Antony's Feed
Jan 5, 2011
via Breakingviews

Beating the rap easier on Wall, not Main, Street

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Is beating the rap easier on Wall Street than Main Street? It sure looks that way. U.S. authorities have collared few high financiers for their role in the crash. By contrast the Federal Deposit Insurance Corp is lining up lawsuits against 109 mostly small-time bankers, arguing that negligence and fraud contributed to their firms’ demise.

Dec 29, 2010
via Breakingviews

Squeezed I-banks will fight for talent in 2011

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

NEW YORK — This might seem like an unlikely time for a bidding war for investment bankers. After all, the industry’s high-paying culture is still under scrutiny from regulators and politicians. And new capital rules and economic uncertainty mean returns may be lackluster again in 2011. So why is Wall Street limbering up for a battle for talent?

Dec 2, 2010
via Breakingviews

Madoff trustee has nothing to lose gunning for JPM

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Irving Picard’s decision to lob a $6.4 billion lawsuit in JPMorgan’s path might smack of desperation. After all, the trustee responsible for recovering assets for victims of Bernie Madoff’s gargantuan Ponzi scheme has had almost two years to file suits and now has just a week left. He’s hitting up UBS for $2 billion as well for its role aiding feeder funds. But Picard has nothing to lose.

Dec 1, 2010
via Breakingviews

Is Citi prepping for its next bailout already?

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Is Citigroup prepping for its next government bailout already? It’s a bit unfair to infer that from the latest news emanating from the recovering megabank: Citi is hiring President Barack Obama’s former budget chief Peter Orszag. But for a firm that’s been whacked by more financial crises than most over the past few decades, having a direct line to the White House is something of a must-have.

Nov 30, 2010
via Breakingviews

First Republic tale turns into buyout Goldilocks

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

NEW YORK — Banks these days don’t generally make for good fairy tales. But First Republic’s story gets pretty close. What looked like a happy ending three years ago turned out to be a miserable existence trapped inside not one, but two, grim houses before finally escaping. Now First Republic’s narrative is turning into a buyout Goldilocks.

Nov 17, 2010
via Breakingviews

U.S. bank dividends face a long slog upwards

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
By Antony Currie and Richard Beales

A return to boom-time dividends remains distant for investors in U.S. banks. It’s not just that the Federal Reserve is imposing strict criteria, unveiled on Wednesday, before financial firms can return more capital to shareholders next year, including stress-testing their portfolios again. Dividends have also dwindled so badly that they already faced a long slog back.

Nov 15, 2010
via Breakingviews

Don’t cry for Goldman in bank dividend kerfuffle

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Goldman Sachs’ shareholders have little to grumble about. Sure, the bank’s plans to buy back $5 billion in expensive preferred stock held by Warren Buffett appear to have been put on hold thanks to an industry-wide debate with the Federal Reserve over how to manage capital. That includes deciding when dividends can go up. But investors in Goldman’s common stock already have an advantage over the competition.

Nov 10, 2010
via Breakingviews

Investors shouldn’t get too sweet on dolled-up GM

The impressive third-quarter showing from General Motors shouldn’t wow prospective investors too much. Sure, the automaker’s $2 billion profit beat Ford’s. It even eked out a slightly better pre-tax margin than its rival. But GM’s last set of earnings before next week’s initial public offering aren’t as flattering as they look.

The company stuffed its dealers with 10 percent more inventory than it did at the end of June. There’s nothing inherently wrong with that. Car sellers have kept fewer vehicles on lots over the past couple of years. Demand was lacking, as was financing. But in GM’s case, many dealers also held stocks down in case the Motown manufacturer cut them loose in its restructuring. Rebuilding those levels now makes sense as the 2011 season approaches and sales pick up.

Nov 9, 2010
via Breakingviews

Ending prop just the start of Goldman’s make-over

Closing its proprietary trading desks is just one stage in Goldman Sachs’  make-over — and an early one at that. The Wall Street firm confirmed in a regulatory filing that it has “liquidated substantially all” the positions taken by its principal strategies group. The Volcker Rule mandated the move. But shuttering so-called prop desks is emblematic of a broader shift at the firm.

Goldman used to be the master of managing business conflicts, perceived or otherwise. Even though some clients would occasionally mutter that they suspected the firm’s traders were trading against them, Goldman convinced enough of them of its market nous to boost the number of its trading clients by half to 6,000 between 2006 and 2009.

Nov 5, 2010
via Breakingviews

BlackRock paves way to reshape mortgage market

BlackRock’s new $1 billion jumbo mortgage fund paves the way to reshape the U.S. mortgage market. If its blue-chip presence tempts others to follow, it would reopen the private mortgage securitization market, reduce the need for federal guarantees and bypass many of the conflicts and practices that contributed to the housing-led economic crisis.

The idea, first reported by Reuters, is pretty simple: rather than buying mortgage bonds from lenders, the asset manager will buy packages of loans from the banks instead and bundle them into securities itself. It’s not the first to do so — in April Redwood Trust sold the first, and so far only, mortgage bond in more than two years not backed by government-run entities like Fannie Mae and Freddie Mac.

    • About Antony

      "Antony Currie has more than a decade of experience as a financial journalist, having worked with Euromoney since 1996, most recently as a U.S. editor. He has worked on assignments in the major financial centers of Europe and the U.S. and written stories on capital markets, global economies and the investment banking industry. He holds a bachelor's degree in German language and literature and a master's degree in politics and international relations from the University of Bristol."
    • Follow Antony