Ameriprise Financial is looking to take advantage of other firms’ problems. The sleeping giant in the financial planning world (it has about 10,000 advisers) is looking to expand in that bread and butter business and asset management, Newswires’ Jessica Papini reported earlier today. It’s a great time for one of the healthier financial services companies to do something like that. We’ve already seen Citigroup, desperate for capital, sell of a big stake in its Smith Barney business to Morgan Stanley. Merrill Lynch got thrown into the arms of Bank of America.
Archive for May, 2009
Bank Rescue Plan, Financial Planners, Mergers & Acquisitions, Wall Street / 3 Comments
Corporate Finance, Credit Markets, Economy, Federal Reserve, U.S. Dollar, U.S. Treasurys, Wall Street, Washington / Comments Off
The Federal Reserve’s dilemma in the face of a bond market rebellion that’s pushed up rates on the 10-year Treasury note is nicely captured in a page one article in today’s Wall Street Journal by Jon Hilsenrath and Liz Rappaport.
Immediate heat is being reduced on the Fed as the 10-year yield reverses course after a steep price drop/rate rise. Dow Jones Newswires recently cited the 10-year yield at 3.553%, down from a Thursday high of 3.76%.
I’ll be blogging infrequently for a couple of weeks as my family and I say goodbye to our friends in Asia and then head back to the U.S. after nine years abroad. The New Jersey house I’ve blogged about should be ours on June 8, thanks to a 4.625% 30-year fixed-rate mortgage (we paid 1 point to nail the lovely low rate.) The bank’s appraiser valued the house at precisely the amount we’re paying – which made me happy until someone told me appraisers and banks are in cahoots and the numbers always match up. Hmmm. Continue reading…
U.S. Defense Secretary Robert M. Gates – traveling to Singapore for a defense conference – says China was surprised by North Korea’s test of a nuclear device earlier this week. You’ll recall the device was bigger than its first-ever such test, in 2006, and was followed by a flurry of short-range missile test fires. “Just based on what the Chinese government has said publicly, they’re clearly pretty unhappy about the nuclear test in particular, and they weren’t very happy about the missile test, either,” the WSJ’s Peter Spiegel quotes Gates as saying. This is enormously significant; one can only guess at the non-public knowledge Gates has of China’s reaction to Pyongyang’s shenanigans. What’s shaping up is a strong, united approach to the North Korean nuclear dictatorship led by the world’s two superpowers. It will be interesting to see what role Russia plays but Moscow will probably calculate there’s no upside to dissing Washington and Beijing on this particular issue. Here’s the WSJ story with additional Gates comments: http://online.wsj.com/article/SB124356144592465073.html Continue reading…
The chart tells about all you need to know about Dell Inc. The company’s big exposure to the personal computer marketplace has weighed heavily on its stock. Over the past year, Dell shares have fallen close to 50% while the Nasdaq is off around 30%. Today’s earnings report explains it in detail. It reported earnings of 15 cents a share while analysts were expecting 23 cents. Sales were $12.3 billion, about $300 million less than what was expected. Its large enterprise business unit saw sales drop 31% from a year ago. Government spending was down 11% (schools included here). Small and medium business customers spent 30% less. And consumers spent about 16% less. The company has been trying to manage costs – it has been aggressviely cutting inventory, for example. But you can only cut so much. The company is hopeful IT spending wil turn around later in the year. But until then, it will continue to be painful for shareholders.
Banks, Credit Crisis, Credit Markets, Currencies, Economy, Investing, U.S. Dollar, U.S. Treasurys, Wall Street / 1 Comment
We’ve woken up to a something new in the U.S. Treasurys market. It now looks more like the market in foreign exchange.
By that I mean a cat-and-mouse game between traders and a government entity constitutes at least one dynamic in determining trading action and prices.
For years, periodic government intervention to support a currency, sometimes concerted among a group of countries to achieve a common aim, has been a consideration for traders in the U.S. dollar, the Euro, the yen and other major currencies.
Credit Ratings, Treasury, U.S. Dollar, U.S. Treasurys / Comments Off
Standard & Poor’s comments supportive of U.S. Treasurys’ AAA rating – reported exclusively by DJN – have just strengthened USD/JPY. They follow similar comments by Moody’s – Neal blogged about this Wednesday. In our story, headlined “S&P Says US Rating Not Under Threat,” a senior S&P analyst named Kyran Curry addresses recent market speculation that the U.S. could lose its triple-A sovereign debt rating. Curry says: “We don’t believe so at the moment. No. We will have more to say about that in the next few days.” As DJN’s Simon Louisson writes, S&P’s decision last week to lower its outlook on the U.K.’s AAA rating spurred a USD selloff amid speculation about the U.S.’s standing. Curry, who is responsible for Australasia, tells DJN his comments reflect “a global view” within the agency and in fact he has been accompanying S&P’s global head of sovereign ratings on a tour of New Zealand. Check out Simon’s story for more on what Curry said about the U.S. economy and its medium- and longer-term credit quality. He also weighs in on the dollar’s global clout and the Obama administration’s fiscal planning. His comments came after S&P lifted a threatened downgrade on New Zealand’s sovereign debt rating after the government took steps to cut its budget, among other things.
Sports / Comments Off
Asia-based fans of a pair of football teams in Manchester and Barcelona are bleary eyed today, having woken up at 3:30 a.m. (or thereabouts, depending on where in Asia) to witness the latter trounce the former. The WSJ reports that those rich Americans and Russians (among others) who bought British soccer teams in the years leading up to the crash have taken a beating similar to the one Manchester United suffered, losing 0-2 to what bereft British colleagues describe as an other-worldly FC Barcelona. As Aaron O. Patrick and Dana Cimilluca observe in their piece tied to the Champions League final, the clubs’ new owners saddled them with mountains of debt and now face sliding ticket prices, unhealthy corporate sponsors, and player salaries that aren’t capped. ”Analysts fear the owners who spent big will now be whipsawed by the downturn and forced to make deep cuts,” Patrick and Cimilluca write. Pity the fans, not the owners, who, after all, made the investments because they could afford to - not because the transactions necessarily made financial sense. And today, pity Man U’s fans.
Steve Rattner is worth at least $188 million and as much as $608 million, the WSJ reports, citing disclosure documents Obama’s auto czar submitted prior to his appointment. The former New York Times reporter turned uber-financier was allowed to give a range rather than specify his precise value. Rattner also owned as much as $1 million worth of shares in Cerberus Institutional Partners LP Series 2, which is managed by Chrysler owner Cerberus Capital Partners. He sold his shares shortly after joining the Treasury Department in February, the WSJ’s Neil King Jr. writes. ”Rattner is a key player in the administration’s bid to rescue Chrysler through a Chapter 11 bankruptcy reorganization that will wipe out the value of Cerberus’s shares.”
Recessions create predictable behavior. People look to cut costs, whether it be on necessary household items like clothing and accessories or family entertainment. Jo-Ann Fabric figures it offers a way to save money on both. The company’s stores sell items for crafting, decorating and sewing – you can do all three to save money or for a hobby or for both. The company reported strong earnings after the market closed. It earned 33 cents per share in the first quarter versus 12 cents a share a year ago. Same store sales were up 1%. The company has been smart on invetory management and expenses. Below is a stock chart for the past year with notations that show earnings.