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Paulson Announces New Plans to Buy Equity Stakes in Banks and Revive Credit Markets
The U.S. government yesterday (Tuesday) announced plans to invest $250 billion, more than a third of the $700 billion congressional bailout allotment, into nine of America’s largest banks in an effort to bolster confidence in the financial system. Similar to steps taken by European governments earlier this week, the government will guarantee new debt and take equity stakes in the participating banks.
"Government owning a stake in any private U.S. company is objectionable to most Americans – me included," U.S. Treasury Secretary Henry Paulson said announcing his decision to effectively nationalize the nation’s banking sector. “Yet, the alternative of leaving…
15Oct2008 | Money Morning | Comments Off | ContinuedBarclays Gets a $927 Million Jump Start as Japanese Banks Ramp Up Overseas
Barclays PLC (ADR: BCS), the United Kingdom’s fourth-largest bank, may get a $927 million cash infusion from Japan’s Sumitomo Mitsui Financial Group Inc. by the end of the month. The investment, which will be made through the group’s Sumitomo Mitsui Banking Corp. unit, underscores an evolving trend among large Japanese banks that have so far been unaffected by the subprime collapse.
Sumitomo Mitsui, Japan’s second largest bank, has not confirmed the agreement, but its 100 billion yen investment will secure an approximate 2.3% stake in Barclays. Barclays was racked by the housing collapse that started last year and has since dragged…
21Jun2008 | Money Morning | Comments Off | ContinuedBuyer Beware: Why You Don’t Want to Buy What Wall Street Banks Are Selling
Imagine that you’re the investment director for one of the new sovereign wealth funds (SWFs). A very important guy – you get to invest several hundred billion dollars, with far fewer committees and shareholder interest groups harassing you than if you the head
of U.S. institutions such as CalPERS or TIAA-CREF.
Last winter, you had delegations from all the big banks in New York explaining that
they’d just had this teensy weensy hiccup in subprime mortgages and so were giving you an unparalleled opportunity to buy shares – or convertible bonds – at a modest discount to the market price. You bit and…
Election 2008: Obama or McCain – U.S. May Suffer Either Way
As Barack Obama closes in on the Democratic presidential nomination, investors should focus their minds around one uncomfortable fact: Whether it’s Obama or Republican John McCain who wins the White House, expect some policy changes that won’t sit well with investors – or with the U.S. economy.
This could make for several rough years for U.S. investments, underscoring yet again the importance of searching out profit plays overseas.
That’s why it’s crucial that we understand just what each candidate is likely to do should he reach office. Interestingly, there are three areas where the two presidential hopefuls seem to be in agreement.…
6Jun2008 | Money Morning | Comments Off | Continued
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