Lauren's Feed
Jan 14, 2013

When Goldman’s new CFO talks, insiders say they listen

By Lauren Tara LaCapra and Carrick Mollenkamp

(Reuters) – In 2004, Harvey Schwartz, who was then head of the financing business at Goldman Sachs Group Inc’s investment bank, came up with a new way for the bank to make money from a seemingly mundane activity: helping companies buy back their shares.

He created a product that could save companies money by getting them improved pricing on buybacks while generating fees and trading profits for the bank. To build what became a multibillion-dollar market, Schwartz had to convince dozens of skeptical Goldman sales people, derivatives traders, corporate finance specialists and lawyers that they could make buybacks more enticing, said Martin Chavez, a Goldman quantitative analyst who worked with Schwartz.

Jan 11, 2013

Big U.S. banks expected to post accounting charges, again

Jan 11 (Reuters) – As Wall Street banks begin reporting
earnings next week, analysts and investors are once again
prepared for big accounting charges related to changes in the
firms’ own credit spreads.

The charges stem from the improving corporate bond markets.
When bonds that banks have issued become more valuable, banks
take charges known as “debt valuation adjustments,” or DVAs, to
reflect the fact that buying back debt would be more expensive.
When their bonds weaken, banks can record gains.

Jan 11, 2013

Goldman’s investment arm says bank stocks are top pick for 2013

Jan 11 (Reuters) – Goldman Sachs Group Inc’s
investment-management arm is telling clients that the best place
to put their money this year is in stocks of U.S. banks, even
after their recent run-up.

At the same time, Goldman Sachs’ wealth management arm is
advising investors looking for higher returns to shun U.S.
Treasuries, most other bonds and even hedge funds, warning that
most hedge funds will generate only mid-single-digit returns.

Jan 10, 2013

Morgan Stanley to cut jobs, may signal more pain ahead

Jan 9 (Reuters) – Morgan Stanley plans to slash 1,600
jobs in what may be just the beginning of a new round of layoffs
at large investment banks, this time driven by a deeper
reassessment of Wall Street businesses in the face of new
regulations and capital standards.

Morgan Stanley, the sixth-largest U.S. bank by assets, plans
to begin letting go of the employees, many of whom work in its
securities unit, starting this week, two people familiar with
the matter said on Wednesday.

Jan 9, 2013

Morgan Stanley cuts 1,600 jobs as business languishes

By Lauren Tara LaCapra

(Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research) plans to cut 1,600 employees starting this week, two people familiar with the matter said on Wednesday, in the latest sign of a pullback on Wall Street as revenue from trading and deal-making remains in the doldrums.

The staff reduction pertains to Morgan Stanley’s institutional securities unit – which includes sales, trading and investment banking, and whose staff will be reduced 6 percent – as well as related support staff who work in areas like technology, said the sources, who were not authorized to speak publicly about the matter.

Jan 9, 2013

Morgan Stanley to cut 6 percent of securities unit staff: source

By Lauren Tara LaCapra

(Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) plans to cut 6 percent of its institutional securities unit staff starting this week, two people familiar with the matter said on Wednesday in the latest sign of a pullback on Wall Street as revenue from trading and dealmaking remains in the doldrums.

Combined with related job cuts of support staff, Morgan Stanley’s workforce reduction will amount to 1,600 people, said the sources, who were not authorized to speak publicly about the matter.

Jan 8, 2013
via Unstructured Finance

Goldman: 1, Volcker: 0


By Lauren Tara LaCapra

There’s an interesting article out today from Bloomberg, which accuses Goldman Sachs of skirting the yet-to-be-defined-or-implemented Volcker rule, and accuses its top executives, including CEO, Lloyd Blankfein, of being a hypocrite.

Bloomberg reporter Max Abelson has done some good work on the subject. His article is well written and well sourced—he spoke to at least 20 people and got many of them to go on the record about their former employer and describe how Goldman continues to place bets with the firm’s own money.

Jan 8, 2013

Rising rents may prod affluent US city dwellers to buy homes-Reis

Jan 8 (Reuters) – U.S. apartment vacancies declined and
rents rose again in the fourth quarter, continuing a years-long
trend that is likely to encourage more affluent renters to
become home buyers this year, according to real-estate research
firm Reis Inc.

The national apartment vacancy rate dropped to 4.5 percent
in the last three months of 2012 from 4.7 percent in the
previous period, marking three straight years of vacancy
declines, according to Reis data released on Tuesday. It was the
lowest vacancy rate since the third quarter of 2001, according
to Reis data.

Dec 27, 2012
via Unstructured Finance

Wall Street channels Charles Dickens in 2012

By Lauren Tara LaCapra

As 2012 comes to an end, it’s clear that Wall Street has had the best-worst year in quite some time.

Bank profits are at record highs and lows, driven by free money from the Fed that they can’t make any money with, and a historically small number of historically huge deals. Facebook’s IPO – among the biggest ever – happened this year, and it was an enormous failure and a terrific success all at once.

Dec 20, 2012

IntercontinentalExchange takes aim at CME with NYSE talks

NEW YORK/LONDON (Reuters) – IntercontinentalExchange is in talks to buy New York Stock Exchange owner NYSE Euronext, in a multi-billion dollar deal designed to push it into the big league of European derivatives and take on arch rival CME Group.

ICE (ICE.N: Quote, Profile, Research, Stock Buzz) may consider a spin-off or sale of NYSE’s stock markets, a source told Reuters. As well as the 200-year old New York exchange, the NYSE also owns bourses in Paris, Amsterdam, Brussels and Lisbon.