Archive
Reuters blog archive
from Breakingviews:
Pyrrhic victory for Dimon is defeat for governance
By Agnes T. Crane and Antony Currie
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The Pyrrhic victory Tuesday for Jamie Dimon is a defeat for governance. Just over two-thirds of JPMorgan shareholders voted to keep him as both chairman and chief executive at the bank’s annual meeting in Tampa on Tuesday. And Dimon and the board had to devote a considerable amount of time to preserving his titles rather than running America’s largest bank by assets. The episode perfectly illustrates the common sense behind separating the two roles.
Having a third of shareholders vote against Dimon is hardly an overwhelming vote of confidence. It is, though, a marked improvement from last year when 40 percent of shareholders voted for a split just weeks after the bank announced what turned into a $6 billion hit to revenue from the so-called London Whale trading fiasco.
The support comes after the directors lobbied hard - and very late in the day – to keep Dimon at the helm of both the management team and the board. They had even gone so far as to warn that a change in leadership would be disruptive to the bank, unsubtly implying that Dimon might leave if he didn’t get his way.
from Unstructured Finance:
NJ Governor Chris Christie spotted outside Goldman Sachs
New Jersey Governor Chris Christie shakes hands with Lloyd Blankfein lookalike outside Goldman Sachs on Wednesday
Editor's note: Updated with reason for Christie's visit.
These days it seems New Jersey Governor Chris Christie is everywhere, from TV talk shows and radio appearances to accompanying Prince Harry on a well-publicized tour of the devastated Jersey Shore. So maybe it’s not too surprising he was spotted outside of Goldman Sachs’s Lower Manhattan office Wednesday morning.
from Breakingviews:
It’s about good governance, not Jamie
By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Another day, another pressure point for JPMorgan. The latest rebuke of the U.S. bank’s board arrived on Tuesday from proxy adviser Glass Lewis, which like Institutional Shareholder Services helps investors make up their minds about how to vote at the annual meetings of companies. Both firms are now arguing for JPMorgan to split the roles of chairman and chief executive.
from Unstructured Finance:
Spinning single-family home investments into mortgage-backed securities
It's generally been thought the main exit strategy for Wall Street-backed firms that are buying distressed homes to rent them out, is to convert to a REIT and file for an IPO. That attempt to cash-out on the single-family home trade has obvious benefits for the big institutional buyers but risks for retail investors as the math behind the buy-to-rent model becomes increasingly suspect.
But there's another potential exit strategy for the institutional buyers beyond converting to a REIT or flipping homes earlier than anticipated and that's becoming a home lender.
from Breakingviews:
European banks turn tables on Wall Street
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Two of Europe’s biggest investment banking firms have defied fears they would fall behind Wall Street peers in the first quarter. Credit Suisse and Barclays succeeded in maintaining revenue in investment banking year-on-year, against an average drop of 7 percent among U.S. peers. Costs fell too. Given their recent history, the decision by both banks to maintain sizeable investment banking operations is controversial. But the numbers provide some justification.
from Unstructured Finance:
Cleveland Fed leads in measuring stress
By Matthew Goldstein
When you think of Cleveland, finance isn't the first thing that comes to mind.
If you're old enough or a rock-and-roll historian, you might say DJ Alan Freed (and i don't mean DJ as in electronic dance music).1 Or maybe, the old adage "mistake by the Lake" comes to mind.
from Unstructured Finance:
Insider trading—it’s not just hedge funds
Sometimes it seems that insider trading cases are all about hedge funds. After all, the overwhelming majority of the federal government's multi-year crackdown on insider trading has netted dozens of traders and analysts working in the $2.25 trillion hedge fund industry.
But this week's escapades involving a former top audit partner at KPMG and his golfing buddy are reminder that the temptation to profit from inside information exists in many industries and professions.
from Unstructured Finance:
Cash is king in housing
By Matthew Goldstein
It's no secret that housing in the U.S. has become an investors market, especially if it's an investor with cash to burn.
For more than a year now, we and just about everyone else in the financial media have been writing about how Wall Street-backed firms are looking to buy-up the wreckage of the housing bust on the cheap and rent out those homes until the time is right to sell them for a sweet profit. And it should come as no surprise that much of that buying is being done with cash because it's the easiest way for an investor get a deal done quick.
from MacroScope:
Bernanke on Sen. Warren and too big to fail banks: ‘I agree with her 100 percent’
I asked Fed Chairman Ben Bernanke during his quarterly press conference this week if the central bank had its own estimate for the implicit subsidy that banks considered too big to fail receive in the form of cheaper borrowing. Senator Elizabeth Warren had confronted him at a recent hearing with a Bloomberg estimate of $83 billion which itself was derived from an IMF study. At the time, he dismissed her concern: “That’s one study Senator, you don’t know if that’s an accurate number.”
At the press briefing, Bernanke said the Fed does not have its own figures for Wall Street’s too-big-to-fail subsidy, in part because there were too many factors that made it difficult to calculate.
from Unstructured Finance:
Once-obese Goldman analyst becomes fitness evangelical, gym CEO
Wall Street is shrinking, but so are some of its bankers.
Eight years ago, Goldman Sachs Group’s Kishan Shah weighed 400 pounds and couldn’t find a suit that fit his 62” waist for a job interview. Now he’s 195 pounds, and he’s quitting Goldman to spread the gospel of healthy weight loss as chief executive of a chain of gyms for obese Americans.
“I made a vow that day to focus on diet and exercise, and I lost over 200 pounds – no surgeries, no fad diets, no trainers,” Shah said in a video chat this month with First Lady Michelle Obama.
