Wells Fargo Earnings Rise On Mortgage Originations (MarketWatch)
The bank earned $3.3 billion, or 60 cents a share for the third quarter. Like other banks nationwide, improving credit boosted its earnings; the San Francisco lender released $650 million it had previously set aside to cover potential loan losses, up from $500 million in the second quarter.
Dimon Best By Bad WaMu Loans (Bloomberg)
Dimon, like his counterparts at other banks, is waiting impatiently for the housing crisis to ease so the bank can rid itself of its huge portfolio of bad loans. In addition to the WaMu writedowns, the bank faces an avalanche of litigation over allegedly predatory and fraudulent WaMu mortgages and has set aside a total of $3.5 billion in reserves to cover the cost of mounting lawsuits.
Financial Leaders Expect Shift Of Power After Elections (NYT)
Analysts and lobbyists say a Republican-controlled Congress may be less likely to investigate industry practices or hold oversight hearings that may embarrass the industry. While that won’t affect hearings like ones set for later this month in the Senate that will examine the foreclosure mess, it makes them much less likely in the next Congress. “It changes the tone in Washington,” one industry lobbyist said. “If a regulator knows they’re going to get yelled at on Capitol Hill, that influences their decisions.”
GM's New Sticker Price: $50 Billion (WSJ)
The new projections by GM say the company could have a stock-market value at the start of trading of $50 billion—about the same as the solidly profitable Ford Motor Co.—and that it could be as high as $60 billion, said people familiar with the plan. But for the U.S. to break even through sales of the rest of its stake, the share price may need to rise more than 60% from its initial level, to about $50. The initial public offering plan envisions the shares would be priced at $26 to $29 each, these people said. The actual price of the stock to be sold in the IPO would be set about Nov. 17, and the sale would take place the following day.
A Hedge Fund Manager's New Groove (WSJ)
After years of "long-short" investing, Mr. von Mueffling and his analysts and traders no longer short stocks at all. Instead, like a typical stock mutual fund, they stick to buying company shares they expect will rise. Mr. von Mueffling said the strategy is "the right long-term decision." "I'm not saying there aren't overvalued stocks out there," he said in an interview. "There are, but trying to short them when the government is printing money is a very, very challenging game," he said, referring to, among other things, Federal Reserve programs to buy government bonds, which the Fed is widely expected to announce this week. The remade Cantillon pulls in much lower fees than a hedge fund with similar returns would...the majority of Cantillon investors pay just a management fee of 1.25% or less, according to fund documents.
Brooklyn Rabbi Blackmailed SAC Capital Because Founder Was "Rich" And "Jewish" (NYP)
A Brooklyn rabbi ran an unholy scam on a $16 billion hedge fund -- because he knew that its founder was "Jewish and . . . rich," a prosecutor told jurors yesterday. Rabbi Milton Balkany demanded $4 million from SAC Capital Advisors founder Steven Cohen by threatening that a prison inmate he was counseling would go to the feds with insider-trading allegations against the firm, Manhattan federal prosecutor Jesse Furman said. Balkany -- whose "statements were lies, pure and simple," according to Furman -- was videotaped pocketing checks from an SAC lawyer and saying "that Mr. Cohen and SAC were in the clear," Furman said in the extortion trial's opening statement.
Roubini Says Advanced Economies Show Anemic Growth (Bloomberg)
“Economic recovery will be U-shaped,” Roubini said. “The next year is going to see a painful process of deleveraging, both in the private and public sector, lower consumption, lower spending, lower budget deficits, more savings, reduction of debt. That implies an anemic economic recovery.”
Fed Will Probably Start $500 Billion Of Bond Buys, Survey Shows (Bloomberg)
“There’s no silver bullet right now” and central bankers have “very few options left in terms of lowering interest rates,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. He predicted $500 billion of Treasury and mortgage-backed securities purchases in the next six months.
Despite Oil Spill Charge, BP Returns To Profitability (NPR)
The cost to BP PLC of dealing with the Gulf of Mexico oil spill was more than offset in the third quarter by revenues driven in part by higher oil prices, with the British giant posting a $1.79 billion profit, the company reported Tuesday.