Common stock

Common stock – Securities that represent an ownershipinterest in a corporation. If the company has also issuedpreferred stock, both common and preferred have ownership rights. Common stockholders assume the greater risk, but generally exercise the greater control and may gain the greater award in the form of dividends and capital appreciation. The terms common stock and capital stock are often used interchangeably when the company has no preferred stock.

Conglomerate

Conglomerate – A corporation that has diversified its operations usually by acquiring enterprises in widely varied industries

Convertible

Convertible – A bond, debenture or preferred share that may be exchanged by the owner for common stock or anothersecurity, usually of the samecompany, in accordance with the terms of the issue.

Amortization

Amortization – Accounting for expenses or charges as applicable rather than as paid. Includes such practices as depreciation, depletion, write-off of intangibles, prepaid expenses and deferred charges.

Cumulative preferred

Cumulative preferred – A stock having a provision thatif one or more dividends are omitted, the omitted dividends must be paid before dividends may be paid on the company's common stock.

Fed sticks to stimulus plan, says economy abit firmer

WASHINGTON (Reuters) - The Federal Reserve on Wednesday stuck to its plan to keep stimulating U.S. growth until the job market improves even as it acknowledged some parts ofthe economy were looking a bit better.
In a statement after a two-day meeting, the centralbank repeated its vow to keep rates near zero until mid-2015 and its pledge to keep supporting growth while the recovery strengthens.
The Fed 's policy-setting panel made no change in its plan to purchase $40 billion in mortgage-backed debt per month to push interest rates lower and spur a stronger recovery.
"The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," theFed said.
U.S. stocks edged lower afterthe announcement and the dollar extended gains against the euro, while Treasury bonds showed littlereaction, closing the session lower.
The central bank's statement differed little from its announcement last month in which it launched its third round of bond-buying, or quantitative easing, known asQE3, and made clear officialsstill had concerns on the recovery's strength.
Analysts said December will likely be a more eventful meeting as the Fed decides what to do when its separate Operation Twist program, in which it is buying long-term Treasury debt with proceedsfrom short-term securities, expires at the end of the year.
"Officials will likely make a decision then on whether QE3 will be extended to include Treasuries purchaseswhen Operation Twist ends at year-end," said Jim O'Sullivan, economist at High Frequency Economics."We expect it will be."
U.S. gross domestic product grew at an annual rate of just1.3 percent in the second quarter. Economists expect the pace of recovery quickened a bit in the third quarter but not by enough to put steady downward pressure on the jobless rate, which fell sharply in September but remains at anelevated 7.8 percent.
HOUSING STARTS, BUSINESS SLACKENS
The Fed noted the housing sector was continuing to gather its strength and said household spending had grown "a bit more quickly." However, it cautioned that business investment was softening.
It also nodded to a recent increase in inflation but said it was linked to higher energy prices, adding that inflation expectations have remained stable -- a sign officials think pressures will remain under wraps.
Richmond Federal Reserve Bank President Jeffrey Lacker dissented against the decision, as he has done at every meeting this year.
The central bank 's announcement came just under two weeks before the U.S. presidential election. Economists said policymakerswere likely to keep their heads down and avoid drawing any political fire.
The Fed, which has held rates close to zero since December 2008, had alreadybought $2.3 trillion in mortgage-related and government debt before it launched its latest round of stimulus.

U.S. sues Bank of America for$1B for mortgage fraud

The top federal prosecutor in Manhattan sued Bank of America (BAC) for more than $1 billion on Wednesday for mortgage fraud against Fannie Mae and Freddie Mac during theyears around the financial crisis.
U.S. Attorney Preet Bharara said Countrywide Financial, which was later bought by Bank of America, churned out mortgage loans from 2007 to 2009 without making sure that borrowers could afford them.
"The fraudulent conduct alleged in today's complaint was spectacularly brazen in scope," Bharara said in a statement. He said the suit was partly to recover money that Fannie and Freddie lost from defaulted loans.
Bank of America says housing has "begun to turn"Mortgage comeback? Citigroup executive not so sureAmerican banks hit by more than a week of cyberattacks
Bank of America had no immediate comment.
Countrywide sold the loans to Fannie Mae and Freddie Mac, which were left to pay for the loans when they defaulted, according to the lawsuit. Fannie and Freddie were effectively nationalized in 2008.
Fannie and Freddie buy mortgage loans from banks, package them into securities and sell them to investors. The idea is to free up banks to make more loans. If a loandefaults, Fannie and Freddieguarantee payments to the investors.
According to the lawsuit, Fannie and Freddie don't review the loans before they purchase them. Instead, theyrely on banks' statements that the loans meet certain qualifications.
Bharara said the lawsuit was the first civil fraud suit brought by the Justice Department concerning loans that were later sold to Fannie and Freddie.
The suit also underscored how Bank of America's purchase of Countrywide in July 2008, just before the financial crisis, backfired severely.
Risky loans
Countrywide was a giant in mortgage lending, but was also known for approving exotic, even risky, loans. By 2007, as the market for subprime mortgages collapsed, Countrywide was anxious for revenue.

Repay £4.2B and serve 3years Jerome Kerviel ordered

Jerome Kerviel was told he must repay £4.2BILLION after nearly bringing down one of Europe's biggestbanks.
Kerviel, 35, was convicted in a Paris court of forgery, unauthorised computeruse and breach of trustand told to repay the mammoth damages.
He was also jailed for three years - with another two suspended.
But he sought an aquittal and had a two-year fight to clear his name, but the verdict was upheld today.
Kerviel will not go to jail immediately, and his lawyer said that they would study the possibility of a further appeal.
“We had given ourselves the goal of defending Mr Kerviel against an absolutely appalling injustice. I can tell you that we’vefailed,” Kerviel’s lawyer,David Koubbi, told journalists outside the court.
His bosses at banking giant Societe Generale said he carried out huge and risky stock trades worth £45bn without their knowledge between late 2007 and 2008.
The judge in the original case said that the trader’s acts had “damaged the world economic order”.
His former employer said he had lost the £4.2bn they are demanding back through risky trades.
During the trial Kerviel's former boss and colleagues all testified against him.
SocGen's lawyer, Jean Veil, accused Kerviel of"duplicity" for reassuring his bosses that nothing was wrong while racking up the huge losses.
And the bank's president and chief executive at the time, Daniel Bouton, called the trading scandal a"catastrophe".
French media calculated that based on his current salary of £1,700 a month as a computer consultant, itwould take him 177,536 years to pay off the damages.

Your report is 'inaccurate' Santander tells Barclays

Santander has dismissed as “inaccurate” a researchreport by Barclays analysts that warned the Spanish lender could need to raise nearly €18bn (£14.7bn)in new capital.
The Barclays report, entitled Capital doesn’tadd up, claimed that Santander’s domestic Spanish business has a capital-loss buffer about one-fifth the sizestated by the bank’s accounts.
“While Santander reports a 10pc core Tier 1 ratio for its Spanish business, it’s more like 2pc based on the capital that is actually available to absorb domestic losses. This suggests a €15bn to €18bn capital deficitin Spain,” wrote Barclays analyst, RohithChandra-Rajan.
Mr Chandra-Rajan argued that Santander’s accounts “overstate” the ability of its Spanish business to absorb losses by including capital that is
effectively locked up in foreign subsidiaries. He claimed that capitalwould be unavailable to the parent companyshould it be hit by newlosses in its domestic operations.

three major tools the Bank uses to implement monetary policy

three major tools the Bank uses to implement monetary policy: 1. Open Market Operations: Through open market operations, the Bank buys or sells securities in the secondary market in order to achieve a desired level of Bank reserves. Alternatively, the Bank injects money into the economy through buying securities in exchange for money stock. As the law of supply and demand takes effect to determine the costof credit (interest rates) in the money market, money stock adjusts itself to the desired level. This process influences availability of money in the economy. 2. Discount window operations: The Bank, as lender of last resort, may provide secured short-term loans to commercial banks on overnight basis atpunitive rates, thus restricting banks to seek funding in the market resorting to Central Bank funds only as a last solution. The discount rate is set by the Central Bank to reflect the monetary policy objectives. 3. Reserve Requirements: TheCentral Bank is empoweredby the law to retain a certain proportion of commercial banks' depositsto be held as non-interest bearing reserves at the Central Bank. An increase in reserve requirements restricts commercial banks ability to expand bank credit and the reverse is regarded as credit easing