Skip to main content

Opening Bell: 04.09.09

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."