Category: Online Stock Trading Software

Gillian Tett’s new book, “Fool’s Gold”, is a refreshing and innovative approach to the failings of financial institutions, in that she convincingly ties such failings to the personalities and tribal behavioral patterns of the bankers and economists who putatively cause them. As a trained anthropologist, Tett is well qualified to examine tribal behavior, and her research demonstrates quite clearly that it is alive and well at the corporate level. In her view, the current global credit crisis was unleashed by a relatively small tribe of bankers at J.P.Morgan, a wholesaler of financial services and a significant part of JPMorgan Chase & Co (JPM) which is a leading global financial services firm with assets of $2.1 trillion.

On April 22nd, the U.S. Energy Departmentannounced that it will spend $6 billion to clean up nuclear weapons facilities dating back to the Cold-War era. This endeavor is part of Barrack Obama’s stimulus package, and more than half of the money is going toward clean up in South Carolina and Washington. In total, twelve states will receive funding to clean up nuclear and other hazardous waste left behind from the Cold War. This plan has the potential to be a lucrative opportunity for investors as there are only a handful of companies who specialize in hazardous waste clean up. These companies include American Ecology (ECOL), Clean Harbors (CLH), and Perma-Fix Environmental Services (PESI).

High-speed rail development is a growing industry worldwide, and President Barack Obama recently committed $13 billion in seed money to the United States’ foray into this hot market. If the federal government follows through with visionary plans for a cross-country high-speed rail system, U.S. companies that specialize in railway equipment, technology and vehicles could get a boost in business for years to come.

The Financial Accounting Standards Board’s (FASB) mark-to-market rule requires firms to report the fair-market value of their assets on a quarterly basis. The valuation is based on the sales price fair market price of equivalent assets. Opponents of mark-to-market contend that in illiquid markets, mark-to-market unduly penalizes companies by making them write-down their assets, thereby exposing them to more financial risks as a result of the unfavorable valuations that result from the ensuing depressed prices. Proponents on the other hand believe that the fair market price is a true reflection of the value of the asset at the time.

On March 10th of this year, Federal Reserve Chairman Ben Bernanke made a bold statement when he declared that large banking institutions will not be allowed to fail. What this has essentially done is put a temporary bottom in the financial market, and gave investors a reason to starting buying shares of some of the large banks. Up until this time, there was a good deal of uncertainty regarding whether or not some of the large banks would be nationalized. The government had already taken a 35% stake in Citigroup (C), one of the largest financial institutions in the country with over 7,700 branches, and investors thought other banks may also fall victim to the same fate.

The retail sector has seen some dramatic declines over the last six months. People are losing their jobs, their houses are being foreclosed, and wages have become stagnant. All of these factors spell doom for the retail sector. During a recession, people still spend money they just spend less and often spend it at discount retailers. Some of the best discount retailers include names like Wal-Mart (WMT), Big Lots Inc. (BIG), Family Dollar (FDO), and Ross Stores (ROST). These companies should survive just fine. With that said, 90% of the retail stores will not be fine and should see dramatic declines in key indicators such as their same-store-sales and sales-per-square-foot, which will lead to declines in their share prices. I am not advocating that investors put their money to work in the retail sector, but if you must, the discount retailers would be your best bet.

In January 1920, an Italian immigrant discovered an arbitrage potential in international reply coupons – IRC. By purchasing IRCs for stamps in Spain, and then exchanging them for postage in the USA, he could net a profit. Forming a corporation called “Securities Exchange Company”, he decided to raise capital by selling investment coupons with a guaranteed 50% rate of return in only 45 days. Investors lined up. A required $1,000 dollar investment returned $1,500 for a gross of $500. Investors were so pleased from the results that they re-invested their earnings. Over the better part of 1920, approximately 15,000 people invested, and reinvested. Investors used their life savings; homes were mortgaged and assets were liquidated. People continued to reinvest their profits. Money was being made hand over fist. After only 5 months, the Securities Exchange Company had made several million dollars.

Mortgage rates are near record lows. This came about from the Federal Reserve Board’s relentless downward bias pressure on interest rates. Ben Bernanke, chairman of the Federal Reserve Board, wants a near zero percent rate for short term interest rates based on prevailing economic data. With this near zero rates, the Fed’s goal of spurring up economic activity is gaining foothold in the industry where this financial mess started in the first place – the mortgage sector of the housing industry.

Twas the Night Before Expiration by: Michael Chupka (With apologies to Clement Clarke Moore) www.poweropt.com

Much of the focus of the country’s economic problems has been on the burst of the housing market’s bubble and the related credit crisis. While this focus is appropriate, the foreclosure rate has hit a record level and these problems are frequently blamed on “the poor.” However, much of the data shows that this is not the case. It is often assumed that those with lower income levels are a bad credit risk in the first place. In fact, foreclosure rates are comparable across all income levels. High foreclosure rates are found in many communities across the country. There are, however, significant and surprising exceptions. The current national foreclosure rate is approximately 1 in 450. However, states that are frequently regarded as more affluent, California, Nevada, Arizona and Florida, are all facing foreclosure rates of more than 1 in 200. Conversely, Mississippi, the poorest state in the US, has a…