JP Morgan Chase

When President Bush was in office, the democrats blamed him for the downturn in the economy. Now that Obama is in office, he is being blamed for the sluggish and slow recovering economy. Fact is, the economy is based on the business cycle, and it always has been. Sure, monetary and fiscal policy both have effects to a certain degree, over recovery time and how long an economy stays dormant for. However, there will always be peaks and troughs in the economy.

Today we learn of JP Morgan Chase’s (JPM on the NYSE) large profits for the 3rd quarter of 2010. Profits for the company rose 23 percent to $4.4 billion in this latest quarter, which includes July through September. A 23 percent increase from this time last year is believed by many to be a sign that a recovery must be near.

According to the reports, the retail banking arm was the main factor in such a large increase in profits. JP Morgan Chase saw their profits from retail financial services rise from $7 million in 2009′s 3rd quarter to $907 million this year. That’s not a typo.

All of this good news comes as the federal reserve looks to be about to initiate more quantitative easing, which should (if used correctly and timed right) help businesses grow.

Is a bull market on the horizon? It is very possible. What do you think?

SS&C Acquires Tradelink from TD Ameritrade

“The thinklink transaction is aligned with our growth strategy for our front office software and software-enabled services. We are excited to leverage thinklink’s platform with our existing trading capabilities and deliver additional value to our clients and prospects as well as cross-selling our complementary solutions to their client base,” said Bill Stone, CEO of SS&C Technologies Holdings.

Thinklink is a trade order management system, as well as an execution system which is deployed over the internet. The acquisition of tradelink by SS&C will add over 50 sell-side clients to SS&C.

TD Ameritrade is an online broker with over 6 million customers located in the United States and even more internationally.

The Dow Jones Industrial Average is shaky enough to get anyone dizzy. Today the DOW dropped below the 10,000 mark for the first time since early June. Concerns about the overall economy, and the legitimacy of the recovery, have investors questioning the equity markets. Early in the day the market rallied and was in the green for an extended amount of time as the Labor Department reported a better than expected unemployment number. The rally didn’t last the day though, and stocks went the other way as the Federal Reserve reported that manufacturing growth in the Kansas City Missouri area fell in August.

“The cumulative weight of all the bad data is just adding up. “It’s like the weight of water behind the dam just pushing for some release,” stated Peter Cecchini, who is chief strategist at BGC Partners.

The market anxiety will continue into Friday when two important events are set to take place. First of all, the Commerce Department will release the most up to date estimate of the 2nd quarters’ GDP. Many analysts expect the number to be revised downward a considerable amount. The second event will be the speech my Federal Reserve Chairman, Bernanke at the Wyoming Central Bank Retreat.

August 25th, Gold Prices

Pratik Sharma, Managing Director of Atyant Capital, feels that the volatility of the Dow may spill over into the gold markets, now that the Dow is trading at, or below 10,000. As the US economy continues to show signs of a weakening recovery, investors are turning to gold as a way to preserve their wealth. The dismal numbers released by the Commerce Department showing large drops in both new and pre-owned homes, has contributed to the uncertainty in the economy. Investors will turn their attention to the Federal Reserve’s two day meeting with various world bankers in Wyoming which begins on Friday, for signs of any additional monetary easing.

With the US stock market all over the place in the last three years, investors seem to mainly be keeping their money in the bank or possibly in government bonds. Sure these investment vehicles are very safe, but basically they are not investments at all. You can hardly call a return of under 2% an investment when inflation has averaged more than that in the last 50 years, on average. The problem is that stocks seem too risky for many.

So, what are your other option to at least make a little money from your money? Real estate in my opinion is a great investment right now. Most locations in the United States have hit bottom, price wise. This means things can only go up. With so many foreclosures, people are looking to rent places, thus an opportunity for you as a landlord should you invest in real estate. The great thing about real estate is that you can earn money in two ways. First the property’s value is sure to rise in the coming years as the economy picks back up. That’s what you call capital gains. Secondly the rental income can easily offset any expense you may have with the property, such as property taxes and maintenance. In addition to this, you will likely have a good amount left over as income.

Another option is managed forex accounts. Foreign exchange trading has become a big business, and although it is risky, you can easily do an online search for some of the more stable managed trading accounts out there. Always look at the trader’s credentials and trading history before giving them your money though.

There are options out there, you just need to think outside the box a little.

If you happened to tune into CNBC earlier you likely were able to catch the segment where Hedge fund manager Kyle Bass was able to give his thoughts on the economy and markets in general. Kyle Bass has been credited for making several doom and gloom predictions on the economy that ended up coming true in the long run.

When asked his opinion on the current state of the world economy he stated, ” Given my outlook on the world, I don’t know how you can be long stocks”. Bass feels that the situation in Europe is out of control. Their banking system is “infinitely” more leveraged than that of the United States when comparing the GDPs of both economies. He feels like the European bank stress tests were worthless, and that a restructuring of European debt will have to occur before things inprove.

Although Bass is long in several US investments, he is not long in the stock market. He likes US high yield debt in the form of corporate bonds, and also indirectly invests in US bank debt and US mortgages. it is rather ironic however that Bass makes these comments the same day that George Soro’s showed excitement towards the long term prospects of equities.

Mark Hurd resigns as CEO of HP

The investigation did not turn up any evidence of sexual harassment on the part of Hurd, but it did turn up actions performed by Hurd that were deemed to be detrimental to the company. These actions seem to stem from extraordinarily large payments made to a women who Hurd had relations with. This woman was a contractor who did work for the company.

Hurd has been everything HP could want as a CEO. Revenues and profits have increased significantly since Hurd took over as head of the company in 2005. The resignation comes as a major surprise, after all the beneficial things he has done for Hewlitt-Packard. No immediate long term replacement has been chosen, but Chief Financial Officer Cathie Lesjak will temporarily replace Hurd as Interim CEO. The company is said to be looking both internally and externally for a replacement.

HP stock fell a staggering 10% yesterday after the news broke, but has been inching it’s way back up in after hours.

The Bulls have Returned

The Dow Jones Industrial Average closed more than 200 points higher than it did on Monday. It now stands at 10,322 and the market appears to be stabling out a bit.

The NASDAQ and S&P 500 also surged forward on this bullish day, while Gold jumped marginally higher as well. Gold has been the only stable point in the economy over the past year. However this could change if stocks begin to catch fire.

The EUR/USD is currently trading at $1.288, after the dollar lost some value during the trading day today. The USD still has gained quite a significant amount over the EUR since January. This creates a great opportunity for US travelers to visit Europe. If you have any vacation time, now may be the time to take it.

The X-Change Corporation (OTC: XCHC), a multimedia and e-commerce venture serving the diverse and growing Hispanic market, announced a one-for-twenty reverse stock split. A reverse stock split reduces the number of shares.
Company President and CEO, Haviland Wright, Ph.D., said, “Since March, we have been executing a new business plan designed to build a company that we believe is an excellent investment, with the potential for extraordinary growth. We are taking this action so that investor evaluation of The X-Change Corporation will be accurately reflected in our stock price. We expect this to enable us to raise the capital needed to execute our business plan.”
The X-Change Corporation is a publicly traded shopping, auction, and social networking venture serving the diverse and growing Hispanic markets of the Americas through the provision of services tailored to our customers’ cultural expectations and preferences. The Company intends to seek out or build complementary products that help it achieve its goals for growth and profitability.