Merrill admits defeat, Teck Cominco huge quarter, more buyouts, and the markets

The general market sentiments is an interesting thing, as the monthly consumer confidence numbers, in combination with one or two key commodity figures is enough to set the tone for the day. After all, traders are people, and people inevitable base many decisions on emotion, no?

Still, these daily fluctuations are far too short sighted and are often corrected next day by rounds of buyers remorse... let's wait and see.

"US Consumer Confidence Ticks Up!"

June's revised number was 51, which "ticked" upward to 51.9, releasing a torrent of pent-up bullishness at the starting gate. Whence cometh this rush of optimism? "The percentage of consumers saying jobs are "hard to get" rose to 30.3% in July from 29.7% in June." So, increasing difficulty in finding a job is a bullish indicator, apparently because somebody is still looking for a job, I suppose. Go figure.

Maybe consumers are gaining confidence in another round of "tax rebate" stimulus checks from Congress.

Interesting enough, the banks jumped nicely across the board from 10%+ to Merril's 17%. As if the consumer confidence and a still all time low of home sales and liquidity will help erase all the bad debts from the defaulting loans!

Unfortunately, even at $24/share, it's a far cry from the $90/share holier-than-thou pedestal a year ago when the CEO said no additional capital is required for such a long standing prestigious investment bank.

Merrill Lynch to Reduce Risk Exposure, Raise Capital

Merrill Lynch & Co., in a broad move to clean up its troubled balance sheet, said Monday it will sell a big slice of its toxic asset-backed securities and issue new stock to raise $8.5 billion of fresh capital.

The world's largest brokerage, struggling to right itself as the credit crisis continues, said it will issue more than 200 million new common shares as part of the deal. Merrill (MER: 26.25, +1.92, +7.89%) said it will write-down $5.7 billion because of additional losses on the sale of mortgage securities and hedging contracts.

Chief Executive John Thain, who joined Merrill Lynch last year, had vowed in the past he wanted to avoid using a public offering to raise money. The latest move comes just over a week after Merrill reported a $4.6 billion second-quarter loss, where he raised $8 billion of much needed capital from asset sales instead of diluting the stock by issuing more shares.

In other industry news - Metal and mining giant (Canadian) Teck Cominco announces records profits and another huge buyout news... $15 billion for Fording Coal. Seems like consolidation is already picking up its pace... record profit means a big decision... more acquision or buy more supposedly safe bank shares?

I think I'll stick with mining exploration stocks that's supposed to be risky instead!