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U.S. Banks Looking to Score Profits Again
Although we’re still in the middle of the worst financial crisis in decades, a few select banks are positioned to make a boatload of profits. And if you pick the right ones, gains of 100% or more are easily within reach.
The U.S. Federal Reserve’s actions in cutting short-term interest rates to almost zero – together with a gentle rise in U.S. Treasury bond yields since the start of the year – have given us a steeply sloping yield curve, where long-term rates are about 3% above short-term rates.
What’s more, lending rates to corporate and personal borrowers are way up, far…
18Mar2009 | Money Morning | 0 comments | ContinuedEconomic Experts to Obama: Focus on the Fundamentals
In sports, championship-caliber teams all have at least one characteristic in common: They’re able to focus on the fundamentals. With the U.S. unemployment rate jumping to its highest level in a quarter century in February, it’s become abundantly clear that that the U.S. recession is much deeper than President Barack Obama anticipated, meaning it’s likely that additional measures will be undertaken to arrest the slide and restart growth.
Many experts are now calling for the Obama administration to focus on the fundamentals – fundamental economics, that is. They want him to drop some of its ancillary pet projects – such as healthcare…
9Mar2009 | Money Morning | 0 comments | ContinuedGlobal Investing Roundups
South Africa Cuts Interest Rates; BlackRock Cans 500; Empire Co. Posts 13% Profit; KB Toys Files for Bankruptcy; Citi and UBS to Buy Back $30 Billion in Securities; Bank of America to Cut 35,000 Jobs
- South Africa’s central bank cut a half-percentage point from its benchmark interest rate, marking the country’s first interest rate reduction in more than three years, Bloomberg reported. The growing global crisis, rising unemployment and falling commodity prices are hampering growth for the emerging economy.
- Asset manager BlackRock Inc. (BLK) cut 500 jobs, Chief Executive Laurence Fink said Thursday. Many of the job losses were part-time employees, Reuters reported. BlackRock…
Global Investing Roundups
Consumer Confidence Climbs; Home Prices Record Plunge; Troubled Banks on the Rise; Oil Falls 7%; Slim’s Bank Buys Citi Stock; D.R. Horton Shares Vault
- The Conference Board said yesterday (Tuesday) that its Consumer Confidence Index now stands at 44.9, up from a revised 38.8 in October. Last month’s reading was the lowest since the research group started tracking the index in 1967.
- Home prices plunged in the third quarter, according to the S&P Case-Shiller Home Price index, which posted a 16.6% drop for the three-month period. That outpaces the second quarter’s record 15.1% decline.
- The number of problem U.S. banks and thrifts soared…
Then There was Citi
Nov. 24 (Bloomberg) — "Citigroup Inc. received a U.S. government rescue package that shields the bank from losses on toxic assets and injects $20 billion of capital, bolstering the stock after its 60 percent plunge last week."
Although it was an inevitability, we can officially add Citigroup Inc. to the list of failed and bailed corporation.
The government will use $20 billion of the TARP funds to buy preferred stocks. The U.S. (taxpayer) and FDIC will put a guarantee on $306 billion in assets. In exchange for the $306 billion parachute. Citi will incrementally issue $7 billion in preferred stock to the…
25Nov2008 | Oxbury Research | 0 comments | ContinuedCitigroup Whacks Another 50,000 Jobs; Cuts Expenses by 20%
Citigroup Inc. (C) today (Monday) unveiled plans to cut more than 50,000 jobs in the “near term” and slash expenses by 20% to preserve capital as it faces a global slowdown that’s expected to push well into 2009.
The cuts are on top of the 23,000 jobs eliminated so far this year. Chief Executive Officer Vikram Pandit plans to whittle the company’s workforce down to 300,000. By the time Pandit puts down the machete, he’ll have lopped off about 20% of the company’s headcount since Citigroup’s peak.
Just last week, Citigroup announced the release of 10,000 employees in addition to hiking…
18Nov2008 | Money Morning | Comments Off | ContinuedCitigroup Concedes Wachovia to Wells Fargo
The much-ballyhooed battle between Citigroup Inc. (C) and Wells Fargo & Co. (WFC) ended with a whimper Friday, as Citi gave up its pursuit of the assets of Wachovia Corp. (WB) – the Charlotte-based lender that was undermined by its broad exposure to subprime assets.
On Sept. 29, Citigroup bid $2.2 billion for Wachovia’s banking operations, but left both Wachovia’s A.G. Edwards brokerage unit and its Evergreen mutual fund family on the table. That left the door open for Wells Fargo to swoop in four days later with a $12 billion bid for all of Wachovia’s operations. That includes a $498 billion…
13Oct2008 | Money Morning | Comments Off | ContinuedTemporary Litigation Halt as Citigroup and Wells Fargo Continue to Vie for Wachovia
After a day of dueling lawsuits yesterday (Monday), all parties agreed to halt litigation for two days as Citigroup Inc. (C) and Wells Fargo & Co. (WFC) continued to squabble over rights to purchase Wachovia Corp. (WB).
The three banks jointly pledged to “cooperate in good faith to agree among themselves to secure orders where necessary in all applicable cases in all jurisdictions,” according to a statement from Wachovia.
The agreement was reached after consultations with the U.S. Federal Reserve, Bloomberg News reported. The “litigation standstill” will be in effect until noon EDT tomorrow (Wednesday).
Earlier in the day, Citigroup had…
7Oct2008 | Money Morning | Comments Off | ContinuedCitigroup Takes Issue with Wells Fargo Bid for Wachovia
Wells Fargo & Co. (WFC) Friday agreed to buy all of Wachovia Corp. (WB) for about $15 billion in stock, however, Citigroup Inc. (C), which had already agreed to buy Wachovia’s banking operations, immediately issued a protest that could jeopardize the deal.
“Citi has substantial legal rights regarding Wachovia and this transaction,” Citi said in a statement. “Wachovia’s agreement to a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citi and Wachovia.”
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Wells Fargo’s $15…
6Oct2008 | Money Morning | Comments Off | ContinuedAfter Reloading With Wachovia’s Banking Business, Citigroup Takes a New Aim at the U.S. Banking Market
Citigroup Inc. (C) will acquire Wachovia Corp.’s (WB) banking operations for $2.l6 billion, a deal that will restore Citi’s title as the biggest U.S. bank by assets while transforming the once-highly regarded Wachovia into an investment-management operation.
In becoming the latest big U.S. bank to bolster its assets by rummaging through the remains of a nearly defunct financial institution, Citi agreed to buy Wachovia’s banking operations for $1 per share. The deal gives Citi a strong retail-banking network – adding 3,300 branches and offices in 21 states – as well as $2.2 billion in deposits; but the bargain also brings City…
30Sep2008 | Money Morning | Comments Off | Continued
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