For Immediate Release
Chicago, IL – December 4, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Citibank (C), KeyCorp (KEY), Ford (F), Abbott Laboratories Inc. (ABT) and Teva Pharmaceutical Industries Ltd. (TEVA).
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Here are highlights from Thursday’s Analyst Blog:
Ben’s Confirmation Testimony
The stress tests proved to be a brilliant move in restoring confidence to the banking system, and particularly to the huge and very troubled mega-firms like Citibank (C) and KeyCorp (KEY). While the baseline scenario used in the tests was a farce, the more adverse scenario did prove to be a relatively accurate forecast of the path of the economy, and it showed that the big systemically important banks could survive it -- provided they were able to raise more private capital, and the stress tests played a role in allowing them to do so.
I would like to see the stress tests simply become a regular annual part of the bank examination problem, rather than a one-time extraordinary thing. It sounds like they are moving partially in that direction with his talk of horizontal reviews.
"To complement on-site supervisory reviews, we are also creating an enhanced quantitative surveillance program that will make use of the skills not only of supervisors, but also of economists, specialists in financial markets, and other experts within the Federal Reserve. We are requiring large firms to provide supervisors with more detailed and timely information on risk positions, operating performance, and other key indicators, and we are strengthening consolidated supervision to better capture the firmwide risks faced by complex organizations. Good idea, but hardly a hard one to just now come up with. Why didn't it get implemented sooner...like, say, 1913 when the Fed was founded?
"In sum, heeding the lessons of the crisis, we are committed to taking a more proactive and comprehensive approach to oversight to ensure that emerging problems are identified early and met with prompt and effective supervisory responses."
"We also have renewed and strengthened our longstanding commitment to transparency and accountability. In the making of monetary policy, the Federal Reserve is highly transparent, providing detailed minutes three weeks after each policy meeting, quarterly economic projections, regular testimonies to the Congress, and much other information. Our financial statements are public and audited by an outside accounting firm, we publish our balance sheet weekly, and we provide extensive information through monthly reports and on our website on all the temporary lending facilities developed during the crisis, including the collateral that we take.
"Further, our financial activities are subject to review by an independent inspector general. And the Congress, through the Government Accountability Office, can and does audit all parts of operations, except for monetary policy and related areas explicitly exempted by a 1978 provision passed by the Congress. The Congress created that exemption to protect monetary policy from short-term political pressures and thereby to support our ability to effectively pursue our mandated objectives of maximum employment and price stability."
True, relative to the near total-opaqueness of the Greenspan Fed, the Bernanke Fed has been as transparent as crystal. Bernanke actually talks in a way that any reasonably well-educated person can understand him, while Greenspan was the absolute master of talking but never really answering any question posed to him. While I applaud this trend, I would love to see still more transparency.
Being able to audit everything but monetary operations is a bit like an accounting firm being able to audit everything at Ford (F) except its auto operations. Monetary operations are the absolute core of what the Fed does. I understand the point about political pressure. However, the Ron Paul bill, which Bernanke was clearly referring to, allows for a six-month delay in releasing the audits. I could see a reasonable case for extending that delay to, say, a year, but not one for continuing the exemption from audit.
Abbott Settles Dispute with Teva
In a filing with the U.S. Securities and Exchange Commission (SEC), Abbott Laboratories Inc. (ABT) announced that it has settled its patent litigation with Teva Pharmaceutical Industries Ltd. (TEVA), which was seeking to market generic versions of Abbott’s TriCor.
According to the agreement between the companies, Teva will be allowed to launch a generic version of TriCor no sooner than March 28, 2011. However, under certain unspecified circumstances, Teva might not receive such rights until July 1, 2012. Additional details were not provided. The settlement involves the 145 mg dose of TriCor, which accounts for a major part of TriCor's sales.
Abbott’s cardiovascular business is being driven by TriCor, a powerful triglyceride lowering agent often used in-combination with statins, and its next-generation candidate, TriLipix. Given the generic threats to TriCor, Abbott is looking to shift users to TriLipix. TriLipix was approved in December 2008 and should strengthen Abbott’s position in the fenofibrate market.
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