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Posted
Oct 20 2009, 07:45 AM
by
Kim Peterson
Money Blog: Top Stocks Blog - MSN Money
 The salary of banking executives is a sore point with, well, everyone, but the perks are just getting better.
Financial firms that received taxpayer bailout money boosted their executive perks about 4% on average last year, the Washington Post reports. Bosses that didn't quite get the bonus or salary they wanted had their ruffled feathers smoothed over with a nice country club membership.
Ken Lewis of Bank of America (BAC) and Jeffrey Peek of CIT Group (CIT), for example, each got an extra $100,000 in personal jet use over the year.
And Comerica (CMA) chief Ralph Babb Jr. got a slick new country club membership that would normally have cost him $200,000.
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Posted
Oct 16 2009, 06:28 PM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
The Dow Industrials tumbled back under the psychologically important 10,000 threshold on Friday after some surprisingly bad news from the banks jarred the bulls out of their complacency.
Bank of America (BAC) reported a third-quarter loss of $2.2 billion or 26 cents per share, falling below the consensus estimate of a 12 cent loss as its consumer credit portfolio continues to deteriorate. Similar problems plagued Citigroup (C) when it reported a 27 cent per share loss on Thursday. The results would've been even worse if not for some accounting trickery surrounding the amount of money set aside for future loan losses.
Remember that it was news the banks had returned to profitability back in March that got the equity rally going in the first place. Now, after a 53% rise in the Dow and a 146% increase in bank stocks as represented by the Financial SPDR (XLF), one wonders: Will the beleaguered financial system deal yet more damage to the real economy as loan growth is tightened and fresh losses recognized? It's too early to say, but the banks are already balking at plans to increase capital requirements. Moreover, there is evidence that the consumer loan delinquencies that have dampened Q3 results are about to get worse.
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Posted
Oct 06 2009, 01:48 PM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
This article is written by Minyanville's Megan Barnett This week has seen yet another round in the battle between Goldman Sachs (GS) and the Rest of the World. See also, Goldman Sachs Lightning Bolt Sparks Rally. On Monday, Goldman Sachs analysts Richard Ramsden and Brian Foran upgraded their outlook for big banks from neutral to attractive. The news sent shares of JPMorgan (JPM), Bank of America (BAC), and Wells Fargo (WFC) sharply higher. And yes, even Goldman Sachs shareholders benefited from the news, as its shares jumped nearly 4%.
The upgrade baffled many banking analysts and it came against a backdrop of negative opinions. And these aren't just slightly bearish views -- they're downright scary outlooks that suggest some of the worst still lies ahead for banks and the rest of the economy. Here's a sampling:
Meredith Whitney, the analyst who made her name as a banking bear at the start of the credit crisis, penned an op-ed for the Wall Street Journal last week in which she predicted that small businesses will become the next victims of the crisis since their access to credit is being denied by banks and other lenders. She believes “we are only in the early stages of the second half of this credit cycle."
George Soros reiterated his gloom for a roomful of global financial policy wonks in Istanbul yesterday, saying that the US economic recovery will be extremely slow thanks to the “basically bankrupt” banking system at its core.
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Posted
Oct 05 2009, 09:02 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
It seems that Henry Paulson was a bit too optimistic about the prospects of several banks which received TARP funds at the end of last year. The Treasury Department’s inspector general Neil Barofsky reports that the department “lost credibility” when its top officials claimed that the first capital injections from the $700 billion financial rescue were for healthy banks. At the time, Bank of America (BAC) and Citigroup (C) were actually in a great deal of trouble.
The inspector’s report states “Treasury may have created unrealistic expectations about the institutions’ condition and their ability to increase lending.”
It was, perhaps, only a little white lie. Paulson and Bernanke knew that confidence in the credit markets was worse than fragile as the financial crisis spun nearly out of control. They also knew that the TARP was likely to keep large banks from failing, at least for a few months, while the world credit system had a chance to catch its breath.
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Posted
Oct 05 2009, 08:23 AM
by
Jim Van Meerten
Rating:
Money Blog: Top Stocks Blog - MSN Money
Over the weekend, McClatchy Newspapers had two powerful articles entitled "Help with mortgages is difficult to come by" and "Some firms with spotty pasts get tax dollars." The articles expose how firms like Bank of America (BAC), Citigroup (C) and Morgan Stanley (MS) -- firms who were bailed out from the brink of bankruptcy by TARP with billions of taxpayer dollars -- are now abusing mortgage borrowers who are in trouble. The Treasury is doing little, if anything to monitor the situation.
In one case, Ronnie Fruia was about to lose his home when he, his mother and son were all hospitalized. He was recovering from a stroke and couldn't talk, but CitiFinancial sent someone to his hospital room to sign modification papers that didn't even cut his interest rate. State regulators had to step in to get his rate changed from 11.5% to a reasonable 5%.
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Posted
Oct 02 2009, 07:41 AM
by
Jim Van Meerten
Rating:
Money Blog: Top Stocks Blog - MSN Money
 I moved to Charlotte right in the middle of its Golden Age. Hugh McColl and Ed Crutchfield, two local good old boys, had built not one but two international banking empires in the same town and it looked like there was no stopping them from becoming even bigger.
Charlotte was calling itself the second largest financial center in the U.S., second only to New York City. Most of the locals were reaping the benefits of the large dividends from Nations Bank and First Union. If you didn't work for one of the two banks, you owned a good chunk of the stock.
They both endorsed a new, young and charismatic mayor named Pat McCory, and the three together got funding for everything Charlotte needed to be a great city. We were getting mass transit, the downtown was bringing back people after dark to a football stadium, new arena, dining and entertainment venues. The Arts & Science Council and United Way were receiving full funding from everyone. The local joke was that the official bird of Charlotte was the building crane. They were sighted all over town, in flocks.
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Posted
Oct 02 2009, 03:38 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
When Ken Lewis finally leaves Bank of America (BAC), he will get a $125 million goodbye from the financial firm, unless the federal government’s pay czar decides to challenge the package.
Most of the Lewis compensation was set long before the big bank got into trouble and had to take $45 billion in TARP funds, so his employment contract may be sacrosanct. If so, he will get one of the largest severance packages in American corporate history.
According to Reuters, Lewis’ severance package "includes $53.2 million in retirement benefits, mostly from a program frozen years ago, and $72.8 million in accumulated stock and other compensation."
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Posted
Oct 01 2009, 11:42 AM
by
Louis Navellier
Rating:
Money Blog: Top Stocks Blog - MSN Money
Great news this week for shareholders of Bank of America (BAC). Ken Lewis will finally be leaving as chief executive.
Sorry, Kenny. Hate to see you go. Bing: More on Ken Lewis
You want to know how happy BAC shareholders are? When the news hit the wires, the stock traded up in the after-hours market by about 1%. In other words, the bank is already worth $1.5 billion more without him!
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Posted
Sep 30 2009, 07:36 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
 This article is written by Minyanville's Justin Rohrlich
The financial crisis that began in August 2007 had relatively little to do with traditional bank lending…Its prime cause was the rise and fall of "securitized lending," which allowed banks to originate loans but then repackage and sell them out.
-- Niall Ferguson, The Ascent Of Money
The dust is still settling from the great market crash of 2008-09, and we still don’t know exactly who or what to blame. It might have been securitization, but it probably wasn’t David Bowie. For more on securities, see Banks Realize Securities Are Like a Box of Chocolates.
Securitization is the process of taking a group of assets and transforming them into a tradable security. By aggregating them into one large pool, investor risk is, in concept at least, distributed more evenly. Asset-backed securities resemble bonds in that they pay a fixed amount of interest over a specific time period. Bing: The history of Bowie bonds
These securities can be backed by mortgages, credit card debt, car loans, or anything else that will (theoretically) generate future cash flow. Like song royalties, for instance.
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Posted
Sep 29 2009, 11:15 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Bank of America (BAC) is already in hot water for its suspicious acquisition of Merrill Lynch last year. Now, the heat is getting turned up a notch.
The Ohio attorney general wants billions of dollars from Bank of America and its executives over the way it handled the Merrill purchase, the Wall Street Journal reports. Attorney General Richard Cordray has sued the bank on behalf of five pension funds. The lawsuit alleges that the bank and its executives hid Merrill's financial situation before shareholders voted to approve the deal in December. The pension funds had filed five different lawsuits, and have now joined together in one megalawsuit, with Ohio leading the charge. It's a safe bet that other shareholders are on the phone with lawyers, too.
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