Investment News: Money Morning

FOMC Brainstorms; Dimon and Lewis Bet Big on Financials; Former BofA CEO Thain Reinvents Self; Yahoo! Posts Fourth-Quarter Loss; Consumer Confidence Hits Record Low; S&P/Case-Schiller Housing Index Plunges 18%

• The Federal Open Market Committee (FOMC), the policymaking arm of the U.S. Federal Reserve, will conclude a two-day meeting today (Wednesday), and investors are expecting members of this key central bank group to determine just what’s the next monetary-policy step needed to jump-start the recession-plagued U.S. economy, Bloomberg News reported.  Back in December, the FOMC slashed the Federal Funds rate to a range of 0% to 0.25% – an all-time low for that benchmark for U.S. borrowing costs.

• The chief executive officers of two top U.S. banks have made big bets on their own institutions, filings with the U.S. Securities and Exchange Commission show. JPMorgan Chase & Co. (JPM) CEO James “Jamie” Dimon bought 500,000 bank shares at a price of $22.929 each on Jan. 16, an outlay worth nearly $11.5 million, the documents show. Four days later, embattled Bank of America Corp. (BAC) CEO Kenneth D. Lewis bought 200,000 shares at prices ranging from $5.98 to $6.06 a share, resulting in a total outlay of $1.165 million, SEC records show.

• Once he was known as Wall Street’s “Mr. Fix-it.” But the once-teflon-coated reputation of ousted Bank of America Corp. (BAC) executive John Thain now needs fixed up. Thain, who joined BofA when that bank took over Merrill Lynch & Co. Inc. at the very end of last year, was fired last week after losses at Merrill led to a $15.3 billion loss at Bank of America, and forced BofA to seek additional government aid. According to Bloomberg News, Thain has reportedly retained public relations specialist Sunshine, Sachs & Associates, whose clients include Ben Affleck and Leonardo DiCaprio – most likely in a bid to rebuild his image.

• Yahoo! Inc. (YHOO) logged a fourth-quarter loss of $303 million, compared with earnings of $206 million a year ago. Sales in the quarter fell 1% to $1.8 billion from $1.83 billion.

• The Conference Board’s Consumer Confidence Index fell to a new record low of 37.7 this month from a revised 38.6 in December. “It appears that consumers have begun the new year with the same degree of pessimism that they exhibited in the final months of 2008,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “Looking ahead, consumers remain quite pessimistic about the state of the economy and about their earnings.”

• The Standard & Poor’s/Case-Shiller 20-city housing index plunged 18.2% year-over-year in November – the sharpest annual drop on record. Homes in the 20-city index have lost a quarter of their value since their peak in July 2006. The National Association of Realtors said Monday that the median home price fell a record 15% in December to $175,400 – down from $207,000 a year ago.

January 28th, 2009

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This entry was posted on Wednesday, January 28th, 2009 at 12:30 pm and is filed under Global Business Roundup, Global Roundup. You can follow any responses to this entry through the RSS 2.0 feed. Due to the amount of comments we receive Money Morning will not be able to respond to all questions. If you have not already registered to leave a comment, once doing so you will receive Money Morning's Daily Email.

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1. Comment by Busy Man Fitness on 28 January 2009:

   More of the same.

   All we can do is try to profit from what we know is coming.

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