10 countries, 10 solutions

United Kingdom

GDP -1.2%
Inflation 0.1%
Unemployment 6.3%
Markets -11.2%
Gallon of gas $4.85
Interest Rates 0.5%

Challenges The pound fell to a 23-year low against the dollar in January 2009 as the banking sector continued to post historic losses. The country's productivity and home values have plummeted, leading the nation's economy into a recession.

Solutions Prime Minister Gordon Brown unveiled a $63 billion bailout for the banking sector in October. In January, the Bank of England set up a special fund to buy up to $74 billion of high-quality private sector assets. The new plan also created a wide scale insurance program aimed at protecting banks against further losses and guarantee bank assets backed by mortgages and other loans.

Link: http://money.cnn.com/galleries/2009/news/0903/gallery.g20_economies/2.html

10 countries, 10 solutions

A financial crisis has engulfed countries from the best-off to the worst-off around the world. The solutions to the problem are varied.

United States

GDP -1.6%
Inflation 0.2%
Unemployment 8.1%
Markets -10.7%
Gallon of gas $1.99
Interest Rates 0% to 0.25%

Challenges Home prices have plummeted since the summer of 2007, devaluing many of banks' holdings that were backed by mortgages. To prevent further losses, banks largely stopped lending. The economic downturn that ensued led the economy to shed 4.4 million jobs in the past 14 months.

Solutions The government flooded the frozen financial system with trillions of dollars of unprecedented liquidity programs, including a $700 billion bank bailout. After a $168 billion stimulus package unveiled in February 2008, the Obama administration produced another $787 billion stimulus plan in February 2009.

Link: http://money.cnn.com/galleries/2009/news/0903/gallery.g20_economies/index.html

Warning: Bear isn't hibernating yet

Some fear the bear will return in April. Even if the economy has hit bottom, the news may just be 'less bad'; GM, bank stress tests and earnings are concerns.

By Paul R. La Monica, CNNMoney.com editor at large

Last Updated: April 1, 2009: 12:37 PM ET

NEW YORK (CNNMoney.com) -- March came in like a bear and out like a bull on Wall Street. But will the bull stick around or will the bear return to try and prove T.S. Eliot right about April being the cruelest month?

The S&P 500 fell nearly 8% during the first six trading days of the month but surged nearly 18% after that to finish the month up 8.5%. The stunning rally in the latter part of the month came despite more bad news about the economy and Corporate America.

That's led some investing experts to question whether the recent rally has legs. There are growing fears that the Tilt-A-Whirl otherwise known as the stock market is ready to start spinning madly out of control once again.

Talkback: Is the bear market over or will stocks fall back to their March lows?

John Lynch, chief market analyst with Evergreen Investments, predicts that the markets will test the early March lows once again before stocks finally hit bottom.

Simply put, he said there's still the potential for more grim economic and corporate news out there that hasn't gone away just because the markets popped at the end of last month. He thinks the rebound, once it unfolds, will be gradual, and not steep.

"GM (GM, Fortune 500) and Chrysler are still in trouble and we've got the bank stress tests coming," Lynch said, referring to the Treasury Department's plan to determine how well-capitalized struggling big banks like Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500) are to withstand a longer recession. Those tests are expected to be completed by the end of April.

"The worst is probably over for the economy but investors need to be prepared for a couple of quarters that are simply less bad. This recovery is going to be shaped like a short, fat lowercase u and not a capital V," Lynch added.

Bill Stone, chief Investment Strategist with PNC Wealth Management in Philadelphia, said it's looking like the economy probably shrunk by at least 5% in the first quarter, following a more than 6% drop in the fourth quarter of 2008. He added that the job market is still in bad shape as well.

So with that in mind, Stone agreed with Lynch that it would not be a major surprise if stocks retreated back toward this year's lows. "It's never safe to say we've hit bottom," he said.

Earnings are going to 'stink'

The upcoming onslaught of corporate earnings reports this month could also weigh on the markets.

According to John Butters, director of U.S. earnings research for Thomson Reuters, analysts are predicting that first-quarter profits for the S&P 500 will fall 36% from a year ago. That would be the seventh consecutive quarter of declining earnings.

What's more, profits in all ten sectors of the economy are expected to fall during the quarter. Butters said that this has never happened in the more than ten years that Thomson Reuters has been tracking profit growth by sector.

"At the start of this downturn, most of the problems had been concentrated in the financials sector and, to a lesser extent, consumer discretionary companies like autos, retailers and homebuilders," Butters said. "Now, there is weakness across the board."

Stone said most investors realize that first quarter results for most companies will be short on good news. So it will be more important to hear what executives have to say about the future. Unfortunately, he thinks most CEOs will clam up and not take the risk of sounding too optimistic.

"Nobody's buying stocks today for first quarter earnings. They're going to stink," he said. "If we get some sort of guidance about when things are picking up, that could be good news, but my suspicion is more and more companies will just say times are rough and that they have no visibility."

Still, Lynch is worried that investors, particularly in bank stocks, may be underestimating just how bad results will be for the quarter. Several bank CEOs, including the heads of Citi, BofA and JPMorgan Chase (JPM, Fortune 500), helped spark a rally in bank stocks by saying they were profitable in January and February.

But Lynch pointed out the CEOs were careful to say they were profitable on an operating basis. Since banks still are likely to be forced to book massive losses on soured loans and securities in their portfolios, he thinks "more writedowns are looming" and that "earnings are not going to be as rosy as Wall Street is anticipating."

Recovery may be closer, but the road to it is full of potholes

Despite their pessimism though, neither Stone nor Lynch consider themselves to be overly bearish. They just simply think investors need a reality check after the big runup in stocks.

Stone said that it's encouraging that the government has taken many bold actions to try and get the economy back on track -- such as the stimulus package, the Treasury Department's new public-private partnership to buy banks' toxic assets and the Federal Reserve's plan to jumpstart lending to consumers and small businesses with its Term Asset-Backed Securities Loan Facility, or TALF.

Stone thinks many of these initiatives will eventually work. And he adds that many stocks are attractively valued for the long-haul.

But the climb out of this recession is going to take some time. It won't be a smooth process, and at times, investors may show their frustration.

"Is the market going to be patient? There are so many moving pieces to the recovery plan and it opens itself up to things going wrong along the way," Stone said. "So for the short-term, the easiest forecast to make right now is for more volatility."

Lynch shared that assessment.

"There is light at the end of the tunnel. The economy and markets always find a way to adapt and innovate. But it's never pretty though," he said.

And that's exactly why Lynch is hoping that there is a sell-off sooner rather than later. The S&P 500 is currently hovering around 800, up from its early March closing low of about 677. If the markets continue to surge without evidence that the economy or earnings are finally ready to rebound, the eventual pullback would be much worse.

"I'd rather the market test the lows after the S&P 500 hits 800 than 1000. A euphoric rally without fundamentals justifying it would put too much air back into the market," he said.

Link: http://money.cnn.com/2009/04/01/markets/thebuzz/index.htm

DBS Vickers (Spore):Market Focus: Equity Strategy : Trading opportunity

By Janice Chua (65) 6398 7954

The current bear market rally is being driven by a normalization of the equity risk premium as global risk aversion subsides. This presents investors with a near term trading opportunity. However, until there is a convincing turn in the fundamentals, the risks remain that the re-emergence of systemic risk factors could curtail the nascent rebound.

Equity risk premium in normalization mode as sentiment improves and economy show signs of bottoming. Sentiment seems to be improving with bad news well absorbed by the market as the market searches for signs of stability in the financial market. Initial signs of the economy bottoming out in US and Singapore will raise investors’ risk appetite. Equity risk premium for the Singapore market was close to its peak last quarter at 5.5%. A normalizing of ERP closer to 3% could trigger the bear market rally, even as we wait for confirmation of an eventual recovery in the economy.

Market bottoms when GDP bottoms – 2Q09 the inflexion point?
Based on DBS Economist forecasts, Singapore’s GDP will hit two more extreme negative quarters – the weakest quarter is in 1Q09 -7.8%, –6.9% (2Q09) and –5.2% in 3Q09. We think 2Q09 holds a key inflexion point for a market bottom, and volatility will persist – we expect a trading range of 1200 to 2000, providing investors opportunity to accumulate as the market weakens.

Narrowing the valuation gap to 2100 assuming PE normalizes. At 1585, the STI’s PE rises to 10.2x (09F) on earnings decline of 19%. Assuming PE rating normalizes back to 1 standard deviation of 13.5x, the target STI will be 2100. Our stock picks this quarter are early cyclicals trading on low cycle PE : SembCorp Marine, City Developments, Venture Manufacturing,
OCBC or stocks trading on bombed out valuation SPH and A REIT.

(Document link: Singapore Research)

China stocks vs US stocks

I have been reading quite a number of posts in forums lately lambasting how untrustworthy S shares are, how it is a con job etc etc.

Lets compare apple to apple, China vs USA.

While Lehman Brothers loss and collapse caused a massive tsunami into the financial system, which S shares or china stock could have done an impact as such? Take note that Lehman Brothers at the brink of destruction were still telling the public they are solvent and sound!

Next, Madoff's ponzi scheme. How long did it last? Well, really noone knows.

Last but not least, the massive collapse of the big US banks, which is causing banks, economic systems, sovereign wealth funds around the world falling with them.

But nevertheless, psychologically, people still have faith in USA rather than China. While everyone is shooting china stocks as cheats, swindlers, what happen to US stocks?

How Banks Can Exploit Geithner's Plan

An interesting article I read:

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By Morgan Housel
March 31, 2009 | Comments (5)

want Treasury Secretary Tim Geithner's plan to save the banks to work. I want banks to jettison all the crap on their balance sheets and allow taxpayers to profit. Everyone does. It'd be the ultimate victory during an economic collapse where nothing has gone right.

But I'm also a realist. There are several reasons to think that Geithner's plan to form a public-private investment partnership will not only fail, but will become a massive wealth transfer from taxpayers to banks. When the plan first came out last week, I didn't think such a transfer was likely. With a simple example, I now realize otherwise.

No buyers, no sellers
The gap between what banks like Wells Fargo (NYSE: WFC) or Bank of America (NYSE: BAC) are willing to sell for and what investors are willing to pay is gigantic. If AIG (NYSE: AIG) wants to sell an asset for $0.80 on the dollar, yet private investors are only willing to pay $0.40 on the dollar, we get nowhere.

To solve this dilemma, Geithner's plan provides 85% nonrecourse financing to private investors. The Treasury then splits the equity 50/50. So, to buy an asset for $100, private investors only have to risk about $8. While that seems like an unfair risk for taxpayers, private investors theoretically won't overpay, because they can lose every dime they put in. In all likelihood, that'll prove to be the case most of the time.

Unless …
Yet with a little creativity, it's easy to see how banks could sell assets at extravagant prices -- perhaps 100 cents on the dollar -- while dumping most of the risk on taxpayers. Private investors who participate in this plan, you see, have sole authority to set the bid price on assets. As the Treasury's recent press release states:

The highest bid from the private sector … [will] define the total price paid by the private investors and the Treasury.

Hence, banks have a huge incentive to get someone to bid exorbitant prices. Who is that "someone"? Well, that's where things could get shady.

According to the Treasury, investors who meet a few simple criteria pre-qualify to participate in the plan. For example, pre-qualified investors must have:

• Capacity to raise at least $500 million of private capital.
• Experience investing in eligible assets, including through performance track records.
• A minimum of $10 billion of assets under management.
• Headquarters in the United States.

All pretty simple. Oodles and oodles of hedge funds and private equity funds fit those requirements.

Trouble is, you can draw a straight line from banks to some of those seemingly "independent" private investors. Hedge funds in particular have extraordinarily tight relationships with investment banks like JPMorgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), or Morgan Stanley (NYSE: MS) that often play ball on the same court.

In fact, private investment partnerships can actually be owned by banks themselves. For example, Lehman Brothers invested in, provided management for, and supplied office space to a hedge fund called R3 Capital Partners last year. It then sold $4.5 billion worth of assets to R3 at undisclosed prices. For whatever reason, Lehman essentially sold assets to itself through an "independent" entity.

Welcome to the ingenuity of Wall Street -- throw in a little creativity and fancy structuring, and suddenly the distinction between banks selling assets and private investors buying assets is blurred.

Here's a simple example of how this could derail the success of Geithner's plan:

• Bank A has a toxic asset no sane investor would pay more than $30 for.
• Bank A gets Private Investor B -- an entity with ties to Bank A itself -- to participate in Geithner's plan and pay full price for the asset -- $100, in this case.
• Bank A receives $100. Expect something similar to Citigroup's (NYSE: C) famous "We're saved! Everything is fine!" memo to follow.

In due time, the asset's true value -- $30 -- is realized. Since Private Investor B only put up a sliver of equity, it loses its $7 and walks away. No biggie.

Now connect the dots:

• Bank A sold an asset worth $30 for $100 -- it made a $70 windfall.
• Private Investor B -- with ties to Bank A -- loses only $7 when those assets go bad. Bank A happily repays $7 to Private Investor B for the trouble. Everybody wins, except for …

… the taxpayer
Since government-issued nonrecourse leverage is involved, banks can simply overbid for assets via "independent" investors and funnel most of the risk onto taxpayers. Heads they win, tails you lose.

Like I've said before, 2+2 is never going to equal 100, no matter how many bells and whistles you slap on these bailouts. If the goal is to recapitalize banks in an efficient manner, there are other sensible ways to do it. Giving banks the ability to write their own ticket isn't one of them.

Link: http://www.fool.com/investing/dividends-income/2009/03/31/how-banks-can-exploit-geithners-plan.aspx?source=iflfollnk0000001#

G20: Confronting the crisis

World leaders will convene in London on April 2 to discuss how to prevent another global economic crisis from happening again. Here is a snapshot of 10 key economies and the challenges they face.

Link: http://money.cnn.com/news/specials/storysupplement/global_crisis/index.html

By David Goldman

Gallery: 10 economies in decline

Country	GDP growth*	Inflation	Unemployment	Stock market decline	Gallon of gas	Interest Rates
Brazil	1.80%	5.90%	8.20%	6.90%	$4.17	11.25%
China	6.70%	-1.60%	9%**	22.10%	$3.01	5.31%
Germany	-2.50%	1.00%	7.90%	-11.90%	$5.97	1.50%
Iceland	-10.00%	17.60%	6.60%	-9.00%	$8.20	18.00%
India	5.10%	10.40%	6.80%	-7.00%	$4.06	5.50%
Japan	-2.60%	0.00%	4.10%	-4.20%	$4.09	0.10%
Mexico	0.30%	6.20%	5.00%	9.30%	$2.19	6.75%
Russia	-0.70%	12.00%	8.10%	16.20%	$2.81	13.00%
United Kingdom	-1.20%	0.10%	6.30%	-11.20%	$4.85	0.50%
United States	-1.60%	0.20%	8.10%	-10.70%	$1.99	0% to 0.25%

Avoid the Mistake That Cost Buffett 8 Years of Better Returns

Some useful reading for long term investment.

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By Richard Gibbons
March 28, 2009

There's one investment strategy you won't read much about on Fool.com, even though many have tried it. In fact, Warren Buffett spent eight years working with it before discarding it as worthless.

What investment strategy is that? Technical analysis.

Invest like a lemming
Technical analysis is the practice of predicting where stocks will trade based on charts of historical pricing and volume information. There's a certain logic to it. Stocks trade based on supply and demand, which is greatly influenced by investors' attitudes about the stocks. The charts should reflect those attitudes and might predict where the individual stocks will go.

It's an attractive idea. Clorox (NYSE: CLX) has bounced between $55 and $65 quite a few times in the past few years. Why not buy at the low, and sell at the high? Or look at Green Mountain Coffee Roasters' (Nasdaq: GMCR) chart. Clearly, investors love the stock. Its rise from $24 to $48 seems unstoppable. Why not jump aboard and profit?

Technical analysis is a simple yet compelling strategy. You can see why Buffett spent years early in his career trying to master it.

An expensive mistake
But Buffett discovered one small problem. Technical analysis didn't work. He explained, "I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."

After eight years of trying, he concluded that it was the wrong way to invest. Then he focused on the teachings of Ben Graham, which stressed business fundamentals, finding a strategy that both made sense and, more importantly, worked.

Three simple rules
The billionaire discussed that strategy at the 2008 Berkshire Hathaway (NYSE: BRK-A) general meeting. When he was asked how to avoid the crowd mind-set, he said he simply followed Graham's three most important lessons:

1. Buy stocks with a margin of safety.
2. A stock is part of a business.
3. The market is there to serve you, not instruct you.

The first lesson usually makes the headlines. It means that you should buy stocks for less than they're worth. But when Buffett talks about the second and third lessons, he's basically admitting that he wasted eight years of his investing life.

Buying a business
After all, thinking about a stock as part of a business is the opposite of what technical analysis is all about. Technical analysis focuses on trading securities. It doesn't matter whether the security is a share of Suncor Energy (NYSE: SU), with its oil sands, natural gas, energy marketing, and refining segments; or whether that security is a derivative promising the delivery of three tons of Italian meatballs. It's all the same because technical analysis doesn't care about the business -- or the fundamentals.

In Graham's second lesson, stocks are far more than just pieces of paper or lines on graphs, and to understand them, you need to understand the business. If you're looking at Under Armour (NYSE: UA), ignore whether the stock has been up three days in a row, and focus instead on how the company plans to address its inventory management issues.

Ways to serve man and woman
Similarly, when Buffett says the market isn't there to instruct, he's saying the movements in the market aren't telling you how to invest.

When Wells Fargo (NYSE: WFC) fell under $2 per share in 1990 (adjusted for splits and dividends), the market was saying that poor-performing California residential loans would sink the company.

When McDonald's hit $13 in 2003, the market was announcing that the Big Mac would end up in the Museum of Neat Ideas Gone Wrong, alongside the tapeworm diet, land wars in Asia, and Paris Hilton's home videos.

But in both cases, the market was wrong.

So, instead of listening to the market, Buffett seeks to take advantage of it. Sometimes, the market will offer to buy a stock for far more than it's actually worth. Other times, it'll offer you the chance to buy shares of a great company for far less than its fair value. An investor who understands the true value of a business will be able to profit when the market offers great companies on sale.

The Foolish bottom line
You can learn from Buffett's error -- don't focus on charts. Instead, understand businesses and seek excellent stocks that the market offers at low prices. These days, the market is particularly treacherous. Some stocks that seem cheap will turn out to be very expensive. Others that are simply beaten down by negativity will post amazing returns.

Link: http://www.fool.com/investing/value/2009/03/28/avoid-the-mistake-that-cost-buffett-8-years-of-bet.aspx

Don't Fall for Citigroup's Fantasy

Overdue, but never late than never. Interesting news on Citi, when I was doing my reservist.

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By Morgan Housel
March 10, 2009 | Comments (43)

Markets exploded today because of a memo from Citigroup (NYSE: C) CEO Vikram Pandit, telling employees that -- surprise! -- the bank was actually on track to post its best quarter in over a year ... and a profit! Maybe things aren't as bad as we thought! We're saved! We're saved! Whoo-hoo!

Not so fast
You can't blame the market's reaction. Since Feb. 6, the Dow Jones has risen all of five times. Even relatively healthy banks like JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) are being treated like basket cases. Anything that can be slightly spun as good news is bound to be clinged to. Just give us any good news -- even if it's not, you know, true -- and the market will run with it.

This is no exception. Citigroup's announcement that "Hey, hey, we're actually profitable!" is twisted, tortured, and largely irrelevant to its ultimate fate.

The gist of Pandit's memo was that operating profit was going gangbusters -- as if operating profit has been the problem all along. The problem is not a bank's ability to generate current income, but its ability to absorb losses on legacy assets that are worth a fraction of their purchase price -- using absurd amounts of leverage to boot.

The memo disclosed numbers that point to an operating profit of about $8.3 billion this quarter, but Pandit didn't give any mention of what asset writedowns would be. "In January and February alone, our revenues excluding externally disclosed marks were $19 billion," he said. Great! Now... uh... about those "externally disclosed marks?" How are those workin' out for you?

I'm not worried that Citigroup can't generate operating profit: I'm worried it's not solvent. There's a big difference. Imagine a person drowning in debt but insisting they're wealthy because their paycheck exceeded their grocery bills. You get the idea.

Same game, different day
You can't blame bank CEOs for trying to instill confidence these days. Bank of America (NYSE: BAC) tried a similar approach a few weeks ago, telling investors that Countrywide and Merrill Lynch were the "stars" of 2009, and that Merrill Lynch will be "a thing of beauty," pointing to, you guessed it, operating profits.

It doesn't take a tremendous amount of thought to see that if a company has an operating profit of X and losses on existing assets of X times 100, things might not turn out so hot. Such is the case with Merrill Lynch, whose losses in 2007 and 2008 wiped out all profits earned over the preceding eleven years, and ultimately caused B of A to become the recipient of one of the largest federal bailouts ever. "A thing of beauty" indeed.

Posting the occasional operating profit will indeed provide a cushion for banks to absorb impending writedowns, but it's a clown show to think it'll be enough to plug the black hole of losses, especially in Citigroup's case.

Link: http://www.fool.com/investing/dividends-income/2009/03/10/dont-fall-for-citigroups-fantasy.aspx

ANALYSIS-Wagoner's exit puts B of A CEO Lewis in hotseat

March 31, 2009: 08:00 AM ET

(Repeats March 30 story for additional readers with no changes to headline or text)

By Elinor Comlay

NEW YORK (Reuters) - Bank of America Corp Chief Executive Kenneth Lewis may be the next corporate boss to feel the heat after the administration forced General Motors Corp Chief Executive Rick Wagoner to resign in return for further government assistance.

The second-largest U.S. bank has received $45 billion from the government, making it one of the biggest recipients of government bailout money in the banking system.

Big shareholders have been calling for Lewis to step down since Bank of America announced in January it took a $20 billion government bailout to secure the acquisition of troubled Merrill Lynch & Co, which lost almost $16 billion in the last quarter of 2008.

The government may now add to the pressure from shareholders, analysts said. The sudden departure of Wagoner after nine years in the top job at GM signals the Obama administration is looking for management changes at bailed-out companies.

"His longevity in the job is probably very much in question," said Keith Wirtz, chief investment officer of Fifth Third Asset Management and a former CIO at a Bank of America subsidiary. Fifth Third holds shares in the bank.

The bank disagreed with the assessment. "We do not see the parallel with the U.S. auto industry," said a Bank of America spokesman, noting that since 1991 the bank has been profitable in every quarter except one, and made a $4 billion profit in 2008.

Still, shareholders say Lewis is in a precarious situation, citing both the government bailout as well as the fourth-quarter losses at Merrill, which suggest Bank of America did not perform adequate due diligence.

"It makes him look like he wasn't fully aware of what was going on," said Malcolm Polley, CIO of Stewart Capital Advisors, which owns Bank of America shares.

Bank of America stock closed at $33.74 before the Merrill merger was announced in September. The shares, which have lost more than 80 percent since then, dropped $1.24 to $6.10 Monday.

The government's total cash injection amounts to more than Bank of America's market capitalization of about $41 billion.

The bank wants to repay the $25 billion from the government's Troubled Asset Relief Plan (TARP) in October "as soon as we can," Lewis told CNBC last week after bank executives met with President Barack Obama.

"He will end up leaving the organization, whether it's of his own volition or not," said Polley.

SHAREHOLDER UNREST

Wagoner's forced exit, announced Sunday, may indicate the government's strategy if other companies like Bank of America ask for more money. "It's a warning," said Robert Lutts, CIO of Cabot Money Management.

Citigroup Inc has also received $45 billion in capital from the U.S. government, and its CEO may also face pressure to step down. But Citigroup's Vikram Pandit became CEO about a year ago, and is suffering from the bad judgment of his predecessors.

Lewis would have no one to blame but himself since he has been Bank of America's CEO for about eight years.

In the last eighteen months, Lewis has spent about $43 billion to buy Merrill, mortgage lender Countrywide Financial Corp and LaSalle Bank Corp, a large lender in the U.S. Midwest. The purchases increased Bank of America's exposure to mortgages and other loans that have driven losses at U.S. banks in the last year.

"He has put the financial health of the balance sheet of Bank of America very much at risk," said Fifth Third's Wirtz.

Investors voted to approve the acquisition of Merrill on Dec. 5, but since Merrill announced details of its losses in the fourth quarter, influential shareholders have called on Lewis to step down.

The Finger family, who are long-time shareholders, has called for Lewis to be replaced as chairman. The family includes Jerry Finger, who founded Charter Bancshares, which was acquired by Bank of America predecessor NationsBank in 1996.

And two of the three largest U.S. pension funds, California Public Employees' Retirement System and the California State Teachers Retirement System, are plaintiffs in an investor lawsuit against the bank over its Merrill acquisition.

Lewis ousted former Merrill CEO John Thain as head of Bank of America's investment banking and wealth management on Jan. 22 in a bid to ease lingering investor concerns about the acquisition.

Yet as Bank of America's annual meeting on April 29 draws closer, investor calls for Lewis to step down may grow louder.

"The (Obama) administration has now flexed its muscles," said Darren Robbins, partner at law firm Coughlin Stoia Geller Rudman & Robbins in San Diego, which filed a class action against Bank of America on behalf of an institutional investor.

"Lewis is under excruciating pressure," he added. (Reporting by Elinor Comlay, additional reporting by Juan Lagorio; editing by Jeffrey Benkoe)

Link: http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH66015_2009-03-31_12-00-09_N30418407.htm

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Now, apparently, the president has the power to control the free markets by ousting CEOs out of their seats. This has changed the playing field and it may indicate more to come after GM's CEO is being kicked out?