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Category Archives: banking
Spinning Deutsche’s Loan Sale
I’m having something of a Rashomon moment with respect to Deutsche Bank’s sale of leveraged loans. Dana Cimilluca and Peter Lattman, in the WSJ, say that the mooted sale by Deutsche Bank "could bolster its own health as well as … Continue reading
Posted in banking, bonds and loans
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Why Wachovia Needs Another $7 Billion
Why does Wachovia need another $7 billion of equity capital, on top of the $8.3 billion it raised earlier this year? It’s not like its capital ratios are particularly gruesome: as of March 31, its Tier 1 capital ratio was … Continue reading
Annals of Stupid Philanthropy, BB&T Edition
What is it with ill-advised million-dollar charitable donations by banks? First of course there was Citigroup giving $1 million to the 92nd Street Y so that Jack Grubman’s twin girls could get into the preschool there. And now, well, I’ll … Continue reading
Posted in banking, ben stein watch, philanthropy
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Attractive Lenders
If I were a chartist, which I’m not, I’m sure I would consider the chart of KKR Financial to be surpassingly ugly. But I had lunch today with Brian McMahon, the CEO and CIO of Thornburg Investment Management, and he’s … Continue reading
Posted in banking, bonds and loans, stocks
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Where Private Equity Meets Public Debt
Back in October, things were so much smaller. The idea then was that KKR would put up $2 billion of equity, leverage it up to a total of $10 billion by borrowing $8 billion from Citigroup, and then use the … Continue reading
Posted in banking, bonds and loans, private equity
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Credit Card Datapoint of the Day
Visa is truly the global leader in credit cards. It has a market capitalization of $50 billion, and has a total transaction volume of $3.5 trillion per year: it’s worth about 1.4 cents per dollar transacted annually. Diners Club (remember … Continue reading
Posted in banking
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Why JP Morgan Asked for a Fed Exemption
If JP Morgan Chase was so confident that it will "remain well capitalized" in the wake of the Bear Stearns acquisition, why did it go to the extraordinary length of asking the Fed to exempt it (or at least $400 … Continue reading
Why Did JP Morgan Need the Fed’s Guarantee?
I got a very good question in my inbox last night: If JP Morgan did cherry pick and dump the riskiest Bear assets on the Fed, then there’s no mistaking the significance of the Fed $29 billion guarantee. If, as … Continue reading
Posted in banking
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Adventures With Bear Stearns Stock
Aren’t SEC filings fun? According to this one, On March 24, 2008, JPMorgan Chase acquired 11,500,000 shares of Common Stock in the open market. The aggregate purchase price of $140,724,350 was paid out of working capital. That works out at … Continue reading
Which CEO to Blame for Citi’s Woes?
When former Citi CEOs start sniping at each other in the press, you know things can’t be good. Today’s story in the FT is quite astonishing, for the quotes it gets from both John Reed and Sandy Weill: “The specific … Continue reading
Posted in banking
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Are Investment Banks Really Trying to Fix the Auction-Rate Market?
The WSJ reports on the market in auction-rate securities today: Last week, UBS said it was marking down an undisclosed amount of the value of auction-rate securities held by its customers. Other banks, including Merrill, aren’t marking down their values. … Continue reading
Posted in banking, bonds and loans
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The Capital Infusion League Table
This probably looks really good on a Bloomberg screen, but the formatting is all screwy online. (Weirdly, the credit-loss league table looks fine.) So as a public service I’ll republish today’s league table here in a slightly easier-to-read format. Suffice … Continue reading
Posted in banking
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Could Bear Stearns Have Filed for Chapter 11 After All?
Does Ben Bernanke know something the rest of us don’t? Here’s a little bit of today’s testimony: On March 13, Bear Stearns advised the Federal Reserve and other government agencies that its liquidity position had significantly deteriorated and that it … Continue reading
Posted in banking, fiscal and monetary policy
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Most People Will Never Understand What Happened to Bear Stearns
I’m catching up on a lot of material from the past week and a half or so, most of which is a little stale by now. But Deborah Solomon’s NYT interview with former Treasury secretary Paul O’Neill is still very … Continue reading
How to Make Money from Losing Money, UBS Edition
UBS is the latest bank to see its share price rise in the wake of an absolutely enormous write-down. The $19 billion write-down announced today almost doubles the write-downs taken since the third quarter of 2007, and, in a move … Continue reading
Lehman: Still Ready to Lend Megabucks
I’m back from holiday, and it seems there’s a 218-page report I Really Ought To Read. Do I hafta? In the meantime, I note that Lehman’s hitting the markets up for cash. Obviously Lehman, like all investment banks, reckons that … Continue reading
Posted in banking, bonds and loans
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The JP Morgan-Bear Stearns Option Agreement
Remember Exhibit A, the stock option agreement between JP Morgan and Bear Stearns which no one made public? Well, it’s finally been filed with the SEC. And it says exactly what everybody’s been saying that it says, only in legalese … Continue reading
Lehman: The Eisinger Effect
If you look at the one-day chart of Lehman’s stock price today, you’ll see that it was up a coupla bucks, happily crusing along, until early afternoon. Then, suddenly, in the last two hours of trading, Lehman’s stock skyrocketed in … Continue reading
Solvency Doesn’t Matter
Northern Rock was not insolvent when it collapsed. Bear Stearns was not insolvent when it collapsed. HBOS, victim of a bear raid yesterday, is not insolvent either. This is meant to reassure us? It doesn’t reassure Andrew Clavell.
Posted in banking
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Why It’s Safe to Bet Against Joe Lewis
Are you tantalized by the prospect of Slate’s new business site? Well, the editor, Jim Ledbetter, is guest-blogging over at Fortune today, so maybe that will give you an idea of what to expect. This morning, talking about the Bear … Continue reading
Bear Raid in the UK
Many people believe that Bear Stearns was brought down by a classic "bear raid" – where a rumor gets started, snowballs, and becomes self-fulfilling. In nervous markets, someone who shorts a bank and then starts a rumor that it’s in … Continue reading
Bear Stearns Shareholder Math
A lot of the back-of-the envelope sums surrounding the Bear Stearns shares assume that Bear’s employees, who own 30% of the outstanding stock, are likely to vote against a deal. But given that New York City’s comptroller has already started … Continue reading
Whither the Discount Window Stigma?
The WSJ headline today implies great dilemmas on Wall Street. "Firms Wrestle With Loans’ Stigma", it says, explaining: Wall Street firms were reluctant to borrow from the program Monday out of concern it could be seen as a sign of … Continue reading
Posted in banking, bonds and loans, fiscal and monetary policy
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Bear Stearns’s Share Price: It’s Not Speculators
That confounding Bear Stearns share price! Unsurprisingly, my explanation yesterday for why BSC was trading well above the offer price doesn’t seem to have persuaded everybody (or, frankly, anybody, really). It was mentioned by DealBook, but the "first best explanation" … Continue reading
Explaining the Bear Stearns Share Price
If you head over here, David Neubert has a slightly cryptic explanation of why Bear Stearns shares are trading in the $7 range. After IMing with him, I think I’m clear on what he’s saying, so let me try to … Continue reading
Posted in banking, bonds and loans, stocks
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