Financial Services Industry Archive

With the U.S. economy on course to a slow, part-nationalized recovery, debate over whether the economy will begin to look like Japan’s is beginning to reemerge. Saturday, James Surowiecki writes in the New Yorker that some are openly questioning American banks’ ability to earn their way out trouble. New York Times op-ed columnist Paul Krugman is one such skeptic: It’s not at...

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President Obama said this week that he wants to crack down on firms that avoid U.S. taxes by using offshore tax havens. That could bring as much as $210 billion in badly needed revenue into the Treasury over the next 10 years. But it may also hurt U.S. insurers already reeling from the recession. Among the insurers that have subsidiaries in tax havens or financial privacy jurisdictions are...

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Several corners of the consumer lending world are regaining signs of life thanks to the Term Asset-backed securities Loan Facility (TALF). GMAC LLC, the auto financing company that was asked to raise $11.5 billion of new capital following the stress test of its balance sheet, isn’t one of them. Nevertheless, it doesn’t seem to be worried and remains confident the U.S. government...

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In the last few months, investors have attempted to use almost every asset there is as a bellweather for risk appetite. But there’s no better example than the safest one in the world: U.S. Treasury Bonds. Earlier today, the government auctioned $14 billion of 30-year bonds with a surprisingly high yield: 4.28 percent. That was 18 basis points higher than the average forecast by analysts....

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Past market crashes have produced their share of bankers who turned to writing for solace, fame and preferably, another fortune. So it seems with this one too. Tetsuya Ishikawa, the son of a successful Japanese expatriate, structured and syndicated mortgage-backed securities for Goldman Sachs and Morgan Stanley in the heady boom days of the mid-zeros. After totting up a seven-figure salary...

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Being a nationalized bank certainly has its share of drawbacks, but it also comes with some perks. Nowhere has this been more evident than in the performance of Bank of America this week. While the news has just kept getting worse, Bank of America’s share price has continued rising higher.  Late last week, the firm dethroned its chairman Ken Lewis, amid shareholder fury over...

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In market rallies, companies sometimes get left behind. So it is for Citigroup and Met Life, which have failed to pick up anywhere near the kind of traction as their competitors in the recent market surge. In the last month, shares in Bank of America have risen 63 percent while Wells Fargo is up 70 percent. Citigroup, on the other hand, has gained just 30 percent in the mad rush towards...

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It’s looking less and less likely Bank of America will be repaying the funds it borrowed through the Treasury Asset Relief Program (TARP) early, as it had once hoped. The Wall Street Journal reported that regulators told the bank it needs to address a capital shortfall of about $34 billion based on results of government’s stress tests out this week. Bank of America had objected to...

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Stress tests to be revealed Thursday will likely show that while subprime, corporate and commercial real estate loans are doing their fair share of tearing apart bank balance sheets, the real gremlin in the banking engine is the credit default swap, or CDS. Credit default swaps are private contracts where the buyer pays for protection against the default of an underlying instrument —...

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Warren Buffet is well known for his contrarian stances. But the Sage of Omaha’s recent comments about Wells Fargo are enough to make even the most ardent value investors pause for a second. “If I had to put all of my net worth into stock, that would be the stock,” he said of the bank at Berkshire Hathaway’s annual general meeting of shareholders this weekend. Motley...

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