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Posted
Oct 07 2008, 11:09 AM
by
Todd Harrison
Rating:
Money Blog: Top Stocks Blog - MSN Money
Last week, by its own account, Wachovia was a breath away from failing. Today, two of the four biggest banks in the country are literally suing each other for the right to buy the troubled Charlotte-based lender.
As I write this morning, Wachovia's fate is unknown. Whether that will be the case by lunchtime is anyone's guess.
By all accounts, Wells Fargo's bid makes more sense, it being the far stronger firm and eschewing the FDIC's involvement in the transaction. Citigroup, however, has yet to capitalize on the bank firesale its competitors are taking advantage of, and it doesn't want to miss the party.
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Posted
Sep 24 2008, 10:20 AM
by
Todd Harrison
Rating:
Money Blog: Top Stocks Blog - MSN Money
Despite all the rhetoric and worry Congress will not formulate a deal that goes through this week, financial stocks were generally higher today. Part of the reason is the change in rules by the Federal Reserve that allows private equity investors and other groups to take positions up to 33% (including 15% voting shares) in financial companies. Previously the limits were 25% and 10%.
This is a step in the right direction, according to Steve Schwartzman of the Blackstone Group, but private equity needs to be able to take larger chunks and even make acquisitions. It is unreasonable they would make large investors only to be minorities with limited voices on boards.
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Posted
Sep 05 2008, 07:05 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
If the markets are to take bond guru Bill Gross at his word, the world's financial markets could go through a cataclysmic failure. The head of fixed income fund operation Pimco says that a rapid sale of assets by banks, brokers, and hedge funds will cause the credit system to collapse. Almost all of these companies need cash and none of them wants to be left holding the bag if housing and commercial markets go to pieces.
The unusually eloquent Gross recently wrote "This rarely observed systematic debt liquidation is what confronts the U.S. and perhaps even the global financial system at the current time. Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami."
Gross wants the US Treasury to move into the market and buy distressed assets to stop the knife from falling.
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Posted
Jul 21 2008, 02:36 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
If only investors had listened to me and The New York Times they would have been able to avoid the mess that is Citigroup. Back in late 2006, I noted Citi's $400 million deal that scored the bank naming rights for the new New York Mets stadium and cited a New York Times article that said:
Citigroup obviously thinks that the naming rights are valuable, but history does not indicate such deals have done much for other banks, or for the ball clubs that play in them. Stocks of banks with ballparks have tended to do worse than stocks of other banks, and teams in these parks have tended to lose more games than they win.
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Posted
Jul 16 2008, 07:48 AM
by
Todd Harrison
Rating:
Money Blog: Top Stocks Blog - MSN Money
Given the daily barrage of bad news about the credit crunch, the mortgage crisis and failing banks, you'd think things would be a lot easier for someone who actually wants to take out a simple home loan.
As a matter of fact, just this morning you read an article about two mortgage companies, one with a name that sounds like what they call your grandmother at her retirement community, the other like some up-and-coming DJ. Fannie Mae and Freddie Mac, could that be it? They ran out of money, apparently, which could make it even harder for you to get a mortgage in the future.
Harder? Is that some kind of cruel joke? How could taking out a mortgage be any more painful than it already is?
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Posted
Jan 29 2008, 02:08 PM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
The head of insurance regulation in New York is busy as a bee trying to bail out Ambac and MBIA. According to the FT, "Eric Dinallo, the New York state insurance superintendent, is being privately supported by the New York Federal Reserve Bank and other regulators." If the muni bond insurance companies go under it could lead to a new round of fixed income instruments write-offs which would hurt Wall Street balance sheets.
If the government is going to drag the muni bond insurance companies out of their mess, why not a little help for the likes of Citigroup, Washington Mutual, and Wells Fargo?
Mr. Dinallo is attempting to get the big U.S. banks to provide the bond insurers with $15 billion in credit to shore up their balance sheets. It is an interesting proposal but it does beg the question of where the cash-strapped banks will get the money. It could be the beginning of a 21st Century version of borrowing from Peter to pay Paul.
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Posted
Jan 18 2008, 04:12 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
Earnings have been pouring out of the financial sector all week and the picture hasn't been pretty. "Write-down" has commanded a starring role in this quarter's earnings reports dashing ahead of "earnings per share" as what investors seem to care about the most.
Citigroup, whose stock just can't seem to find a bottom, seems to have been the worst of the bunch. In an interesting twist, much of the pessimism over the company's quarter came because Citigroup only wrote down some $18 billion and didn't propose as many job cuts as the market was hoping.
CAPS still rates Citigroup just two stars out of five, but there has been some bullish sentiment after the company's earnings release. Michaelkoh1 rated Citi's stock an outperformer and noted that "2007 will be tough, and there will likely be more pain for equity investors as the financials muddle through this year, but this is a strong diversified franchise and will outperform the market over the next 2 to 4 years."
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Posted
Oct 16 2007, 10:57 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
When it comes to evaluating companies as investments, analyzing management can be both one of the most important and most difficult undertakings. One way an investor can measure the quality of management is to look at what management says versus what management does.
This is likely what many investors are running through when it comes to Citigroup's CEO Chuck Prince. Despite his stated plans for the bank, Chuck can't seem to make things happen. And to that point, Deutsche Bank's Mike Mayo took him to task on Citi's conference call.
Quoth Mayo: "Well, one of your main targets for this year was to grow revenues faster than expenses and that is not going to pan out. This could be the third year in a row where that doesn't pan out. That was clearly a very important factor."
In other words, "what exactly are you doing Chuck?"
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