Category Archives: banking

UBS Private Banking Inflows Cease

Posted on August 11, 2008 by Felix

I’m utterly unsurprised at this; if anything, I’d’ve expected the scale of withdrawals to be much bigger. UBS AG, the world’s biggest money manager for the wealthy, may report tomorrow that private-banking clients removed funds for the first time in … Continue reading →

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Who’s Gaining from Volatility?

Posted on August 8, 2008 by Felix

Most hedge funds had a hard time in July, losing twice as much money, on average, as someone invested in the S&P 500. It seems that a lot of people were rushing in to the short-financials trade, and got massively … Continue reading →

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Cartoon of the Day

Posted on August 7, 2008 by Felix

Rex Babin, for the Sacramento Bee: (Via Neubert)

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Good Idea of the Day: Slashing the Structured Product Investor Base

Posted on August 7, 2008 by Felix

Aline van Duyn reports today that a group of A-list banks — "including JPMorgan Chase, Merrill Lynch, Citigroup, HSBC, Lehman Brothers and Morgan Stanley," we’re told, a list which is notable for the non-inclusion of Goldman Sachs — is interested … Continue reading →

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Hedge Fund Datapoint of the Day

Posted on August 6, 2008 by Felix

Evan Newmark: Citigroup estimates that in the past 18 months Fortress has lost an astonishing 85%, or $6 billion to $7 billion, in the value of publicly-traded companies in which it holds large positions. It takes an extra-special level of … Continue reading →

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No Changes to Libor

Posted on August 6, 2008 by Felix

Remember the big Libor makeover, prompted by fears that Libor was increasingly fictional? Well, now that we’ve all pretty much forgotten what the fuss was all about, the BBA has come out and decided to do nothing. In a 14-page … Continue reading →

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Meredith Whitney and the Hierarchy of Payments

Posted on August 5, 2008 by Felix

It used to be that if you were having difficulty making your mortgage payment, you’d end up, one way or another, putting it on your credit card — if only by being unable to pay off much of your credit … Continue reading →

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Merrill: Losing the Expectations Game

Posted on August 5, 2008 by Felix

Dennis Berman looks today at Merrill Lynch’s earnings per share. With earnings down and the number of shares up, he concludes, reasonably enough, that, in the words of Sanford Bernstein’s Brad Hintz, "it’s extremely difficult to get to the earnings-per-share … Continue reading →

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Mobile Banking for the Poor

Posted on August 5, 2008 by Felix

At a press conference this morning in Mumbai, mobile-banking company Obopay announced an alliance with Grameen Solutions — an alliance with an extraordinarily ambitious goal. In ten years’ time, the companies said, they would like to see 1 billion of … Continue reading →

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Jimmy Cayne’s Latest Own-Goal

Posted on August 4, 2008 by Felix

Jimmy Cayne has been speaking at length with Fortune’s William Cohan, and has now managed to tell his side of the story. No wonder people don’t like him much: he comes across really badly even here. After reading the piece, … Continue reading →

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How Risky is Venezuela’s Bank Nationalization?

Posted on August 4, 2008 by Felix

Hugo Chávez has done a lot of things to endanger the Venezuelan economy. But to read John Lyons in the WSJ today, one of the worst and riskiest is his decision to nationalize Banco de Venezuela, which the then-government sold … Continue reading →

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The Upside of Moral Hazard

Posted on August 1, 2008 by Felix

Bob Van Order, a former chief economist of Freddie Mac, has a long and sensible piece describing what Fannie and Freddie are good for, and examining the problems they’re currently facing. Along the way, he talks a bit about the … Continue reading →

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Hiring Alan Schwartz

Posted on August 1, 2008 by Felix

Dear John Thain is very upset that Alan Schwartz, the last CEO of Bear Stearns, might get a good job elsewhere, now that he’s decided not to stay at JP Morgan. Indeed, he says that offering a job to Schwartz … Continue reading →

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The Problems With For-Profit Microlending

Posted on July 31, 2008 by Felix

After posting about the spat between Muhammad Yunus and Compartamos yesterday, I found a recent Economist editorial in favor of the Mexican for-profit lender. Since it’s one of the more lucid arguments in favor of the for-profit model, it’s worth … Continue reading →

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Muhammad Yunus vs Microlending “Loan Sharks”

Posted on July 30, 2008 by Felix

BusinessWeek’s Steve Hamm has a good overview of the latest dust-up in the world of microfinance, where industry Top Dog Muhammad Yunus has started lashing out at for-profit microlenders like Mexico’s Compartamos, accusing them of "moving into the same mental … Continue reading →

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The Mystery of Merrill’s Asset Reduction

Posted on July 30, 2008 by Felix

Alea is as eagle-eyed as ever: The most important and most ignored sentence in Merrill’s press release: The sale will reduce Merrill Lynch’s risk-weighted assets by approximately $29 billion. How is this possible? After all, last month the CDOs being … Continue reading →

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When Banks Hide Fees in FX Rates

Posted on July 29, 2008 by Felix

I just transferred some money from my US bank account to a vendor in the UK. Citibank’s wire-transfer fee was a modest flat rate of $20 — or so I thought until I looked at the exchange rate, which was … Continue reading →

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John Hempton, Financial Blogger Extraordinaire

Posted on July 29, 2008 by Felix

In mid-May, Australian fund manager John Hempton started a blog which is already one of the best in the world for serious analysis of finance investment ideas on both the long and the short side. Coming back from holiday today … Continue reading →

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Chart of the Day: Merrill’s Write-Downs

Posted on July 29, 2008 by Felix

A picture tells a thousand words: Remember this. Just because a write-down is large, doesn’t mean it’s final. (HT: Ritholtz)

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The Failure of John Thain

Posted on July 29, 2008 by Felix

Want proof that CEOs are overpaid? Just look at the mind-bogglingly awful Merrill Lynch announcement yesterday. It’s hard to know where to start: maybe the fact that Merrill is selling off $30.6 billion of CDOs to Lone Star for just … Continue reading →

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The Unconvincing Rally in Financials

Posted on July 17, 2008 by Felix

Financials are on a roll right now: the XLF index fund, which tracks the S&P financials index, traded as high as $20.89 this morning, exactly $4 or 23.6% higher than where it traded at the same time Tuesday morning. That … Continue reading →

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Bloomberg Datapoint of the Day

Posted on July 17, 2008 by Felix

Back in 1985, investment-banking powerhouse Merrill Lynch bought a 30% stake in Bloomberg LP for $30 million. A few years later, Bloomberg bought back a 10% stake for $200 million, leaving Merrill with 20% — which it’s now selling, again … Continue reading →

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Is Your Bank Your Mortgage Lender?

Posted on July 17, 2008 by Felix

Anthony Bianco on Ken Lewis: As lending volume exploded, the issue of whether B of A should jump back into the subprime game sparked fierce internal debate. Customers by the millions were going elsewhere for mortgages and taking their banking … Continue reading →

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The SEC Panics

Posted on July 15, 2008 by Felix

I think it was about the time that the SEC started trying to curtail short selling that I finally decided that we’re in panic mode. The market’s actually flat, as I write this, although Fannie and Freddie are down 20%, … Continue reading →

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Going Private, Lehman Edition

Posted on July 15, 2008 by Felix

Lehman Brothers is now trading at $12 a share, which is less than its asset-management business alone is worth. So at this point it makes perfect sense for CEO Dick Fuld to go private, sell off Neuberger Berman, and basically … Continue reading →

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