My Connroy Finance Blog

Some More Positive Signs

http://news.yahoo.com/s/ap/20090917/ap_on_bi_ge/us_economy;_ylt=AnIT14zNe3srQ2×8_gizx5CyBhIF;_ylu=X3oDMTJia2ljbm0xBGFzc2V0A2FwLzIwMDkwOTE3L3VzX2Vjb25vbXkEY3BvcwMzBHBvcwM2BHNlYwN5bl90b3Bfc3RvcnkEc2xrA2hvdXNpbmdhbmRqbw–

Maybe a drop at a time, but oceans too are made up of drops and Rome was not built in a day. So we have some more fragile and tentative signs of the recession beginning to go away. There was a drop in the number of first time jobless claims filed last week, and housing construction rose in August.
True that these positive signs are mere flashes, but the hope is that they will, maybe not very soon, but  nevertheless at some point, turn into a strong bright light which will draw the country up and on to the path of growth.
There remains a large amount of pain which the country still has to bear. The unemployment situation is not going to get better in a hurry and the average individual is expected to continue to suffer the stresses relating to job losses, and poor hiring.

US Deficit To Top $1.58 Trillion This Year

http://www.thestar.com/business/article/686446

The White House has predicted that the US government will face mounting debt and exploding deficits over the next few years. The cumulative budget estimates for 2009-19 now stand at $9 trillion, $2 trillion more than the earlier estimates announced in May. The public debt is now expected to double by 2019 and surge to three quarters the size of the national economy. Congressional budget analysts have said that the current year’s deficit is likely to top $1.58 trillion and a mix of lower spending and increased tax revenues is essential to improve the fiscal situation. The unemployment level is expected to surge to 10% this year with a gradual decline expected next year. The US economy is now expected to contract by 2.8% and expand by 2% in 2010.

Swiss Banks Look Beyond US For New Clients

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSLL48507320090821

The uncertainty surrounding the settlement between the Swiss banking giant UBS and the US authorities has made the Swiss banking industry look beyond the US for new clients. While several Swiss banks have stopped entertaining new US clients besides asking the existing ones to exit, many others are focusing on Europe and emerging markets to expand their business. Swiss authorities have recently agreed to disclose the names and details of the bank accounts of 4,450 wealth American clients of UBS as part of a settlement of an investigation into UBS’ role in helping several US citizens in evading taxes. This many believe tarnishes the country’s image of having the best banking secrecy laws in the world. Consequently many Swiss banks have made it mandatory for their US clients to show that they are complying with the tax rules in their country.

Switzerland Selling UBS Stake After Tax Accord With US

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ9MeWnsvofc

A day after a landmark agreement was finalized between the US tax authorities and the UBS, the Swiss government has decided to sell its holding in the country’s biggest bank to institutional investors. The Swiss government had purchased UBS mandatory convertible notes last year to help UBS reduce its toxic assets in times of recession. The settlement of the US lawsuit appears to have strengthened the government’s confidence in the bank. The placement of stake with the financial institutions will provide UBS with the required flexibility to strengthen its operations. The Swiss government is expected to make significant profits on its sale of 332.2 million shares for 16SFr-16.50 SFr per share. UBS has also said it intends to make itself free of government support as soon as possible.

America Losing Hope

http://www.usatoday.com/news/washington/2009-07-20-obama-poll-economy_N.htm

According to recent polls, a huge number of Americans are losing hope in their President! They are skeptical whether he will be able to guide the country out of the financial mess that it is currently in. The recession has been on for many months now and millions have lost their jobs and homes. This can not be happening to the US – after all America is the land of opportunities! With patience wearing thin and the ending of recession nowhere in sight, the President and his team had better gear up to hasten reform. On the flip side, the people too could show more endurance - after all there is no ‘so much’ that any human can do.

Locke Says Trade Imbalance With China Unsustainable

http://www.reuters.com/article/politicsNews/idUSTRE56E1B520090715?pageNumber=2&virtualBrandChannel=0

US Commerce Secretary Gary Locke has said that the trade imbalance between the US and China is not sustainable and the two countries should take joint responsibility for reducing the green house emissions. China should go improving its exchange rate flexibility, open up its markets besides modifying its policy of focusing on export led growth, Locke said. Various structural issues need to be resolved so as to promote better trade relations between the two nations. Locke who is scheduled to visit China soon, said since both China and the US were the biggest emitters of Carbon Dioxide, they need to take up special actions such as deployment of energy efficiency and clean energy technologies. Although the developed nations have contributed significantly too the rise in the green house gas emissions, developing countries too need to take action and restrict the emission levels.

Who Will Win? The Bulls Or The Bears?

http://news.yahoo.com/s/ap/20090630/ap_on_bi_st_ma_re/us_wall_street;_ylt=AlYhQ5vHxKA1P4qcS4S31JuyBhIF;_ylu=X3oDMTJmaGUzYTVrBGFzc2V0A2FwLzIwMDkwNjMwL3VzX3dhbGxfc3RyZWV0BGNwb3MDMwRwb3MDOQRzZWMDeW5fdG9wX3N0b3J5BHNsawNzdHJvbmdxdWFydGU-

The stock markets ended the quarter on a buoyant note. Most market indexes have shown a double digit percentage increase in the second quarter, this despite the fact that the rallies ended a couple of weeks ago and the markets have been cautious since then.

What should the investor expect in the third quarter? It is that time of the year again; the earnings season. A lot depends up on the kind of numbers companies will give out. As we move into the second half of the year, companies now have the advantage of doing a comparison with a previous year number which too was not that great. The first effects of the recession were felt in the third quarter of 2008. So though in absolute numbers earnings may not be great, in comparison, the figures may not look bad. Often that much is enough to keep Wall Street happy.

Morgan Stanley Emerges As Top M&A Advisor

http://www.nypost.com/seven/06222009/business/macks_on_track_175418.htm

In the current year, so far John Mack led Morgan Stanley has emerged as the leading advisor for mergers and acquisitions by handling deals worth $175 billion. The company has toppled Goldman Sachs from the top position as it handled deals worth $158 billion, according to a report. Morgan Stanley has returned to the top position after 1996. The merger activity on the whole has, however, declined significantly and has tumbled by 47% year this year to $284 billion. Although the deal volume has gone down, Morgan Stanley has emerged as a winner by advising 13% more deals than last year. Goldman Sachs’ downfall is attributable to a 46% year on year decline. Several other bankers such as the Citi Group, Bank of America, UBS and Deutsche Bank have witnessed a significant fall in their deal volumes.

Chrysler Sale Put on Hold by Court

http://money.cnn.com/2009/06/08/news/companies/chrysler_stay/?postversion=2009060905

Chrysler LLC’s hopes of a quick exit from chapter 11 bankruptcy protection have been dashed by a stay announced by the Supreme Court. Justice Ruth Bader Ginsburg has granted a request for the delay in the approval of the proposed sale of the most valuable assets of the automobile major to a group led by Italy based Fiat AG. The delay was sought by a group of Indiana based pension funds who had argued that they were being unfairly treated by the bankruptcy court. The Treasury department believes that the stay is meant to allow the bankruptcy court to have a closer and detailed look on the merits of the stay.  Fiat has given Chrysler the deadline of June 15 to close the deal and a longer stay could delay the whole process.

Books And Recession

http://www.nytimes.com/2009/05/29/business/media/29books.html?ref=economy

Another sector that has been hit by the recession is book sales. The downturn has had an overpowering effect on book sales with fewer books being sold in 2008 and 2009. The sales figures have reduced by 1.5% according to book experts.  More and more publishers are reporting dwindling sales. To save on costs, some publishers have even begun to gather to focus on digital publishing. They are also toning down their customary parties and events. Even the hugely popular “Twilight” series have not been able to garner good sales. The book market sure doesn’t look good since Harry Potter made an exit.