*Economists seem to have lost ALOT of their credibility, what do you think. hum.....
Economists: U.S. bailouts could lead to second recession
Economists are starting to worry that workers, businesses and local governments could become dependent on U.S. government rescue money, raising the possibility that cutting off the aid at the end of the recession will lead straight into a second recession. "Stuttering attempts" by the Obama administration to repair the financial system "suggests that by 2010, the specter of a second dip into recession will be looming large," said Sheryl King, an economist at Merrill Lynch. Reuters (02 Mar.)
S&P forecasts biggest dividend cuts since 1938
Standard & Poor's said dividends paid to U.S. equity investors are likely to decline at least 22.6% this year, marking the severest drop since the 36.3% fall in 1938. Analysts expect a 3.49% dividend payout for the S&P 500 this year. Financial Times (02 Mar.)
BofA's Lewis calls aid request for Merrill a "mistake"
Kenneth Lewis, CEO of Bank of America, called the bank's request for $20 billion in U.S. government aid to help with its takeover of Merrill Lynch a "tactical mistake." He said the move made BofA appear to be as weak as Citigroup. Lewis also pledged to remain as CEO until the bank repays the $45 billion it received through the government's Troubled Asset Relief Program. Financial Times (02 Mar.)
JPMorgan reportedly made $5B in derivatives profit
In one of the worst years on Wall Street, JPMorgan Chase reaped $5 billion through trading over-the-counter derivatives, sources said. Led by Matt Zames, the JPMorgan trading desk might have benefited from Lehman Brothers' collapse and the takeover of Bear Stearns, because the developments left hedge funds and companies with fewer derivatives-trading partners. "It's a flight to quality," said Craig Pirrong, a finance professor at the University of Houston. "They expanded the scale of business, the number of trades people wanted to do with them, and it gave them pricing power." Bloomberg (03 Mar.)
*yesterday an ijiot from Marketplace was forecasting $300 a barrel oil not too far off
OPEC's supply limits not enough to stop oil-price slide
Despite success by the Organization of Petroleum Exporting Countries at keeping its members in compliance with supply cuts, the price of oil dropped almost 10% on Monday. The weak price "is being driven by the deteriorating global economic environment," said Nauman Barakat, senior vice president at Macquarie Futures USA. Forbes/Reuters (02 Mar.)