Money Managers Look Forward To 2011

In a recent interview on Fox Business, Ed Butowsky joined other panelists to discuss the following topics on the horizon for investors and analysts in 2011:

Billion Dollar IPO Boom in 2011?

Investors are expecting a huge launch of billion dollar IPOs starting at the beginning of 2011. In comparison, in all of 2010 there was approximately $200 Million IPOs, which considering the recession is not to bad. When examined by investors and analysts in 2010 many of these companies really did not want to IPO, but because of hardships financing elsewhere they were forced to push the IPO button. Looking forward the IPO push for 2011 is credible. Many of these companies that could sustain the waiting period are now ripe, and ready to go. While the market looks healthy this could also be a huge illusion. Venture capitalist are looking at their books and trying to figure out a way to get their biggest holdings off the books, and with the current state of the economy this is a prime time for them to off load these holdings. The economy may be a scary discussion point, there will surely be some sort of correction whether it’s the market correcting itself of the dollar collapsing. All in all this environment for IPOs seems like the tech bubble of days past, however this could potentially be good for the economy to some degree. While this administration is lacking in providing clarity and providing more gridlock than ever before, companies that IPO could yield new jobs and growth which is needed in our economy.

Possible Bank Failures Post Tarp

Almost 100 banks that received Tarp funding during the recession are facing possible failures. These banks received over $4.2 Billion of taxpayer money. These banks are sure to fold despite the help they received, but the reality is that no one knows how many banks will really fail because of a lack of transparency. If and when these banks start to fail, this will surely have a ripple effect on the market. Its important to point out that the banking industry is a good indication how the economy is doing. While many of the banks bailed out did in fact pay back their portion of the Tarp funding, it will be these banks that are going to fail that will test the fragility of this economy. To make matters a little worse, there are a lot of adjustable rate mortgages that are coming due over the next couple of years that will put added pressure on some of these banks that are in trouble. This should not surprise anyone and could actually double by midyear.