Commentary

August 4, 2009 (FinancialWire) (By Philip Holmes) — Stocks ended sharply higher on Monday following pleasant economic news from various sources, including a man who was once called Chicken Little for predicting recession as far back as 2006. Bank of America (NYSE: BAC) had to pay up over SEC charges of telling tall tales regarding its acquisition of Merrill Lynch. Will everyone love the banks again once the recession is over?

The Dow Jones industrial average ended the trading day at 9,286.56, up 114.95 points, while the Standard & Poor’s 500-stock index gained 15.15 points to finish at 1,002.63. The Nasdaq composite index gained 30.11 points to end at 2,008.61.

Nouriel Roubini, a man once ridiculed for daring to suggest that the 2001-2006 real estate boom was going bust, and would drag the economy down with it, has seen the green shoots. The NYU economist joins former Fed chair Alan Greenspan in suggesting that the recession might now be easing.

Two U.S. economic reports released Monday support this wave of optimism. The ISM Manufacturing index for July hit 48.9. That’s closer to the Fabulous 50 that would signal recovery, and well up from 44.8 in June. Also, June Construction Spending was up 0.3%.

The U.S. Securities and Exchange Commission made Bank of America pay $33 million over charges that the company made false and misleading statements to investors regarding bonuses during its acquisition of Merrill Lynch. The bonuses were paid even as the companies lost billions.

In an editorial, the New York Times sees a bigger issue at stake as both BofA and Citi prepare to ask Uncle Sam’s permission to pay a round of bonuses to their top executives. According to the Times, “Saved by taxpayers from the brink of collapse, Citi and Bank of America are still dependent on the public purse to survive. The federal pay czar, Kenneth Feinberg, would be right to reject requests for big bonuses at banks feeding from the public trough.”

There’s also the bigger issue of “how executive pay will be structured at the nation’s banks in the future.”

Indeed, but where’s the outrage? Last fall it seemed that the average person was mad as hell and not taking it anymore with regard to bankers and their porky pay. We didn’t see riots in the streets but at least the Times was fielding a few thousand angry letters a day.

Now, it seems, a moment has passed. What will happen if our new dream economic couple, Nouriel and Alan, prove correct and the economy comes back from the brink? Rest easy, BofA, Citi, Goldman and the rest of you miscreants.

The FirstAlert(tm) Economics Calendar lists Personal Income & Consumer Spending for June (8:30 a.m.), Weekly Chain Store Sales (8:55 a.m.), Pending Home Sales for June (10 a.m.).

The FirstAlert(tm) Events Calendar showcases CATY, SSBI, PFBC, EWBC at B. Riley & Company California Bank Conference; NATI Annual Investor Conference; SY, MV, ACIW at Global Concepts Cash Management Forum.

FirstAlert(tm) Website of the Day: http://www.satchmo.net/

Quote of the Day: “All music is folk music. I ain’t never heard no horse sing a song.” Louis Armstrong

Today is: Chocolate Chip Day, Coast Guard Day

Happy Birthday: Percy Bysshe Shelley, Louis Armstrong, Billy Bob Thornton, Roger Clemens, Jeff Gordon,

Today in History: Date traditionally ascribed to Dom Perignon’s invention of Champagne in 1693. New York Weekly Journal writer John Peter Zenger was acquitted in 1735 of seditious libel against the royal governor of New York, on the basis that what he published was true. Wolfgang Amadeus Mozart married Constanze Weber in 1782. The U.S. Coast Guard was established in 1790. The family of Lizzie Borden was found in 1892 murdered in their Fall River, Massachusetts home. Greenwich foot tunnel under the River Thames opened 1902. New York Yankee outfielder Dave Winfield accidentally killed a seagull during warmups in the outfield prior to a baseball game in Toronto in 1983 at Exhibition Stadium and was charged by local police for his “act of cruelty to animals.” His manager Billy Martin quipped, “It’s the first time he’s hit the cutoff man.” In 1985, Tom Seaver of the Chicago White Sox became the 17th pitcher to win 300 career games, and Rod Carew of the California Angels became the 16th player ever to collect 3000 career hits.

[FirstAlert(tm) was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information. The opinions expressed in FirstAlert(tm) do not necessarily reflect the opinions of Investrend.]

FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation for its news, opinions or distributions. Further disclosure is at the FinancialWire(tm) web site (http://www.financialwire.net/disclosures.php). Contact FinancialWire(tm) directly via inquiries@financialwire.net.

Free annual reports for companies mentioned in the news are available through the Free Annual Reports Service (http://investrend.ar.wilink.com/?level=279).

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.