Morgan Stanley To Post Loss (WSJ)
“Because of the accounting treatment on some bonds issued by Morgan Stanley before the financial crisis erupted, the New York company is expected to take a hit of $1.2 billion to $1.7 billion on the bonds when it reports quarterly results later this month, according to people familiar with the situation.
That is somewhat higher than the $500 million to $1 billion mark that many analysts are predicting Morgan would take from the bond-price move.”
Wells Fargo Expects Record First Quarter Earnings of Approximately $3 Billion (PRNewswire)
“Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group,” said Chief Executive Officer John Stumpf. Expected results include:
* Total revenue of $20 billion, including another quarter of double-digit revenue growth at legacy Wells Fargo, up an estimated 16 percent;
* Strong operating results at legacy Wachovia;
* Solid operating margins with consolidated net interest margin of approximately 4.1 percent and efficiency ratio of approximately 56 percent;
* Combined net charge-offs of $3.3 billion, compared with fourth quarter net charge-offs totaling $2.8 billion at legacy Wells Fargo and $3.3 billion at legacy Wachovia;
* Provision expense of approximately $4.6 billion, including $1.3 billion credit reserve build, bringing the allowance for credit losses to $23 billion; and
* Pre-tax pre-provision profit of approximately $9.2 billion.
Jean-Claude Trichet Interview, Post G20 (ECB)
He actually sounds half sane through this one; new Rx?
Interactive Recruitment Map (FT)
Citi has recruited more people than UBS; that’s just funny for some reason.
Wells Fargo May Keep Evergreen (Reuters)
Wells Fargo-Edwards-Ovia isn’t quite sure what they’re keeping and what they’re not yet; Evergreen seems like it’s something you would want to hold on to though, guys. Or, for the sake of the Evergreen employees, sell it to a bank that knows what they’re doing.
“Wells Fargo said the asset management unit Evergreen Investments which it inherited when it bought Wachovia Corp was not for sale, even as it scales back Wachovia’s investment banking operation, the NY Post reported citing sources.
In a report posted on its website, the paper said Wells Fargo had informed potential buyers of Evergreen that it would not sell the money-management firm.
The bank is likely to keep Wachovia’s investment banking unit, although in a smaller form, even though market observers had predicted that Wells Fargo would sell the business, the Post reported.”
U.S. Imagines Bailout As Investment Tool (NYT)
There’s going to be a lot of propaganda in days to come on how the PPIP makes sense for the everyday person; this starts by likening it to the war-bonds of days past (and then goes on to point out the Government thinks of this as an investment strategy in the Country’s future).
“This is an opportunity to forge an alliance between Main Street, Wall Street and K Street,” said Steven A. Baffico, an executive at BlackRock, referring to the Washington address of many lobbying firms. BlackRock, a giant money management firm, is playing a central role in the government’s efforts and is considering creating a bailout fund. “It’s giving the guy on Main Street an equal seat at the table next to the big guys,” he said.”
Buffett Gets Handed Downgrade From Moody’s (NYT)
One wonders if this isn’t an attempt to clean up their reputation, as though to boast they’re willing to downgrade the big O. But I got news for ya, Moody’s: you can’t download that level of sex appeal. It won’t play by your rules.
“Moody’s Investors Service on Wednesday stripped away the triple-A rating of Berkshire Hathaway, the conglomerate and investment vehicle run by Mr. Buffett, citing the economic pressures on the firm.
The news is yet another sign that, despite all of Mr. Buffett’s investing prowess and business savvy, even the man that investors regard as the Oracle of Omaha cannot avoid the tremors coursing through the markets.”
Regulators Don’t Want TARP Money Back Anytime Soon (Reuters)
This is why you should never play with the Government.
“But banking experts said regulators will likely be wary of letting big banks, at least, repay TARP any time soon.
“They have to be very careful about sending any accidental signals,” said Seamus McMahon, an independent bank and regulatory consultant. “There is not much downside from (the regulators’) perspective to taking their time.”
Mindful of their role in keeping the financial system healthy, regulators would not want to allow banks to return money only to find later the repayment was premature and they needed new capital.”
US Destroyer VS. Pirates! (FT)
“A US navy destroyer, the USS Bainbridge, reached waters off Somalia on Thursday to help free the captain of the Maersk Alabama, whose 20-strong crew had fought back after the vessel was boarded by pirates 350 nautical miles off Somalia’s east coast, in an area that has seen a surge in piracy.”
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Dead Zebra girl
http://online.wsj.com/article/SB123922644853002669.html
I think Barney Frank should have a hearing to discuss why the Oracle was downgraded. I mean it could cost him more to borrow money and we all know that isn’t fair.
I’m putting together a script on Somali pirates. I’ve got Zwick to helm, Bale as the bitter/drunk russian captain, Decaprio to play the clever american engineer, Djimon Honsu as the pirate, with cameo by Daniel Craig as Royal Navy Officer #1.
gee so the mighty oracle, and oft-quoted ‘derivatives are evil’ genius is getting downgraded… this couldn’t have anything to do with all the puts (which, last i checked are derivatives) that he sold on equity indices? nah… those things are evil, Mr Buffet wouldn’t have any exposure to those now would he? oh, wait a minute, selling large amounts of puts isn’t a derivative play…. that’s right…
In other news, S&P has downgraded orgasms, which they now believe are at risk of becoming over leveraged in a down market.
I hate ratings agencies.
- Ruth Madoff
@3 Colonel Dubaku from 24 would also make a great pirate leader.
“Evergreen seems like it’s something you would want to hold on to though, guys. Or, for the sake of the Evergreen employees, sell it to a bank that knows what they’re doing”
william – your comment on wfc vis a vis evergreen investments shows not only your sickening NYC-centric elitism, but also a deep and profound ignorance. wfc already has an investment management arm that is actually larger than evergreen…so yea they already know the business very well, have been very successful, and weren’t ever planning on jettisoning evergreen.
@6, but don’t forget that in the end, it will actually be Jon Voigt (played by Jon Voigt!) behind the whole spat of pirates attacks, because we know he needs bio-weapons so that Blackwa…umm…Starkwood can take over the world.
@3 – No joke…I really want to see that made.
I’d also add there needs to be a Dirk Pitt role given the operating environment…except not Matthew Mcconaughey. He sucks, and should wear a shirt more often.
@9
my friend’s dad wrote die hard & the fugutive (really), so if i have some time this weekend maybe i’ll toss some ideas at him. think blackhawk down meets das boot
@trojan
‘Indiana Jones and the Saucer Men From Mars’ – I’m sure that was probably 1000 times better than what eventually came shooting out of Spielberg’s pooper last year.
@7
Where’d you get NYC-centric elitism from?
Anal_yst – the concept that a “retail bank” like wfc couldn’t possibly run an asset management business like evergreen properly could only have come from someone like that, its the typical nyc attitude. i’ll concede that it also sounds a bit like a sell-side knuckle dragger as well.
it was a foolish and uninformed comment by william trying to appeal to all the GS/MS fanboys on this board. i just hate the GS/MS worship that you see from bankers, it drives me crazy. i work at a big buyside shop and i dont see that attitude much at all…its really refreshing.
They need to make an example of one boat load of pirates…annihilate one boat of them to show the rest they mean business this whole stand off for months is ridiculous
Erin Burnett is looking pretty good today, but then again, she looks good every day!
I hope the Somali Pirates have a booth at HBS career fair or an internship program.
They’re killing it.
delicious irony?
Moodys downgrades Berkshire Hathaway one notch due to ‘concerns about major losses in their equity portfolio’
one of their bigger losses was $10B on an investment made in… you guessed it, Moodys…
Somali “pirates” = Black flag ops funded by CIA.
- a bunch of impoverished fishermen now highjack tankers at will – (where do they get the tech and intel ?)
Objective: create a “crisis” which requires “intervention”. As we speak U.S. is sending naval forces into the area to “stabilize” it. Since setting up AfriCom – US has wanted a base and strong military presence in Africa but has been denied by the African countries. Creating a crisis provides the excuse.
US believes a presence necessary to counterbalance Chinese influence (major investor in Africa – for resources oil, etc.) on the continent.
I’m waiting for WFC to post their exposure from their Eastdil Secured and Well’s Capital Markets Group CMBS holdings.
Guest@#14…
“They need to make an example of one boat load of pirates…annihilate one boat of them to show the rest they mean business.”
Unfortunately, that’s not going to happen anytime soon.
The spineless wanks who run the shipping companies aren’t about to violate that sacred Int’l Law which says, “no weapons aboard commercial vessels.” Until they grow some balls and stop putting their defenseless ships, cargo, & crews in harm’s way, this piracy will continue unabated.
Is anyone aboard this thread who knows something about Admiralty Law and who would care to sound-off?
TGFD says, enough with the hand-wringing. Violate the law and arm the ships.
Until that time comes, TGFD wishes the pirates well. More power to them. When you have a stupid, vulnerable, and tasty prey that keeps on strutting past your hole, hey man, go for it. The more the better. Laugh like hell as you do.
Also, TGFD hopes that the insurance companies make their premiums so prohibitively high, that the vapid ship owners will be forced to make a decision.
I no longer have any sympathy with the ships or with their crews. This hijacking business has become boring and annoying to TGFD.
FBI hostage negotiators are now on the scene. Hahaha. What a f’n laugh this is going to be.
The Guy from Delaware
its called maritime law…wanker.
@18 – Maritime piracy has always been a problem in the Gulf of Aden, Southeast Asia, etc. And your characterization of AFRICOM is a bit of an oversimplification… AFRICOM was not “created” to respond to a pretend crisis. A number of factors culminated in establishing AFRICOM, not the least of which was the manpower, resources and dedicated staff that would be better than, in essence, a set of cubes at EUCOM with analysts and linguists and a map.
You can buy the tech and the intel very easily (radios, gps, weapons, NVDs, small rubber craft). The Gulf of Aden narrows into a choke point (go look at a map) where anyone entering/exiting the Red Sea is a target. Pay a few people working port ops with satellite phones to tell you who’s leaving, do a few time distance problems and voila! Instant pirates, just add RPG’s.
If they’re making a profit then why do they need a “bad bank” to buy their bad assets? Also does this profit include losses that aren’t on their books now because they’re using SIVs? If they hadn’t received billions from TARP there wouldn’t be a “profit” now. Too bad other companies in this country can’t find a way to get billions from the government so they can be “profitable” also.
If they’re making a profit then why do they need a “bad bank” to buy their bad assets? Also does this profit include losses that aren’t on their books now because they’re using SIVs? If they hadn’t received billions from TARP there wouldn’t be a “profit” now. Too bad other companies in this country can’t find a way to get billions from the government so they can be “profitable” also.
@18
You sound like you’re a bit crazy. Do you fear the New World Order, forced FEMA camps, and the impending North American or perhaps global currency?
@18 – Is that you, Michele Bachmann? I knew it!
Guest@#23/#24…
I like your post. Nice, concise summary.
TGFD would add one thing, though:
The effort by FASB to revise Mk to Mkt rules is not enough to make the toxic PPIP turds palatable.
Getting the Food and Drug Administration involved might help with Main Street. Just think, FDA “Safe for Human Consumption” labels on all those turds that are still hiding in the banks. You never know. MainStreeters might eat them then.
The Guy from Delaware
LegalGenius@#21…
“Admiralty law (also referred to as maritime law) is a distinct body of law which governs maritime questions and offenses. It is a body of both domestic law governing maritime activities, and private international law governing the relationships between private entities which operate vessels on the oceans.”
Courtesy of Wikipedia.
The Guy from Delaware
@ 18 — lay off the tinfoil, dude– DOD has got African countries clamoring to host bases — we’re already in Djibouti (Horn of Africa) – a miserable hellhole that used to be a French Foreign Legion outpost (only without the mandated hooker allotment, unfortunately) and going to be setting up a nice crib Sao Tome e Principe (west Africa coast).
TGFD — wiki blows goats — Maritime Law is the general law of the sea – Admiralty is more limited to ship collisions, salvage, and issues related to maritime commerce.
TGFD: Thank you.
NAS Kef boi@#29…
I think we are discussing “issues related to maritime commerce”. Are we not?
The Guy from Delaware
HeyTGFD — Yeah, but Admiralty law is not criminal in nature — it’s really the civil side of the house (torts, claims, etc.) Maritime Law is much broader and encompasses things like piracy which in turn involve international relations, criminal sanctions, Law of Armed Conflict, etc.