| August 20, 2012
Sign up for free:
 | | This week's sponsor is Progress Software. |  | Webinar: Controls for automated trading. Can you rely on the sell-side alone?
Wednesday, August 29th, 11 am ET / 8 am PT Join us for this informative and thought-provoking webinar, lead by renowned Capital Markets expert Richard Bentley, VP of Capital Markets, Progress Software . And learn how you can better mitigate and manage the risk of automated trading. Register today! |
Today's Top Stories
1. Bank of America lags in modifications
2. Libor litigation exploding
3. Why NY prosecutors are targeting ex-Goldman Sachs programmer
4. Big banks lose on internet start ups
5. Deutsche Bank banker sues LAPD for beating Editor's Corner: Few U.S. banks among the world's safest Also Noted: Kaseya
Spotlight On... Hedge funds bet on oil
JPMorgan preps Euro bond sale; and much more... News From the Fierce Network:
1. Icahn scores modest wins against Forest Labs
2. Prosecutors seek names of Swiss bank employees
3. Small banks face big compliance costs
| 
Few U.S. banks among the world's safest Given the state of the economy and the lingering effects of the financial crisis, the very solvency--at a minimum, the creditworthiness--of banks is a legitimate issue. While there is little chance of an outright default by any of the top U.S. banks, it's fair to say that their credit worthiness has taken some hits. Although bank bonds have been on a tear as of late, and CDS spreads are wonderfully narrow, relative to yesteryear, they're in tough straights. Another way to look at the stability and solvency, instead of temporally, is spatially. Once again, the big U.S. banks don't look great. Indeed, Global Finance takes a look at the top 50 safest banks in the world. Unfortunately, there are only five U.S. banks in the top 50, and the highest ranking U.S. bank, Bank of New York Mellon, comes in at 29. Of the big national consumer banks, only Wells Fargo made the list, ranking 48, behind CoBank ACB, U.S. Bancorp, and Northern Trust. Even in North America, U.S. banks fare poorly, as the top six safest banks are all Canadian, led by TD Bank group. The 10 safest banks in the world, somewhat surprisingly, are all European. Germany had four of the top safest banks, led by KfW. The analysis was based on an analysis of credit ratings from S&P, Moody's and Fitch. None of this is all that surprising. The good news is that U.S. banks may be reaching their nadir relatively from a credit worthiness point of view. -Jim Read more about: Bank Bonds, Creditworthiness
back to top
|
| Sponsor: The Mobile Wallet Summit FierceLive! Webinars > Controls for automated trading. Can you rely on the sell-side alone? Wednesday, August 29th, 11 am ET / 8 am PT
> Webinar: Network Security: Emerging threats require updated Best Practices- September 12, 2pm ET/ 11am PT
Events > Investment Consultants Forum - The Crowne Plaza Times Square, New York, NY - March 2, 2012
> NFC Ticketing Europe 2012 - March 20-21 - London
> NYIF Essentials of Project and Infrastructure Finance - September 10-12 - New York, NY
> Investment Trends Summit - September 12-14, 2012 - The Four Seasons, The Biltmore - Santa Barbara, CA
> NYIF Core Skills Analyst Program - October 22- November 16 - New York, NY
> NYIF Wealth Management Program - October 29- November 16 - St. Petersburg/Tampa FL
> NFC Payments USA Unites NFC Experts in Boston Once Again - October 29-30 - Boston, MA
> The Mobile Wallet Summit - November 28-29 - London
Marketplace > Get Subscriptions to the Leading Finance Magazines for FREE
> Whitepaper: Using Modern CRM to Attract and Retain Advisors and Clients
> Whitepaper: Ten Effective Habits of Indispensable IT Departments
* Post a classified ad: Click here.
* General ad info: Click here | Today's Top News 1. Bank of America lags in modifications Recall that the February settlement between state attorneys general and federal regulators and the big mortgage bank compelled the banks to modify a "significant" amount of troubled mortgages. So how are banks faring in that program, which is hardly the only modification program in place? Bloomberg reports that Bank of America has emerged as a laggard. Bank of America, "plagued by complaints about customer service in its mortgage unit, said it hasn't yet refinanced a 'significant number' of loans as part of the industry's $25 billion settlement of foreclosure abuses. The lender blamed the 'time required to underwrite' loans for why it hasn't completed many of its planned $1 billion in modifications…By contrast, JPMorgan Chase & Co. said last week it has already finished a 'significant portion' of its $500 million program and Wells Fargo & Co. said it expected to complete its $900 million requirement two years ahead of the 2015 deadline." Bank of America's burden is the greatest, even though it may have the worst infrastructure to deal with the massive volume. Banks get credit for each modification as they work toward the targets set by the settlement. Loans modified within the first year of the program are worth 25 percent more in credits. Bank of America may end up giving up a lot. At the same time, mortgage modifications now have the benefit of very low interest rates. Bank of America told the media outlet that it doesn't expect to have to pay fines for its sluggishness and is on the right path. For more:
- here's the article Related articles:
Wells Fargo hit by higher costs of mortgage settlement
Bank of America's customers slow to accept principal reduction offer Read more about: banks, mortgages
back to top
| This week's sponsor is The Mobile Wallet Summit. |  |
2. Libor litigation exploding The Libor scandal is shaping up as yet another litigation explosion that will force banks to add millions of dollars to their cash reserves. As of now, it's hard to model the expected losses, but the risks are certainly on the rise. For one thing, the states seem to be sensing a huge, can't miss gravy train, as they set their sights on monster settlements. Citigroup and UBS were subpoenaed earlier this year as part of a probe by the states of Conn. They have also sent subpoenas to JPMorgan, Barclays, Deutsche Bank, RBS and HSBC. Other states are also taking a look, including Florida and Massachusetts. Can California be far behind? There may be another attempt at a "global" settlement that would involve all the states. If the mortgage meltdown settlement is any guide, the process could take a while. In addition to suits by regulators, we're also in the middle of a legal explosion wrought by would-be class action plaintiffs. The jockeying for certification remains intense. One New York plaintiff's attorney filed a suit on behalf of investors in Alaska, Wyoming, North Dakota and other states, though he has yet to generate a list of aggrieved investors. "His hunt for plaintiffs shows how lawyers are lining up to get a piece of what is shaping up to be massive litigation over the scandal. Lawyers have filed a smorgasbord of claims on behalf of a wide range of investors, and they hope a federal judge will allow their cases to proceed as class actions," notes Reuters. Not too long ago, the idea that banks should be considered as akin to tobacco companies due to all the litigation was in vogue. More people may find the comparison apt. For more:
- here's the article Related articles:
LIBOR may boost CDO losses
Who will be left holding the Libor bag?
Read more about: LIBOR
back to top
3. Why NY prosecutors are targeting ex-Goldman Sachs programmer Sometimes, New York state and federal prosecutors seem to be at odds. Their respective, quite divergent conclusions as to the extent of Standard Chartered money laundering crimes stands as a good example. But then there are times when they are in cahoots. Consider the case of Sergey Aleynikov, who won a great victory when an appellate court overturned his conviction on federal charges he stole proprietary computer code from Goldman Sachs. He was freed from jail, where he has been for about a year, only to be re-arrested, this time on state charges. Unfortunately, for him Manhattan district attorney, Cyrus Vance Jr., and Preet Bharara, U.S. attorney in Manhattan, have made the prosecution of corporate, high-tech crimes a top priority and area of cooperation. Reuters notes that Vance "has been handed a rare prosecutorial roadmap in his criminal case against" Aleynikov. The local prosecutors "will have the benefit of most, if not all, of the investigative material and trial evidence that the U.S. Justice Department used at Aleynikov's federal trial." There's a lot at stake for Vance's office, as it has an opportunity "to raise the stature of his cyber-crime unit." For more:
- here's the article Read more about: Proprietary Code
back to top
4. Big banks lose on internet start ups Will Wall Street win or lose on the tech start-ups that it so avidly courted recently? As of right now, the answer remains an unknown, but it's fair to say that the likes of Facebook, Zynga, Groupon and others have significantly underperformed relative to expectations. DealBook notes, "Though promising at the time, nearly all those bets have soured. Zynga's shares have plunged 70 percent from the offering price. Shares of Groupon, once heralded as 'the fastest-growing company ever' on the cover of Forbes magazine, are off more than 70 percent, closing on Thursday at $5 a share. And the golden child of the new Web, Facebook, is struggling to persuade investors to hold on. Its stock has lost more than 47 percent of its value, and many fear it could stumble further in the coming months." Big banks, including Goldman Sachs, Morgan Stanley and JPMorgan, fell all over themselves to extend loans, invest directly and find other big investors. The payoff -- if there is to be one -- is not imminent. Take a look at Goldman Sachs' involvement with Facebook. "Goldman made a direct investment of nearly $500 million. Entities affiliated with Goldman, including the direct investment and its private clients, managed to sell 28.7 million shares in Facebook's I.P.O. at $38 a piece — a profitable outcome. The firm, however, is still holding 37.3 million shares. It is less certain whether Goldman will make any money on this remaining block. It paid about $20 a share for its January investment." The price now hovers in that neighborhood. It could have been worse. At least it wasn't the lead underwriter in the botched IPO. That distinction went to Morgan Stanley. Increasingly, the privilege of underwriting companies requires massive investment in ways beyond just the underwriting duties. You've got to put skin in the game and extend big loans to win the mandate, and that raises the stakes. For more:
- here's the article Related articles:
Bulls, bears battle over Facebook
Biggest technology fails in recent memory Read more about: banks, IPOs
back to top
5. Deutsche Bank banker sues LAPD for beating What really happened to well-known Deutsche Bank media banker Brian Mulligan on the night in May when he claims he was severely beaten by LA cops? In his version of events, laid out in a lawsuit, two police officers confronted him in near a Highland Park marijuana dispensary, and asked what he was doing. They searched him and his car and found $5,000. They then drove him to a motel where they put him in a room, telling him to stay there. Mulligan claims to have waited for several hours, before leaving out of fear he was about to be robbed or killed. When he tried to flee the motel room, he was apprehended by officers. They then beat him. The LA police has a much different version of events. According to local reports, "officers first encountered Mulligan at around 10:40 p.m. after being called to the Jack in the Box restaurant near York and Eagle Rock Boulevards , where Mulligan was allegedly attempting to open the doors of cars that were passing through the drive through." Officers "reported that Mulligan appeared to be under the influence of drugs or alcohol. A Drug Recognition Expert was called to the scene to conduct a field sobriety test, which showed that Mulligan did not appear to have any drugs in his system. Officers then took Mulligan to his car, Neiman said, where they found a large sum of cash. The officers then conducted a money count…., a standard procedure meant to preclude any accusations of theft." Mulligan was not arrested, but was instead taken to the Highland Hotel to rest. Police encountered Mulligan again at about 1 a.m. when responding to a traffic collision. He was said to be running through traffic and again attempting to open car doors. When officers approached Mulligan, Mulligan "took a fighting stance and charged officers. In controlling him, categorical use of force was employed." Mulligan is seeking $50 million via a suit against the LAPD. Obviously, this is not an ideal situation for Deutsche Bank. You do not want employees drawing this kind of attention. It would not be surprising if he were to take a leave at some point. For more:
- here's the article Read more about: LAPD, Deutsche Bank
back to top
Also Noted | This week's sponsor is Kaseya. |  | Ten Effective Habits of Indispensable IT Departments
It's no secret that responsibilities are growing while budgets continue to shrink. Enact these ten IT habits throughout your financial institution to help you cut costs, create operational efficiencies and align IT to business goals. Download Today!
|
SPOTLIGHT ON... Hedge funds bet on oil There's nothing like a war to jack up the price of oil. Reuters reports that hedge funds are betting that an Israeli strike on Iran, or even the perception that such an attack is nearer, will have a big impact on oil prices. "In the U.S. crude oil options market, calls are being bid higher than puts for the first time since February." These Iran-linked bets have flurried before, and it remains to be seen if this one will last. Article Company News:
> JPMorgan readies European bond sale. Article
> Goldman Sachs sued over WellPoint deal. Article
> Goldman Sachs conflicts in spotlight again. Article
> Rothschild seeks funding opportunity. Article
> Peregrine CEO pleads not guilty. Article
> Evercore sinks Groupon. Article
> Carlyle interested in Chemring. Article
Industry News:
> Bonds avoid big losses. Article
> More on Facebook stock swoon. Article
> CDS spreads narrow more. Article
> California munis at risk? Article
Regulatory News:
> Did moles give hedge fund manager tips? Article
> U.S. tightens reins on GSEs. Article And Finally…What needs to get done by noon? Article > Controls for automated trading. Can you rely on the sell-side alone? Wednesday, August 29th, 11 am ET / 8 am PT Join us for this informative and thought-provoking webinar, lead by renowned Capital Markets expert Richard Bentley, VP of Capital Markets, Progress Software . And learn how you can better mitigate and manage the risk of automated trading. Register today! > Webinar: Network Security: Emerging threats require updated Best Practices- September 12, 2pm ET/ 11am PT The security picture at financial services seems to be getting cloudier by the day. While many banks have awoken to the risks imposed by possible network breaches, the landscape continues to morph, raising the stakes. Cyber criminals continue to refine their techniques and to develop more advance hacking methods to compromise corporate networks, and they are as sophisticated as ever. The very notion of Best Practices in the realm of network management and security continues to evolve. We take a look at current trends and up-to-date practices. Register today!
| > Investment Consultants Forum - The Crowne Plaza Times Square, New York, NY - March 2, 2012 This conference provides a unique environment for developing dialogue between plan sponsors, managers and consultants. This event will feature panel-driven discussions focused on specific investment techniques of fixed income and hedge fund managers, the evolving role of institutional consultants, the manager evaluation process and more. Register today. > NFC Ticketing Europe 2012 - March 20-21 - London Come and join MasterCard, Renfe, Deutsche Bahn, Visa Europe, Orange, Arriva Netherlands, O2 and many more for the first event to bring together the whole NFC Ticketing industry for discussion, debate and quality networking. Click here. > NYIF Essentials of Project and Infrastructure Finance - September 10-12 - New York, NY This is a practical course that provides executives, whether as financiers, sponsors, or professional support, an opportunity to understand the risk-return character of limited recourse projects from multiple perspectives. Case studies span a variety of sectors and geographical regions. This course will not use in-depth models involving Excel™, but the instructor (a broad-based finance and investment executive with global experience throughout the U.S., Europe and the emerging markets of Latin America and Asia who has negotiated numerous transactions, including mergers and acquisitions, public offerings, mezzanine financings, international bank syndications, corporate valuations and fairness opinions) will review modeling approaches with examples. Register today. > Investment Trends Summit - September 12-14, 2012 - The Four Seasons, The Biltmore - Santa Barbara, CA The Investment Trends Summit is an educational forum focused on analyzing trends for the future, and exploring ways to implement new strategies in investment plans. Speakers and attendees will discuss topics such as investor's perspectives, investment management theories, and more. Register Today! > NYIF Core Skills Analyst Program - October 22- November 16 - New York, NY Bringing together core finance concepts and theories, this program is a challenging and rewarding experience for entry-level analysts, finance and investment professionals seeking to enhance their skill set. Real-life case studies supplement the hands-on learning experience, providing a wealth of practical knowledge to take back to the workplace. The program provides four weeks of intensive training in accounting (optional), corporate finance, credit risk and financial modeling. Register today. > NYIF Wealth Management Program - October 29- November 16 - St. Petersburg/Tampa FL The 3-week Program captures the best practices and insights from corporate thought leaders and wealth management firms. This modular suite of classes is designed to prepare client-facing professionals with the knowledge and skills to meet and add value to wealthy individuals and families. The Program explores the following topics: Global Economic Impact on Wealth, Consultative Discussions and Recommendations, Asset Allocation and Portfolio Optimization, Lending and Leverage, Tax and Intergenerational Planning, and Maintaining Good Relationships with Investment Clients. Register today. > NFC Payments USA Unites NFC Experts in Boston Once Again - October 29-30 - Boston, MA NFC Payments USA (Oct 29-30th)is back for its second year, hosting 150 senior level delegates to debate industry challenges and facilitate the roll out of NFC payments. Speakers include Best Buy, PayPal, Verizon, Barclaycard, T-Mobile, Best Buy, VISA, Capital One, MasterCard. Click here for more information. > The Mobile Wallet Summit - November 28-29 - London The Mobile Wallet Summit is the only show that looks at the future of mobile transactions. It brings together every industry you find in your physical wallet, loyalty, identity, ticketing and payments and provides a forum for debate on how they will fit on your mobile.
| > Get Subscriptions to the Leading Finance Magazines for FREE Mercury Magazines offers top Finance titles for Free to professionals. No Credit Card Required. Stay Ahead in your Industry. Sign up now. > Whitepaper: Using Modern CRM to Attract and Retain Advisors and Clients Learn how this “next generation” CRM delivers game-changing benefits over early CRM options and can help your organization attract and retain top tier talent, foster customer loyalty, and grow assets under management or increase share of wallet/household. Download here. > Whitepaper: Ten Effective Habits of Indispensable IT Departments It's no secret that responsibilities are growing while budgets continue to shrink. Enact these ten IT habits throughout your financial institution to help you cut costs, create operational efficiencies and align IT to business goals. Download Today! | ©2012 FierceMarkets This email was sent to kumaresan.selva.blogger@gmail.com as part of the FierceFinance email list which is administered by FierceMarkets, 1900 L Street NW, Suite 400, Washington, DC 20036, (202) 628-8778.
Refer FierceFinance to a Colleague Contact Us Editor: Jim Kim
VP Sales & Business Development: Jack Fordi
Publisher: Ron Lichtinger Advertise Advertising: Jack Fordi or call 202.824.5040
Media Kit: www.fiercemarkets.com/advertise
Press Releases: email jimkim@fiercefinance.com Email Management Manage your subscription Change your email address Unsubscribe from FierceFinance Explore our network of publications: |
No comments:
Post a Comment