Posts belonging to Category Stocks



Bubbles are Plentiful in the Investment Markets

 

Experts are seeing signs of bubbles in stocks, bonds and farmland.  This froth is basically the result of the Federal Reserve’s policy of credit easing – implemented primarily by its purchase of Treasuries and mortgage securities, which lowers interest rates and drives investors into riskier assets. The Fed’s primary reason for doing this is to [...]

Investors Should Be Wary of Variable Prepaid Forward Transactions

 

Variable prepaid forward transactions result in a huge judgment against JPMorgan. An Oklahoma state court judge recently found that JPMorgan Chase breached its fiduciary duty as a co-trustee of a trust and ordered it to pay more than $18 million, including punitive damages for “reckless disregard for the rights of others.” In a 32-page opinion, [...]

SEC Suspends Trading in 16 Stocks

 

The SEC has halted trading in the shares of a number of companies for various violations, including “lack of current and accurate information,” according to the Wall Street Journal (“SEC Suspends Trading in 16 More Firms,” by Tess Stynes). The suspensions are said to be temporary.

Many ‘Safe’ Investments Aren’t So Safe

 

Wall Street is adept at adjusting its marketing to the times and is never at a loss to pitch products, including those designed to play on investor fears. After all, that is what securities salespeople do. Many investments that Wall Street is currently calling “safe”, however, are actually both too risky and too costly, as [...]

Insider Trading Problems at JP Morgan

 

More bad news for J.P. Morgan Chase ? regulators in Japan have found that a Japanese employee of JP Morgan was involved in insider trading in connection with a share offering by Nippon Sheet Glass Co. The employee, who was not identified, reportedly leaked inside information to people at Asuka Asset Management. This latest revelation [...]

Was Facebook’s Disastrous IPO Rigged by Wall Street?

 

The house always wins. That saying was originally meant to warn people away from the Vegas Strip on Las Vegas Boulevard. But sometimes it applies even more strongly to Wall Street. Recently, investors who wanted to get in on the next Google lost a ton of money on the Facebook IPO, while Wall Street did [...]

The Facebook Fiasco Confirms that Wall Street Views Smaller Investors as Second Class Citizens

 

Facebook made national headlines last Friday when the social networking giant sold shares to the general public in its IPO. The company is now making even more headlines as investors have filed lawsuits against it and all of its underwriters alleging that they released material information to only “preferred investors” (See “Facebook, banks sued over [...]

Facebook Underwriters Make Millions – Investors Lose Their Shirts

 

In addition to substantial IPO fees, the Facebook underwriters headed by Morgan Stanley made “a profit of about $100 million” through an options bet which benefits the banks when the IPO price is too high and the stock value plummets. (See “Morgan Stanley, Others Make Profit of $100 Million Stabilizing Facebook,” Gina Chon, Aaron Luchetti [...]

Greater Volatility Equals Lower Returns

 

A recent study has concluded that investments that have higher volatility generate lower returns for investors. For many years, it has been a basic precept of modern portfolio theory that the price of opting for lower risk is lower reward. That is bunk, according to Robert Haugen, a former professor of finance at the University [...]

Regulators Warn Investors about the Dangers of Crowd Funding Investments

 

The North American Securities Administrators Association (NASAA), an organization comprised of the 50 state securities regulators, believes that the crowd funding provisions of the so-called JOBS Act are just another “Regulation D-like rip-off,” according to InvestmentNews (“Crowd funding draws scorn from NASAA,” by Mark Schoff Jr.). Regulation D provides a registration exemption for certain investments [...]

Regulators Remain Concerned about the Impact of ETFs on Market Volatility

 

The Securities and Exchange Commission and regulators in the United Kingdom have been investigating exchange traded funds for some time. Part of those investigations are now reportedly focusing on a situation called “settlement fails,” which occurs when trades are not completed on time. Although most exchange traded fund trades have seven days to clear or [...]

Corporate Bankruptcies Expected to Increase

 

An increase in corporate borrowing costs and Eastman Kodak’s recent bankruptcy filing have set off a round of speculation about whether it is the start of a growing trend in corporate bankruptcy filings. While Chapter 11 bankruptcy filings have been falling since 2009, George Putnam of BankruptcyData.com is expecting an uptick in corporate bankruptcy filings. [...]

More Investors Avoid Stocks – Demand for Equities Drops

 

The dynamics of equity investing are changing and investors need to consider these changes when making investment decisions. Investors have pulled over $400 billion out of equity mutual funds since 2008, resulting assets of some of those funds being cut in half. Money has flowed into bond funds, but even more money (eight times as [...]

Investor Demand for Equities is Waning

 

A report issued by the McKinsey Global Institute forecasts that investor allocation to equities worldwide will drop from 28 percent in 2010 to 22 percent in 2020. (“Equities Losing Appeal in Global Financial System,” InvestmentNews).

Investment Corruption Reportedly Reaches the Highest Levels of Government

 

A recent Bloomberg Markets Magazine article raises troubling questions about investment corruption at the highest levels of government. In July 2008, as market fears mounted, Treasury Secretary Henry Paulson reportedly met with a group of hedge fund managers (five of whom were former officers of Goldman Sachs, where Paulson was CEO), and described a scenario [...]