Continue reading Closing Bell: Market Stages Furious Rally (BP, C, GE, MSFT, T, F)

Closing Bell: Market Stages Furious Rally (BP, C, GE, MSFT, T, F) originally appeared on BloggingStocks on Fri, 11 Jun 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Forgetting About Earnings (CIEN, KO, GS, IBM, MGM, MTG)

Closing Bell: Forgetting About Earnings (CIEN, KO, GS, IBM, MGM, MTG) originally appeared on BloggingStocks on Tue, 20 Apr 2010 16:10:00 EST. Please see our terms for use of feeds.

Continue reading Inflation Jumps in U.K.; Is U.S. Next?

Inflation Jumps in U.K.; Is U.S. Next? originally appeared on BloggingStocks on Tue, 19 Jan 2010 17:40:00 EST. Please see our terms for use of feeds.

First of all what is sovereign debt? Sovereign debt is created by the issuance of bonds by a country's government. When the financial meltdown occurred last year, governments around the world issued bonds to obtain money for their respective stimulus programs. The amount of debt (bonds) issued worldwide has been astronomical.

Now, investors around the world are worried that some countries are in danger of their bond markets collapsing or, worse case scenario, for the country to default on its bonds.

Continue reading New Investor Alert on Sovereign Debt

New Investor Alert on Sovereign Debt originally appeared on BloggingStocks on Sat, 02 Jan 2010 16:10:00 EST. Please see our terms for use of feeds.

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.

The numbers cited here for bank rescue costs are staggering -- way beyond our imagination. Keep in mind that we are talking trillions, not billions. You might want to etch these numbers in your memory to say that you have lived through perhaps the greatest financial crisis of our time.

• The U.S. government and the Federal Reserve have spent, lent, or committed $12.8 trillion to bank rescue, which amounts to about the value of everything produced in this country as of March 31.
• EU governments have approved $5.3 trillion of aid, more than the annual GDP of Germany.
• The UK pledged $1.1 trillion to restore confidence in its lenders, the most of any EU member.
• The top three EU states providing capital injections were the UK with $781.2 billion, Denmark with $593.9 billion and Germany with $554.2 billion.

Continue reading Bank rescue costs are staggering, and there's more to come

Bank rescue costs are staggering, and there's more to come originally appeared on BloggingStocks on Fri, 12 Jun 2009 12:00:00 EST. Please see our terms for use of feeds.

Yesterday S&P downgraded its outlook for the British economy to "negative" because government debt in the U.K. may equal 100% of GDP. The pound tumbled on the news.

Today the dollar followed suit and dropped to a five-month low, indicating just how fast these markets can move. The drop was blamed on yesterday's downgrade. The dollar fell 0.4% to $1.3941 against the euro, 0.1% against the pound to $1.5839 and 0.2% to Y94.17 against the yen. The dollar index, which is valued against a basket of currencies, dropped 0.2% to $80.349

Continue reading Dollar follows UK downgrade and trades at five-month low

Dollar follows UK downgrade and trades at five-month low originally appeared on BloggingStocks on Fri, 22 May 2009 11:30:00 EST. Please see our terms for use of feeds.

Continue reading KFC opening up to 300 new British outlets

KFC opening up to 300 new British outlets originally appeared on BloggingStocks on Wed, 18 Feb 2009 18:40:00 EST. Please see our terms for use of feeds.

Barclays (NYSE: BCS) posted earnings that would be the envy of almost any other global bank. In the process, it gave the troubled banking industry some hope that the future will not be one of ongoing losses stretching well into this year, if not into next.

The bank's second half surprised analysts. According to Bloomberg, "It looks like a pretty good underlying performance and start to 2009," said Michael Trippitt, a London-based analyst at Oriel Securities Ltd., who has an `add' rating on Barclays." A lot of the improvement came because many of Barclays large consumer and business service divisions did well when the effects of toxic asset where taken out.

Continue reading Barclays (BCS): Some hope for U.S. bank stocks

Barclays (BCS): Some hope for U.S. bank stocks originally appeared on BloggingStocks on Mon, 09 Feb 2009 08:48:00 EST. Please see our terms for use of feeds.

The UK today announced a series of huge investments in its credit markets. They go well beyond bailing out banks, and the programs could be used as examples of what other large national economies may have to do.

According to the The Wall Street Journal, "The U.K. government also announced that the Bank of England will set up an asset purchase program to buy high quality private sector assets." Put more simply, the UK will buy the debt of corporations and other entities.

The program moves well beyond the steps taken so far in the UK and the US because it pushes the government's actions beyond the banking system. But, that is what may be necessary. Even companies with strong balance sheets are having trouble getting credit. The lack of capital is cutting off expansion. In some cases, corporations with debt coming due may have to default, even if their underlying businesses are in relatively good shape. The state of bank balance sheets has taken them out of the positions as lenders of first resort to the entire corporate world.

Will the new program work? Maybe so. The largest criticism of bank bailouts has been that the banks keep the money to improve their reserves. That won't be an issue if the government is providing the money directly into the lending system.

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

Massive bailout of UK financial markets creates new precedents originally appeared on BloggingStocks on Mon, 19 Jan 2009 05:39:00 EST. Please see our terms for use of feeds.

Banks around the world have been raising capital in the last few months. If the market is efficient, then the cost of capital for these banks should tell us something about how risky they are. Based on the relative cost of capital of banks in the U.S. compared to those in France, Germany and Switzerland, the world's riskiest banks are right here in the good old USA. The safest banks? French ones.

How so? Here is the rough (due to different capital structures) after-tax cost of capital for the banks in different countries:

• U.S.: Morgan Stanley (NYSE: MS) is paying a 17% interest rate and Goldman Sachs Group (NYSE: GS) pays almost 17%
• UK: Barclays pays 16%; HBOS, Lloyds TSB; and Royal Bank of Scotland pay about 12%
• Germany: Commerzbank pays 10%
• Switzerland: UBS's interest rate is relative bargain of 9.9%
• France: BNP Paribas, Societe Generale, and four others pay the lowest rate -- 5% -- for their capital

Maybe there's some sort of trading opportunity to short U.S banks and go long French ones. C'est la vie!

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing, will be published by Portfolio on December 26, 2008. He has no financial interest in Goldman or Morgan Stanley securities.

American banks pay the most for their capital originally appeared on BloggingStocks on Wed, 19 Nov 2008 16:45:00 EST. Please see our terms for use of feeds.

Continue reading No small feat: 2009 could be year global oil consumption growth slows

No small feat: 2009 could be year global oil consumption growth slows originally appeared on BloggingStocks on Mon, 25 Aug 2008 17:43:00 EST. Please see our terms for use of feeds.

Trade group reports the British buy more CDs than anyone else originally appeared on BloggingStocks on Fri, 20 Jun 2008 17:10:00 EST. Please see our terms for use of feeds.

Continue reading JPMorgan Chase taps Tony Blair for advice

JPMorgan Chase taps Tony Blair for advice originally appeared on BloggingStocks on Thu, 10 Jan 2008 17:48:00 EST. Please see our terms for use of feeds.

One more media event for Apple (AAPL): This time it's London originally appeared on BloggingStocks on Fri, 14 Sep 2007 15:15:00 EST. Please see our terms for use of feeds.

Kohlberg Kravis Roberts & Co., reportedly has BCE Inc. (NYSE:BCE), the owner of Bell Canada, in its sights.

A deal for the telecom company would be worth about CAD$30 billion (over USD$25 billion), making it the largest acquisition in Canadian history and one of the largest buyouts ever, according to the Globe and Mail newspaper. KKR is looking for Canadian partners such as the Ontario Teachers' Fund since foreign firms are prohibited from owning more than 46% of a telecom company's voting shares.

Shares of BCE were up 12% pre-market trading. They have dropped about 4% this year.

KKR already has its hands full:

The New York-based buyout firm is part of the $45 billion TXU Corp. (NYSE: TXU) deal, the largest buyout ever. KKR also is among the companies in the hunt for Australian retailer Coles Group Ltd. Last month, it agreed to buy Dollar General Stores Corp. (NYSE: DG).

Apparently, there's no limit to the number of multi-billion acquisitions that KKR can juggle at the same time.

KKR eyes deal for Bell Canada owner originally appeared on BloggingStocks on Thu, 29 Mar 2007 09:40:00 EST. Please see our terms for use of feeds.

Citgroup Inc. (NYSE:C), which already plans to spend $13.4 billion for Japanese brokerage Nikko Cordial, now reportedly has its sights set on ABN AMRO Inc. (NYSE:ABN), the Dutch bank that's in discussions to merge Wit Barclays Plc. (LON:BARC).

If the Japanese deal -- which has encountered some opposition -- happens and Citigroup is able to outflank Barclays for ABN AMRO what will it do then? ABN AMRO has a market capitalization of about $80 billion. Nikko Cordial and ABN AMRO would be a lot for Citigroup to integrate at once.

Chief Executive Charles Prince, though, may have no choice but to take that risk.

Shares of Citigroup have risen only 4 percent over the past five years, underperforming its peers including Morgan Stanley (NYSE:MS) up 44 percent, Merrill Lynch & Co. (NYSE:MER) up 56 percent and Goldman Sachs Group Inc. (NYSE:GS), up 134 percent.

Even so, the prospect of Citigroup entering the bidding from ABN AMRO should worry Barclays. Other U.S. and financial services firms who are seeking growth overseas may enter the fray as well.

The ABN AMRO saga has just begun.

Is Citigroup biting off more than it can chew? originally appeared on BloggingStocks on Fri, 23 Mar 2007 09:59:00 EST. Please see our terms for use of feeds.

Barclays Plc.'s (LON:BARC)$80 billion deal to buy European rival ABN Amro Holdings NV (NYSE:ABN) will add to the pressure on banking and financial services sector stocks which have performed poorly this year amid concerns about the economy and the housing market.

A combined Barclays-ABN Amro would be a formidable competitor. There's little geographic overlap between the two banks and about the only area where there is duplication is in fixed-income investment banking, according to the Wall Street Journal (subscription required).

The merger would be the largest ever in the financial services sector and would create the second-largest bank in Europe, according to Bloomberg News.

This has not been a good year for financial services stocks.

Shares of Merrill Lynch & Co. (NYSE:MER) are down 12 percent, Citigroup Inc. (NYSE:C) is down 9 percent, Morgan Stanley (NYSE:MS) has fallen 6 percent while Deutsche Bank AG (NYSE:DB) has plunged 4 percent. Even Goldman Sachs Group Inc. (NYSE:GS) has only managed to gain 2 percent.

If these stocks don't start to perform significantly better, you can bet more mergers of the size of Barclays-ABN Amro will occur.

U.S. firms will feel the heat from Barclays-ABN merger originally appeared on BloggingStocks on Tue, 20 Mar 2007 17:45:00 EST. Please see our terms for use of feeds.

• The imbalance, the trade deficit and related capital inflow all link the faster-growing U.S. with other aging, slower-growing economies. They are a reflection of growth in the U.S., not weakness.
• Despite our trade deficit and other countries' trade surpluses, the U.S. economy has created 9.3 million new jobs since the 2001 recession, compared with 360,000 jobs in Japan and 1.1 million jobs in the European zone, excluding Spain.
• Speaking of Spain -- like the U.S., Spain (3.6 million new jobs) and the U.K. (1.3 million new jobs) also ran trade deficits and created jobs rapidly during these last five years.
  
• The recent upswing in the U.S. trade deficit partially reflects the shift in the demographics of the world's large economies. The under-60 population in the U.S. is expected to grow for at least 50 years, whereas the under-60 populations in Japan and Europe is already in a decline and China will also be in a decline within a decade.

Is the U.S. trade deficit a sign of strength? originally appeared on BloggingStocks on Thu, 28 Dec 2006 10:52:00 EST. Please see our terms for use of feeds.

Is the Time Warner sale of IPC in the works for private equity buyers, too? originally appeared on BloggingStocks on Mon, 02 Oct 2006 08:59:00 EST. Please see our terms for use of feeds.