Today's Top Stories Also Noted: Spotlight On... SNL names top credit unions News From the Fierce Network:
Today's Top News1. Democrats seek to rebuild Wall Street bridges
Is the break-up between the Democrats and Wall Street permanent? Is there even a hope of a reconciliation? Senator Chuck Schumer seems bent on making up, an effort that has huge implications for the current administration and the upcoming national election. Politico reports Schumer "in recent months has been on a fence-mending campaign with senior Wall Street executives, many of whom have grown furious with the Democratic Party." The senator "who wants to be seen as a friend to Wall Street has been engaged in an intense effort to rebuild trust with the industry that financed the 2006 and 2008 Democratic Senate campaigns. Schumer has been holding private dinners, organizing high-end fundraisers for Democratic candidates and quietly pressing for super PAC donations. Some Wall Street executives say flatly they'll never give campaign cash to Schumer again because of lingering resentment over the 2010 Dodd-Frank financial overhaul law. But others are coming around, reporting an uptick in bridge-building talks with Schumer in recent months." This is hardly surprising, as the Democrats could use some deep pockets right now. All in all, when you get past the rhetoric, the industry has fared well under this administration. The fact is that big banks have been bashed by the right and left. Banks are a favorite target of Tea Party activists. Republicans have been more than willing to bash the private equity industry. At one point, Newt Gingrich called it immoral. For more: Read more about: Democrats 2. OCC on the hot seat in JPMorgan fiasco
The Congressional spotlight was turned on brightly, though not necessarily harshly, on JPMorgan Chase CEO Jamie Dimon, who has been cool under fire. His answers to questions from the House Financial Services Committee were pretty much as expected, and overall the criticism from lawmakers was mild. Indeed, the bank and Dimon personally have been active contributors to key members on the two committees that have held hearings so far. The more interesting testimony this week came from the regulators, who are on the hot seat as well. Should they have known more about the dangerously large positions the bank was amassing? Much of the criticism has borne by the Office of Comptroller of the Currency, which has 65 regulator on site at the bank's New York headquarters and five more at the bank's London office, where much of the questionable trading took place. Thomas Curry reiterated his argument that "we do believe as a preliminary matter that there are apparent serious risk management weaknesses at the bank." He also said, "In hindsight, if the reporting were more robust or granular, we believe we would have had an inkling of the size and potential risk of the position." All in all, five regulators testified. But they shed little new light on the big issues. There are multiple investigations underway, and it will be interesting to see which agency initiates some sort of disciplinary measures. They are once again under pressure to "so something." Mary Schapiro said that said the SEC investigating whether JPMorgan complied with disclosure rules when it shifted its VAR metric to accommodate bigger positions. For more: Read more about: hedging 3. Trading strong at Jefferies
Has mid-market powerhouse Jefferies become the new earnings bellwether for top investment banks? Its reporting quarter ends typically a month before its bigger brethren. So its second quarter ended May 31, while most big banks' second quarter ends June 30. That means we can look to the firm's for some early warning clues as to the results at others. What can we glean from its just-reported results? Net income for the quarter fell 21 percent to $63.5 million, or 28 cents a share, from $80.6 million, or 36 cents, a year earlier, the firm reported. But that still beat the average estimate of 27 cents, according to Bloomberg. Unsurprisingly, investment banking was weak. Revenue declined 9.6 percent year over year to $297 million. Revenue from asset management plummeted 82 percent, to $1.9 million, because of a steep investment loss. But the big news is that FICC-oriented sales and trading activity rose a whopping 31 percent. Capital markets revenue overall inched higher, rising to $188.1 million from $183.8 million. This certainly has implications for the likes of Morgan Stanley, Goldman Sachs and the others. Analysts have been rather downbeat when it comes to trading activity, but this might temper the pessimism a bit. For more: - here's the article Read more about: earnings 4. Jamie Dimon confronted by bank janitor
The Service Employees International Union has emerged as one the most outspoken opponents of big banks. Especially in this election year, political stunts designed to garner media coverage, will be in vogue. This brings up a recent incident after JPMorgan Chase CEO Jamie Dimon testified at a House hearing. As noted by ABCNews, Dimon was confronted by a janitor employed in JPMorgan Chase tower in Houston. "Adriana Vasquez, 37, asked Dimon why the company, which has made billions in profits, is not paying workers who clean the company's buildings a 'living wage.' Dimon told her to 'call his office' to arrange a meeting. Vasquez, who does not speak English but spoke through a translator provided by the Service Employees International Union (SEIU), said she has been in the country for 16 years after leaving Costa Rica." The union represents janitors, who are threatening a strike in Houston over wage and other issues. This sort of ambush has become rather common. I'm not sure whether a meeting would take place. But if it did, both sides would be able to use it to their PR advantage. For more: Read more about: shareholders 5. Deals still scarce, revenue backlog weakens
Last year, hope sprang eternal in the deal economy. It just seemed like the stars were aligning for a really good run of big transactions. Everyone was just so sure that there was so much pent-up demand, for strategic deals especially. The first half of the year was indeed strong, but deal activity dried up in the third quarter and has been weak since. Earlier this year, it seemed like we might get a run of deals, but didn't quite materialize. Year to date, revenue from global merger-and-acquisition activity has fallen 22 percent year-over-year, "while its backlog of future revenue from dealmaking has declined 24 percent," reports Deal Journal, based on Dealogic data. The revenue backlog, which includes potential revenue from deals announced but not yet completed in the last two years, was $5.9 billion, is down compared with last year and close to the low of $5.8 billion posted in 2005, according to Dealogic. The backlog hit a peak of $14 billion hit in June 2007. As of right now, no one really is all that optimistic about a recovery anytime soon. The situation in Europe has people unsettled. For more: Read more about: Mergers & Acquisitions, fees Also NotedSPOTLIGHT ON... SNL names top credit unions Who are the top credit unions? According SNL, Melrose Credit Union is the best performing thrift, followed by Melrose, Navy Army Community Credit Union and the University of Iowa Community Credit Union. SNL ranked the best-performing credit unions using six core financial performance metrics that focus on profitability, asset quality and growth for the 12-month period ended March 31. The metrics used were: ROAA, net charge-offs to average loans, operating expenses as a percent of operating revenue, delinquent loans as a percent of total loans, market growth and net interest margin as a percent of average assets. Article Company News:
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Thursday, June 21, 2012
| 06.21.12 | Jamie Dimon confronted by bank janitor
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