Category Archives: banking

JP Morgan and the Octagon

Posted on June 16, 2008 by Felix

When Chase Manhattan bought JP Morgan in 2000, it knew it was acquiring a valuable brand, but it also wanted to make its presence felt. So the name of the new bank became the unwieldy JP Morgan Chase, and Chase’s … Continue reading →

Posted in banking | Comments Off on JP Morgan and the Octagon

WaMu’s Atrocious Mortgage Servicing

Posted on June 15, 2008 by Felix

You know that if you’re running into problems with your mortgage you should contact your servicer, right? Well, best hope your servicer isn’t WaMu. Over the past six months I have been disconnected more times than I can count while … Continue reading →

Posted in banking, housing | Comments Off on WaMu’s Atrocious Mortgage Servicing

The End of Lehman

Posted on June 12, 2008 by Felix

Why the defenestrations at Lehman? There’s one reason, and one reason only: the share price, which was meant to go up, instead went down. And frankly the only reason Fuld himself still has his job is that he is also … Continue reading →

Posted in banking, defenestrations | Comments Off on The End of Lehman

Pandit: Getting Serious

Posted on June 12, 2008 by Felix

Things are getting serious at Citigroup. Just check out how the WSJ’s reporting has changed from last week, when Citi was merely closing consumer credit outlets in Japan, to this week, when Citi is closing the Old Lane hedge funds … Continue reading →

Posted in banking | Comments Off on Pandit: Getting Serious

Fixing Libor, Redux

Posted on June 12, 2008 by Felix

The FT’s Lombard column asks a good question today: Why is Libor used as a basis for US loans in the first place? Dollar Libor started life three decades ago as a "eurodollar" index – meaning it was mostly used … Continue reading →

Posted in banking, bonds and loans | Comments Off on Fixing Libor, Redux

Libor Gets a Makeover

Posted on June 11, 2008 by Felix

It seems that the BBA will be fiddling with Libor after all. But it’s not at all clear exactly what the changes will be, or even when they will be implemented: Carrick Mollenkamp is simply saying that the number of … Continue reading →

Posted in banking | Comments Off on Libor Gets a Makeover

Brokers Should Unlock Their ARSs

Posted on June 10, 2008 by Felix

Bloomberg’s Darrell Preston has found three investors in auction-rate securities who have found buyers for their holdings. That’s the good news. The bad news is that these investors’ brokers are refusing to let the owners sell. Franklin Biddar bought $100,000 … Continue reading →

Posted in banking, bonds and loans | Comments Off on Brokers Should Unlock Their ARSs

Lehman Stock: The Silver Lining

Posted on June 9, 2008 by Felix

When Lehman Brothers stock closed Friday at $32.29 a share, that put the bank on a price-to-book ratio of 0.82, based on Lehman’s Q1 announcement that it had a book value of $39.45 per share. When Lehman Brothers stock opened … Continue reading →

Posted in banking, stocks | Comments Off on Lehman Stock: The Silver Lining

Lehman’s Slow-Motion Trainwreck Continues

Posted on June 9, 2008 by Felix

Banks, by their nature, are opaque creatures, and investment banks even more so. Even when they have a public listing and aren’t owned by a much larger financial-services entity, it’s almost impossible to tell from outside what’s going on inside … Continue reading →

Posted in banking, stocks | Comments Off on Lehman’s Slow-Motion Trainwreck Continues

The Second Wave of Bank Troubles

Posted on June 7, 2008 by Felix

Floyd Norris notes that the S&P financials have sunk back to their mid-March lows. But although the index as a whole is back at its mid-March level, its components generally aren’t. What we’re seeing is pretty much what Mohamed El-Erian … Continue reading →

Posted in banking, stocks | Comments Off on The Second Wave of Bank Troubles

Just How Big Was Lehman’s Buyback?

Posted on June 4, 2008 by Felix

Was I too hasty in being nice about the WSJ reporting on Lehman’s stock buyback? I said that in the absence of any evidence to the contrary, one should probably take the WSJ’s assertion that the buyback was "large" at … Continue reading →

Posted in banking, stocks | Comments Off on Just How Big Was Lehman’s Buyback?

Who Might Buy Lehman?

Posted on June 4, 2008 by Felix

Peter Eavis and David Reilly are thinking along the same lines as me: Lehman Brothers should be sold. But then we part company, for the WSJ writers’ shortlist of potential acquirers is deficient in the only think which matters right … Continue reading →

Posted in banking, M&A | Comments Off on Who Might Buy Lehman?

Return of the SIV

Posted on June 4, 2008 by Felix

Remember last summer, when everybody got very excited about SIVs? (SIV, if you don’t recall, stands for "borrow short, lend long, move everything off-balance-sheet, and pray liquidity doesn’t dry up".) There was a lot of smoke and noise, and eventually … Continue reading →

Posted in banking | Comments Off on Return of the SIV

Lehman and the Exploding Hedge

Posted on June 4, 2008 by Felix

According to Susanne Craig, Lehman CFO Erin Callan "receives a slimmer daily financial summary than her predecessors, relying more on data from the trading-floor contacts built during her 13-year Lehman career". I wonder when and how she found out about … Continue reading →

Posted in banking | Comments Off on Lehman and the Exploding Hedge

Is Libor Dead?

Posted on June 3, 2008 by Felix

It’s time to hoist Henri Tournyol Du Clos from the comments; he’s always insightful, but what he said about Libor last night is particularly spot-on: The problem is that unsecured fixed rate interbank lending is an activity that firmly belongs … Continue reading →

Posted in banking, bonds and loans | Comments Off on Is Libor Dead?

Lehman and the Failed Hedges

Posted on June 3, 2008 by Felix

It looks as though Lehman Brothers is going to lose money in the second quarter. That’s partly because the second quarter, for banks, includes March, which was a particularly brutal month in the capital markets. But it’s also because the … Continue reading →

Posted in banking | Comments Off on Lehman and the Failed Hedges

Ideas for Fixing Libor

Posted on June 2, 2008 by Felix

Many thanks to Stanford’s Darrell Duffie for leaving a comment on my last post about Libor. Duffie is one of the academics who signed off on the WSJ’s attempt to prove the measure flawed, so he’s probably disappointed that the … Continue reading →

Posted in banking | 1 Comment

How Bear Failed

Posted on May 30, 2008 by Felix

Did you have time to read more than 10,000 words by Kate Kelly on the fall of Bear Stearns? It’s an interesting series, full of color. My favorite bit is Jamie Dimon vs Vikram Pandit: Late Sunday night, as lawyers … Continue reading →

Posted in banking | Comments Off on How Bear Failed

Defending Libor

Posted on May 29, 2008 by Felix

Carrick Mollenkamp and Mark Whitehouse got some pretty heavyweight backing for their Libor investigation today: before running it on the front page of the WSJ, they got sign-offs from Darrell Duffie of Stanford, Mikhail Chernov of London Business School, and … Continue reading →

Posted in banking | 8 Comments

Should Citi Cut its Dividend?

Posted on May 28, 2008 by Felix

Holman Jenkins has a most peculiar column today which seemingly tries to defend Citigroup’s decision to continue paying dividends, even as it’s raising billions of dollars of capital elsewhere. Except he never quite comes out and says that Citi is … Continue reading →

Posted in banking, stocks | Comments Off on Should Citi Cut its Dividend?

Citi’s Dreadful Succession Planning

Posted on May 23, 2008 by Felix

Sandy Weill is sniping at Chuck Prince via the FT – again. Why? It makes him look like a petty and bitter old man, rather than any kind of elder statesman of finance. Interestingly, this time he’s not just blaming … Continue reading →

Posted in banking, governance | 1 Comment

When Hedges Fail

Posted on May 22, 2008 by Felix

Here’s a gentle reminder for CFOs and risk officers at major international banks: if you hedge your position but you don’t hedge it 100%, then you haven’t fully hedged your position. Last month, it was UBS, which made a decision … Continue reading →

Posted in banking, stocks | Comments Off on When Hedges Fail

Check Forgery Datapoint of the Day

Posted on May 20, 2008 by Felix

Luke Mullins talks to Frank Abagnale, the acknowledged expert on such matters: Check forgery is now at about $20 billion a year, up from about $12.6 billion in 1996. There was an increase in check forgery of over 25 percent … Continue reading →

Posted in banking, personal finance | Comments Off on Check Forgery Datapoint of the Day

Barclays’ Plan B: No Better Than Plan A

Posted on May 20, 2008 by Felix

Is Bob Diamond delusional? Barclays’ top team feels it has earned kudos with the City by walking away from last year’s battle for ABN Amro, which was bought by a consortium led by RBS for ߣ47bn. Um, walking away? That’s … Continue reading →

Posted in banking, M&A | Comments Off on Barclays’ Plan B: No Better Than Plan A

Chart of the Day: Credit Losses Per Employee

Posted on May 19, 2008 by Felix

Here Is The City has put together this chart of credit losses per wholesale-banking employee, and it’s quite eye-opening, even if you discount the Mizuho outlier: Wachiovia, UBS, and Citi have all managed to rack up more than $1 million … Continue reading →

Posted in banking, charts | Comments Off on Chart of the Day: Credit Losses Per Employee