Monday, May 28, 2012

Spanish Borrowing Costs Soaring

With the fourth-largest bank in the country - Bankia SA - teetering on collapse, Spain announced a plant to save the bank via further expanding its debt.

Ignoring the poor practices of banks in the nation, along with spending more than the country can afford, Prime Minister Mariano Rajoy rather chose to point the blame on uncertainty over the euro zone for the rising costs of borrowing.

Rajoy said this in a news conference:

There are major doubts over the euro zone and that makes the risk premium for some countries very high. That's why it would be a very good idea to deliver a clear message there's no going back for the euro.
The costs of borrowing aren't because of the uncertainty surrounding the region, but rather because nations in the euro zone, just like Spain, refuse to stop spending in regard to promises they cannot keep.

As Keynesianism (using debt to fund government programs and growth) is increasingly seen as a failed "economic" method, countries in Europe and other areas of the world, are embedded in a financial circumstance they don't have the will or means to remedy.

Greece is a good test case to see how the populations will respond when austerity is enforced in response to unsustainable budgets. It won't be pretty as things get worse.

According to Reuters, Spain is thinking about funding Bankia using sovereign paper, which would result in the country taking shares in the bank. That would raise the debts in Spain to 79.8 percent of the estimated economic production in 2012.

The Spanish government has already injected $4.5 billion into the company, and parent BFA has requested an additional $23.8 billion on top of that.

Even though the bailout is immanent, the means Spain will take to employ it still hasn't been decided.

Interest rates on Spain's 10-year bonds have jumped to 6.42 percent on the secondary market, moving closer to the 7.0 percent mark which is believed to be unsustainable.

Rajoy continues to insist that's because of the situation in Europe and Greece, and not related to Bankia itself.

To make things worse for Spain, the government announced the areas of the country that are in serious debt face a refinancing bill of 36 billion euros, far above the the formerly estimated 8 billion.

Spain is the one country most analysts and observers believe would bring the euro zone to its knees if it defaulted, probably ending the misguided experiment.

Friday, May 25, 2012

Peter Schiff Says Stimulus Worst Choice for EU

Peter Schiff recently stated that the worst choice that could be made by the EU would be for them to put more stimulus into play.

After former French President Sarkozy was voted out of office, German Chancellor Angela Merkel lost her most important ally in implementing austerity measures, and so has been under increasing pressure to cave on going the stimulus route rather than cutting back on spending.

Schiff doesn't think Germany will cave in. He said, "Either Greece is going to leave the euro zone, or it's going to have to accept austerity as a price of remaining a member. There's no way that Germany is just going to cave and support the Greek welfare state."

Of course the real issue isn't the largely irrelevant Greece, but the obvious consequences of other nations lining up soon afterwards to demand they be bailed out as well.

Germany will find itself footing the bill for much of that, draining valuable resources that could be used for productive means and redistributing it to governments who refuse to cut spending to sustainable levels. In other words, the German people will get screwed.

Schiff doesn't believe it will happen, but I'm not so sure. Never underestimate the stupidity in regard to failing Keynesianism, which supports the anemic idea that governments can endlessly spend themselves into prosperity.

The failure in Europe and the growing, unsustainable debt levels in the United States show that Keynesianism is dying and a complete failure, and leaders need to accept that as the reality of the future.

Austerity will be forced on nations around the world whether they like it or not, but it won't come without a lot of pain, as the promises made by politicians who are supported by elites pursuing a New World Order, have never been realistic, and the day of reckoning will be soon at hand for those who have refused to take action and continue to kick the can down the road in hopes the default won't happen on their watch.

Peter Schiff is right in saying the worst action by Europe would be to throw more money into the economy via another stimulus, but it would be surprising to me if Merkel holds out and refuses to engage in more money printing, as most leaders and everyday people don't understand the precipice they're all heading for.

If Merkel has any courage, she would resist stimulus and remain firm on austerity as the economic answer for the region. There is no other way.

Thursday, May 24, 2012

China's Economic Challenges Continue

New data from the HSBC Flash Purchasing Managers Index confirms that factory orders in China are slowing, as it dropped from Aprils final reading of 49.3 to May's final reading of 48.7.

This is the seventh month in a row that the index has been under 50, which means the economy continues to contract.

Hopes that China's economy will rebound in the second half appear to be dashed, as the global economic slowdown continues.

HSBC's chief economist Qu Hongbin, said this, "Policymakers have been and will step up easing efforts to stabilize growth. As long as the easing measures filter through, China will secure a soft landing in the coming quarters."

This not only points to a weakening Chinese economy, but other economies around the world as well, as that's where the weakness lies, with orders plunging from overseas customers. That means those businesses don't see strong demand in the near future.

According to Markit Economics Research,, for new export orders, the sub-index fell from 50.2 in April to 47.8 in May, bringing it down to close to March's final reading of 47.7.

Other weak economic indicators in China for April resulted in the Chinese central bank cutting the amount of cash banks must hold in reserve in order to provide more liquidity in the economy.

That hasn't worked so far, as there is more than enough liquidity, but not much demand for capital. That has resulted in few loans.

Unfortunately, the failed Keynesian idea of spending more money by the government in an attempt to boost growth is being considered by Beijing, which is now going to go further into debt by financing infrastructure projects, which of course means an attempt to artificially prop up the economy in hopes the private sector will rebound.

You would think China would look to the fiasco in Europe and the extraordinary debt in the U.S. as examples of what not to do. But they are ignoring all that, apparently thinking they won't face similar issues by participating in the same practices. They're wrong!

This is also the outlook of new socialist French President Francois Hollande, who wants to stimulate the French economy as well, by focusing on "growth" rather than fiscal discipline.

To think of this a novel idea is of course ridiculous. Some even call it 'game-changing.' What's changing the game about governments spending themselves into failure. What doesn't Hollande understand about the sovereign debt crisis in the region?

He's a socialist of course, so he's even more blinded by the idea of government as savior than most. Yet encouraging more spending will lead Europe quickly closer to the economic precipice than they are now.

Most of Hollandes idea is centered around eurobonds, which is pooled European debt. What it would do is destroy the free markets once and for all, as the market wouldn't be allowed to punish poorly run countries, but rather the cost of money would be the same no matter what the credit rating or outlook of the country is.

In other words, it would take even more incentive away for countries to to get their financial houses in order, and they would attempt to spend themselves out of the dilemna. This is another spin on failing Keynesianism, and will itself fail over time.

Out of control spending and political promises in Italy and Spain has resulted in the countries having to pay close to five times as much interest as Germany does when issuing national bonds.

To socialists like Hollande this is an outrage. He doesn't like the idea of markets forcing discipline on governments, and wants to eliminate that altogether.

It will be a disaster if it is ultimately agreed to, as the last bit of restaint would be taken off of the irresponsible governments in the region, and they would be able to be able to just about spend with impunity, as the cost of failed policies couldn't be interfered with by the market through higher interest rates.

That means the countries in Europe would all be viewed the same in regard to eurobonds, even though they would widely differ in financial health.

Chancellor Angela Merkel rightly opposes this, and would be irresponsible to the German people if she were to agree to it. Her concerns are rightly that the German people would have to underwrite the weaker and vastly irresponsible nations of the eurozone in perpetuity. She is right.

If she does agree to it, it will show that the obsessive idea of keeping the eurozone and European Union in tact is more important than the people of the nations represented; especially those that have their financial houses in relatively healthy order.

Going back to China, it needs to learn from this fiasco if they're going to avoid the same fate in the future.

Wednesday, May 23, 2012

Facebook (FB) IPO Facing Numerous Lawsuits

There was no question lawsuits would start flying as the disastrous story of the IPO of Facebook (NASDAQ: FB) unfolded, with three lawsuits already filed in regard to the company going public, with one of them being against Nasdaq OMX Group, which delayed the IPO because of technical issues, and also had difficulty sending executions confirmations to let traders know they had been successfully completed.

Another lawsuit was filed against Facebook, Facebook officers, and the underwriters of the IPO.

From the complaint:

The true facts at the time of the IPO were that Facebook was then experiencing a severe and pronounced reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices rather than a traditional PC such that the Company told the Underwriter Defendants to materially lower their revenue forecasts for 2012. And, defendants failed to disclose that during the roadshow conducted in connection with the IPO, certain of the Underwriter Defendants reduced their second quarter and full year 2012 performance estimates for Facebook, which revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the Registration Statement and/or Prospectus.
Among the defendants named in the lawsuit include Facebook executives Mark Zuckerberg, CFO David Ebersman and Chief Accounting Officer David Spillane; board members of the company Marc Andreessen, Peter Thiel, Erskine Bowles, Donald Graham, Jim Breyer and Reed Hastings; and underwriters Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), JPMorgan Chase (NYSE:JPM), Merrill Lynch (BAC) and Barclays Capital.

It centers around the lowering of revenue forecasts by Morgan Stanley consumer Internet analyst, Scott Devitt, which was unusual because it was done at a late hour of the offering, while in the midst of Facebook's roadshow leading up to the IPO.

Questions on whether retail customers received the news in a timely manner is a major question generated by the suit.

Facebook was trading at $31.83, gaining $0.83, or 2.68 percent, as of 11:21 AM EDT.

Tuesday, May 22, 2012

Hopes for Pfizer's (PFE) Vyndaqel Dashed by FDA

If the report from the Food and Drug Administration is used as an indicator, Pfizer's (NYSE: PFE) new drug Vyndaqel has a big uphill battle to climb if it hopes to win approval in the United States.

Vyndaqel, which is a drug developed to treat transthyretin familial amyloid polyneuropathy, which is a neurodegenerative disease.

FDA reviewer Devanand Jillapalli said this in a report prepared to be reviewed by the advisory panel, “I recommend a complete response action, based on inadequate evidence of effectiveness.” What that means is it is recommended the drug be rejected.

Pfizer has already been approved in Europe for the drug, but in the U.S. it is believed they haven't performed a strong enough study to substantiate claims the drug works as the company asserts.

In a document prepared for the review panel on Thursday, Pfizer admits the product was developed on a fast-forward basis, although that quick process is in fact allowed and supported by the FDA.

At this stage of the process these are only recommendations, and once the panel reviews and listens to arguments from a variety of sources of input, they will make their recommendations to the FDA, which at that time make the decision to accept or reject the treatment in the U.S.

The disease has no approved treatment in the United States at this time.

Pfizer has been under growing pressure to produce new lines of drugs that are protected by patents as former blockbuster drugs like Lipitor are now competing with generic drug makers.

Monday, May 21, 2012

Yahoo (YHOO) Pops on Alibaba Sale

Sales of Yahoo (NASDAQ: YHOO) were popping in early Monday trading as confirmation of the speculation the company was going to sell some of its holdings in Alibaba has investors liking what they heard.

Yahoo owns approximately 40 percent of Alibaba, and said it will sell about 50 percent of its stake, which would raise about $7.1 billion for the tech giant.

Per terms of the deal, it'll be for preferred stock in Alibaba as well as cash.

The company stated it will give back most of the cash to its shareholders.

Industry watchers see this as probably clearing the way for a probable initial public offering by the Chinese tech firm.

When Alibaba goes public, other terms of the sell are it will have to allow Yahoo to sell it shares in the company at that time, or Alibaba will have to acquire 254 percent of Yahoo's remaining shares it holds in the company.

Yahoo was trading at $15.53, gaining $0.11, or 0.71 percent, as of 11:03 AM EDT. It has soared as high as $16.00 on the day.

Friday, May 18, 2012

Facebook (FB) IPO Fails to Meet Hype

However it may be spun, the IPO of Facebook (NASDAQ: FB) was a disaster by any measure, as the much-hyped bringing of the company public resulted in a deafening yawn, as the social networking company ended its first day of trading a mere 38 cents over its initial offering price of $38.00, with almost 600 million shares exchanging hands.

Now that the company is under scrutiny as never before as to its business model, many are concerned over how it's going to make money going forward, as a significant number of advertisers and marketers don't consider it a good place to spend money.

I've heard that from a number of online marketers over the years who did a lot of experimenting on Facebook with very little return for their money.

The question is how long with advertisers go along with the hype with so little impact from their campaigns.

Having a huge number of people interact on Facebook is one thing, but very few want to interact with ads, or even take notice of them. That's the major problem Mark Zuckerberg, Facebook, and his team face ahead.

That's not to say the share price of the company won't grow, as it simply has too much publicity not to have people in states of euphoria dump their dollars on the company shares, not even knowing the risks associated with its dubious business model, which the company itself admits is under pressure because of privacy concerns around the world.

To make matters worse on its opening date, reports say that underwriters JPMorgan (NYSE: JPM) and Morgan Stanley (NYSE: MS) acquired shares in the company to keep it from dropping under its offering price. That doesn't bode well for the company.

Once the realization the business model of Facebook is flawed, who knows what the company will morph into via acquisitions and new focus, as pressure will inevitably mount for the company to grow revenue and earning in a way it hasn't proven it can do over time.

Maybe we'll eventually see a Facebook smart phone and tablet in the future. Growth will have to come from somewhere.

Thursday, May 17, 2012

Wal-Mart (WMT) Reports Great First Quarter

Wal-Mart (NYSE: WMT) hit all cylinders in the first quarter, with U.S. and international sales both doing well, as did Sam's Club.

Even though the currency market was a negative for the company for the quarter, it was still able to generate 8.6 percent consolidated net sales growth year-over-year.

Same-store sales in the United States climbed a healthy 2.6 percent over the same quarter in 2011, while Sam's Club sales, not including fuel, jumped 5.3 percent.

Wal-Mart International sales soared by 15 percent as the company continues its aggressive expansion. Operating income at the unit rose 21 percent over last year during the same period.

Diluted earnings per share beat previous guidance, coming in at $1.09, up from the $0.98 a share last year in the same quarter, an increase of over 11 percent. Analysts had been looking for $1.04 a share for in the quarter.

Guidance from Wal-Mart for the second quarter in 2013 is projected to come in at a range of $1.13 to $1.18 a share.

Wal-Mart also announced it is boosting its dividend to an annual $1.59 a share, upping it by 9 percent.

The giant retailer was trading at $62.23, up $3.04, or 5.14 percent, as of 1:45 PM EDT.

Central Banks Buying Gold

With the exception of China, most gold consumption and investment in gold dropped in the first quarter.

Balancing that off a little was the continual acquisition of gold by a number of central banks.

Countries boosting their official gold reserves in the first quarter included Tajikstan, Kazakhstan, Russia, Mexico, the Philippines, Belarus and Ukraine.

Even though central bank demand for gold remains relatively robust, it did drop significantly from the first quarter of 2011, falling 41 percent. But the first quarter of 2011 was an unusual one for gold demand, so the drop in demand was expected. In the first quarter of 2012 central banks acquired 80.8 tons of gold.

For the year, according to the WGC, investment gold demand climbed by 13 percent to 389.3 tons. Gold coins and bar demand fell 17 percent year-over-year.

With economic conditions continue to be the same in 2012 as they were in 2011, the WGC says it expects central banks to continue buying on a net basis.

They base that probability the increasing strategy of countries diversifying their foreign reserves, while others attempt to keep their current ratio of gold to foreign reserves in tact, requiring them to buy more gold.

Wednesday, May 16, 2012

JPMorgan (JPM) Sued by Investors Over Trading Loss

It didn't take long for the expected lawsuits against JPMorgan (NYSE:JPM) to emerge in response to the trading loss of $2 billion last quarter, as two lawsuits have already been filed against the giant bank, with more probably to come.

One of the lawsuits accuses the company of securities fraud, based upon “materially false and misleading statements and omissions” allegedly made by CEO Jamie Dimon on the April 13 earnings call.

The complaint states this:

“Defendants misrepresented the losses and risk of loss to the company arising from massive bets on derivative contracts related to credit indexes reflecting interest rates on corporate bonds. These derivative bets went horribly wrong, resulting in billions of dollars in lost capital for the company and billions more in lost market capitalization for JPMorgan shareholders.”

In the other lawsuit top executives Dimon and CFO Douglas Braunstein, along with the board members of the bank being accused of being in breach of fiduciary duty, wasting corporate assets and receiving unjust enrichment.

This appears to be an attempt to take advantage of what appears to be an investing mistake which cost the bank money in order to gain back some of the losses.

An error made in investments isn't a legal matter, in spite of the hype of the Federal Reserve, SEC and FBI investigating the bank.

Tuesday, May 15, 2012

Moody's (MCO) Downgrades Italian Banks

A total of 26 banks in Italy were downgraded by Moody's (NYSE:MCO) today, prompting outrage from the Italian banking association, saying the actions from the rating agency were irresponsible and unjustified.

After the downgrades, when measured against similar countries in the European Union, Italian banks are now among the lowest in rank.

This of course makes it even more difficult for the banks, which will now face higher financing costs, as well as making funding in general harder to come by because of the ongoing sovereign debt crisis in the region.

UniCredit and IntesaSanpaolo, the two largest banks in Italy are expected to be okay, but smaller banks like Banca Monte dei Paschi di Siena, which was cut to just above junk status, will struggle in funding and higher costs.

For now, the short-term requirements of the Italian banks were met via 3-year loans from the ECB. Even so, over the long term there is strong concern and fears over the Italian banks will be able to be funded in light of the sovereign debt crisis, which continues on as governments have little will to cut back on spending and shrink the debt.

Italy alone has a gigantic 1.9 billion euro debt, putting it in danger of collapsing from the crisis. For the local banks, it will make it much harder to acquire funding.

To make matters worse, the banking problems in Spain are escalating, as is political volatility in Greek, where citizens refuse to accept the government - which made unsustainable promises - must cut back on spending if the country is to financially survive.

This is of course the entire story of the EU, which has long ago abandoned free markets and limited government to socialist and fascist practices which are destroying them as a parasite does any host.

UBS (UBS) Led by Wealth Management Unit

Led by its wealth management unit, UBS (NYSE:UBS) reported solid earnings for its latest quarter. The division generated a pre-tax profit of $866 million for the quarter, up 70 percent over the prior quarter, and a 24 percent improvement for the same period last year.

This bodes well for the financial institution, as wealth management is a far more predictable business than sales & trading, which has recently crushed JPMorgan (NYSE:JPM) with a $2 billion loss and fading confidence in the company.

Another good sign for UBS is its exposure to the wealth management business, which accounts for an estimated 40 percent of its share price. On the other hand, JPMorgan is estimated to have only 10 percent of its share price associated with wealth management, making it far less predictable, and more volatile as well.

The good performance from the unit of UBS comes from shrinking expenses as a result of changes made in relationship to employee pension plans.

Also contributing to profits was the performance of the wealth management unit in North and South America, where pre-tax profits rose by 34 percent to $225 million from the previous quarter.

That's not to say the sales & trading of the division tanked, as it still generated $1.1 billion in earnings for the period. Overall, the unit landed $1.6 billion in revenue for the quarter.

Jim Rogers: U.S. Debt Unsolvable

In an interview with Steve Forbes of, billionaire investor and commodity expert Jim Rogers said he sees nothing out there that will be able to solve the "staggering debt" now weighing on the United States.

Rogers said:
I would like to think that there’s something which is going to save us. I can think of some things which will give us rallies. But I cannot see anything – I mean, look at Japan. Japan has staggering internal debt. They still are externally a creditor nation. They still have a balance of trade surplus. We’re the largest external debtor nation in history and the largest internal debtor nation in history. We’ll have rallies. But ... I don’t see what can cause us to repeat, perhaps, the ’70s. We’re in relative decline ... I don’t see that that relative decline will stop.

As Rogers mentioned, there will be rallies, but with no political will to change the outrageous spending in Washington, there is no way out but an eventual default by the country.

It's only a matter of what type of default, not whether there will be one or not.

Monday, May 14, 2012

Gold Prices Fall on Stronger Dollar

A temporarily strengthening U.S. dollar continues to put pressure on gold prices, as investors pour money into the greenback based upon perceived safety.

This of course isn't a nod towards a really strong dollar, but rather the consequences of an falling euro in response to the endless sovereign debt crisis in Europe, as well as the volatile political climate.

Gold prices will continue to fall, as they usually do, as long as the U.S. dollar gets stronger against the euro. As soon as that changes it will reverse, and gold prices will resume their climb.

Until that happens, we could see gold prices drop to December lows of close to $1,520, and from there, if the euro remains weak, gold could fall below the $1,500 an ounce mark.

The U.S. dollar climbed against a basket of major currencies while the euro dropped to a four-month low against the dollar.

Also pressuring gold is the unwinding of bullish positions in the metal by money managers, who have slashed their long positions by about 20 percent. That brings holdings in gold futures by the money managers to the lowest level since the latter part of 2008.

Since the fundamentals accompanying the rise in gold prices remain in place, it's only a matter of a relatively short time before prices start to climb again.

Best Buy (BBY) Chairman Richard Schulze Stepping Down

An outside law firm hired by Best Buy after its audit committee found the CEO at the time, Brian Dunn, had violated company policy by entering into a relationship with a female employee, has now resulted in founder and Chairman of the company, Richard Schulze, stepping down from his Chairman position.

The reason for the pressure on Schulze to step down comes from the fact he knew about the relationship and failed to report and deal with it per company policy by reporting it to the audit committee.

While Dunn was found to have an inappropriate relationship with the female employee based upon company policy, the law firm did say there wasn't any misuse of company funds or resources in connection to the relationship, as well as no use of aircraft for the purpose of facilitating the relationship.

Even so, Dunn still received a huge $6.6 million severance package.

Schulze said in a statement, "In December, when the conduct of our then-CEO was brought to my attention, I confronted him with the allegations (which he denied), told him his conduct was totally unacceptable and contrary to Best Buy's policies and everything I, and the company, stand for. I understand and accept the findings of the Audit Committee."

Schulze will remain on through June 13, with a new title of chairman emeritus. That is simply an honorary position given him until he finishes his term.

Hatim Tyabji will replace Schulze. Tyabji is the chairman of Best Buy's audit committee.

After dropping to 3-year lows, Best Buy has rebounded, trading at $19.61, up $0.33, or 1.71 percent, as of 12:00 PM EDT.

Chesapeake (CHK) Faces Increasing Shareholder Pressure

Chesapeake Energy Corporation (NYSE:CHK) CEO Aubrey K. McClendon, who is also co-founder of the company, faces growing pressure from shareholders as the company struggles to survive in the midst of heavy debt and anemic natural gas prices.

With just about everyone in the industry knowing the financial struggles of the company, it has made it impossible to sell quality assets for what they're worth, as the company has been receiving low ball offers for some of its properties. That's not likely to change in the current scenario Chesapeake faces.

That has led to more debt, as the company announced it has secured a $3 billion loan from Jefferies Group (NYSE:JEF) and Goldman Sachs (NYSE:GS).

Low natural gas prices have hammered the company after its debt load grew to $13 billion as a result of aggressively investing in numerous properties.

Speculation as to the reason behind taking on more debt to deal with the situation is the board of Chesapeake is probably requiring McClendon to go that route rather than sell good assets at fire sale prices.

The $3 billion in financing should help Chesapeake boost its negotiating position a little, although time is definitely working against it. Chespeake recently said it will delay some of its asset sales in order to secure the financing, which resulted in the shares getting hammered, plunging over 13 percent on Friday, May 11.

After the fallout, a Chesapeake spokesman asserted it still has the of still hitting the asset sales target of $10 billion they set for 2012.

Billionaire Carl Icahn is building a significant stake in Chesapeake again, which would probably force the hand of McClendon to take the necessary steps to right the company ship.

The last time Icahn did this he acquired over 5 percent of Chesapeake, which forced McClendon to sell all its holdings in the Fayetteville shale of Louisiana for close to $5 billion for the purpose of reducing debt. Icahn reportedly made about $500 million after he sold his shares in the company.

There is growing pressure from Shareholders for McClendon to step down as CEO of Chesapeake.

JPMorgan (JPM) CIO Steps Down after $2 Billion Loss

The chief investment officer of JPMorgan (NYSE:JPM), Ina Drew, who oversaw the division of the giant bank responsible for $2 billion in losses in the last quarter, has "retired."

Drew has offered to step down several times since the revelation of the enormous losses, and finally has taken the step. According to a regulatory filing, Drew made $15.5 million in 2011, one of the highest salaries at the bank.

In April CEO Jamie Dimon asserted there was no reason for concerns over the trading practices of the bank, although at the time he said that the losses hadn't happened yet. They have come over the last six weeks.

He said on Sunday on NBC's "Meet the Press" that he was "dead wrong" about the trading situation at the bank, adding, "We made a terrible, egregious mistake."

Speaking even stronger about the situation, Dimon concluded, "There's almost no excuse for it."

The purpose of the trades in question, which were centered around credit derivatives, are supposed to be used as a hedge against financial risk. Instead it appears they were attempted to be used as a way to generate profits for the bank, which resulted in the huge losses.

There is an ongoing internal investigation into the causes of the huge losses by the bank.

At least two more executives at the bank are expected to resign sometime soon.

JPMorgan was trading at $36.19, falling $0.77, or 2.08 percent, as of 11:04 AM EDT.

Tuesday, May 8, 2012

Randgold's (GOLD) Hammering Continues

Following its record breaking previous quarter, shares of Randgold Resources (NASDAQ: GOLD) continues to get pummeled by investors after its latest quarter results revealed the company profits were down by 28 percent and its gold production down 13 percent over the previous quarter.

So far it hasnt mattered to investors that the company profits were up 126 percent over the first quarter of 2011.

That hasn't influenced JPMorgan Chase (NYSE: JPM), which upgraded it from an "Underweight" rating to a "Neutral" rating.

Since its report on May 3, Randgold had plunged from $86.40 a share down to $77.37 a share, as of 1:56 PM EDT. It is down $3.55, or 4.39 percent on the day so far.

It appears the company is now being oversold.