MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Friday, May 25, 2012
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7:25 AM The three board members who oversaw risk at JPMorgan (JPM) were notable for their lack of experience at managing risk at financial institutions. The Bank of Dimon is the only one of the TBTF crowd that doesn't have someone a bit closer to the industry on its risk committee. 3 Comments
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5:27 AM While some top execs take huge payments despite failing, Apple (AAPL) CEO Tim Cook is giving up $75M in dividend income by excluding himself from a program that enables staff to accumulate dividends on their restricted stock units that are still vesting. Cook has 1.125M such units that are due to vest over the next 10 years. (8-K) Comment!
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5:13 AM Citigroup (C) sells a 10.1% stake in Turkey's Akbank (AKBTY.PK) for $1.15B as part of the U.S. bank's program to sell assets in order to meet Tier 1 capital requirements. Citigroup will hold a remaining 9.9% stake for 3 years. The bank will take a post-tax $243M loss on the sale, having bought the 20% holding in 2007 for $3.1B. (PR) Comment!
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4:04 AM The slow-motion train wreck continues in Greece, with police urging citizens to keep their money in the banks rather than sowing the seeds for a wave of home thefts. Greek banks have seen almost 25% of their deposits drained out over the last two years, and are likely to be shored up today or Monday with €18B of bailout funds that are weeks overdue. 1 Comment
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12:49 AM Yuanta Financial says it has pulled out of talks to buy Taiwanese Ta Chong Bank, dealing a blow to Carlyle's (CG) plans to exit the underperforming investment in a sale that could have been worth ~$1.25B. (previously) Comment!
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Thursday, May 24, 2012
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6:16 PM Lehman Brothers (LEHMQ.PK) strikes a deal to buy the 26.5% stake it doesn't already own in apartment giant Archstone from BofA (BAC) and Barclays (BCS) for $1.58B, WSJ reports, ending the high-stakes chess game between Lehman and Sam Zell's Equity Residential (EQR). But Zell won't walk away empty handed, as his firm will get $150M in the deal. 7 Comments
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4:11 PM American Capital Mortgage (MTGE -2.6%) manages to claw back some of its big early loss after a secondary offering of 11M shares which raised $253M. As tipped two days ago, a price premium of about 10% over book value is too enticing for mREIT managements not to do a secondary. (PR) Comment!
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3:54 PM SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." 11 Comments
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3:20 PM In shades of Fannie and Freddie, Spain's bailout of Bankia - originally slated at about €5B, then €7-10B, and now €15B - may grow further as the lender is expected to request even more tomorrow to meet a viability plan set up by new management. Comment!
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1:43 PM TD Bank's (TD -0.7%) earnings beat contrasts with Royal Bank of Canada (RY -4.1%), where earnings rose just 5% and missed expectations. The divergence: RBC's exit from the U.S. consumer market, while TD reported record profits from its American unit. Comment!
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11:50 AM Bank Q1 net profit rose 23% to $35.3B - the highest since Q2 2007 - as revenue rose 3.1% to $169.6B, the FDIC says in is quarterly report. However, loan balances fell $56.3B (0.8%) after three consecutive quarterly increases. Lower provisions for bad loans were a factor in the profit improvement. (PR) Comment!
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9:50 AM The $100M trading profit that underwriters are reported to have made by "greenshoe" short positions on Facebook may seem "like a giant conflict of interest," outside of Wall Street writes Fortune's Stephen Gandel, but no rules were broken and the potential trades were even disclosed in Facebook's prospectus." 4 Comments
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9:15 AM The WSJ details how one of the institutional investors that was notified by an underwriting bank of cuts to Facebook (FB) estimates, Capital Research & Management, decided not to invest in the IPO as a result. It's added that while such selective disclosure is normally illegal, it isn't for IPOs, due to laws that prevent analysts at underwriting banks from issuing research until 40 days after shares begin trading. FB +1.8%. (previous) 1 Comment
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3:50 AM BBVA (BBVA) is considering the sale of its pension businesses in Latin America, calling it an attractive but non-core unit. BBVA is slow-boating it, saying the strategic review will take several quarters and a decision is unlikely to be made this year. Comment!
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Wednesday, May 23, 2012
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9:43 PM Mostly left unsaid about the JPMorgan trading loss is the most crucial point, writes Sallie Krawcheck: The size and risk of the trade was identified not by management, but by the press, and then it took weeks for JPM to put a number on the loss - and this from one of the savvier management teams. Regulators need to take note before heaping more complexity on an already incredibly complex business. 10 Comments
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7:14 PM Clobbered over the last week due to Facebook's (FB) less-than-stellar IPO, GSV Capital (GSVC +4.9%) is now trying to downplay its Facebook exposure. Facebook only makes up 4% of GSV's overall holdings, says CEO Michael Moe, and 2013 IPO candidate Twitter is actually the company's largest position. Meanwhile, fellow Facebook owner SVVC has seen its price fall below its net asset value. 1 Comment
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6:00 PM H&R Block (HRB) names Gregory Macfarlane as the tax preparer's new CFO, replacing Jeff Brown. Macfarlane, who starts in the position on June 4, most recently served as chief financial officer of Ceridian from 2007 to 2011. Shares -0.8% AH. Comment!
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1:16 PM Morgan Stanley (MS -2.6%) has offered a price adjustment to Facebook (FB +2.5%) investors in the event they overpaid due to order execution problems, Dow Jones reports. The news comes as lawsuits fly, politicians huff and puff, and sources tell the WSJ MS and other underwriters have made a $100M profit through "greenshoe" short positions on Facebook shares (Felix Salmon recently explained the arrangement in detail). 8 Comments
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