Talk Back

By Annie Gasparro
    A DOW JONES NEWSWIRES COLUMN

NEW YORK (Dow Jones)–The steady, if sometimes exaggerated, trend of wirehouse advisers shifting to independent brokerages is proving to be more than just a passing fad.

The independent channel took in about 90 advisers from the four major wirehouses last month, while those wirehouses only hired 25 brokers from independents, according to research firm Discovery’s report on registered representative movement for January.

The four wirehouses are Morgan Stanley Smith Barney, Bank of America Corp.’s (BAC) Merrill Lynch, Wells Fargo Advisors, and UBS Wealth Management U.S. Their biggest indie competitors lately: LPL Financial Corp., Ameriprise Financial Services and Raymond James Financial Services. Continue reading…

By Al Lewis
     A DOW JONES NEWSWIRES COLUMN

Another two million homeowners will suffer foreclosures by the end of this year.

One of them, I am afraid, will be Sarah Schrock, 51, who lives in a quaint, yellow house near Kansas City, Kan.

Schrock isn’t perfect.

She has a low credit score. She has had trouble holding on to jobs. She is deaf because her mother contracted rubella during pregnancy. She reads lips, but she was once denied a promotion after her boss complained to her face that she just doesn’t hear so well.

Schrock had long been taking care of her sickly mother. When her mother died in March 2006, she was forced to take out a new mortgage on the house they had shared.

The deaf, grief-stricken, worn-down caregiver, living alone with her dogs, cats and birds, was the perfect target for a predator.

Schrock has now been fending off a foreclosure petition since March 2008.

Her best remaining hope comes from an imaginary horse named Hayseed that she has been drawing since 1981.

Continue reading…

By Al Lewis

A DOW JONES NEWSWIRES COLUMN

Terry Smiljanich was an Assistant U.S. Attorney in Tampa, Fla., in the 1970s, prosecuting loan sharks.

“Just like in the movies, guys would come down from New York to collect,” he recalls.

A deadbeat borrower in one of Smiljanich’s cases even survived the cinematic cliche:

“They went into a bar and grabbed him, took him for a little ride, and told him that if he didn’t find a way to pay them off within 24 hours they were going to break his legs.”

High-interest loans with terrifying consequences is such a lucrative business that America’s banking industry lobbied for years to make them legal.

“Bank of America doesn’t break your legs, but they will ruin your credit and they will hound you to death,” Smiljanich said. Continue reading…

By Peter Eavis
    A DOW JONES COLUMN

This Citi needs a better road map.

Citigroup shareholders just got blindsided again, by a dilutive, mishandled capital raising, undertaken to repay $20 billion of the government’s investment under the Troubled Asset Relief Program.

But there is a way for the bank to start mending fences with investors. It should start to provide more disclosure on those operations meant to be leading the bank out of the doldrums.

Barclays Capital analyst Jason Goldberg notes that institutional investors make up 73% of Wells Fargo’s shareholder base vs. 27% at Citi. What’s more, Citi is trading at an estimated 20% below its tangible common equity, compared with an estimated 30% premium for Bank of America.

Continue reading…

Andrew C. Burns, chief investment officer of Hamilton Point Investment Advisors LLC, a registered adviser, Chapel Hill, N.C., writes:

This is the story of how a 130-year-old model banking institution was snuffed out for doing business the way we now wish all banks would. The bank was Wachovia. Its undoing was its insistence on caution in handling other people’s money.

When I worked for Wachovia in the early 1980s, I was struck by how different it was from Irving Trust in New York City, where I had completed a corporate lending and executive management training program. The professionalism was similar, but the atmosphere was so much more, well, egalitarian. At Irving, dining facilities were divided by caste – the lowly ate in a giant cafeteria in the basement, first-level officers had custom dining a few floors up and top executives rode special elevators past the troops to a private space near the top of the building. Wachovia had one country-cooking cafeteria, where leaders including President John Medlin and Chairman Hans Wanders were just as likely to sit with a group of secretaries as a team of banking officers.

Continue reading…