Chief Executive Officer Brian T. Moynihan is “the right guy for the job,” said Whitney, 41, who started New York-based Meredith Whitney Advisory Group LLC in 2009. Bank of America, based in Charlotte, North Carolina, probably won’t need to raise capital in the public markets, and shareholders should “hold on,” Whitney said. Bank of America has lost more than half its value on the New York Stock Exchange this year. Moynihan, 51, has said repeatedly that the company won’t need to issue shares to comply with new international capital standards. Bank of America has sold more than 20 assets or units since Moynihan took over last year. “They’re biting into the marrow of the institution to raise capital,” Whitney said. “They’re selling some crown jewels.” [Bloomberg]
Archive for August 2011
Meredith Whitney Knows This BAC Situation Might Hurt But ‘Hold On’ And Let The Pain Wash Over You
By Bess Levin
Moody’s Cuts Japan’s Credit Rating (WSJ)
Moody’s said it was cutting Japan’s government bond rating to Aa3 from Aa2, citing “large budget deficits and the build-up in Japanese government debt since the 2009 global recession.” It kept the outlook on the new rating as stable.
Japan Rolls Out Yen-Stopping Measures (WSJ)
Announced by Finance Minister Yoshihiko Noda, the package has two main elements: a $100 billion fund to encourage Japanese businesses to ramp up their overseas mergers and acquisitions, and a rule requiring major financial institutions to report currency-trading positions twice daily.
Markets Remain Unkind To BofA (WSJ)
FYI: “As a bond-fund manager, I do watch Bank of America’s stock price, and under $7 is a bad sign,” said Chris Vincent, a portfolio manager at William Blair & Co.
Paul Tudor Jones Up For The Month, Lowering/Raising Fees (WSJ)
Tudor Investment Corp executives have told clients that early next year the firm will offer a new share class for the firm’s flagship $7.6 billion Tudor BVI Global Fund Ltd., one that charges management fees of 2.75%, down from the current 4% fees. But clients will have to give something to get something. They will choose between paying the new management fee of 2.75% as well as 27% of any gains for the new share class of the fund; or they can stick with the current fees, which include a 4% management fee and 23% of any gains. Either way, the fees will remain higher than the 2% management fee and 20% slice of gains claimed by most hedge funds. One reason the high fees may not deter investors: Mr. Jones has managed to make money amid the market’s recent tumble, scoring gains of more than 3% so far this month, according to investors. The reason: Mr. Jones has held a large slug of gold-related investments as well as bearish positions on stocks. Read more »
$$$ BlackBerrys Work Through Earthquake While Calls Fail, Helping RIM’s Image (Bloomberg)
$$$ Primary Global Chief ID’d As Conspirator In Insider Case (WSJ)
$$$ Greenspan Says Euro is Breaking Down, Some Bank Collateral is Questionable (Bloomberg)
$$$ Dick Bove: I Changed My Mind, Buy the Bank Stocks (NetNet)
$$$ Go Topless Day 2011 protesters take off their tops for justice on Venice Beach (DM) Read more »
Humanitarian’s Plans To Use Fireworks To Teach The Federal Reserve A Lesson Stymied By Cops
By Bess Levin
Authorities detained Glenn Neff, 27, after they spotted him in a red Jeep Cherokee that was parked in an isolated part of the park after closing time Monday. The vehicle, which contained fireworks, also was fitted with a turret and multiple tubes from which the explosives were to be deployed. Neff, a resident of Stuart, Fla., told authorities that he did not want to hurt anyone and was planning to detonate the fireworks to draw attention to himself and issues he had with the banking industry…According to his Facebook page, Neff attended Stetson University in Florida. He describes his occupation as “Humanity’s Last Best Hope for Freedom.” In an “open letter” posted on the site in January, Neff wrote, “I have come to the inescapable conclusion that the bankers at the Federal Reserve engineered this financial crisis on purpose. And ladies and gentlemen, I have figured out how to get rid of the b*stards.” [NYP]
BofA Says Henry Blodget Isn’t Qualified To Talk About Its Capital Hole; JPMorgan Thinks It Might Be
By Matt Levine
BofA would like you to know a few things about its capital adequacy, including (1) that Henry Blodget is a schmuck, (2) that the Wall Street Journal agrees, and (3) look over there, earthquake!
Henry Blodget, who runs financial blog Business Insider, aggregated estimates from other sources to say the bank may face a capital shortfall of $100 billion to $200 billion.
In a statement Tuesday, Bank of America said “Mr. Blodget is making ‘exaggerated and unwarranted claims,’ which is what the [Securities and Exchange Commission] stated publicly when he was permanently banned from the securities industry in 2003.”
Zing! But not everyone who thinks that BofA may need to raise capital has been banned from the securities industry. In particular, given the rumors swirling that that BofA is going to be rolled up into the One Bank To Rule Them All, it might be worth checking in with JPMorgan. Their credit analysts have a note out today, and they think the news is so bad it’s good: Read more »
Back in June, we discussed the possibility of UBS moving out of its Stamford, CT building, which houses the largest trading floor in the world), and into New York City. The bank, which has not been doing too hot of late, seemed to be of the opinion that leaving Stamford would be a panacea for all its woes which, according to UBS, boil down to no one wanting to work in Connecticut (rather than no one wanting to work at a place that doesn’t pay and yells at you when you ask if this month’s check will clear). After several months of talks with developer Larry Silverstein about a possible deal at 3 World Trade Center, which conveniently has 5 trading floors located in “Tower 3,” UBS announced that it’d looked over its finances and realized it wouldn’t be able to come up with the money for a new place, and ditched the plan, while still moving a bunch of employees south and leaving the door open for a move to midtown, an idea that struck absolute terror or delight into the hearts and plums of everyone directly or indirectly related to UBS. Read more »
Or are we looking at an early front-runner for most bat shit crazy rumor of the week? Read more »
Meanwhile, CNBC reports that the “DSK press conference was interrupted” by the quake.
Dominique Strauss-Kahn Gets Off, As Did Everyone Else Who Stayed In His Room At The Sofitel
By Bess Levin
There’s this: “A judge formally ordered the dismissal of all criminal charges against Dominique Strauss-Kahn on Tuesda.” And there’s this: Read more »
Does no one know how to “break a bank”? Must he hold your hand through everything? Read more »
If you’re looking for investment advice, you know by now whom to ask: Twitter, internet message boards, 80s hair-metal bassists. Perhaps a lesser known but equally important tip is: don’t ask investment bankers.
The Wall Street Journal talked to about a dozen senior bankers about what they were doing with their personal accounts, and “most disclosed investment strategies that were both ultraconservative for financial experts and at odds with their banks’ advice to companies, fund managers and individuals.” Some examples include: Read more »
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