The expectation, last year, that damage to insurers' balance sheets and an increase in claims -- particularly for financial services liability coverage -- didn't materialize, as carriers had enough capital on hand to absorb the losses sustained on both sides of the balance sheet. As a result, insurance pricing has been kept under control.

Continue reading Premium income down 18% in UK insurance market

Premium income down 18% in UK insurance market originally appeared on BloggingStocks on Tue, 15 Dec 2009 15:00:00 EST. Please see our terms for use of feeds.

Research firm Punk, Ziegel & Co is putting a "buy" rating on Citigroup (NYSE: C). The research firm feels that the bank is the best proxy for investing in the global investment industry and that its write-downs are secondary. Quoted by MarketWatch, the firm said "The stock allows one to invest in the world's financial growth better than any other company. Others perform in one part of the financial sector or operate in one portion of the world."

That comment may be akin to saying that if you are going to drown in quicksand, you might as well find the best quicksand available. Citigroup is hardly a strong investment and the fact that its business operations are global and that it operates in many sectors has nothing to do with whether the bank can do well over the next year.

Citigroup is being scuttled by huge write-offs in its mortgage-related investment portfolio. Earnings from other divisions in the company are not likely to offset this and the bank may have to raise more capital. The resulting dilution could certainly drive the price of the company's stock down. There have also been comments from Wall Street that the big bank may have to cut its dividend. That is likely to make it much less attractive to a certain category of "yield-minded" investor.

Citi shares could be hit by more write-offs and the need to bring in a large sum of new capital.

That hardly makes it a "buy."

Douglas A. McIntyre is an editor at 247wallst.com.

Citigroup gets an upgrade ... seriously? originally appeared on BloggingStocks on Wed, 02 Jan 2008 09:52:00 EST. Please see our terms for use of feeds.

The stock market is like some punch drunk boxer who gets up after being knocked out only to be pounded yet again.

After rebounding for a milisecond, the Dow Jones industrial average ended the day below 13,000, down 170. The same investors who thought earlier in the day that the world wasn't going to end apparently have changed their minds yet again.

Remember that flicker of optimism earlier thiis afternoon.

Hester Capital Management's Craig Hester told Bloomberg News that, "The market to us looks very oversold and I think it's beginning to create some value in stocks."

Apparently, he wasn't alone.

Investors gobbled up shares of financial companies including Citigroup Inc. (NYSE: C), Goldman Sachs Group Inc. (NYSE: GS) and Merrill Lynch & Co. (NYSE: MER) that had been beaten to a pulp over the past few days. Even Bear Stearns Cos. (NYSE: BSC), which had been especially hard hit, rose for a while. Of course, they all fell by the close of trading.

Continue reading Bloodied stock market rebounds then stumbles again

Bloodied stock market rebounds then stumbles again originally appeared on BloggingStocks on Wed, 15 Aug 2007 18:05:00 EST. Please see our terms for use of feeds.

Merrill Lynch & Co. (NYSE:MER) posted earnings above and beyond Wall Street expectations, proving the company's many naysers wrong.

The financial services giant posted earnings per share of $2.24 on revenue of $9.7 billion, easiily surpassing analysts' estimates of EPS of $2.02 EPS and $9.25 billion in revenue.

A few weeks ago, brokerage stocks were being crushed when Bear Stearns (NYSE:BSC) was facing sharp hedge fund markdowns from toxic mortgage losses. Bloomberg has an article pointing to some $11 billion that the Wall Street firms are having to eat because of a credit crunch on some of the private equity deals.

Chairman & CEO, Stan O'Neal, noted in the release that revenue diversification made the strong performance possible despite uneven market conditions in what he described as "at times, a hostile market environment." That is referring to the current mortgage and debt markets that have been punishing big Wall Street firms..

The firm did not offer any formal guidance since brokerage firms are subject to conditions in the stock and bond markets. Super-leveraged debt instruments and derivatives help brokers live by the sword and die by the sword. So, as long as the markets remain healthy overall, then Merrill and its main competitors among so-called bulge bracket firms should be fine.

Merrill Lynch shares had traded over $89.00 in early trading, but shares are nearly back to flat at $87.45 on the day.

Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.

Merrill Lynch: Not all broker earnings are dead originally appeared on BloggingStocks on Tue, 17 Jul 2007 10:43:00 EST. Please see our terms for use of feeds.

Continue reading Two words for the future: financial services

Two words for the future: financial services originally appeared on BloggingStocks on Fri, 30 Mar 2007 19:37:00 EST. Please see our terms for use of feeds.

For the past two years I have been given 50 free (online) stock trades associated with my Wells Fargo & Co. (NYSE:WFC) Portfolio Management Account (PMA). I do not make anywhere near this many trades and do not expect to -- even in the next five years. So for me it makes all trading free. The PMA account has been convenient in many ways because it ties together my equity line, cash management, checking, credit cards, and stock accounts.

Recently, Bank of America Corp. (NYSE: BAC) has done the same thing and offered me 100 free trades. This seems to be the new direction in banking and relationship management. Telecommunications and cable networks are bundling services as well to increase revenue and make the relationship "stickier."

But as the banking services become similar, it's likely I will drop one bank for another and consolidate accounts further. This will likely happen a lot.

So who loses out? For me, in the short run it is likely to be Charles Schwab Corp. (NASDAQ:SCHW) because it still charges me for trading. Without the same network of branches as its competitors, it loses out on face-to-face contact as well. To mitigate this, I think Schwab will have to continue migrating its services toward asset management and banking and be forced to mimic the services of its competitors.

Mellon Bank / Mellon Financial Corp. (NYSE:MEL) (recently acquired by The Bank of New York Co., Inc. (NYSE:BK)) is also at a disadvantage (although it is not a retail bank and holds our business accounts only.) Mellon has been trying for years to increase the depth of our relationship, but for whatever reason has not elected to tie its services together and cannot compete with the full breadth of services offered by Wells and B of A. To its credit, however, Mellon has offered a high level of service for our many enterprises, and I doff my hat to Fred, Roger, Lynn, Janet, Tamara, Josh, German and Caesar in the Century City office. Without that valuable face-to-face relationship with them, we'd probably be gone.

The price competition in stock trading and the consolidation of the industry has been, and will continue to be, forefront in the business news for years to come. E*Trade, Scott Trade, Fidelity and TD Ameritrade are all beating each other up with free trading offers, discounts to new clients, banking opportunities and more. You can find these amazing offers spread throughout the AOL Money and Finance pages and every other financial web outlet.

The very word "Bank" has become more and more obsolete, while "Financial Institution" becomes ever more relevant. For the consumer, the opportunities are expanding as the services and price competition keep increasing. Who do you "bank" with? Who do you "trade" with? Is there a better term than financial institution?

Check out my other posts for BloggingStocks here. and be sure and read You don't have to be 007 to find the best picks for 2007!

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.

B of A follows Wells Fargo into free trading originally appeared on BloggingStocks on Thu, 18 Jan 2007 17:05:00 EST. Please see our terms for use of feeds.