MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Saturday, May 26, 2012
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3:04 PM Lou Lebedin is out as head of the global prime brokerage for JPMorgan Chase (JPM), just two months after taking sole charge of the unit. He was co-chief of the business after joining JPM via its Bear Stearns purchase. Teresa Heisenrether (from the fixed-income prime brokerage) replaces him. Comment!
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Friday, May 25, 2012
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7:35 PM Speaking on the issue of increased financial regulation, Goldman's Jim O'Neill asks rhetorically: “Is it really that entirely desirable to have financial stability at the expense of everything else? I sort of think you want your investment bank to be a little unstable.” - pure Goldman gold. 20 Comments
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7:00 PM Want to buy banks? Look at some of the regionals, says Dick Bove. The big universals are dealing with a multitude of issues that impede their competitiveness, while community banks are being weighed down by regulations that are driving them out of the business. Firms in the middle tier however, are growing their key commercial and industrial lending portfolios while their competitors have had to pull back. His picks: US Bancorp (USB), PNC Financial (PNC) and Capital One (COF). 7 Comments
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6:15 PM Red flag for the U.S. economy? Lending during Q1 fell by more than $56B Q/Q, or 0.8%, a reversal from three consecutive quarters in which lending expanded. While lending to larger commercial and industrial customers continues to rise, nearly all other types of loans declined, including those to small businesses. Comment!
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3:37 PM Did S&P tip that Spain's Popular might be next in line for a bailout, asks the WSJ's David Enrich. He notes the bank is mentioned in the same breath as Bankia regarding government support in the S&P downgrade report. Enrich on the Bankia chronology: "Last summer, IPO. Last month, 'well capitalized.' Last week, €10B hole. Today, €19B bailout." 6 Comments
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3:06 PM With mounting losses in its home market, Spain's Banco Santander (STD) is under political pressure to unload at least a portion of its profitable Brazilian unit. Likely bidders might be Banco do Brasil (BDORY.PK) or Bradesco (BBD). Shares of Santander's Brazilian unit have been on the rise this year in anticipation of the sale. Comment!
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1:02 PM S&P cuts its ratings on five Spanish banks, and affirms the ratings on another nine. Santander (STD) and BBVA aren't touched, but remain on "CreditWatch with negative implications." 3 Comments
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12:33 PM Hudson City Bancorp (HCBK) could fetch a 31% premium to its current price in a sale to an acquirer "that could take substantial liability marks," reckons Stern Agee's Matt Kelley. Continued to be mentioned as a possible bidder is New York Community Bancorp (NYB). Comment!
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12:07 PM Spain looks set to inject another €19B into Bankia, giving the government about a 90% ownership stake in the troubled lender. This is in addition to €4.5B in preferred shares the government owned and flipped into common 2 weeks ago. The new capital will go towards upping provisions against losses in the bank's real estate portfolio. 3 Comments
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10:58 AM UTX received about $38B in orders at relatively tight spreads to Treasurys on its $9.8B bond offering, which is being used to fund the $18.4B acquisition of Goodrich (GR). The sale was the largest this year and the 6th largest on record. That's how it's done Facebook, write Andrea Johnson and Danielle Robinson. Comment!
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10:02 AM "Another bazooka" may be necessary for Spanish banks facing deposit withdrawals, sitting on big losses on their government paper holdings, and having €85B of maturing debt in Q2 and Q3. The trouble is banks have little left in the way of collateral for further LTRO borrowing. They need QE, not another LTRO, writes Nomura. 1 Comment
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9:05 AM With a record of poor shareholder returns, why do the TBTF banks (JPM, C, BAC) even exist, writes Sheila Bair. Capital markets certainly wouldn't finance such "unstable behemoths" if it weren't for their de facto government backstop. Jamie Dimon can provide a better return to shareholders by recognizing his bank is worth more in smaller pieces. 61 Comments
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7:25 AM The three board members who oversaw risk at JPMorgan (JPM) were notable for their lack of experience at managing risk at financial institutions. The Bank of Dimon is the only one of the TBTF crowd that doesn't have someone a bit closer to the industry on its risk committee. 5 Comments
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5:27 AM While some top execs take huge payments despite failing, Apple (AAPL) CEO Tim Cook is giving up $75M in dividend income by excluding himself from a program that enables staff to accumulate dividends on their restricted stock units that are still vesting. Cook has 1.125M such units that are due to vest over the next 10 years. (8-K) Comment!
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5:13 AM Citigroup (C) sells a 10.1% stake in Turkey's Akbank (AKBTY.PK) for $1.15B as part of the U.S. bank's program to sell assets in order to meet Tier 1 capital requirements. Citigroup will hold a remaining 9.9% stake for 3 years. The bank will take a post-tax $243M loss on the sale, having bought the 20% holding in 2007 for $3.1B. (PR) Comment!
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4:04 AM The slow-motion train wreck continues in Greece, with police urging citizens to keep their money in the banks rather than sowing the seeds for a wave of home thefts. Greek banks have seen almost 25% of their deposits drained out over the last two years, and are likely to be shored up today or Monday with €18B of bailout funds that are weeks overdue. 2 Comments
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12:49 AM Yuanta Financial says it has pulled out of talks to buy Taiwanese Ta Chong Bank, dealing a blow to Carlyle's (CG) plans to exit the underperforming investment in a sale that could have been worth ~$1.25B. (previously) Comment!
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Thursday, May 24, 2012
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6:16 PM Lehman Brothers (LEHMQ.PK) strikes a deal to buy the 26.5% stake it doesn't already own in apartment giant Archstone from BofA (BAC) and Barclays (BCS) for $1.58B, WSJ reports, ending the high-stakes chess game between Lehman and Sam Zell's Equity Residential (EQR). But Zell won't walk away empty handed, as his firm will get $150M in the deal. 8 Comments
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