| Value 142.97 | Change 10.82 | % Change 8.2% |
Treasury Sec Timothy Geithner said that the vast majority of banks will be able to pass the stress tests & gov financial policies were showing signs of progress. But he acknowledged continued weaknesses in the financial system. This includes declines in consumer lending & higher costs for credit despite $B thrown at financial institutions by the gov. He also said that about $110B of the $700B in TARP money remains but paybacks of $25B will bring the remaining funds up to $135B. The IMF projects the global financial system will lose over $4T (spelled out, that's 4,000,000,000,000) with US banks accounting for 60% of the total.
•Geithner Says `Vast Majority' of U.S. Banks Have More Capital Than Needed
Citigroup (C) had its annual meeting, it got ugly at times. Long time shareholders are stunned to see a $3 stock, a price they never could have imagined when investing. 5 directors left, many shareholders wanted to see all go.
The Alerian MLP Index bounced back 2 to the 202s. MLPs are hanging in there after BreitBurn Energy (BBEP) eliminated the distribution to focus on paying down debt in 2009.
- BreitBurn Energy Partners Announces Results of Borrowing Base Redetermination, Temporary Suspension of Distributions and Full Year 2009 GuidanceBusiness Wire(Fri, Apr 17)
Other high yielding groups were up. The Dow Jones REIT Index rebounded 11 & junk bond funds are finding buyers while the VIX pulled back 2. Oil also regained some of yesterday's losses.
| CLK09.NYM | ..Crude Oil May 09 | ..47.20 | .. 1.32 ......(2.9%) |
Caterpillar (CAT) CEO Jim Owens, a member of the president’s Economic Recovery Advisory Board, was critical of the stimulus plan, largely because it's not reaching CAT. He says EPS will be $1.25 (not enough to cover the div) before special charges. Their bulldozers are heavily involved in rebuilding but stimulus money will not be enough to cover lost business in the private sector. Worldwide sales are projected to fall to $38B in 2009 after reaching $51B last year
•Caterpillar Says Obama `Missed an Opportunity' to Fix U.S. Infrastructure
These continue to be exceptionally confusing times. Banks are going thru stress tests. Nobody is sure what is really going on, but a lot of experts (assuming they know that they are talking about) suggest that the banks should pass the tests. A number of regional banks reported today & their stories were dreary. Most have eliminated divs or are only paying a nominal amount to satisfy holders who only invest in div paying stocks. Now Nancy Peolosi will start a "comprehensive inquiry" to learn more about the bankruptcy at Lehman & collapse of Bear Stearns, not to mention anything else that interests her. This will be all political theater, playing well to the public but not so well on Wall Street. Dow was up today, but can't get enough steam to take off. Turnaround means little when we're back to a sideways trading zone, Dow is still under 8K. Confusion hurts.
•Pelosi Sets Wall Street Probe Modeled on Pecora in 1933 After Market Crash
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