a P/E ratio of 16.4 and P/S ratio of 2.9. Apollo Group Inc. had an annual average earning growth of 29.1% over the past 10 years. GuruFocus rated Apollo Group Inc. the business predictability rank of 4-star.

in:
http://www.gurufocus.com/news.php?id=55585

PowerShares Planning To Close 19 ETFs

by Murray Coleman

Invesco PowerShares is making plans to close 19 of its exchange-traded funds, a dozen of which are based on fundamental indexes created by Rob Arnott's Research Affilliates.
But of those so-called RAFI funds, which use fundamental valuations to weight securities based on FTSE Group indexes, nine are U.S.-focused sector ETFs. The other three are niche-oriented international portfolios.
The moves, which are expected to take effect on May 19, comes after a splattering of smaller fund closings by other ETF providers earlier this year. The PowerShares shutterings picks up the pace of consolidations in an industry that had been growing at a faster pace than traditional mutual funds for a decade.
In fact, last year marked the first time since ETFs entered the investment marketplace in 1993 in which any signficant number of fund closings had taken place.

in:
http://www.indexuniverse.com/sections/newsinfocus/5792-powershares-to-close-19-etfs-12-rafi-funds-included.html">www.indexuniverse.com/sections/newsinfocus/5792-powershares-to-close-19-etfs-12-rafi-funds-included.html">www.indexuniverse.com/sections/newsinfocus/5792-powershares-to-close-19-etfs-12-rafi-funds-included.html">www.indexuniverse.com/sections/newsinfocus/5792-powershares-to-close-19-etfs-12-rafi-funds-included.html

Fidelity Says ‘All Things in Place’ for Bull Market

By Hanny Wan and Bernard Lo

Anthony Bolton, president of investments at Fidelity International, said a bull market in equities has already begun and financial shares are poised to drive recent gains higher.

Low valuations indicate advances that began in March are the start of a bull market, Bolton said. He favors financials, consumer cyclical, technology, and “value stocks,” such as retailers, automakers and construction-related shares.

“All the things are in place for the bear market to have ended,” Bolton said in an interview with Bloomberg Television in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”

The MSCI World Index has dropped 3.2 percent this year, extending last year’s 42 percent slump, the worst annual performance since at least 1970. Shares plunged as a collapse in U.S. consumer spending and a freeze in credit markets sent the U.S., Europe and Japan into their first simultaneous recessions since World War II.

in:
http://www.bloomberg.com/apps/news?pid=20601085&sid=a3wlzls3Lq4I&refer=europe

Banks Still Going Bust?

Some creative accounting, a Congress reluctant to offer any more help and the "stress test results" may squash a big comeback by the banking industry. The stock market is bouncing up and down as investors seem jittery about the banking industry, despite several major banks reporting first-quarter profits. Wells Fargo, Inc., Citigroup and Bank of America all reported better than expected earnings for the first part of the year.

Those booming bottom lines from banks are being questioned though. The New York Times financial columnist Paul Krugman warned Americans to stay skeptical as banks maneuvered their numbers. "The biggest positive news in recent days has come from banks, which have been announcing surprisingly good earnings. But some of those earnings reports look a little...funny." For example, Krugman noted that Goldman Sachs changed its definition of "quarter."

Treasury Secretary Timothy Geithner revealed recently that of the $700 billion in government bailout money dedicated to rescuing the U.S. financial markets, only $109.6 billion remains. While the Treasury Department said they expect the fund to receive about $25 billion in the next year as companies repay their loans, Congress seemed a little confused on the return taxpayers were getting on this massive investment. The numbers breakdown as follows, according to the Associated Press:

$355.4 billion - committed under the Bush administration to help bolster AIG, Citigroup, Bank of America, GM, and Chrysler among other companies.

$30 billion - additional funds given to AIG under the Obama administration.

$5 billion - additional funds to automakers under the Obama administration.

$200 billion - disbursed to more than $500 banks.

in:
http://community2.myfoxaustin.com/_Banks-Still-Going-Bust/BLOG/264827/82263.html

Lo que Obama esconde

“Es importante que la gente sepa que lo de Obama no es una conspiración de los friquis, sino algo muy bien trazado desde los centros del poder más rancios e universales”.
Lo afirma Daniel Estulin, autor de La verdadera historia del Club Bilderberg, y uno de los autores que señalan con más insistencia al nuevo mandatario estadounidense como un esbirro de ocultos intereses. Y es que Obama es la nueva estrella de ese mundo en que los poderes oscuros acechan en la sombra.
En primera instancia, porque no hay presidente norteamericano que pueda escapar de las teorías de la conspiración. Pero, además, porque Obama posee el perfil perfecto para encajar en esas teorías. No es como su predecesor, George W. Bush, cuyas conexiones con poderes fácticos eran más o menos evidentes (neocons, grupos religiosos, industrias de la energía y del armamento) y cuyos planes para el nuevo orden mundial estaban en las páginas de los diarios más prestigiosos.
Obama, por el contrario, representa el rostro afable del sistema, alguien de maneras moderadas y de actitud claramente empática, que ha sido acogido como el salvador por la clase media y media-baja. El rostro perfecto y el perfil adecuado, según esta clase de teorías, para dar cuerpo al nuevo Manchurian Candidate, al nuevo “mensajero del miedo”.

in:
http://www.elconfidencial.com/cache/2009/05/02/mundo_40_obama_esconde.html

The top five inflation beating investments

by Philip Scott, This is Money

Deflation is blighting the UK but some fear a return to inflation is not far away
- we outline the best investment hedges against it

Deflation is stalling the UK's economic engine. In February the retail price index (RPI), which includes housing and mortgage costs, recorded deflation for the first time in almost 50 years, after dropping from 0% to -0.4%.

The fall was caused largely by low interest rates driving payments on tracker mortgages down - good news for borrowers, bad for beleaguered savers.

Simultaneously, the consumer price inflation (CPI) index, which excludes mortgage and housing costs, dropped back by 0.3 percentage points to 2.9%, chiefly because of cheaper fuel and food.

in:
http://www.thisismoney.co.uk/investing/article.html?in_article_id=483583&in_page_id=166&ct=5

America in Terminal Decline? No Way, Says Geopolitical Expert George Friedman

by Aaron Task in Newsmakers

With its slumping economy, mountains of debt, ungodly deficits and overseas entanglements, many observers believe the end of the American era is at hand.

Not so, according to George Friedman, founder of STRATFOR, a global intelligence company.

In his latest book, The Next 100 Years, Friedman argues America's power on the world stage will actually increase in the 21st Century for three major reason:

* The immense size of the U.S. economy: The current crisis is painful and America's deficits are shocking on an absolute basis but are "trivial" relative to the country's net worth, which Friedman estimates is about $340 trillion.
* The unrivaled dominance of the U.S. Navy: Even in the digital age, control of the high seas is paramount in geopolitics.
* The ability of the U.S. to absorb immigrants, both culturally and in terms of the nation's relatively low population density.

in:
http://finance.yahoo.com/tech-ticker/article/237808/America-in-Terminal-Decline-No-Way-Says-Geopolitical-Expert-George-Friedman?tickers=^DJI,^GSPC,SPY,DIA,TLT,TBT,UDN