WWW - Posts tagged U.K. banks at BloggingStocks

U.K. banks posts

Citigroup Upgrades Royal Bank of Scotland, Downgrades Barclays

Posted Sep 10th 2010 10:20AM by Mark Fightmaster (RSS feed)
Filed under: Analyst Upgrades and Downgrades, Lloyds TSB Group plc ADS (LYG), Barclays plc ADS (BCS)

Citigroup decided to take some action on banks, upgrading Royal Bank of Scotland (RBS) to buy from hold, and cutting Barclays (BCS) to hold from buy. Citigroup cited valuation as the main reason for the RBS upgrade. In the U.K., RBS finished the day nearly 1.3% higher.

The brokerage firm said it downgraded Barclays because in its view "the 'new' theme that the first-half 2010 results highlighted is the effects that economic deleveraging is having on the loan books and revenues of the banks." Citigroup added that "A much higher proportion of revenues are linked to new business levels than are costs. To tackle this earnings threat, banks need a combination of pricing power, margin expansion and a strong cost story." In overseas trade, BCS finished the day more than 1% lower.

Continue reading Citigroup Upgrades Royal Bank of Scotland, Downgrades Barclays

Hedge fund letter outlines how we got into this mess

Posted Aug 18th 2007 11:40AM by Peter Cohan (RSS feed)
Filed under: International Markets, Other Issues, Industry, Scandals

As investors, we are blessed by the willingness of hedge fund operators to write letters to investors that describe the current financial situation. One such letter helps me understand how financial alchemy transformed subprime mortgages into AAA-rated paper eagerly consumed by European and Asian investors eager to recycle the cash generated by high oil prices and trade surpluses with the U.S.

Barron's [subscription required] excerpted this letter from "A (bearish) hedge-fund operator," in a letter to his investors, describes how a senior Wall Street marketing director recounted the genesis of the current situation:

"'Real money' (U.S. insurance companies, pension funds, etc.) accounts had stopped purchasing mezzanine tranches of U.S. subprime debt in late 2003 and [Wall Street] needed a mechanism that could enable them to 'mark up' these loans, package them opaquely, and EXPORT THE NEWLY PACKAGED RISK TO UNWITTING BUYERS IN ASIA AND CENTRAL EUROPE!!

Continue reading Hedge fund letter outlines how we got into this mess