Investment Banking Explained

Young Chuck moved to Texas and bought a donkey from a farmer for $100. The farmer agreed to deliver the donkey the next day.

The next day the farmer drove up and said,'Sorry, Chuck, but I have some bad news. The donkey died.'

Chuck replied, 'Well, then just give me my money back.'

The farmer said, 'Can't do that. I went and spent it already.'

Chuck said, 'OK, then, just bring me the dead donkey.'

The farmer asked, 'What ya gonna do with a dead donkey?'

Chuck said, 'I'm going to raffle him off.'

The farmer said 'You can't raffle off a dead donkey!'

Chuck said, 'Sure I can. Watch me. I just won't tell anybody he's dead.'

A month later, the farmer met up with Chuck and asked,'What happened with that dead donkey?'

Chuck said, 'I raffled him off. I sold 500 tickets at two dollars apieceand made a profit of $998.00.'

The farmer said, 'Didn't anyone complain?'

Chuck said, 'Just the guy who won. So I gave him his two dollars back.'

Chuck now works on Wall Street. - Author Unkown

Is the Banking Crisis Over

Is it possible that the actions of not just only President Obama but those of former President Bush have stemmed the tide of the banking crisis? Scanning the news today it was refreshing to see that Citigroup doesn’t think it will need anymore cash infusion from the government and is looking forward to running in the black from this point forward. Over at Reuters they have this to say from CEO Richard Parsons of Citigroup..

By John Poirier and Diane Bartz
WASHINGTON (Reuters) - Citigroup Inc Chairman Richard Parsons said on Thursday that the bank does not need any more capital injections from the government and expressed confidence that Citi would remain in private hands.

Asked in an interview with Reuters whether Citigroup needed additional government capital injections, Parsons said: "No, I think actually, particularly with the latest conversion... Citi is actually one of the better capitalized banks in the world." - Reuters

Then I look over at Bank of America and they are good to go too! They don’t need no stinking money either. Could this crisis be turning a corner where the big fish will now feed on all the little fish in the banking industry? Bloomberg is reporting that the bank has been profitable since the beginning of the year and has this report…

Bank of America Expects to Post Full-Year 2009 Profit
By Christopher Condon and Sree Vidya Bhaktavatsalam

March 12 (Bloomberg) -- Bank of America Corp., the biggest U.S. bank, expects to make money for the full year after posting a profit for January and February, Chief Executive Officer Kenneth Lewis said.

“We have been profitable for the first two months of the year,” Lewis told reporters after a speech to the Boston College Chief Executives’ Club in Boston today. “We expect to be profitable” in 2009. In his speech, Lewis said the bank may earn $50 billion this year, measured before taxes and provisions, and the company won’t need more federal aid. - Bloomberg

Word to the wise to those of you with some free cash to invest, you might want to look at both of these companies as part of your near future investments. Citi closed at $1.67 today and that price has nowhere to go but up in my honest opinion. Bank of America closed at $5.85 per share today. Or could it be that the strong arm of the Obama administration is scaring the pants off of the big banks with their hands out? Or could it be that they (big banks) don't want the endless gravy trough at the top to end with government intervention? I'm leaning towards a little of both, yes they can turn things around on their own and no they don't want the Federal Reserve telling them how much they can skim off the top in bonuses and mega salaries. Was there truly a banking crisis at all or was it a free for all at the taxpayers expense? Things that make you go hmmm…

One has to look at the stock market as a gambling den, so much money goes in and the same amount of money comes out. It is a matter of perspective of who lost and who won at the end of the day. If $500 bucks went into the poker game, then $500 bucks came out. It's all in who won the game that day or for that matter that year. Belly up to the bar boys and girls, Citigroup and Bank of America are back in play.

Papamoka

President Obama

With one hand on the holy bible and the other raised in oath and promise, Barack Obama will become the next President of the United States of America. It has been a long hard road to this point and it marks the coming of a new generation of America. A new page in our children’s history books will need to be written for them to study, learn from, and know that nothing is impossible in America.

With all of the financial crisis America is facing, President Obama, and his entire cabinet will have their hands full on day one. Not since the days of Franklin Delano Roosevelt has such a dire set of circumstances existed in our country for a President to face and conquer. And just like FDR, President Obama and Vice President Biden will get to work on not just fixing the fundamental problems that caused this economic meltdown but also the heart and soul of America. How they manage to bring America back from the brink or screw it up even more will also be something for the history books as well.

At times like these, I am so glad that we have someone like President Barack Obama that knows how to build a bridge over troubled waters not just politically but in the financial part of our nations economy. President Obama will also be able to talk to the average American and surpass President Ronald Reagan as the great communicator. Having faith in those entrusted to get our nation past this crisis is half the battle of fixing this mess that we are all stuck in…

Video Link



Yes we can! Get out of this financial crunch, yes we can! Get out of the housing collapse, yes we can! Turn the economy around, yes we can! Create millions of new jobs in new industries, yes we can! Work together as one people to save our economy, yes we damn well can!

Congratulations President Obama, Vice President Biden, now get your asses to work and fix this nation! The clock is ticking… tick, tock, tick, tock…

Papamoka