Cyprus conceded on Saturday bailout goes down to wire

. .. . . By K Tagaris and M Kambas - Cyprus conceded on Saturday to a one-off levy on deposits over 100,000 euros in a dramatic U-turn as it raced to satisfy European partners and seal an 11th-hour bailout deal to avert financial collapse. The island's finance minister, Michael Sarris, reported "significant progress" in talks with international lenders, with the clock running down to end-Monday deadline for Cyprus to clinch a bailout deal with the EU or lose emergency funding for its stricken banks and risk tumbling out of the euro zone. His counterparts in Europe's 17-nation currency union scheduled talks in Brussels for Sunday evening to see if the numbers add up, and the EU's Economic Affairs Commissioner Olli Rehn said progress was being made towards a solution. As Cypriot party leaders met, a senior Cypriot official told Reuters that Nicosia had agreed with EU/IMF lenders on a 20 percent levy over and above 100,000 euros at No. 1 lender Bank of Cyprus, and four percent on deposits over the same level at others. Troika officials could not immediately be reached for comment. Cypriot President Nicos Anastasiades tweeted: "We are undertaking great efforts. I hope we have a solution soon." The conservative leader, barely a month in the job and wrestling with Cyprus's worst crisis since a 1974 invasion by Turkish forces split the island in two, was due to lead a delegation to Brussels, also on Sunday, to meet heads of the EU, the European Central Bank and International Monetary Fund, in a sign a deal might be near. "Hopefully by tomorrow in Brussels we will have the agreement of our partners," Averof Neophytou, deputy leader of the ruling Democratic Rally party, told reporters. Government officials held talks through the day at the finance ministry with Cyprus's 'troika' of lenders - the EU, ECB and IMF. Angry demonstrators outside chanted "resign, resign!" Its outsized banking sector crippled by exposure to crisis-hit Greece, Cyprus needs to raise 5.8 billion euros in exchange for a 10 billion euro EU lifeline to keep the country's economy afloat. But in a stunning vote on Tuesday, Cyprus's 56-seat parliament rejected a levy on depositors, big and small, as "bank robbery", and Sarris spent three fruitless days in Moscow trying to win help from Russia, whose citizens have billions of euros at stake in Cypriot banks. Rebuffed by the Kremlin, Sarris said on Saturday talks with the troika were centered on a possibly levy of around 25 percent on savings over and above 100,000 euros at failing Bank of Cyprus. In a sign of how fluid the situation remains, however, a senior ruling party lawmaker said other options were on the table, including a "voluntary haircut" in exchange for equity that would not require parliamentary approval. The EU's Rehn said the bloc recognized the progress made by the Cypriot government, and warned of tough times ahead. "Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solutions available," he said in a statement. "Today, there are only hard choices left." It was far from certain that a majority of lawmakers would back a revised levy, or whether the government might bypass the assembly. Ordinary Cypriots were outraged by the original proposal, and have been besieging cash machines ever since bank doors were closed last weekend on the orders of the government to avert a massive flight of capital. RESISTANCE Racing to placate its European partners, Cypriot lawmakers voted in late-night session on Friday to nationalize state pensions and split failing lenders into good and bad banks - a measure likely to be applied to No.2 lender Cyprus Popular Bank, also known as Laiki. They also gave the government powers to impose capital controls, anticipating a run on banks when they reopen on Tuesday. A plan to nationalize semi-state pension funds has met with resistance, particularly from Germany which made clear that tapping pensions could be even more painful for ordinary Cypriots than a deposit levy. The senior official who told Reuters of the levy agreement said the pension funds would not be part of the package to seal the bailout. The bank restructuring has also angered Cypriots. On Saturday, around 1,500 bank workers marched on the presidency, holding banners that read, "No to the bankruptcy of Cyprus" and "Hands of workers' welfare funds". OFFSHORE HAVEN The pace of the unfolding drama has stunned Cypriots, who in February elected Anastasiades on a mandate to secure a bailout and save banks whose capital was wiped out by investments in Greece, the epicenter of the euro zone debt crisis. Then news of the levy on bank deposits broke, an unprecedented step in Europe's handling of a debt crisis that has spread from Greece, to Ireland, Portugal, Spain and Italy. Cypriots leaders had initially tried to spread the pain between big holdings and smaller depositors, fearing the damage it would inflict on the country as an offshore financial haven for wealthy foreigners, many of them Russians and Britons. The tottering banks hold 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros - enormous sums for an island of 1.1 million people which could never sustain such a big financial system on its own. But panicked by the visceral reaction of ordinary Cypriots, support from lawmakers fell away and they rejected the levy as "bank robbery". Asked about the new plan for a possible 25 percent levy, Finnish Prime Minister Jyrki Katainen, whose country is allied with Germany in taking a hard line on Europe's debt-laden southern flank, replied in English: "If it was like this, I think it might be quite suitable because it means that the highest deposits will be taxed." Cyprus fears this will drive wealthy depositors away, but the likes of Germany and France say Cyprus's offshore-haven business model was never sustainable. "Cypriot banks have for years been taking the kinds of risks that are not allowed in France," Bank of France governor Christian Noyer told the French newspaper Le Journal Du Dimanche.

Cyprus Rescue euro zone bailout Risks

It is, of course, true that imposing principal losses on Cyprus bank depositors in itself shouldn't cause the sort of economic disruption that would justify hundreds of billions on global market value shifting at once. Which is why Monday's selloff in risk assets is best viewed here as a handy excuse - rather than highly targeted cause - for an overstretched stock market carried toward unseen heights to pull back hard and undergo a reality check on its gentle and previously unflappable first-quarter rally. Here are a few reasons markets are registering significant concern - aside from the obvious threat that the pain imposed on Cypriot banks' depositors could (though my no means is certain to) invite a flare-up of European debt contagion concerns for a fourth summer running.With the money due to have been withdrawn electronically from bank accounts over the weekend, politicians in Nicosia were discussing how they might adjust the levy to make it appear fairer. Monday is a public holiday on the island, when banks are closed, but European officials said contingency plans were being put in place to calm any turmoil in the country's financial system when the banks eventually reopened. Cyprus needs some 17 billion euros in a loan programme from the euro zone to recapitalise its banks, which were hit by the Greek sovereign debt restructuring, and finance government spending over the next three years. Because such a bailout would almost equal the country's gross domestic product, euro zone officials are examining various ideas for how to make the island's debt sustainable. Some proposals have been strongly opposed by the European Central Bank, the European Commission and some euro zone countries, such as imposing losses on depositors in Cypriot banks or restructuring Cypriot sovereign debt. Since the global financial crisis began in 2008, few European bank depositors have taken losses. Denmark forced some large depositors to do so in 2011, when two midsize lenders collapsed. Iceland also decided not to repay foreign depositors when it suffered a bank crisis in 2008—although the British and Dutch governments stepped in to make sure savers didn't incur losses. In 1992, Italy imposed a small tax on its depositors. European Pressphoto Agency A woman found this Bank of Cyprus ATM was out of order Sunday This year's market pattern is uncomfortably familiar. As noted here lately (See: Will Stocks Third Time Around Be a Charm or Hex? and "The 'Relentless Rally' of 2013 Tracks a Familiar Path) the U.S. stock market action to start the year has been a tight match for last year's first act and the run in early 2011. In each year, the Standard & Poor's 500 index levitated out of the gate, logging what might be considered a good year's worth of gains by the turn of spring, with volatility collapsing, economic confidence welling up and investors massing on the bullish side of the boat."The very nature of banking has been shaken to its roots." The parliamentary vote, which could be delayed till Tuesday afternoon, according to Reuters news agency, won't be successful, Gartman said. He foresees that by the time of the vote there could be so much organized opposition to the law that it may not become fact. Softer economic data, new signs of an unsettled Europe and U.S. budget standoffs led to deep pullbacks from 9% to 19% into summer each year.

Will Spain to Seek Bailout for Banks

Economy Minister Luis de Guindos said Saturday the aid will go to the banking sector only and so would not come with new austerity conditions attached for the economy in general.The money will be funneled through an existing bailout fund called the FROB.Spain will ask for a bank bailout from Europe, becoming the fourth and largest country to seek help since the single currency bloc's debt crisis erupted.
De Guindos said that with markets in turmoil, the government's efforts so far to shore up the financial sector -- through new provisioning requirements -- "Must be completed with the necessary resources to finance the needs of recapitalization."
"Therefore, the Spanish government states its intention to request European financing for the recapitalization of banks that need it," the minister told a press conference after a videoconference with colleagues from the 17-member eurozone.
A statement issued after that meeting said up to 100 billion euros would be made available to Spain.
The Spanish acceptance of aid for its banks is a big embarrassment for Prime Minister Mariano Rajoy, who said just 10 days ago firmly that the banking sector would not need a bailout.

Jim Cramer"s buy list :Banks And Buy These 5 Technology Stocks ?

There
are few reasons to place long positions, as US stocks dropped 4.7% for the week ending November 25. The performance capped the worst Thanksgiving-week performance seen since 1932.
Jim Cramer, host of CNBC’s Mad Money made fewer “buy” calls between November 18 and 23. Of the 42 stocks mentioned, 27 were rated “buy” (64.3% of the calls) and 15 (or 35.7%) were rated “sell.”
Cramer was bearish on banks but bullish on technology. The financial sector still constitutes the second-highest in daily trading volume as illustrated by trading on November 23rd. Technology is the next heaviest by net share volume:

Sector	Share Volume
Conglomerates	889,897,513
Financial	821,013,349
Technology	778,933,666
Basic Materials	387,038,775
Services	355,314,236
Healthcare	138,711,644
Industrial Goods	117,519,652
Consumer Goods	116,295,114
Utilities	24,313,135
Grand Total	3,629,037,084

During his lightning round, Cramer said quite simply that "the banks just can't be trusted”.
1) JPMorgan Chase (JPM)
US banks are scheduled to go through another round of stress tests that includes the scenario for a European collapse. Cramer was least worried with JP Morgan Chase (JPM) in the sector, but advised investors to avoid the banking sector until the tests are completed.
JPMorgan Chase has a P/E of 6.07 and trades with a PEG of just 0.70 when it last traded at $28.48. The bank has a debt/equity of somewhere between 3 and 4. Between the two, JPMorgan and Goldman Sachs (GS) sold protection on more than $5 trillion of debt around the world (according to Bloomberg). JPMorgan’s “funded” exposure was below $1.5B.
Moving to the technology sector, Cramer was bullish on 5 out of 6 stocks:

Company	Symbol	Call	Date
Oracle Corporation	(ORCL)	Buy	11/18/2011
QUALCOMM Inc.	(QCOM)	Buy	11/22/2011
Baidu, Inc.	(BIDU)	Buy	11/22/2011
CA Inc.	(CA)	Sell	11/18/2011
Novellus Systems, Inc.	(NVLS)	Buy	11/21/2011

2) Oracle Corp (ORCL) – Cramer says “Buy”
With growth highest in segments that helps lower costs, Oracle pales in comparison to virtualization software companies. VMWare (VMW) and Citrix (CTXS) are still riding with a high P/E. Trading with a P/E of 16.33, Oracle is down 20.95% from a 52-week high. It closed recently at $28.74.
Oracle is expected to grow revenues by 8% in fiscal 2012, compared with 33% in the previous year.
Insider selling was elevated in October due to activities by Kurian Thomas (EVP of Product Development). Thomas sold $48.4M worth of shares at a price of $33.15.
3) Qualcomm Inc. (QCOM) - Cramer says “Buy”
Qualcomm shares dropped $4 to close at $51.86 at a P/E of 19.14. Analyst targets range from $63 to $70. Cramer considered Qualcomm a buy in the context of the markets still being controlled negatively by Europe.
Qualcomm remains an aggressive play in the ongoing growth of the Apple (AAPL) iPhone 4S, RIM Blackberry (RIMM), and to a smaller degree, Nokia’s (NOK) Windows mobile phone. The “risk-off” is creating price downside on Qualcomm shares, but growth in cellular is in a long-term upward trend. Tablet and notebook growth provide additional long-term upside for investors looking for a play in these trends.
4) Baidu, Inc. (BIDU) – Cramer says “Buy”
Baidu shares backed off from $140 and now trade at a P/E of 46.30. The stock closed recently at $119.91, with no signs that heavy selling in recent trading sessions is about to end.
Baidu came up as the only Chinese stock that should be considered a “buy.”
Accounting scandals plagued many Chinese-listed stocks this year, but Baidu’s business model ensures the search engine will be dominant in China for the long term.
5) CA Inc. (CA) – Cramer says “Sell”
Backing down from a $22 level, CA closed on November 25 at $19.80. Cramer cited a lack of momentum as a reason to avoid CA. He suggested Oracle instead. CA shares are hovering 6.68% above a yearly low, down 22.22% from its 52-week high at current prices.
In its most recent earnings report, the company beat EPS expectations by $0.02. Revenues were in-line with estimates. Even though the fiscal year 2012 was also in-line, revenue was below consensus.
6) Novellus Systems, Inc. (NVLS) – Cramer says “Buy”
Similar to other semiconductor stocks that rallied from a bottom at the beginning of October, Novellus shares closed at $31.57. The P/E is 9.12. Traders failed to trade beyond the $36 level.
Novellus will be providing a mid-quarter update for its fourth quarter on Monday, December 5, 2011. Cramer’s “buy” call on Novellus is consistent with the one made at the start of November. At that time, Cramer liked the aggressive share buyback the company was making.
With semiconductor stocks signaling a global slowdown, investors should not make heavy bets in this space.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours

USA Rating downgrade: Did S&P get it right ? America's Debt Crisis

America's Debt Crisis

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Rating downgrade: Did S&P get it right?

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By Jeanne Sahadi @CNNMoney August 7, 2011: 4:29 PM ET

NEW YORK (CNNMoney) -- A credit rating is an informed opinion. Nothing more. Nothing less.
That helps explain why one major credit rating agency -- Standard & Poor's -- has downgraded the United States, while another -- Moody's -- has chosen to affirm its credit rating with caveats.

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Both agencies had the same essential set of facts about U.S. debt: There's a lot of it now. There's a lot more of it to come. And there's very little in the way of actual policy today that looks likely to seriously change that outlook.
Where the agencies differ, however, is in their degree of skepticism that Congress will follow through on meaningful debt reduction. (Read: Your money in a AA-rated world)
S&P is pessimistic. It points to the reckless debt ceiling debate, which artificially tied the longer term need to reduce the debt with the immediate need to raise the borrowing limit to ensure the United States makes good on all its bills.
"The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed." S&P said Friday in downgrading the United States to AA+ from AAA.

S&P rating downgrade: FAQ

In some ways, it's easy to see why S&P is so pessimistic. Throughout the struggle to raise the debt ceiling, some lawmakers repeatedly suggested it would be better to risk default and not raise the ceiling until Congress passed a spending-cuts-only plan to reduce debt. (Read: Who is in the AAA club?)
"We clearly pose more of a risk to investors than we did previously. We're the only developed nation in the world that talks openly about default," said Donald Marron, a former acting director of the Congressional Budget Office.
The deal that lawmakers eventually struck did remove the risk that the United States would default by raising the debt ceiling. It also called for at least $2.1 trillion in debt reduction over a decade. More than half of those cuts will be determined by a new joint committee in Congress. If the committee process fails, automatic cuts of $1.2 trillion would be triggered.

0:00 / 2:50 S&P: Why we downgraded the U.S.

Critics of the new Budget Control Act note that $2.1 trillion in cuts won't significantly slow the growth in U.S. debt. And it doesn't explicitly tackle the drivers of the country's long-term solvency problem -- the ultimately unaffordable entitlement programs and a tax code that doesn't generate enough revenue to match the country's

Stock news you need to know before the opening bell

•Asian markets were mixed in overnight trading, with the Hang Seng down 0.35%. Major European are mixed, and US stocks are heading slightly lower. This is a big reversal from sharp gains Sunday night.


•Ireland formally requested a bailout this weekend, which is rumored to be worth €90 billion. The UK, which is not in the eurozone, will offer an additional €7 billion in support to Ireland as part of the deal. Here's why the bailout might not be enough >

•Rumors this morning say the Green Party, part of the Irish government, may withdrawal its support putting the bailout in jeopardy. Irish markets have responded by dropping. For background, here's how Ireland got into this mess >

•The euro initially moved higher on the news of the Irish bailout, but the gains have all but melted way. Pressure still remains high on the currency as fears of contagion to Portugal or Spain persist. Here's Niall Ferguson's complete guide to sovereign debt crises >

•Portugal has put out a statement this morning in a bid to combat speculation against its debt. The statement, from the country's socialist government, details the "well capitalized" status of the Portugal's banking sector. Here are the country's most likely to default >

•The U.S. is asking for Chinese help to curb the nuclear aims of North Korea. North Korea says it has built a nuclear facility with thousands of centrifuges able to turn uranium into nuclear weapons material. Check out the threats the U.S. Air Force is really worried about >

•Hana Financial Group has beat out ANZ Bank to a deal for 51% of Korea Exchange Bank. The deal is worth and estimated $4.1 billion.

•The top banks in the U.S. will need to raise as much as $150 billion to meet new Basel III requirements. 90% of all shortfalls in the U.S. banking sector are to be found in the country's top 6 banks, according to a Barclays report.

•Top wind turbine maker Vestas has reduced its outlook for 2011, saying profits will not grow. This is being blamed on weakening demand from Europe's public sector.

•The Obama administration has defended the TSA's controversial airport screening procedures as required due to the threat. Some passengers are considering protesting the screening procedures on Wednesday. Here's what those full body scans look like >

Banks move stock higher today ............................

 new global banking rules and robust Chinese economic data helped shore up sentiment in the markets Monday, with stocks up strongly and the euro climbing a cent against the dollar.



The FTSE 100 in London was up 59 points, or 1.1 percent, while the DAX in Frankfurt rose 56.31 points, or 0.9 percent. The CAC 40 in Paris was 40.86 points, or 1.1 percent, higher.



Futures indexes indicated a higher opening on Wall Street. American stocks have rallied since the first of the month, pausing only once because of worries about European banks. Otherwise, traders have been encouraged by economic reports that have topped modest expectations. Recent data has relieved worries that the economy might slip back into recession, though it still indicates growth will be slow.



The Dow is up 4.5 percent in September, typically one of the weakest months.



Treasury prices fell as investors moved back into stocks. The yield on the 10-year Treasury note rose to 2.83 percent from 2.79 percent late Friday.



Europe’s positive start to the week has come after central bankers agreed on rules to require banks to hold more capital as a buffer against future difficulties and Chinese figures showing that growth in industrial production accelerated to 13.9 percent year-on-year in August from July’s 13.4 percent increase.



The main relief in the markets over the conclusion of the so-called Basel III negotiations Sunday is that the proposals for new bank rules appear to be less onerous than many in the markets had been predicting.



“There was some slight trepidation on Friday ahead of the weekend’s meeting regarding capital requirements for banks, but while new levels are more than double, the timetable for putting them in seems fairly relaxed,” said Ben Critchley, a sales trader at IG Index.



The recommendations, which must be ratified by the Group of 20 leading industrial and developing nations in November, will require banks to hold as much as 7 percent of their capital in reserve. One reason the world suffered its deepest recession since World War II was that the banks were badly undercapitalized when the financial crisis broke around three years ago.



Though the new ratio is higher than the 2 percent banks held in the run-up to the financial crisis, they will have up until 2018 to put the rules fully in place.



The president of the European Central Bank, Jean-Claude Trichet, said the deal was ”a fundamental strengthening of global capital standards,” while American regulators described it as a ”significant step forward” in preventing a repeat of the banking crisis that led to many banks collapsing or needing emergency funds from governments to shore up their capital position.



Analysts said the agreement had helped underpin investor confidence at the start of a busy economic news week, particularly in the United States.



There will be some interest in Tuesday’s release of retail sales in the United States for August as investors get a chance to see if the growing talk of a double-dip recession during the month reined in consumption.



Retail sales are particularly important because consumer spending accounts for around 70 percent of the American economy.



The improvement in sentiment was visible in the currency markets, where the euro was 0.8 percent higher on the day, at $1.2810 .



Earlier in Asia, Japan’s Nikkei 225 stock average rose 82.65 points, or 0.9 percent, to 9,321.82 as the dollar remained above 84 yen. Last week, the dollar fell to a fresh 15-year low of 83.35 yen, which further fueled concerns among Japan’s high-value exporters that they would be priced out of the international marketplace.



Hong Kong’s Hang Seng index added 2 percent and China’s Shanghai Composite Index gained 0.9 percent.

China Yuan Down Big , After Hitting Modern-Era Intraday

China's yuan fell sharply against the U.S. dollar late Monday afternoon after the Chinese currency hit a modern-era high earlier in the session, amid the dollar's rebound in offshore markets and signs of intervention from the Chinese central bank.




On the over-the-counter market, the dollar was at CNY6.7758 around 0930 GMT, up from CNY6.7711 Friday, which was the yuan's highest settlement level against the dollar since the 1980s, before the currency was allowed to be regularly traded as part of China's market-oriented reforms.



The yuan had a strong start Monday and in mid-afternoon trade hit CNY6.7676 against the dollar, the Chinese currency's highest intraday level in the modern era.



However, a wave of selling in the last trading hour dragged the yuan down to an intraday low of CNY6.7766 to the dollar, amid signs of strong dollar buying by the People's Bank of China via the automatic price-matching system.



"I think the central bank is sending a signal that it doesn't want the yuan to appreciate further in the near term," said a Shanghai-based foreign bank trader.



The price-matching system is a little-used anonymous trading platform that dealers believe the PBOC uses on occasion to signal its intentions to the market, while not officially showing its hand.



"The central bank has expressed its intention through today's higher dollar-yuan central parity but the market continued to buy the yuan earlier today as we wanted to know how much the central bank would let the yuan rise," the trader said.



The PBOC set the session's dollar-yuan central parity rate moderately higher at 6.7733 from Friday's record low of 6.7720, even though the dollar continued to weaken against the euro Friday.



"The higher central parity rate today may be signaling the central bank doesn't want the yuan to rise too quickly given the gains last week," said a Shanghai-based trader at a local bank.



The yuan has appreciated 0.74% against the dollar since the central bank announced on June 19 a decision to drop its nearly two-year-old currency peg to the dollar and promised to make the yuan exchange rate more flexible.



The dollar's slight rebound against the euro and yen also capped further gains in the yuan, traders said.



The euro was at $1.2530 at 1022 GMT, down from $1.2543 in late New York trade Friday.



Traders said room for any future yuan appreciation may not be large, as shown by lackluster trading in the offshore dollar-yuan nondeliverable forwards market of late. Mad Money w/ Jim Cramer T-Shirt



"The offshore NDF market shows foreign investors don't believe there's room for large yuan appreciation in the near term," said another Shanghai-based trader at a local bank.

Top Bank stock to buy : The First Bancorp, Inc. ( FNLC )

The First Bancorp, Inc. 

(Public, NASDAQ:FNLC) 15.44 / Target price 21.75

The First Bancorp, Inc., formerly First National Lincoln Corporation, serves as the parent holding company of The First National Bank of Damariscotta. The Bank emphasizes personal service, and customers are primarily small businesses and individuals for whom the Bank offers a variety of services, including deposit accounts, consumer and commercial and mortgage loans. In addition to providing traditional banking services, the Company provides investment management and private banking services through First Advisors, which is an operating division of the Bank. First Advisors is able to offer an array of private banking, financial planning, investment management and trust services to individuals, businesses, non-profit organizations and municipalities of varying asset size. The Board of Directors of The First Bancorp (NASDAQ: FNLC), today declared a quarterly dividend of 19.5 cents per share. This first-quarter dividend, which is payable April 30, 2010, to shareholders of record as of April 5, 2010, is equal to the 19.5 cents per share declared in the previous six quarters.

“Given the current economic conditions, I am pleased that we are able to maintain our dividend at its current level”

“Given the current economic conditions, I am pleased that we are able to maintain our dividend at its current level,” stated Daniel R. Daigneault, the Company’s President & Chief Executive Officer. “We also feel that the yield of our dividend is very attractive given the current low level of interest rates. The quarterly dividend of 19.5 cents per share translates into an annual dividend of 78.0 cents per share, and based on Tuesday’s closing price of $14.95 per share, this results in a current dividend yield of 5.22% annually.”
The First Bancorp, headquartered in Damariscotta, Maine, is the holding company for The First, N.A. Founded in 1864, The First is an independent community bank serving Mid-Coast and Down East Maine with 14 offices in Lincoln, Knox, Hancock and Washington Counties. The Bank provides a full range of consumer and commercial banking products and services. First Advisors, a division of The First, provides investment advisory, private banking and trust services from two offices in Lincoln and Hancock Counties.
Forward-looking and cautionary statements: except for the historical information and discussions contained herein, statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.The dividend yield on this conservatively run bank is 4.9+. It has averaged 3ish over the last ten years. It is located in an area of Maine that is attracting wealthy retirees and has an excellent management team. The stock is thinly traded. This is not for flippers. Priced for value, this one is selling for less than 2 times book. Divident rate at the current price per share is nearly 5%. ROE is nearly 12%.good increasing dividend plus stock repurchase plan.

I definitely like this one for the next couple of years.Remember i also like C,BAC,JPM for the long term play ........

Dow Jones Pops Higher to 497.56 points / 6.84% higher !

Wall Street is getting the good news it wants on the economy’s biggest problems: banks and housing.
Investors reignited a two-week rally Monday, cheering the government’s plan to help banks remove bad assets from their books as well as a report showing a surprising increase in home sales. Major stock indicators jumped more than 6 percent including the Dow Jones industrial average, which surged nearly 500 points .
The Treasury Department’s bad asset cleanup program would tap money from the government’s $700 billion financial rescue fund and also involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.Treasury Secretary Timothy Geithner had announced an outline of the program last month but provided few details then about how it would work, leading to a poor reception in the markets.
The housing report released Monday was overwhelmingly positive for the markets even though it showed a decline in home prices in February. Investors are embracing any sign that a glut in homes for sale may be easing.
The market had received another dose of good news last week on the troubled industry as housing starts for February came in much better than expected.
Collapsing home prices and the damage they have caused banks are at the center of the economy’s current problems and are a major focus for the stock market. Banks have sharply curbed lending after becoming weighed down with loans that have gone bad, especially mortgages.
Investors had been largely disappointed in the government’s efforts to date to restore the banks to health, but finally seemed encouraged by the long-awaited announcement Monday of details for the government’s bad loan cleanup plan.
“The actions that we’re getting from a policy standpoint are very helpful in removing the sand from the gears,” said Alan Gayle, senior investment strategist at RidgeWorth Investments. “That is going to be good for the financials.”
The plan seeks to draw in private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.
Shares of the country’s largest banks, which have been beaten down in recent weeks over concerns about their ability to weather the crisis, soared on Monday. Citigroup Inc. jumped 15 percent, and Bank of America Corp. added 18 percent.
Even banks regarded as more sound posted big advances. JPMorgan Chase & Co. rose 15 percent, while Wells Fargo & Co. rose 16 percent.
According to preliminary calculations, the Dow rose 497.56 points or 6.84 percent, to 7,775.94.
Broader stock indicators also surged. The Standard & Poor’s 500 index rose 54.61, or 7.11 percent, to 823.15. The Nasdaq composite index rose 98.50, or 6.76 percent, to 1,555.77.

msnbc.com

Will Monday be the day to Revive U.S. Banks and the stock market ?

The Obama administration put the finishing touches on a plan to remove troubled assets from banks’ balance sheets that will be unveiled early next week.

Treasury Secretary Timothy Geithner intends to expand the Federal Reserve’s new $1 trillion Term Asset-Backed Securities Loan Facility to buy frozen assets, according to people familiar with the proposal. The revamped Fed program will sit alongside the Treasury’s planned public-private investment funds, while the Federal Deposit Insurance Corp.’s role will probably involve buying distressed loans, the people said.

“We’re going to move quickly to lay out a new financing program to deal with these legacy assets,” Geithner said in an interview with Bloomberg television at a meeting of Group of 20 finance ministers in Horsham, England, last weekend. “We have and expect to see a lot of support for this program.”

Geithner’s next step to cleanse banks’ balance sheets so they can start lending again will be crucial after the lack of detail in a rescue he outlined last month caused a sell-off in financial stocks. The initiative’s success will depend on the participation of financial institutions, some of whose leaders yesterday criticized congressional proposals to tax Wall Street bonuses.

Private investment managers would run the Treasury funds that purchase the toxic securities. The rollout of details on the toxic-asset plan slipped into next week as the Treasury Department grapples with the outcry over bonuses awarded by insurer American International Group Inc. AIG has received more than $170 billion in government aid.

Revamping TALF

As it’s currently set up, the Fed’s TALF program may lend as much as $1 trillion to investors from hedge funds and pension funds to insurance companies to buy recently created securities backed by loans for car purchases, college education and real estate.

Broadening the TALF to include older, illiquid and lower- rated securities could allow the participants in the public- private investment funds to potentially repackage assets and sell them on to a wider group.

The Fed’s policy-making committee, which met this week in Washington, said in its March 18 statement that the range of eligible collateral for the TALF “is likely to be expanded to include other financial assets.” The Federal Open Market Committee also pledged $1.15 trillion of extra measures to lower borrowing costs, including purchases of long-term Treasuries.

The TALF is supported with money from the $700 billion bank-rescue fund passed by Congress in October. The Bush administration originally set aside $20 billion to seed $200 billion in loans; Geithner has proposed raising the government contribution to $100 billion. The facility could need additional money to address so-called legacy assets.

FDIC’s Role

The FDIC’s role will likely also expand to help finance the administration’s initiative, and may run an aggregator-type unit that would purchase whole loans -- those not packaged into other securities -- three people said. FDIC officials have extensive experience dealing with nonperforming loans from their role in taking over failed banks. Under one scenario discussed, the FDIC would attach a government guarantee to the assets and then sell them to investors.

Treasury spokesman Isaac Baker declined to comment. Details of the plan could still change. “The markets are just getting increasingly nervous, the longer they wait to announce the plan,” said Stephen Myrow, a former Treasury official in the Bush administration who helped create the TALF.

Recession Impact

American banks have suffered more than $800 billion in writedowns and credit losses since the market for subprime mortgages collapsed in 2007. The credit crisis that followed pushed the economy into the deepest recession since 1982. A surge in unemployment and collapse in house prices has added to bad loans and further discouraged banks from lending.

The crisis pushed the U.S. government into pouring billions of dollars into financial institutions, including Citigroup Inc., Bank of America Corp. and AIG.

President Barack Obama has ordered Geithner to “pursue every legal avenue” to recoup money distributed to employees in an AIG unit that sold credit-default swaps and whose bad bets helped touch off the financial crisis.

Bank of America Chief Executive Officer Kenneth Lewis called a proposed tax on bonuses “unfair” in a memo to employees yesterday, while Citigroup CEO Vikram Pandit said his bank is “working in every appropriate way with policymakers.” JPMorgan Chase & Co. CEO Jamie Dimon held a conference call with about 200 executives, saying the firm is concerned about retention and is working with lawmakers.

Outcry in Congress

The banks are responding to an outcry in Congress over $165 million in bonuses paid by AIG after the insurer received $173 billion in federal bailout funds. The Senate will vote next week on levies on bonuses after the House of Representatives approved a 90 percent tax on bonuses at companies that received bailout funds.

“People are very anxious about this getting too widespread, this notion that no one on Wall Street or in banking deserves any money,” said Seamus McMahon, a consultant with Booz & Co. in New York, who works with financial firms.

The Treasury secretary disappointed markets and lawmakers when he didn’t provide many specifics about the distressed asset clean-up in his Feb. 10 unveiling of the administration’s approach.

Stock Rebound

The Standard & Poor’s 500 Financials Index slumped 11 percent that day. It has since advanced about 12 percent after statements from banks including Citigroup and Bank of America that earnings accelerated since the start of the year.

Still, the index has retreated the past two days as legislators worked to increase restrictions on executive pay. The Fed said earlier this month that existing pay limits wouldn’t apply under the TALF program.

Opening the TALF to legacy assets “is the most effective and efficient way to purge troubled assets from the financial system,” Myrow said. To guard against losses the Fed would take so-called haircuts, or discounts on the loans, for the collateral it accepts.

It’s not clear when Obama will need to ask Congress for more money to continue to fund the bank-rescue program. Most of the $700 billion has already been allocated to existing programs.

“We’re talking about big numbers here,” said Kevin Petrasic, a former official at the Office of Thrift Supervision, who is now a lawyer at the Paul, Hastings, Janofsky & Walker law firm in Washington. Congress is still “smarting” from having to dole out for saving Wall Street, he said.
bloomberg.com

Mad Money, Jim Cramer on $700b Bailout / Invest in America ?

Unprecedented capacity to produce
+Declining Profit rates
+increased investment in the stock market (paper money)
+expanding credit balloon
+this is the natural progression of Capitalism
= priceless

Should u Buy Bank Stocks ?

AFTER A RECORD-SETTING RALLY LAST Wednesday, the brutal selloff in financial stocks -- the worst for any major industry group since the technology bubble burst in 2000 -- could be over.

Many financial companies face additional loan losses and credit-related write-downs in the coming quarters, particularly if the economy stays weak into 2009. Yet a slew of earnings reports last week from marquee banks like Wells Fargo and JPMorgan Chase suggests that most financial companies have sufficient earning power to offset a rising tide of bad loans and should be able to absorb further write-downs without having to seek significant amounts of additional capital.

Financial stocks in the Standard & Poor's 500 index are down 29% this year and off 43% in the past 12 months, even after a record-setting 13% gain Wednesday and a 6% rise Thursday. The group was up slightly Friday. Financials are the worst-performing group this year in the S&P, which is off 14%. And they've risen just 10% since the most recent bull market began in October 2002, against a 62% advance by the index. Financials are down to 14% of the S&P 500 from a high of 23% in late 2006 as more than $1 trillion of market value has vaporized, in part because of huge declines in such former mega-stocks as Citigroup (ticker: C) and American International Group (AIG).

I would buy companies like BAC,Citigroup ( C ) , American Express & Wells Fargo w/ caution , Buy the stocks in stages like 25% of your holdings now , and if the stock dips down another 10 % - 20 % put your next 50 % into the stock ! this is a long term hold not a short term Play , so if u have the stomach for a bumpy ride u can make some good money in the long term !!