There are sickly European banks. And then there is Deutsche Bank.
Shares of the German banking giant, like those of a number of its peers in Europe, have swooned over the last year as investors reject banking models that rely on volatile market activities as opposed to collecting deposits or managing investor accounts.
The latest turbulence came on Monday. Shares of Deutsche Bank touched new lows after a German magazine reported that Berlin had ruled out providing government aid to Deutsche Bank…
Bank says it’s “determined to meet challenges on its own”
Focus reports that German government has ruled out state aid
Deutsche Bank AG shares dropped to a record low and its riskiest bonds declined after a media report said the German government wouldn’t step in to back the lender, fueling investor concerns about its weakened finances.
The shares slumped 6 percent to 10.73 euros at 1:55 p.m. in Frankfurt, bringing losses to about 52 percent this year. The lender’s 1.75 billion euros ($2 billion) of 6 percent additional Tier 1 bonds, the first notes to take losses in a crisis, fell about 2 cents on the euro to 73 cents, near a seven-month low, according to data compiled by Bloomberg…
The Securities and Exchange Commission’s latest insider trading case, against the prominent hedge fund manager Leon G. Cooperman, will test whether the old proverb “where there’s smoke, there’s fire” is enough to prove a violation.
The S.E.C.’s complaint seemingly paints a picture of a classic violation in which an investment manager receives news from someone inside the company and then rushes to trade on it. But the case is hardly typical, and Mr. Cooperman vowed to fight the charges in a five-page letter to his investors that said, “We have done nothing improper and categorically deny the commission’s allegations.”…
Fed overhaul of stress tests would be tougher on big banks
Agency will let banks assume lower dividends during duress
Wall Street would have to come up with billions of dollars in additional capital in a proposed revamp of the Federal Reserve’s annual stress tests that could also scrap some provisions that lenders have criticized.
As the Fed has signaled for months, it is considering changes that would raise the minimum capital that the biggest banks need for a passing grade, Fed Governor Daniel Tarullo said Monday. But the Fed is also mulling concessions that Wall Street has sought, such as eliminating its assumption that lenders would continue to pay out the same level of dividends and buy back shares during periods of financial duress, he said…
CEO accused of misleading investors about Tolstedt retirement
Investor seeks class action status for others over 2 1/2 years
Wells Fargo & Co. was accused of misleading shareholders about its opening of unauthorized accounts and blamed for a 9 percent drop in the bank’s stock price when details became public this month.
The San Francisco-based bank deceived investors for years about its fraudulent practice of cross-selling financial products and misrepresented the success of its model, according to the complaint filed Monday in San Francisco federal court. The investor who sued seeks class-action status on behalf of all shareholders from Feb. 26, 2014, to Sept. 15, 2016…
Tastes and risk levels have gone through the wringer
‘One doesn’t want to become the next episode of “Billions”’
The lonely $250,000 S-Class coupe at Mercedes-Benz of Greenwich says it all. For six months, it’s been sitting in the showroom, shimmering in vain while models priced at only $70,000 fly out the door.
“We haven’t had anyone come in and look at it,” says Joey Licari, a sales consultant at the dealership, looking over his shoulder at the silver beauty. “I feel like normally they would, maybe a few years ago.”…
New rules create a buying frenzy.
In China, even getting crushed under a giant door won’t deter at least one aspirant homeowner from pursuing his dream. (Wait for the 14-second mark.)
This viral video was caught on a surveillance camera last Saturday and posted online by the People’s Daily,which reported that this enthusiastic group of buyers was intent on snapping up new real estate in the Chinese city of Hangzhou. The mad frenzy was prompted by an effort to get in ahead of new restrictions taking effect on Monday that would ban those born outside the city from buying more than one property…
Takeover helps bolster Anbang’s dealmaking credibility
Deal includes Essex House in New York, Four Seasons in D.C.
Anbang Insurance Group Co. completed most of its $6.5 billion acquisition of Strategic Hotels & Resorts Inc., helping to bolster the Chinese company’s credibility as a global buyer after its abrupt withdrawal from the bidding war for Starwood Hotels & Resorts Worldwide Inc. earlier this year.
Central corridor rail seen as profitable for ‘next 100 years’
Railtrack to link Tanzania with Rwanda, Burundi and Uganda
The African Development Bank will hold an investors’ roadshow to attract as much as $7.6 billion in financing for a railway line linking Tanzania’s port in Dar es Salaam with neighboring landlocked countries.
The Abidjan, Ivory Coast-based lender is teaming up with the World Economic Forum to help attract investors to bankroll the 2,200-kilometer (1,370-mile) line, according to Gabriel Negatu, AfDB’s regional director for East Africa…
‘Market headwinds against us have been strong,’ Perry wrote
Fund lost 18.4% since end of 2013; assets drop more than half
Richard Perry, one of the biggest names in hedge funds, is calling it quits after 28 years.
Perry, 61, is winding down his New York-based flagship fund as the industry confronts one of the most tumultuous periods in its history. In a letter to investors Monday, he said his style of investing no longer worked.
LONDON — Nets, a Danish payments processor, said on Friday that it was valued at 30 billion Danish kroner, or about $4.5 billion, in its initial public stock offering in Copenhagen.
The offering came about two and a half years after a group of Nordic banks sold the company for 17 billion kroner to a consortium of investors that included the private equity firms Advent International, ATP Private Equity Partners and Bain Capital.
Nets priced its offering of 105 million shares on Nasdaq in Copenhagen at 150 kroner apiece, within the company’s anticipated range of 130 to 160 kroner. It announced its intention to proceed with an initial public offering this month…
Overdue payments from LoanDepot borrowers are on the rise
Startups draw ire of Eisman, investor who foresaw Big Short
Online consumer loans made by LoanDepot Inc. are going bad faster than underwriters expected, threatening payments to investors who bought bonds backed by those debts less than a year ago.
Lenders typically expect to write off a portion of their loans as some of the borrowers go delinquent and eventually default. But in the bond deal tied to Loan Depot loans called MPLT 2015-LD1, overdue payments are already so high that they’ve triggered a provision that diverts cash from low-ranked bondholders to protect investors with higher priority…
There are other things to worry about.
No need to spend much time viewing this problem.
After the market close on Thursday, Facebook Inc. disclosed that for the last two years it has been overstating to marketers and ad buyers the average time spent viewing video clips on the site, by as much as 60-to-80 percent. The company, which gets more than 90 percent of its revenue from advertising, blamed a mistake in their metrics that has since been corrected, but after the announcement was made to advertisers and the press, Facebook’s stock fell as much as two percent in off-hours trading. On Friday, it was down 1.5 percent as of 2:30 p.m. in New York…
Do you think executive compensation is out of control or that a company should have to disclose its political contributions?
If so, you may also think that your mutual fund should vote on these and other issues in accordance with your beliefs. Good luck with that.
As investors, we are supposed to be able to sound off on corporate governance matters at the companies whose shares we own. We do so by voting on the issues when they arise at a company’s annual shareholders’ meeting…
Baring Private Equity offers A$4.75 a share, a 32% premium
SAI share price has fallen 31% from a June 2014 peak
SAI Global Ltd., the Australian standards and risk management company, accepted a A$1.01 billion ($769 million) takeover offer from Baring Private Equity Asia following a slump in its stock.
Shareholders in SAI Global will receive A$4.75 a share in cash, 32 percent more than the stock’s closing price on Sept. 23, the Sydney-based company said in a statement Monday.
Boston Fed chief among three dissenters at this week’s meeting
Dove-turned-hawk says failing to hike could stoke imbalances
The president of the Federal Reserve Bank of Boston took direct aim at Janet Yellen’s argument for keeping interest rates unchanged this week, shedding more light on pressures confronting the Fed chair as she tries to coax the U.S. economy through a period of slow growth and deep uncertainty.
Eric Rosengren, who dissented from the decision by the Federal Open Market Committee on Wednesday, said in a statement Friday the Fed’s failure to get back to a strategy of gradual rate increases may threaten the economic recovery…
Photographer: Zhang Peng/LightRocket via Getty Images
Here’s the latest uncertainty facing China’s currency: sky high house prices.
A runaway boom in the largest cities will push investors to look for cheaper alternatives overseas, draining money out of China and putting downward pressure on the yuan in the process, according to analysis by Harrison Hu, Chief Greater China Economist at Royal Bank of Scotland Group Plc. in Singapore.
An “enlarged differential between domestic and foreign asset prices will lead to capital outflows and depreciation, until parity is restored,” Hu wrote in a note. He said that the 30 percent year-on-year price gain in Tier 1 and leading Tier 2 cities implies a 25 percent rise in dollar terms, which far outpaces the 5 percent gain in major U.S. cities. That ratio is here in red:
The deal marks first time Wenner’s allowing outside investors
BandLab is headed by scion of one of Asia’s richest families
There comes a time when even Jann Wenner needs a little help from his friends.
After a five-decade run full of interviews with pop stars and presidents, the founder of Rolling Stone is selling 49 percent of the iconic magazine to an Asian billionaire’s son. It’s the first time Wenner has admitted an outside investor, a deal that encapsulates the plight of an industry fighting to stay relevant in an online age. Wenner Media LLC also owns Us Weekly and Men’s Journal…
President and COO Tim Sloan is longtime Wells Fargo employee
Not someone viewed as a ‘transformational CEO,’ analyst says
As the scandal over Wells Fargo & Co.’s bogus consumer accounts was coming to a head this summer, executives concluded they had to act. It was time for a chat with Carrie Tolstedt, the manager who oversaw the retail business.
The man assigned to do the messy task: Tim Sloan, the bank’s 56-year-old president, chief operating officer and trusted No. 2 to Chief Executive Officer John Stumpf. As Stumpf recounted for Congress this week, Sloan told Tolstedt that the bank would “go in a different direction.” She was soon replaced…
Funds are in the form of time deposits, central bank says
Central bank also introducing 7-day, 28-day repo agreements
Saudi Arabia’s central bank stepped up efforts to support lenders in the Arab world’s biggest economy as they grapple with the effects of low oil prices.
The Saudi Arabian Monetary Agency, as the central bank is known, said it decided to give banks about 20 billion riyals ($5.3 billion) in the form of time deposits “on behalf of government entities.” It’s also introducing seven-day and 28-day repurchase agreements, as part of its “supportive monetary policy.”…
Ivy League rival Harvard University lost 2% in fiscal year
Some of the largest college endowments are posting declines
Yale University posted a 3.4 percent investment gain, besting rival Harvard University and most college endowments that reported annual losses.
The value of Yale’s endowment declined less than 1 percent to $25.4 billion because the targeted spending rate of 5.25 percent was higher than the fund returned in the year ended June 30, according to the New Haven, Connecticut-based university. Yale, which has the second-largest U.S. school fund behind Harvard, has the best return among school funds that have posted so far. The endowment has been led by David Swensen for three decades…
About 75 posts said to be lost in Asia region, excluding Japan
Goldman Sachs is said to make job cutbacks later this year
Goldman Sachs Group Inc. plans to cut about a quarter of its investment-banking jobs in Asia, excluding Japan, because of a slump in deal-making in the region, according to a person with knowledge of the matter.
The New York-based bank plans to make the cutback of about 75 jobs in the region later this year, the person said, asking not to be identified because the matter is confidential. The job reduction comes as the bank faces its worst Asia ranking in equity issuance since 2008, according to data compiled by Bloomberg data. A Goldman Sachs spokesman said he was unable to comment…
CreditJohn Macdougall/Agence France-Presse — Getty Images
A German court has been flooded with new lawsuits against Volkswagen from investors who say they lost billions as the value of the carmaker’s shares plunged after its diesel emissions scandal.
The surge could add to the company’s financial woes as it deals with the fallout from the revelation a year ago that it had cheated on emission tests.
A hawkish hold, but a dovish trajectory.
Though the Federal Reserve elected to maintain its benchmark policy rate at a range of 25 to 50 basis points, as was almost universally expected, the September meeting was not without fireworks.
Three voting members dissented from that majority decision, preferring an increase in interest rates at this meeting, while the dot plot revealed that the same number of Fed officials don’t think it will be appropriate to raise rates in 2016 at all…
Wells Fargo & Co. faces potential damages of less than $50 million if it were to reimburse customers whose credit scores were harmed by the bank opening unauthorized accounts in their names, according to Goldman Sachs Group Inc. analysts.
The issue of reimbursement came up during Tuesday’s Senate Banking Committee hearing, when lawmakers including Jon Tester grilled Wells Fargo Chief Executive Officer John Stumpf about the possible ripple effects of unauthorized accounts that bank employees set up to help meet sales goals. About 565,000 of the 2 million potentially bogus accounts were for credit cards, and would have been reported to credit-rating companies…
Bankers love the phrase “cross-sell.” I don’t.
As a matter of fact, I propose a moratorium on using the phrase as a way to stop future abuses like the creation of 1.5 million accounts at Wells Fargo that may or may not have been authorized by customers.
I feel so strongly about this that I never once used it during my decade-long career as the head of a major wealth management business…
Sales of previously owned U.S. homes unexpectedly declined to a six-month low in August, signaling buyers are getting discouraged by a limited selection of properties that’s kept prices high, National Association of Realtors data showed Thursday.
- Contract closings fell 0.9 percent to a 5.33 million annual rate (forecast was 5.45 million)
- Sales rose 7.3 percent from August 2015 before seasonal adjustment
- Median price of an existing home increased 5.1 percent from August 2015 to $240,200
- Inventory of available properties fell 10.1 percent from a year earlier to 2.04 million, the fewest homes since March…
Stocks favored by mutual funds have gone nowhere this year.
Photographer: Michael Nagle/Bloomberg
Mutual-fund hotels have roaches.
In a note to clients, Goldman Sachs Group Inc. Chief U.S. Equity Strategist David Kostin chronicles the “challenged” performance of a group of mutual funds that have a cumulative $1.5 trillion in assets under management.
While the S&P 500 is up almost 6 percent in 2016, Goldman’s index of the stocks most favored by mutual funds is flat year-to-date. Basket constituents include three of the ‘FANG’ stocks — Facebook Inc., Amazon.com Inc., and Alphabet Inc. (Google) — as well as companies like Visa Inc., JPMorgan Chase & Co., and Salesforce.com Inc…
Technology Crossover Ventures is said to be among lead investors in the round, expected to total $850 million.
Airbnb Inc. said it has raised $555.5 million in new funds as the company, which lets people rent out their homes to travelers, expands around the world.
This funding round, which values the San Francisco-based company at $30 billion, could eventually reach $850 million, said a person familiar with the matter, who asked not to be identified because talks are ongoing. Bloomberg reported last month that Airbnb was seeking up to $850 million in new funding at a $30 billion valuation. The company disclosed that it has raised $555.5 million in a regulatory filing on Thursday…
Has wage growth finally arrived?
A trend that’s helped force U.S. home ownership to a 50-year low may finally be running out of steam.
According to a new report from Zillow, a real estate and rental marketplace, incomes are now rising faster than home values for the first time since 2011. The data shows that home values have been growing at a 5 percent annual rate since the beginning of the year, outstripped by 2015’s income growth of 5.3 and 5.4 percent for family and non-family households respectively…
Plus some serious artistic roots
Helen Mumford Sole and her husband Peter Sole were moving from Greenwich, CT to New York and wanted to buy a house with a past. “Something interesting, with a bit of history,” Mumford Sole, an executive coach, said. “Something a little bit unique.”
After a year of searching, they found what they were looking for in a 20-foot-wide, 4,250 square-foot townhouse at 110 West 13th Street in Manhattan’s Greenwich Village. Built in 1844, it had been occupied for the last half-century by the family of Howard Wise, a pioneering gallerist and patron who helped introduce kinetic and light art to America…
An inside look at the KeyBank-First Niagara Bank merger and the latest challenges facing real estate financing.
Norman Nichols, Head of Income Property and Community Development Lending for KeyBank
Cleveland—KeyBank’s acquisition of First Niagara Bank made headlines this summer, as the $4.1 billion merger created one of the largest banks in the U.S. With the Federal Reserve’s seal of approval this past July, the new company is now determining how it can benefit from each team’s unique experience and geographic diversity, as well as efficiently leverage the firm’s extended product base.
The company plans to almost double its branch network
Shares have fallen this year after surging 75% in 2015
Small loans are adding up to a record profit for Thailand’s Muangthai Leasing Pcl.
The nation’s second-biggest consumer lender by market value expects unprecedented net income over the next two years, driven by a near-doubling of branches to 2,200 by the end of 2017 and forecast annual credit growth of at least 60 percent, according to Chief Executive Officer Chuchat Petaumpai…
CreditKim Kyung Hoon/Reuters
HONG KONG — China’s biggest banks are struggling with a slowing economy, rising bad debts and shrinking profits.
So to raise more than $7 billion in the world’s largest new share sale in two years, a stodgy Chinese bank has sought a little help from its friends.
Savills says buyers will wait to see outcome of negotiations
Broker cuts five-year value growth estimate to 3.2 percent
London’s luxury homes will slump the most since 2008 this year after Britain voted to leave the European Union, according to Savills Plc.
Prices will drop 9 percent, the broker said Wednesday. It estimated in October that values would be unchanged this year. Uncertainty surrounding the outcome of the U.K.’s negotiations to leave the EU will accelerate declines that began when higher sales taxes were introduced last year, Savills said…
Commodity trading advisers are down in August and September
Mistimed bets on rates and commodities are to blame, CS says
For once, the trend was nobody’s friend.
Commodity trading advisers, the catch-all phrase for a breed of quantitative investorswho use trends in asset prices and volatility as trading signals, posted some of the hedge fund industry’s worst losses in August — and it isn’t getting better. The group is down between 1 percent to 1.5 percent this month, according to Credit Suisse Group AG.
Shadow lending booms as banks step back from riskier loans
Business owner with spare C$300,000 attracted by big returns
Alternative lenders in Canada have doubled their share of the residential mortgage market in the past decade, increasing risks in the housing sector where they operate with limited federal government oversight.
These mortgage providers, which fall outside the responsibility of Canada’s main banking regulator, increased their share of the C$1.4 trillion ($1.06 trillion) mortgage market to about 13 percent last year from 6.7 percent in 2007, according to the finance department. The lenders, also known as the shadow or private market, cater to the self-employed, new immigrants and those turned down by regular banks. They include publicly listed companies, investor groups and retirees who borrow against their homes to provide funding…
Warren urges criminal probe of Stumpf, urges him to return pay
CEO says he will respect any decision by board of directors
John Stumpf arrived at Tuesday’s Senate Banking Committee hearings with one hand in a bandage. He left even more battered and bruised.
The Wells Fargo & Co. chief executive officer took fire from Democrats and Republicans alike, who blasted the executive’s handling of a scandal over the opening of more than 2 million accounts without customers’ authorization, as employees sought to meet cross-selling targets…
Florida was home to half of the top 10 communities with rising home inventory
U.S. house hunters frustrated by a shortage of listings should consider the Sunshine State.
While overall U.S. home inventory continued to decline in July on a year-over-year basis, a fifth of the nation’s 100 largest markets saw increases in supply, according to a report Wednesday from real estate search engine Trulia. Half of the top 10 gainers were communities in Florida…
Marketplace lenders for real estate provide speed, flexibility
But speed and property loans may not mix — remember 2008?
Alex Sifakis never raised this much money this fast.
The house flipper from Jacksonville, Florida, crowdfunded nine deals totaling more than $9 million through RealtyShares over the last two and a half years. A July deal for $1 million took him just 12 hours.
“Generally, raising money takes so much time,’’ said Sifakis, 33. “This offers so much flexibility and time savings. It’s so much better than going to family offices, banks or Wall Street firms.’’…
Swiss to vote Sept. 25 on proposal to boost pensions by 10%
Government opposes initiative as it plans own pension reform
Swiss voters decide this week whether to support a 10 percent increase in the basic state pension amid an opposition campaign that likened the proposal to feeding gourmet food to pigs.
The labor unions and Socialist and Green parties backing the initiative to boost the maximum monthly AHV pension to 2,585 francs ($2,645) have called on the young to show solidarity with retirees facing the prospect of shrinking incomes. The Christian Democrat party showed its opposition to a plan it says an aging population can’t afford by serving a three-course lunch of salad, stuffed zucchinis and berries to pigs outside the Swiss parliament in Bern…
It turns out that having Leon Cooperman for a grandpa is pretty much exactly like you’d expect:
On July 28, 2010, at approximately 6:59 a.m. EDT, APL publicly announced for the first time that it was selling Elk City for $682 million. As a result, on that day, APL’ s stock price increased approximately 31% and other APL-related securities greatly increased in value.
After this announcement, Cooperman emailed a family member stating that: “[minor family member] will be pleased to know that the bond I bought [for minor family member] the other day has risen 7% in price as the company just sold some assets that resulted in an improvement of their credit standing.”
Lots of people think that a President Trump would more or less instantaneously wipe out about half of the stock market’s value. Not Carl Icahn. As Carl sees it, the only thing preventing CEOs from reinvesting in their businesses isn’t the fact that the Carl Icahns of the world are always demanding share buybacks and mergers and the like. No: It’s that they are afraid of “irrational” government regulations. And what could be more rational than a Trump administration?
“If you look ahead three years, this economy will be a lot better if Trump gets elected” rather than Democratic candidate Hillary Clinton, Icahn said, speaking at the CNBC “Delivering Alpha” event in New York….