Continue reading Merrill & Wachovia give up the ghost

Merrill & Wachovia give up the ghost originally appeared on BloggingStocks on Fri, 02 Jan 2009 16:40:00 EST. Please see our terms for use of feeds.

From TheStreet.com Network

• Cramer's Top 2009 Stocks
• Hedge Fund Hell: Banks Jockey For Position

Continue reading Cramer on BloggingStocks: One of the best

Cramer on BloggingStocks: One of the best originally appeared on BloggingStocks on Fri, 02 Jan 2009 09:45:00 EST. Please see our terms for use of feeds.

Continue reading Stocks in the news: C, TWC, VIA, MSFT, GM, F, WFC, BAC, AAPL, NOK

Stocks in the news: C, TWC, VIA, MSFT, GM, F, WFC, BAC, AAPL, NOK originally appeared on BloggingStocks on Fri, 02 Jan 2009 08:18:00 EST. Please see our terms for use of feeds.

Former Merrill exec gets $25 million for doing nothing; buys co-op originally appeared on BloggingStocks on Wed, 31 Dec 2008 18:00:00 EST. Please see our terms for use of feeds.

Here is a roster of some of the fallen ones.

Jimmy Cayne Former CEO Bear Stearns - latest compensation $32.1 million. He led Bear Stearns for 15 years. He resigned last January. Bear Stearns was acquired by JPMorgan Chase (NYSE: JPM) for $10.00 a share. He and his wife purchased two luxury apartments at the Plaza.

Richard Fuld Former CEO Lehman Brothers - Latest compensation $34.4 million. Subpoenaed by federal investigators to determine if he misled investors at Lehman. Executives at Barclays Capital (NYSE: BCS) bought Lehman's US assets.

Kerry Killinger Former CEO WaMu - latest compensation $4.5 million. He became CEO in 1990 and built WaMU into one of the largest US mortgage writers. He offered sub prime mortgages which led to WaMU's rapid growth. He was ousted in September when WaMU was sold to JPMorgan.

Continue reading In 2008 they all fell down. Who are they?

In 2008 they all fell down. Who are they? originally appeared on BloggingStocks on Fri, 26 Dec 2008 14:00:00 EST. Please see our terms for use of feeds.

Trillions of dollars have been introduced into the world economy since last July, when I thought it would be interesting to jump in and pick stocks prior to the carnage in the financial sector taking complete hold.

For the past eight months our government has been taking over financial institutions, absorbing debt, lowering interest rates, nationalizing some private companies, investing in others, and rebating taxes through stimulus packages to increase liquidity and spending. The Federal Reserve has essentially dropped the interest to zero.

The government was the last to announce that we are in a recession. Well, duh! However, recession or not the world is still open for business although less of it. Gold is down 30% from it's highs and oil having totally collapsed from $147 a barrel at the time of the original story to the low $30's now.

The original story was Serious Money: Tempting fate with 10 financials -- buying into a pool of financial stocks at a time when these stocks went unloved by all.

Continue reading Chasing Value: reviewing financial ruins MBI, MER, WB, WM

Chasing Value: reviewing financial ruins MBI, MER, WB, WM originally appeared on BloggingStocks on Mon, 22 Dec 2008 15:20:00 EST. Please see our terms for use of feeds.

Continue reading Madoff, Lehman, and suicidal stupidity

Madoff, Lehman, and suicidal stupidity originally appeared on BloggingStocks on Mon, 15 Dec 2008 15:53:00 EST. Please see our terms for use of feeds.

According to a Dow Jones report this morning, Citigroup (NYSE: C) has decided to cancel the Christmas party planned for its fixed-income staff in London. The soirée was supposed to be held this Thursday, December 11, but the financial firm apparently decided it was inappropriate to celebrate, considering the 52,000 job cuts it recently announced. The party's cancellation comes shortly after Citi scrapped a holiday celebration for its London equities division, which would have been held December 3.

Today's news from Citigroup is simply the most prominent report among a growing trend this year for U.S. corporations. In my own neighborhood, I can name more than a few companies who've axed their own Christmas plans in deference to the sorry state of the U.S. economy, as well as the continually growing unemployment rolls. It may be the holiday season, but it's harder than ever to find members of the working class who feel like celebrating.

If there's a silver lining to the anti-holiday mood, it's probably the growing trend toward prudent sacrifice among major corporations. Yesterday, we learned that executives at Morgan Stanley (NYSE: MS) and Merrill Lynch (NYSE: MER) will forgo bonuses -- and regular pay, in some instances -- along with many of their peers at other investment banks. Is it the least these guys could do? Maybe. But, as any addict can tell you, the first step toward recovery is admitting you have a problem. Now that top executives are starting to shoulder some of the blame, Wall Street could finally be ready for rehab.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Holiday parties scrapped at Citigroup and others -- Wall Street ready for rehab? originally appeared on BloggingStocks on Tue, 09 Dec 2008 12:45:00 EST. Please see our terms for use of feeds.

On Monday morning, Doug McIntyre posted that former Merrill Lynch CEO John Thain was demanding a $10 million bonus for his work there. But now CNBC is reporting that Thain won't be getting any bonus at all.

So far, details are not forthcoming but Charlie Gasparino, CNBC's On Air Edtior, reported that Thain, along with several other executives, will forgo bonuses this year. The Wall Street Journal is also reporting that according to people familiar with the matter, Thain, Merrill President Gregory Fleming and wealth management chief Robert McCann asked the board's compensation committee not to pay them for their work in 2008. So did two other Merrill executives.

Thain is being unfairly punished because the problems at Merrill happened under his predecessor Stan O'Neal. O'Neal walked away from the mountain of toxic waste he created with $161 million. He's the one who should be forking over a chunk of his compensation due to the problems he caused. To make Thain pay the price is unfair -- but politically expedient.

[Update: Morgan Stanley (NYSE: MS) CEO John Mack would not get a bonus for a second straight year. The bank also announced compensation changes that should link pay and performance better.]

Peter Cohan is president of Peter S. Cohan & Associates. Portfolio will publish his book about Boeing, You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing, on December 26, 2008. He has no financial interest in the securities mentioned.

Is Wall Street greed on holiday? No bonus for Thain. originally appeared on BloggingStocks on Mon, 08 Dec 2008 17:22:00 EST. Please see our terms for use of feeds.

Continue reading Stocks in the news: GM, F, BAC, HIG, WMT, AAPL, MOT, MET, IFX ... (update)

Stocks in the news: GM, F, BAC, HIG, WMT, AAPL, MOT, MET, IFX ... (update) originally appeared on BloggingStocks on Mon, 08 Dec 2008 08:20:00 EST. Please see our terms for use of feeds.

The vacation that greed took to make way for austerity on Wall Street compensation ended prematurely. Merrill Lynch (NYSE: MER) CEO John Thain wants a $10 million bonus and he wants it now.

Merrill's board is likely to give Thain nothing. According to The Wall Street Journal, "The difference of opinion between Mr. Thain and directors who hired him just a year ago is part of the bigger debate about compensation practices at Wall Street firms."

To characterize Thain's request as a simple matter of excessive pay making a return to Wall Street would be an oversimplification. The Merrill CEO has been on the job for a year. He was brought into a situation which was nearly untenable. The company was faced with mounting losses because of decisions made by earlier management. He may have saved the firm by selling it to Bank of America (NYSE: BAC). It is hard to compare that with other financial chiefs who have done little or nothing for their firms beyond letting their share prices fall and forcing government bailouts.

Continue reading Greed returns to Wall Street -- Merrill Lynch CEO wants his bonus (update)

Greed returns to Wall Street -- Merrill Lynch CEO wants his bonus (update) originally appeared on BloggingStocks on Mon, 08 Dec 2008 04:00:00 EST. Please see our terms for use of feeds.

Harvard's business school (HBS) has been celebrating its 100th anniversary this year. And it looks to be at the peak of its power. That's unfortunate because five of its most powerful graduates have made significant contributions to absolutely wrecking the global economy. HBS admits people who are natural leaders. Unfortunately, many of the most powerful of these leaders have followed the path of destruction.

Here are five Harvard MBAs who wrecked the economy:

• George W. Bush ('75). The best thing I can say about Bush is that he said he was sorry for all the problems that occurred while he was in the White House. Unfortunately, he seems to believe he was a victim of events outside his control. One of his HBS professors said of Bush "He showed pathological lying habits and was in denial when challenged on his prejudices and biases. He would even deny saying something he just said 30 seconds ago."
• Hank Paulson ('70). As Treasury Secretary Paulson has consistently ignored the severity of the financial crisis -- In June 2006 he gave a speech at HBS in which he said, "this is by far the best global economy that I have seen in my career" -- but this September he was able to sell Congress on an ineffective plan to fix what he finally realized was an imploding economy -- a plan has kept changing. The economy has continued to crash despite his bone-headed efforts to save it.

Continue reading Five Harvard MBAs who wrecked the global economy

Five Harvard MBAs who wrecked the global economy originally appeared on BloggingStocks on Sun, 07 Dec 2008 13:40:00 EST. Please see our terms for use of feeds.

Merrill Lynch & Co. (NYSE: MER) is planning to cut year-end bonuses in half in a show of fiscal discipline.

Why stop there?

Shares of the New York-based company are down more than 78% this year. Keep in mind that Bank of America Corp. (NYSE: BAC) agreed to buy the once-venerable firm for $50 billion, a deal which is still making its way through the regulatory process. Did I mention that Merrill and Bank of America got a combined $25 billion from the Treasury Department and that Merrill may lose $13.3 billion this year, based on the average estimate of nine analysts surveyed by Bloomberg? That's more than double from a year earlier.

What in that sorry performance merits a reward of any sort? Wall Street needs to ween itself from the notion that everyone deserves a bonus, regardless of the macroeconomic environment. Top executives at Goldman Sachs Group Inc. (NYSE: GS) and UBS AG (NYSE: UBS) are refusing bonuses. Heck, so are the heads of the tone-deaf auto industry.

Merrill has already been very generous with its employees. Chief Executive John Thain got a $15 million sign-on bonus when he joined the company with the expectations that he would fix the mess created by Stan O'Neal. Given the turn of events, maybe he should give some of that money back. In 2007, the company paid out $15.9 billion, about $248,000 per employee.

Continue reading Who at Merrill deserves a bonus?

Who at Merrill deserves a bonus? originally appeared on BloggingStocks on Wed, 03 Dec 2008 10:43:00 EST. Please see our terms for use of feeds.

Most analysts believed that Bank of America (NYSE: BAC) would cut about 10,000 jobs in its consolidation of operations with Merrill Lynch (NYSE: MER) which it bought earlier in the year. That would be enough people to hit the promised cost saving for putting the two firms together. It is a lot of people out of work, but not a blood bath.

Well, it looks like the blood bath has come and no one appears to have expected it. According to CNBC, "Bank of America could end up cutting 30,000 jobs as it moves to absorb Merrill Lynch, three times as many as previously estimated."

Did Bank of America mislead its employees, the press, and investors? Perhaps, but it may have done so for all of the right reasons. Predictions now are the B of A will lose a lot more money than most observers expected a month ago. It faces huge write-offs in its real estate and consumer credit portfolios. That may mean the firm could be faced with having to raise more money and dilute current shareholders. It could also hurt the bank's chances of maintaining its dividend and current share price level which is already down from a 52-week high of $47 to just above $14.

The new layoffs are not good for the poor people who will be hitting the exits, but the news may add weight to the impression that bank earnings for the current quarter are falling apart fast.

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

Financial company layoffs take an ugly turn at Bank of America originally appeared on BloggingStocks on Wed, 03 Dec 2008 10:28:00 EST. Please see our terms for use of feeds.

Continue reading Stocks in the news: GM, F, BAC, MER, EBAY, AAPL, YHOO, DHI, KBH ...

Stocks in the news: GM, F, BAC, MER, EBAY, AAPL, YHOO, DHI, KBH ... originally appeared on BloggingStocks on Fri, 28 Nov 2008 08:28:00 EST. Please see our terms for use of feeds.

Vikram Pandi, the CEO of Citigroup (NYSE: C), does not seem to be good at very much, but he is starting to get the hang of firing people. According to Reuters, "Citigroup Inc. plans to shed about 10 percent of its global workforce, a person familiar with the matter said Friday."

Maybe Pandit is responding to pressure he is facing to keep his own job. Citi's shares are below $10 for the first time in over a decade and have fallen much more than those of the other major U.S. money center banks. Wall Street still fears another year of write-offs as the big financial firm faces trouble with its portfolio of consumer debt , heavy with credit card customers who are defaulting in greater numbers as the economy worsens.

Pandit's greatest sin may be that he has not done any deal to spread his risks, broaden the bank's businesses, and transform the company. Several of his peer companies have done deals like Bank of America's (NYSE: BAC) purchase of Merrill Lynch (NYSE: MER) which brings in more deposits and an investment banking and money management unit.

At this stage there is nothing Pandit can do. He has let the problems at the bank go too far. The economy is failing at too fast a rate. Citi's troubled balance sheet is almost certainly getting more troubled.

It is not a bad bet that Citi ends up the way AIG (NYSE: AIG) has. If so, investors could lose another 80% or 90% of their money.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Citigroup (C): Another 35,000 to be fired? Another big hit to the stock? originally appeared on BloggingStocks on Sat, 15 Nov 2008 06:32:00 EST. Please see our terms for use of feeds.

Citigroup (NYSE: C) CEO Vikram Pandit faces much of the blame for the bank's falling share price. He has not sold off enough under-performing units. He has not cut costs enough. He has not articulated a strategy for where the company plans to make its money over the next several years.

And, the write-downs keep coming leading to billions of dollars in losses each quarter. Some analysts expect that to continue well into next year as Citi take charges for its consumer credit portfolio.

Pandit is turning to a tried and true way to make himself look better. He is firing large numbers of people in an attempt to keep his job.

According to The Wall Street Journal, "Starting this week, Citigroup is handing out pink slips to at least 10,000 employees in its investment bank and other divisions throughout the world." Other workers will have their compensation cut, and more lay-offs are expected.

Pandit's need to fire more people can be put at his own feet. He has shown no skill in buying other banks to raise his deposits base the way that Wells Fargo (NYSE: WFC) has. He lost the opportunity to buy Merrill Lynch (NYSE: MER) to bring in their capital and more investment banking skill.

Pandit should be in the line of the 10,000 people packing up their desks and leaving.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Citigroup: CEO Pandit's solution to keep his job -- fire people originally appeared on BloggingStocks on Fri, 14 Nov 2008 04:05:00 EST. Please see our terms for use of feeds.

This is the third in a four part series which I hope gives buyers, sellers, shareholders and dare I say management a platform for discussion.

The most valuable asset eBay (NASDAQ: EBAY) has is PayPal, the dominant internet financial transaction facilitator. When I started imagining what might happen if eBay started auctioning off its parts I envisioned that PayPal would be worth the highest premium.

I think there would be dozens of interested companies that would find it highly advantageous to acquire PayPal.

The reason eBay bought PalPal in the first place was that they had first hand experience trying to compete with it when it was a separate company, and even with its huge base of customers, eBay could not build much traction. As the old saying goes, "if you can't beat them, join them", or in this case buy them.

For starters, all of the major credit card companies would be very interested with MasterCard Inc'A' (NYSE: MA) and Visa (NYSE: V) leading the bidding and beleaguered American Express (NYSE: AXP) trying to find a way too.

Then there are the few prospering banks still left standing that would have to give this potential acquisition strong consideration. Bank of America (NYSE: BAC) which has already bought out Countrywide Financial and will soon add Merrill Lynch (NYSE: MER) would find this a must have. JPMorgan Chase (NYSE: JPM) has added Bear Stearns and Washington Mutual (NYSE: WM) to its group of enterprises and might be best suited to expand the company given its growing resources. Wells Fargo (NYSE: WFC) that recently agreed to acquire Wachovia Corp (NYSE: WB) after staying on the sidelines most of the year might want PayPal, but I do not think it would pay up.

Continue reading Serious Money: eBay auction off PayPal -- create bidding war

Serious Money: eBay auction off PayPal -- create bidding war originally appeared on BloggingStocks on Thu, 13 Nov 2008 10:00:00 EST. Please see our terms for use of feeds.

Around the world, governments are flooding the market with new currency in order to stem the tide of bank collapses and slippery stock market slopes. They are taking over financial institutions, absorbing debt, lowering interest rates, nationalizing some private companies, investing in others, and rebating taxes through stimulus packages to increase liquidity and spending.

So far all we can say is that the world is still open for business, but it is a different world. Even gold and oil are down significantly.

In concert with world markets, the stocks in my daring (maybe fool hardy) story I posted a few months ago Serious Money: Tempting fate with 10 financials -- buying into a pool of financial stocks at a time when the "hate 'em" factor was at a peak, or so I thought -- are down even more. I think I am turning into the web's leading glutton for punishment by posting such stories. However, while my stock ideas have taken a beating now and then, I hope my integrity has remained intact.

I took some major lumps during the collapse of Washington Mutual (NYSE: WM) as I candidly posted, Chasing Value: Not -- WaMu one week later - ouch!, and I lost some money also.

Nine of the ten financial stocks I wrote about are down or out at this point. When I last reported, the portfolio was losing 4.8%, and now it is losing 47% to date, not counting dividends. Only MBIA Inc. (NYSE: MBI) is up and there are question marks about this company too.

Continue reading Chasing Value: Money flood & bank mud

Chasing Value: Money flood & bank mud originally appeared on BloggingStocks on Mon, 27 Oct 2008 11:28:00 EST. Please see our terms for use of feeds.

Continue reading Kudos to Andrew Cuomo for forcing AIG to suspend executive bonus pay

Kudos to Andrew Cuomo for forcing AIG to suspend executive bonus pay originally appeared on BloggingStocks on Wed, 22 Oct 2008 17:45:00 EST. Please see our terms for use of feeds.