Financial Services Industry Archive

The Find: An impassioned defense of the “quants” who have taken much of the blame for the financial crisis. The Source: A post by Jack R. Anderson Professor of Business at the Columbia Business School on its Public Offering blog. The Takeaway: In much of the press coverage of the current market turmoil, Anderson points out, “arcane” and “dizzyingly complex”...

More...

The shocking (at least to some of us) thumbs-down by Congress to the financial buyout program now brings us to Plan 2: improving Plan 1. A number of financial thinkers and economists agree with the House majority that the first plan had a major fault — taxpayers assumed all of the risk while firms receiving help contributed little to the package. It seems certain that in the days to come...

More...

The ultimate fate of the proposed $700 billion economic bailout is up in the air, but one thing is certain: Never underestimate the anger of the American people. The bailout, which failed to pass the House of Representatives today, is deeply unpopular with many taxpayers. Even after including a number of last-minute provisions aimed at protecting  them and assisting home owners...

More...

While the proposed $700 billion, taxpayer-backed rescue of the economy is grabbing the nation’s undivided attention,  private investors are pouring billions into the U.S. financial system and backing banking groups poised to survive the current crisis. Right now, an estimated $40 billion in outside money is being pumped into some of the country’s biggest banking concerns....

More...

The reasons underlying the US financial crisis seem to be revealed hourly, layer by layer, like a stinking onion. But here’s a question I haven’t heard adequately explained. Investment banks and lending institutions have at their disposal some of the most sophisticated computer tracking and modeling programs this side of the Pentagon. Surely in the glow of 31-inch computer displays,...

More...

Many CEO pay packages will now come under the microscope, courtesy of the proposed multi-billion economic bailout plan that will require limiting top executive pay-outs. Passage of the rescue plan will provide more ammunition to shareholder activists and corporate governance interests fighting to contain, or roll back,  giant compensation pacts for corporate CEOs and...

More...

With his $5 billion investment in Goldman Sachs, super-investor Warren Buffett is betting the proposed $700 billion economic bailout package, now being hotly debated before Congress, will soon pass without any major changes or restrictions. Once the proposed bailout legislation is law, the U.S. government becomes the ultimate buyer of bad debts, mostly subprime mortgages and other sick...

More...

In a competition that no business sector wants to win, the country’s financial services companies are cutting more jobs than the ever-shrinking U.S. auto industry. Since August, the financial services business has chopped 102,000 jobs, according to workforce specialist Challenger Gray & Christmas in Chicago. Meanwhile, the automotive sector has cut 80,323 positions during...

More...

An overseas banking giant is getting a chance to double down on the U.S. market, courtesy of the turmoil on Wall Street. Japan’s Mitsubishi UFJ Financial Group, one of the largest commercial banks in the world, is investing $8.2 billion to acquire up to a 20 percent stake in troubled investment bank Morgan Stanley. That investment comes shortly after Mitsubishi’s recently...

More...

All of a sudden those down-to-earth neighborhood bank accounts are looking pretty good next to a couple of Wall Street’s fallen stars, Goldman Sachs and Morgan Stanley. In scrapping the pure investment banking business model and opting to become bank holding companies, the duo will be allowed to attract and hold billions in federally-insured customer deposits. That money helps shore...

More...