| August 21, 2012
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Today's Top Stories
1. Goldman Sachs kills independent research unit
2. Columnist slams Goldman Sachs
3. A look at JPMorgan's expansion
4. Carlyle Group aims for financial services firms
5. Wacky protest against banks Also Noted: Kaseya
Spotlight On... Another robo-signing incident?
Barclay's culture: deeply flawed?; Freddie sells bills and much more... News From the Fierce Network:
1. Failure of the cybersecurity law a bad sign
2. Current dotcom bubble never really inflated
3. Bullish bond market good news for banks
| 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
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* General ad info: Click here | Today's Top News 1. Goldman Sachs kills independent research unit The expiration of the $1.4 billion settlement in 2003 between Wall Street banks and regulators over biased research seems to have a taken a toll on independent research firms. Under the accord, Wall Street firms were required to purchase and redistribute independent research. At the time, the conventional wisdom was that the future of innovative independent research firms was golden, as buy-side firms were sick of the same-old-stuff from the sell-side. But four years after the accord expired, reality has settled in a bit differently. Reflecting the new reality, Goldman Sachs "has given up trying to sell research from independent analysts to its institutional clients, after spending millions of dollars on distribution only to find that big money managers had little interest. The bank has laid off or reassigned the dozen or so employees at its Hudson Street Services unit, which offered data and independent research to investors. Goldman also sold its minority stakes in most firms that were producing the research, generating an overall profit in the process," reports Reuters. The buy-side has been hit hard by the financial crisis and apparently are less keen to allocate soft dollars toward independent research. Spending on such research will be down 24 percent this year compared with 2008, according to one estimate. For more:
- here's the article Read more about: analysts
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2. Columnist slams Goldman Sachs An esteemed New York Times columnist has taken Goldman Sachs to task for its bankruptcy court gamesmanship over $20.7 billion in funds that an arbitration panel has ruled the bank is liable for. The controversy stems from the Bayou Group scandal, in which Samuel Israel III was found to be running a Ponzi Scheme, not a hedge fund. As the clearing firm, Goldman Sachs was sued by 200 Bayou investors, who alleged Goldman Sachs should have known that the many trades and activities of the firm were illegal. An arbitration panel ruled in their favor, and Goldman Sachs cut a check to the investors. But the twist is that Goldman Sachs, on the same day, also "filed its own creditor's claim for the same amount — $20.7 million — in the Bayou bankruptcy. Goldman contended that paying the award had made it, too, a Bayou creditor. If the court agrees, the investors who won their arbitration case — also unsecured creditors of Bayou — will be out of luck." The bank's claim keeps the investors from collecting. This would appear to be a novel legal tactic on the part of Goldman Sachs. One expert was quoted saying that "Arbitrators are appointed for equity and justice to prevail. After an arbitrator's decision and two levels of failed appeals, Goldman's claim in bankruptcy court, which will further delay distribution to long-suffering customers, only impedes the realization of these ends." But that's why Goldman Sachs is paying its lawyers. In the end, it has the resources and the gumption, and no amount of bad PR over this can amount to more than what it suffered in the aftermath of the financial crisis. It seems willing to take the hits for $20.7 million. For more:
- here's the article Related articles:
Goldman Sachs loses Bayou appeal Read more about: Goldman Sachs, Columnist
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3. A look at JPMorgan's expansion It's going to be hard to grow by acquisitions right now, so JPMorgan has settled on a organic growth as one path to domestic expansion. The bank recently embarked on a plan to grow its market share in areas where it is currently not active, which includes Charlotte, North Carolina, the home of ailing Bank of America. It has set up a team of commercial bankers in the area, as it has in other strategic cities, the likes of Kansas City, Missouri, various cities in Tennessee, Minnesota and states along the eastern seaboard. Reuters notes that, "In a February investor presentation, JPMorgan said it was looking to expand middle-market banking in 19 markets, including nine cities inherited in its 2008 Washington Mutual acquisition and 10 in metro areas outside its retail banking territory. Executives said that expansion could bring in an extra $400 million to $500 million in profits over a five- to seven-year period. That's a relatively small amount for a company that made $19 billion last year. But banks are struggling to increase revenues as new regulations crimp fees and low interest rates make it more difficult to make money from loans. Commercial lending has been a bright spot for banks in recent quarters, but growth could be slowing." The middle market clearly looms as a great opportunity. But the reality is that there will be a lot of competition from other big banks, and especially from regional banks. As the economy heals, banks would like to be in position to be benefit from a surge in commercial banking. For more:
- here's the article Read more about: JPMorgan, banks
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4. Carlyle Group aims for financial services firms It's fair to say that Carlyle Group has been among the most active private equity firms this year. The firm has said that for the first six months of the year it has made 122 investments worth $2.91 billion; 82 of the investments were in the second quarter. Since then, the deals have kept on coming. "As of one week ago, when Carlyle announced its second-quarter results, the company said it had reached six more deals with a value of $1.6 billion. There was the joint-venture deal to keep open Sunoco's Philadelphia Refinery, a move that was expected to save hundreds of jobs and earned the praise of politicians...There were investments in hotels in China and Texas, an industry Carlyle particularly likes, and a deal to acquire auto-body repair-shop chain King Collision Repair Centers," notes Deal Journal. One of the more interesting recent investments: Two Carlyle funds--the Carlyle Global Financial Services Partners and the Carlyle Partners V--took a 60 percent stake in TCW, the money management firm. The deal calls for TCW's management and key employees' ownership to rise to 40 percent from 17 percent and all portfolio managers are expected to stay with the firms. The financial terms were not disclosed. The industry's take on this deal has been positive, and some wonder if private equity firms are poised to boost their activity in the financial service industry. The TCW deal was 2th made by Carlyle's financial services group and its first majority stake in an institutional money manager, notes P&I. It likely has its eyes on more gems. For more:
- here's the Deal Journal article
- here's the P&I article Read more about: Private Equity, Carlyle
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5. Wacky protest against banks The protests against big Wall Street banks have waned as of late. The Occupy Wall Street movement is well past the fever-pitch stage, and protests now are small and less covered by the media. For the groups that are still bent on making big media splashes by protesting big bank activity, the bar has been raised. One group that seems to be leading the charge is #MicCheckWallst, which recently drew media attention for an odd claim: A group of psychic protesters gathered in Seattle and "channeling the collective strength of their psychic powers, psychic thinking hats, incantation chalkings and dollar bills fastened to their third eyes (and with the help of) renowned world psychic 'The Magnificent Federico' who used his remote viewing skills to verify their success," the group made all the money in the vault at the Bank of America branch at 500 Olive Way in Seattle simply disappear…by moving it to a credit union, as reported by the Sky Valley Chronicle. This is wacky to say the least. Perhaps more likely it will attract protestors to its demonstrations is its practice of throwing $5,000 in hard cash off of buildings to protest bank activity. All that said, banks still need to take seriously the notion that rank-and-file customers would be better off with credit unions. The industry needs to make a serious case against that. For more:
- here's the article Related articles:
Financial firms need new approach to Millennials
Protests loud at Bank of America meeting Read more about: Occupy Wall Street, Bank Protests
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Also Noted | This week's sponsor is Kaseya. |  | Ten Effective Habits of Indispensable IT Departments
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SPOTLIGHT ON... Another robo-signing incident? A New York Times editorial suggests that the banking industry's credit card collections problems are eerily reminiscent of the mortgage robo-signing problems that so traumatized the industry. There are some similarities, including missing documents and faulty records. By one estimate, in 90 percent of credit card lawsuits, plaintiffs cannot prove the defendant owes them a debt. Credit card collection has the ability to become a whole new issue, depending on what the regulators do. You can bet the issue is being mulled. For banks, this could be yet another legal nightmare and the nation is weary of scandals -- a fact that might impact enforcement decision making. Article Company News:
> Barclay's culture is deeply flawed. Article
> CME heads to Europe. Article
> Freddie sells bills. Article
> Lipper fixed income index moves higher. Article
> JPMorgan picks Ex-Exxon CEO to head probe. Article
Industry News:
> Stakes rise in Best Buy war. Article
> Early investors flee Groupon. Article
> A view on mortgage banking. Article
> Variable annuity sales decline. Article
> Are CEO shying from M&A? Article
Regulatory News:
> Banks underestimating forex risk? Article
> Fed on tight credit and spending. Article
> Tough times for Swiss banks. Article
> Treasury's new top dog on AML. Article And Finally…Forex skills handy when vacationing. 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.
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