The Markets March 24, 2009

Stock Market Close to Bottom, Panelist Says

Infrastructure is poised for growth as an investment opportunity, according to a panel hosted by Dow Jones Indexes.
Reported by

Craig Noble, portfolio manager at Brookfield Redding, said during the panel that the federal stimulus package focuses on infrastructure, which will translate into growth for partners and operators of infrastructure assets.

Much of the $50 billion allocated in the stimulus plan to infrastructure is set to go to “shovel-ready’ projects, which will have an immediate economic impact. However, long-term projects will see growth as well, as President Barack Obama’s Administration has long-term priorities. Those projects will have more of an impact on the private sector due to longer-term investment horizons. “I believe that the stimulus bill is a positive for the private infrastructure sector,” Noble said.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Green Future

Richard Sandor, chairman and CEO of Chicago Climate Exchange, said the Obama Administration’s focus on energy and environment will generate employment, help companies better manage their energy costs, and help the economy maximize benefits of the cap-and-trade mechanism.

The Chicago Climate Exchange is a voluntary, legally binding integrated greenhouse gas emissions reduction, registry, and trading system. Members have promised to reduce emissions 6% in 2010, Sandor said. “Carbon trading is not a thing of tomorrow; it’s a thing of today and yesterday,’ he said.

“I believe we are just in the first inning of a vast structural exchange with regards to power and pollution,’ Sandor said. “It’s a very, very bright spot in a dim economy.”

When Will It End?

Gus Faucher, director of macroeconomics for Moody’s Economy.com predicted that the stock market will bottom out shortly, followed by home sales and then housing prices by the end of this year. The jobless rate should peak halfway through 2010 at close to 10%. Faucher noted that the jobless rate would have reached 12% by 2011 without the stimulus.

“The United States is experiencing the most severe economic downturn since the Great Depression, and conditions are expected to worsen before we see signs of recovery,’ he said.

Compliance March 24, 2009

Some BofA Shareholders Want Lewis Out

Bank of America (BofA) shareholders are trying to oust CEO Kenneth Lewis and two other board members, according to reports.
Reported by

A group that owns BofA stock is trying to get other shareholders to vote against re-electing Lewis, who is also chairman of the board, as well as Lead Director O. Temple Sloan and Jackie Ward, the Associated Press reported. The election of board members is scheduled to take place at BofA’s annual shareholders meeting on April 29.

BofA has been under increased scrutiny for acquiring Merrill Lynch because of $3.6 billion in bonuses doled out to Merrill executives right before the deal went through. The bonuses are being investigated by the New York attorney general’s office. Also, the more than $15 billion loss Merrill recorded in the fourth quarter has been under examination (see “Cuomo Says Merrill Accelerated Bonus Payments’ and “Merrill Executives Subpoenaed in Bonus Probe’).

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Finger Interests Number One Ltd., which owns about one-fifth of 1% of BofA stock, said in a regulatory filing that the board disregarded protecting the interests of shareholders during its purchase of Merrill Lynch, the AP reported. Finger Interests said shareholders were repeatedly misled by the board and not provided proper disclosures during the Merrill acquisition.

The bonuses led to the resignation of former Merrill CEO John Thain as head of wealth management at the combined bank (see “Thain to Leave Bank of America’).

BofA has received an additional $20 billion from the Troubled Asset Relief Program (TARP), in addition to the $25 billion it already received.

Finger Interests is also asking shareholders to approval proposals that would create an independent chairman of the board and allow for advisory voting by shareholders regarding executive compensation, according to the news report.

Another shareholder, Change to Win Investment Group, wants Lewis fired because of the Merrill deal, the AP reported. CtW Investor Group has said that if the bank does not remove Lewis, it will petition shareholders to vote against his re-election at the annual meeting.

The news comes the same day as reports that BofA will be sued by two large state pension funds over the controversial merger with Merrill (see “CA State Retirement Systems Seek to Lead BofA Class Action“).


«