Category Archives: banking

RBS Acquisition of ABN Amro More Likely Than Ever

In the battle for ABN Amro, the consortium of RBS, Fortis, and Santander has now clearly bested its rival, Barclays. The RBS consortium’s bid is about 20% higher than Barclays’ bid, thanks largely to Barclays’ sinking stock price, and Barclays … Continue reading

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Morgan Stanley’s Email Problem

Morgan Stanley has been fined $12.5 million for not providing emails. The Wall Street journal also notes that the company was also fined $15 million in 2005 for not providing emails. It doesn’t note that Morgan Stanley was ordered to … Continue reading

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How Deteriorating Crediworthiness Can Make You Millions (If You’re a Bank)

It’s not quite as laughable as it might seem at first glance that the latest tranche of investment-bank earnings reports showed hundreds of millions of dollars in profits from the fact that those banks’ bonds had fallen in value. Morgan … Continue reading

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Bear Earnings Bad, Market Response Good

Bear Stearns’ earnings today were atrocious. Never mind the fact that sales and trading revenue slumped by an eye-popping 88%; Bear also, uniquely, saw its investment-banking revenues fall as well. Interestingly, the bank’s stock is unchanged in early trading, and … Continue reading

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Goldman’s Stunning Earnings

Hank Paulson surely has a hint of a smile on his face this morning. Even as he earnestly tries to protect Main Street from suffering too much as a result of the Wall Street crunch, in the back of his … Continue reading

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The Sunny Side of Morgan Stanley’s Earnings

Morgan Stanley’s stock price might be down today in the wake of disappointing earnings, but I don’t think that these results really counteract the relatively good news from Lehman brothers yesterday, and I still have that weirdly good feeling I … Continue reading

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The Sunny Side of Lehman’s Earnings

The Lehman earnings look weirdly different now, in the aftermath of the 50bp rate cut, than they did this morning, when most of the market was expecting just 25bp. Back then, John Carney was doing his best Old Curmudgeon act, … Continue reading

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Northern Rock: No Need to Panic

In the Times of London today, Anatole Kaletsky worries about the magnitude
of a potential mass
liquidation
of Northern Rock’s liabilities:

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Metaphor of the Day

Justin Urquhart-Stewart of Seven Investment Management, quoted by the BBC: "You have to look at all these bad loans as a bit like a blancmange that’s been hit very heavily by a spade and it’s gone everywhere."

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Banks’ Capital in the Era of Re-Intermediation

Charles Goodhart says in the FT today that there’s loads of money sloshing around the banking system; what’s missing is not liquidity, but capital. He explains: Just as the central bank is lender of last resort to banks, so banks … Continue reading

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ATM Fees as Bully Tactic

In the literature, the question of ATM fees is generally considered to be a regulatory problem: should they be banned? In the real world, Bank of America has raised its ATM fee to $3. Which is the kind of thing … Continue reading

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The Northern Rock Bailout

What to make of the Northern Rock bailout? To me, it looks like textbook central banking on the part of the Bank of England. Mervyn King, the BofE’s chief, has no particular interest in cutting interest rates or otherwise bailing … Continue reading

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Citibank Refuses Hand-Drawn Check

People don’t pay by check nearly as much as they used to, because checks are
time-consuming, inconvenient, and not in the slightest bit fun or interesting.
But what if that changed? What if checks became time-consuming, inconvenient,
and fun and interesting? After all, when you write a check, it doesn’t
need to come out of one of those official checkbooks.
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Whither Countrywide?

While I’m on the subject of bank valuations, it’s worth revisiting Countrywide,
which is now languishing at about $16.50 per share and looking
for a second white knight
to come in and provide much-needed operating
capital.
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Barclays: Going Cheap

The market really doesn’t want Barclays to buy ABN Amro. After Barclays president
Bob Diamond all
but threw in the towel
yesterday, the bank’s shares
are up 20p, or 3.45%, today.
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Citi in Japan

A Japanese listing makes sense for Citigroup.
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Why Goldman Might Sell its Loans at a Discount

The Breaking Views column in today’s WSJ features a column
by Lauren Silva originally published last Thursday. "Can Goldman Win on
Debt?" is the headline on the piece, which asks whether Goldman Sachs is
"about to turn the credit crunch to its advantage".
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Nostalgia for Glass Steagall

Yves Smith at Naked Capitalism submits: Boy, is sentiment changing. The latest indicator: an article in MarketWatch bemoaning the demise of Glass Steagall, the law enacted in 1933 that separated commercial banking from investment banking. The article by Thomas Kostigen … Continue reading

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Extreme Measures III: Cambiz Alikhani at the Financial Times

Yves Smith of Naked Capitalism submits: As concern about tightening conditions in the credit markets and the continued erosion of the US supbrime and broader housing market has grown, so too have calls for Extreme Measures to combat these snowballing … Continue reading

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Commercial Real Estate Prices May Drop 15% in Next Year

Yves Smith at Naked Capitalism submits: Experts warn that the boom in commercial real estate prices, fueled by cheap credit, is going sharply into reverse. Fitch had noted as early as April, and again in July that commercial real estate … Continue reading

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Brad DeLong Argues That Central Banks Should Cut Interest Rates

Yves Smith at Naked Capitalism submits: It’s always dangerous for mere mortals to take issue with Serious Economists, but let’s start with Professor of Economics at U.C Berkeley Brad DeLong’s thesis (hat tip Mark Thoma): The fact that there is … Continue reading

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Will Asking Mortgage Servicers to Modify Mortgages Have Much Impact?

Yves Smith at Naked Capitalism submits: Bloomberg tells us that the Fed and the Treasury made a joint statement today asking mortgage servicers to take a more proactive stance, identify borrowers in danger of gong into default, and offer loan … Continue reading

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Cash-Out Refis: The Missing Actor in the Subprime Drama

Yves Smith at Naked Capitalism submits: Ah, fall is upon us, and with it comes the spectacle of renewed discussion of what to do about the snowballing subprime/housing mess. Members of Congress will compete for air time to Bemoan the … Continue reading

Posted in banking, bonds and loans, housing, Media | 6 Comments

Bundesbank President Weber vs. White House on Housing Crisis

Yves Smith at Naked Capitalism submits: Apologies for the heavy reliance on the Financial Times today, but the pickings elsewhere are meager indeed. The FT has an interesting juxtaposition of stores on its website tonight. The lead story, from the … Continue reading

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Fed Governor Mishkin Urges Swift Action to Combat Housing Price Decline

Yves Smith at Naked Capitalism submits: In a paper presented at the Fed’s Jackson Hole conference, Federal Reserve governor Frederic Mishkin urged central bankers to respond quickly and aggressively to large falls in housing prices, arguing that it was less … Continue reading

Posted in banking, bonds and loans, fiscal and monetary policy, housing | 1 Comment