Archive for April 2011
Bank Of America Has Bigger Problems Than Analysts For Whom A $2 Billion Profit Isn’t Good Enough
By Bess LevinEarlier today, Bank of America reported a $2.05 billion profit, a thirty-six percent drop from the first quarter of 2010. Still, as this represented the first time the bank had made money in three quarters, those in Charlotte felt pretty good about themselves this morning and hoped analysts and the market would give them props for a job relatively well done. Baby steps and all that jazz. Instead, all BofA heard was how it didn’t live up to anyone’s expectations and its stock took a kick in the pants. Despite the fact the bank has said itself by way of “Project New BAC,” wherein first year analysts have been asked “why don’t you tell us” how to turn a profit, that it needs a timeout from being as harshly judged as other firms and valued by the numbers, it was all “you’ve disappointed us this” and “why can’t you be more like JPMorgan” that. And apparently profit isn’t the only thing on which people won’t get of Moynihan and Co’s back about. Continue reading »
Bank Of America Earnings Miss Expectations, Profit Drops (BAC)
The bank reported net income of $2.0 billion, or $0.17 per diluted share, for the first quarter of 2011, compared with $3.2 billion, or $0.28 per diluted share, in the year-ago period and a net loss of $1.2 billion, or $0.16 per diluted share, in the fourth quarter of 2010.
Banks Near Deal With SEC (WSJ)
U.S. securities regulators are in talks with several major Wall Street banks to settle fraud allegations related to mortgage-bond deals that helped unleash the financial crisis, according to people familiar with the matter. The expected settlements, some of which could be reached as soon as next week, collectively mark the biggest attempt by enforcement agencies to hold Wall Street accountable for its role in the subprime mortgage bust. The settlements are expected to vary significantly among banks—but few, if any, are expected to surpass the $550 million penalty that Goldman Sachs paid last year to settle allegations that it misled investors in a mortgage-bond investment called Abacus 2007-AC1.
True Scale Of Glencore’s Trading Empire Unveiled (FT)
Glencore disclosed that it controls 45 percent of the third-party lead market, 38 percent in alumina, and between 30 and 20 percent for aluminium, cobalt and thermal coal. It has a smaller market share for nickel, ferrochrome, oil and grains. The sheer dominance of raw materials trading is set to play into Glencore’s favor as it pushes for a 15-20 percent stake sale worth $9 – $11 billion in London and Hong Kong.
Moody’s Cuts Ireland By Two Notches (Reuters)
Moody’s cut Ireland’s sovereign rating by two notches, to BAA3 from BAA1, to the verge of junk status on Friday and kept its outlook on negative.
Greece To Unveil Austerity Measures To Meet Deficit Goals (Bloomberg)
The government’s medium term-fiscal policy plan will detail more than 22 billion euros ($31.9 billion) of deficit-reduction measures through 2014, most of them in spending cuts, according to Finance Minister George Papaconstantinou. The government is also expected to unveil plans to raise 15 billion euros by 2013 through state-asset sales.
Deutsche Expands Nordic Focus as Bank Lands Biggest Merger Deal (Bloomberg)
Deutsche Bank which won 2011’s biggest Scandinavian corporate-finance deal when it led DuPont Co.’s bid for Danisco A/S, is boosting its Nordic unit as the pace of mergers in the region tops that of Europe and the U.S. “The Nordic market is playing a more important role relative to the rest of Europe,” said Jan Olsson, head of Deutsche Bank’s Nordic investment banking division, in an interview in Stockholm. Deutsche Bank set up a four-person currency team in Stockholm last year. The company also started offering corporate finance services at its Oslo branch, which until 2010 only provided banking to the country’s shipping industry.
JPMorgan Bankers Who Doubted Madoff In 2007 Are Named (NYT)
Those executives are John J. Hogan, the bank’s chief risk officer for investment banking; Matthew E. Zames, who oversees several important bank trading operations; and Carlos M. Hernandez, the head of global equities at the bank’s investment banking unit.
Mexican Economy Shrugs Off Narco War (CNBC)
“The buzz that has surrounded the BRICs (Brazil, Russia, India, China) and other fast-growing emerging economies in recent years has largely passed Mexico by, and arguably for good reason” said Rafael De La Fuente, an economist at UBS in a research note. Despite the drug war, Mexico’s economy took off last year with growth of 5.5 percent and UBS is predicting 2011 growth will hit 4.8 percent. Continue reading »
$$$ Goldman Sachs Charges Up to Justice Department, Levin Says [Bloomberg]
$$$ Gorman Tops Blankfein [FINS]
$$$ U.S. Senate Investigation Gives New Details on Magnetar [ProPublica] Continue reading »
Every single company with treasuries, every insurance fund, every — every requirement that — it will start snowballing. Automatic, you don’t pay your debt, there will be default by ratings agencies. All short-term financing will disappear. I would have hundreds of work streams working around the world protecting our company for that kind of event. [PBS via BI]
Raj Rajaratnam’s “Star” Witness May Have Been Given A Reason To Make The Galleon Founder Look Good
By Bess LevinFifteen million of them. Continue reading »
Dunkin IPO Offers Golden Opportunity For Eating Challenge Failures To Redeem Themselves
By Bess Levin
Recently around these parts, we’ve been getting some complaints about how it’s been far too long since we’ve chronicled a food eating challenge and a demand for answers. Here’s the rub: Continue reading »
Here’s what they’ve come up with: “Goldman only published the sell note on crude because they were left out of the Glencore IPO.”
And the award goes to… Continue reading »
