Now raising intellectual capital

Cazenove lives it large in ECM


Thomson Reuters data on equity capital markets activity over the first 9 months of the year throws up some pretty exciting data if you are a Cazenove shareholder.


Top of the European league table by a country mile sits JP Morgan with $33.5 billion of deals. And that figure incorporates the ECM deals done by JPM’s UK subsidiary (50 percent plus a share) JP Morgan Cazenove. On its own JPM Caz was responsible for $24.2 billion of deals, making it top of the table by some distance. Its nearest rival was Morgan Stanley with $15.5 billion of deals.

This figure has particular resonance because of the possibility that JPM might buy out the Cazenove stake in JPM Caz.

$24.2 billion is a touch under 15 billion pounds. Underwriting fees are about 3.25 percent of value these days. Apply this to the figure and you get to about 480 million pounds. JPM Caz doesn’t get to keep all of this: it has to pay JPM for access to its balance sheet and share fees with other institutions when it sub-underwrites. There are also accountants and lawyers to pay.

Squeeze is on for investment banks


Peter Thal Larsen.jpgInvestment banks are facing a big squeeze. For an industry that was generating record revenues just months after the collapse of Lehman Brothers, this may seem unlikely. But the revival looks set to be short-lived. Increased regulation and greater competition means the super-charged returns the industry generated for most of the past decade are likely to prove elusive.

Analysts at JPMorgan believe 2009 will prove to be the high point in the investment banks’ relentless upward march. They expect revenues in 2011 to be no higher than in 2006. More significantly, the industry’s return on equity will fall to 10.8 percent, far lower than what they have got used to.

The recession is tough on teeth


Child winces as dental hygienist checks teeth

The U.S. economy isn’t giving dentists many reasons to smile yet, an annual survey of the profession by JPMorgan has found.

    84 percent of dentists said the economy was having a negative or strongly negative impact on their practices. 74 percent said they think the economy will continue to weigh on their businesses 12 months out.

Dental Equipment growth JPMorgan

CIT timing not the greatest


Though, I’m not sure if it would have been better for the talks between CIT and the government to break down last week either. The pairing of almost certain bankruptcy of the little guy lender with the blow-out earnings of Wall Street giants, JP Morgan and Goldman Sachs, makes a strong argument for smaller financial institutions to beef up their operations so they, too, can be too big to fail.

I hope Geithner and Bernanke are preparing their defense for the populist backlash.