Dow Jones Will Go Up

Futures rise, combined with gains in Asia, signal a upward shift for the Dow at the start of the week. With the effects of the auto bailout settling in after last Friday’s rocky session, news that China and Denmark are taking action to add liquidity to the system should contribute to propel the market up, offsetting reports of production cutbacks in tech industries, Toyota’s first-ever losses and the continuing shock waves of the Madoff scandal.

As a plethora of analysts starts to forecast a stocks recovery in 2009 in spite of the continuing grim economic data, the extra liquidity is expected to begin trickling back into the market, with investors slowly reversing the selling trends.

Assessment
Expect a slight rise at the end of a volatile session.

Dow Jones Will Fall

Trends are set for another day of market losses. With the effects of the Fed’s intervention wearing off and investors beginning to wonder what’s left on Bernake’s arsenal, news of a fresh $850bn stimulus plan will be insufficient to offset the negative clouds hovering over Wall Street.

Adding to the negative mood are news of automakers cutting back on production, SEC’s admission that it failed to act on Madoff’s case despite warnings, losses in Europe and new unemployment figures that, although showing a slowdown on new claims, still register the worst month since 1982.

Assessment
Expect moderate losses at the end of a roller coaster trading.

Anti-Debt Ad

Cool ad from Dutch agency Rich aimed at keeping people from cheerfully diving into a well of debt. The campaign could hardly be more timely. At this time of impending financial doom, people do need every help they can get to stay cool and not get into a “Who cares? Let’s enjoy it while we can” kind of nihilistic spending spree.

It also comes to show (to those who still need proof of this, which by now I hope will be the last members of a pre-modern tribe verging on extinction) that advertising is a tool that can be used in a plethora of situations, not all of them having to do with getting people to spend, spend, spend. And what do you know, it may even serve to counter, not bolster, consumerism.

And while we’re at it, wouldn’t it be great to inject one of this guys into the heads of stock traders and CEOs all over the world? Wouldn’t that be a fresh way to address the financial crisis, to give them a conscience instead of a new pile of money to play with? Just a thought.

Wall Street bankers in line for $70bn payout | Business | The Guardian

The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.

At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.

In the first nine months of the year Citigroup, which employs thousands of staff in the UK, accrued $25.9bn for salaries and bonuses, an increase on the previous year of 4%. Earlier this week the bank accepted a $25bn investment by the US government as part of its bail-out plan.

At Goldman Sachs the figure was $11.4bn, Morgan Stanley $10.73bn, JP Morgan $6.53bn and Merrill Lynch $11.7bn. At Merrill, which was on the point of going bust last month before being taken over by Bank of America, the total accrued in the last quarter grew 76% to $3.49bn. At Morgan Stanley, the amount put aside for staff compensation also grew in the last quarter to the end of August by 3% to $3.7bn.

Days before it collapsed into bankruptcy protection a month ago Lehman Brothers revealed $6.12bn of staff pay plans in its corporate filings. These payouts, the bank insisted, were justified despite net revenue collapsing from $14.9bn to a net outgoing of $64m.

via Wall Street bankers in line for $70bn payout | Business | The Guardian