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Posted
Apr 14 2008, 02:58 PM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Early indications from companies like Wachovia and General Electric show that the last half of March may have been tougher on bank earnings than Wall Street expects. Bloomberg recently reported that Citigroup, JP Morgan, and Wells Fargo could all miss consensus estimates. But by how much?
A look at the spread of Q1 estimates gives some hint about how far off actual numbers could be compared with investor expectations. At Citigroup, among 15 analysts polled by First Call the average EPS estimate is a loss of $.95. But, the lowest estimate is a loss of $2.24. At JP Morgan, the average figure from fourteen analysts is $.66, but the worst case is a loss of $.11. For Wells Fargo, twenty-three analysts have an average forecast of Q1 EPS at $.57, but the low number is $.45.
The huge discrepancy among the numbers should be troubling to shareholders because recent information would argue that share prices for most banks and brokerages may still be way too high.
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Posted
May 27 2008, 12:24 PM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Solar energy may be the wave of energy's future, but companies like Google and Chevron may best start-ups in getting to the benefits. A number of large American companies with tremendous balance sheets are pouring money into solar energy based on the fact that it is becoming more competitive with oil.
According to Bloomberg, "Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan and Wells Fargo invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand out-paces wind turbines and geothermal."
Given the potential size of the bonanza, the investments should not be surprising, but they could squeeze smaller solar energy companies out of the market. Firms like JA Solar and SunTech bet their entire futures
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Posted
Jun 02 2008, 06:37 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Did you ever wonder which stocks Warren Buffett holds in Berkshire Hathaway? Here's a snapshot of his various holdings, broken down alphabetically, as of the reporting cut off date of March 31, 2008.
Some have multiple positions because of various entities that are held. Here goes:
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Posted
Aug 22 2008, 10:30 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
The sour U.S. economy is unlikely to rebound before 2009, billionaire investor Warren Buffett said Friday.
He said the credit crunch will continue to worsen, and noted that Federal Reserve Chairman Ben Bernanke doesn’t have a “magic wand” to strengthen the economy and tame inflation.
“You always find out who’s been swimming naked when the tide goes out,” Buffett told CNBC. “We found out that Wall Street has been kind of a nudist beach.”
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Posted
Sep 24 2008, 10:20 AM
by
Minyanville
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
Oct 07 2008, 11:09 AM
by
Minyanville
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
Oct 09 2008, 06:43 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Henry Paulson watched the Brits come up with a new plan to save the banking system before he did. He is probably embarrassed by that. He and Bernanke seemed to have a big lead over everyone else in building Lego models for saving the financial world.
The latest idea if for the Treasury to actually buy equity in banks thereby mainlining capital into large financial institutions in the hope that they will then lend that money out.
It would be a fabulous and daring program if it made any sense. According to The New York Times,"Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system."
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Posted
Oct 13 2008, 07:05 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
The UK government is about to become the de facto largest shareholder in two of the country's largest banks, HBOS and RBS. Given the number of times that England has invaded Scotland, it must be especially hard for the RBS management, so the CEO and chairman have decided to resign and move south.
Even though the government will own preferred shares, it will still be putting a huge amount into the firms based on present market cap. In many ways, the banks are no longer "independent". The next question is whether something similar could happen in the US if the worldwide rescue of banks does not take hold immediately.
The British program is rich indeed. A total of $73 billion will go into several banks. According to MarketWatch, "banks will pay a hefty annual interest rate of 12% for the cash and have also agreed not to pay any dividends until all the preference shares have been repaid in full."
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Posted
Oct 23 2008, 09:34 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
For anyone wondering where the billions of dollars in worthless mortgage-backed securities will wind up, look no further: The mirror.
Fannie Mae and Freddie Mac, the formerly quasi-public, now taxpayer-owned mortgage behemoths, are stealthily sopping up the worst of the structured mortgage debt Wall Street churned out during the boom.
In a story that barely made the back pages of the nation’s newspapers, the Federal Housing Finance Agency announced Fannie and Freddie will start purchasing $40 billion per month of “underperforming mortgage bonds.”
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Posted
Oct 24 2008, 06:39 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
No matter where economists look there is no evidence that a recession in the US, EU, and Asia is doing anything but deepening. The stock markets are the least of it. Some of the indexes in the largest countries are off 40% from their peaks reached a year ago. Banks are failing. In cases where the government has not stepped in some have disappeared and others have been merged into more healthy institutions. Healthy for now, that is.
The financial sector could easily lose several hundred thousand jobs in the US. New York City expects employment in the banking and brokerage sector to fall by 150,000. Marriages like the ones between Bear Stearns and JP Morgan and Wachovia (WB) and Wells Fargo will clearly put tens of thousands of people out of jobs. Goldman Sachs apparently will let 10% of its workers go.
The trouble has spread well beyond banks. Merck, Xerox, GM, and Chrysler just said they will push more poor souls out the door. Even a successful tech company such as Hewlett-Packard has taken significant numbers of people out of its workforce.
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