Category Archives: banking

TED Spread Datapoint of the Day

Posted on January 15, 2009 by Felix

‘Cos we all need some good news today: The TED spread is now in double digits! I wonder how much credit for this is going to be taken by Neel Kashkari. Me, I just call it the moral hazard trade.

Posted in banking, bonds and loans | 1 Comment

Citigroup: Where Was Geithner?

Posted on January 15, 2009 by Felix

The toughest question for Tim Geithner, at his confirmation hearing, will be something along these lines: "The single most important job of the president of the New York Fed is to prevent the collapse of a systemically-important bank. No bank … Continue reading →

Posted in banking, regulation | 1 Comment

Nationalize Citigroup and Bank of America

Posted on January 15, 2009 by Felix

Both Citigroup and Bank of America are down more than 20% in early trade today, and I imagine that Hank Paulson and Tim Geithner are starting work on yet another weekend deal of some description, since at this rate it … Continue reading →

Posted in banking | 1 Comment

When Citigroup Competes With Itself

Posted on January 15, 2009 by Felix

Dear John Thain is getting into the weeds of the Morgan Stanley Smith Barney joint venture, and doesn’t like what he’s seeing. The big problem here, according to DJT, is that Citigroup is intent on keeping its private bank — … Continue reading →

Posted in banking | 1 Comment

JP Morgan: A Better Acquirer than Bank of America

Posted on January 15, 2009 by Felix

Once Citigroup has been broken up, America will have two big financial supermarkets: Bank of America and JP Morgan Chase. There are many differences between them, but a very big one is their track record when it comes to recent … Continue reading →

Posted in banking, M&A | 1 Comment

Vikram Pandit is Still a Robot

Posted on January 14, 2009 by Felix

Did you really think that Vikram Pandit would really manage to leave Citigroup without topping his infamous memo from last June? His effort today includes one of the most astonishing sentences ever to emanate from a megabank CEO: We are … Continue reading →

Posted in banking, leadership | 1 Comment

Deutsche Results Hit Citi Shares

Posted on January 14, 2009 by Felix

When Citigroup realized it was going to lose much more money in the fourth quarter than the market expected, it decided to leak the news to the press. Deutsche Bank is more grown-up about such things, releasing a "preliminary and … Continue reading →

Posted in banking | 1 Comment

Morgan Stanley Smith Barney Datapoint of the Day

Posted on January 13, 2009 by Felix

How rich are Morgan Stanley Smith Barney’s clients? Consider this: According to the official press release announcing the formation of Morgan Stanley Smith Barney, the new joint venture will have "6.8 million client households globally – with a strong presence … Continue reading →

Posted in banking | 1 Comment

From Citigroup to Citicorp

Posted on January 13, 2009 by Felix

David Enrich says that the new big idea over at Citigroup is "to focus on wholesale banking for large corporate clients and retail banking for customers in selected markets around the world". If that ever happens, I have the perfect … Continue reading →

Posted in banking | 1 Comment

Where are the Risk Auditors?

Posted on January 13, 2009 by Felix

As Roger Lowenstein says, Ezra Merkin was (is?) "a Wall Street sage, noted philanthropist and professional money manager". And yet for all his protestations that he was risk-conscious and diversified and an expert at due diligence, he still ended up … Continue reading →

Posted in banking, hedge funds, regulation | 1 Comment

Why Banks Need to Lend Out Their TARP Funds

Posted on January 13, 2009 by Felix

Justin Fox likes Jack Guttentag’s argument as to why it makes sense for banks to sit on TARP funds rather than lending them out. I don’t. Guttentag defines a bank’s capital as "the difference between its assets and its debts", … Continue reading →

Posted in bailouts, banking | 1 Comment

How Safe is Ken Lewis?

Posted on January 13, 2009 by Felix

Oh, the fickle Wall Street Journal. It was so kind last month, when the American Banker named Bank of America’s Ken Lewis Banker of the Year for the second time in six years: If anyone deserved the award, it is … Continue reading →

Posted in banking, defenestrations | 1 Comment

The End of Citigroup

Posted on January 12, 2009 by Felix

Citigroup shares closed today at $5.60 apiece. Only twice in recent memory have they closed lower: on November 20 and 21. Back then, the parlous state of Citigroup’s equity caused Treasury to implement an emergency bailout package. Today, the b-word … Continue reading →

Posted in banking | 1 Comment

Vikram Pandit, Dead Man Walking

Posted on January 12, 2009 by Felix

Remember Jack Flack’s five levels of CEO hell? The fourth ("On The Ropes") is when the board starts expressing confidence in the CEO; the fifth ("Dead Man Walking") is "when the corporate flacks, who are typically the staunchest of the … Continue reading →

Posted in banking | 2 Comments

Smith Barney Math

Posted on January 11, 2009 by Felix

I’m trying to work out the mathematics of the proposed joint venture between Citigroup and Morgan Stanley, and what it does for Citi’s balance sheet, using stories from the FT and Bloomberg. According to the FT, Citigroup has 15,500 brokers; … Continue reading →

Posted in banking | 2 Comments

Rubin Deserts a Sinking Citi

Posted on January 9, 2009 by Felix

Robert Rubin built the basis of his reputation, and his fortune, at Goldman Sachs. He then went to work on the two in sequence: the former at Treasury, and the latter at Citigroup. It all worked out quite well for … Continue reading →

Posted in banking | 1 Comment

Will FHLB Atlanta’s Failure Spark a Major Regulatory Overhaul?

Posted on January 8, 2009 by Felix

Over a year ago, Chuck Schumer said (and I agreed) that the Federal Home Loan Bank of Atlanta was an all-but-unregulated nightmare of enormous proportions. Now, HousingWire’s Paul Jackson tweets a rumor that FHLB Atlanta is going to be taken … Continue reading →

Posted in banking, regulation | 1 Comment

Singapore’s Outperforming Merrill Investment

Posted on January 8, 2009 by Felix

The FT says today that the government of Singapore’s $23-a-share investment in Merrill Lynch was worth just $12.10 per share at the end of 2008, a drop of 47%. A paper loss of more than $2 billion is tough for … Continue reading →

Posted in banking | 1 Comment

Can GMAC Lose its Newfound Bank Status?

Posted on December 29, 2008 by Felix

GMAC says it’s still "tabulating" the results of its bond exchange, which means we still don’t know whether the crucial 75% hurdle has been reached. If it isn’t, then what? On Friday morning, the answer was clear: The deadline for … Continue reading →

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GMAC: Who’s in Charge?

Posted on December 24, 2008 by Felix

To me, the most interesting part of the Fed’s decision to allow GMAC to become a bank is the fact that it will be broken up to the point at which its owners will effectively have no control over it … Continue reading →

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Bailouts: The Darling Approach

Posted on December 23, 2008 by Felix

Robert Peston talks to UK finance minister Alistair Darling about the fateful week in October when the UK took the lead in terms of injecting massive amounts of capital into its banking system, in the process effectively nationalizing a large … Continue reading →

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Why Isn’t ProPublica Attacking Citigroup?

Posted on December 17, 2008 by Felix

ProPublica got its knickers in a twist when it discovered that Goldman Sachs had put out negative research on California, which had the potential of raising California’s borrowing costs. Just imagine what would have happened if a major bank put … Continue reading →

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More Evaporating Billions at Morgan Stanley

Posted on December 17, 2008 by Felix

Morgan Stanley’s earnings this morning are truly dreadful. When your stock is trading around $15 a share, a quarterly loss of $2.24 per share is a big deal. But in fact it’s worse than that: the bank recorded "net revenue … Continue reading →

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Did Geithner Bail Out Goldman Sachs?

Posted on December 16, 2008 by Felix

Add the NYT editorial board to the Goldman Sachs conspiracy theorists. It asks some good questions about Lehman revisionism, but then ends up with this: The revised version of the story sidesteps questions about whether the bailout of A.I.G. — … Continue reading →

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Goldman Starts Getting Smaller

Posted on December 16, 2008 by Felix

Thanks to the tactical leak to the WSJ a couple of weeks ago, today’s Goldman Sachs results are not particularly surprising, even if they are genuinely atrocious. And it’s also not news that all of the losses came from the … Continue reading →

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