Bill Gross thinks conditions are ripe for a liquidity crisis, and he points a finger at his old firm for its potential to be at the center of the storm.» Read More
Jamie Dimon is still the king of Wall Street.
Just in time for Christmas, Dealogic has released its annual investment banking league tables. And JPMorgan, which took the top spot last year, has won again.
Despite taking the top place again, JPMorgan's revenues were down 6% overall.
So here's where the banks stand. (Figures include both debt and equity underwriting, advisory and lending.)
• JPMorgan leads the pack in investment banking revenue for the second year in a row. JPM took in $5.2 billion in fees.
• Bank of America was second at $4.6 billion in revenue from similar services.
• Goldman Sachs came in third, with an even $4 billion in revenue from investment banking.
• Morgan Stanley was fourth, at $3.8 billion in revenue from banking services.
• Wells Fargo revenue from investment banking fees declined 13 percent.
The latest Internet meme circulating around New York — and elsewhere — is a Christmas list .
It is a — self titled — "Dream Wish List."
Here is a sampling of items:
•"Gold or Silver or Sparkly Christian Louboutins"
[A handwritten margin note indicates a cost of $795.]
• "A necklace like this:"
[Like all items on the list, a URL link is helpfully included. A handwritten note indicates a cost of $2400.]
• "Hermes Avalon Blanket — Orange — $1125"
And so on.
If you follow the story of the Basel Capital Accords, you know it's rather tricky business.
The current incarnation, Basel III, is being workshopped even as you read this post.
Regulatory proposals usually begin with the high minded intention of improving market stability, efficiency, transparency and so on.
But they usually fail to achieve any of those goals.
The reasons for failure are manifold: Markets are dynamic and difficult to handicap, every trade has two sides, risk is difficult to quantify. And so on.
In fact, there may be nearly as many reasons for regulatory failures as there are failed regulatory regimes. (Ok: Not quite as many — but you get the point.)
Joseph Cotterill, at The Financial Times Alphaville, wrote a recent piece hashing through some potential points of failure for Basel III.
The primary problem is that banks can still carry highly rated sovereign debt as zero risk weighted assets on their books. In light of the deterioration of credit quality of many European sovereigns, this is obviously risk-weighting divorced from reality.
In an interview with the British newspaper The Times, Julian Assange has confirmed that WikiLeaks is holding a vast cache of documents from a major US bank.
Today the Federal Communications Commission is expected to vote in favor of "net neutrality" which will prohibit broadband providers from being the ultimate deciders of their Internet traffic.
This battle has been going on for about five years and even after its expected passage, the Republican-led House next year is anticipated to take up this issue again.
Companies like Amazon.com , Skype and Netflix have voiced their opposition on the new rules. Proponents say the rules would prohibit phone and cable companies from playing favorites or discriminate when it comes to opening or closing their virtual doors if you will, to web traffic.
But as with any regulation there are two sides to it.
One of the leading "net neutrality" skeptics is Congresswoman Marsha Blackburn \(R-T,\) member of the Energy and Commerce Committee, which has jurisdiction over the Federal Communications Commission. In the Republican led House next year, Blackburn will be the Vice Chairman of the Subcommittee on Commerce, Manufacturing, and Trade. I decided to sit down with the Representative to get her concerns on what this regulation could mean for business.
The move of Peter Orszag from the Office of Management and Budget to Citigroup has sparked a renewed debate about the tight knit fabric that wraps Wall Street and Washington, DC. together.
This is a debate that is always worth renewing.
Will Wilkinson started the debate off by pointing to the seemingly inevitable capture of well-intentioned government programs by special interests.
Moody's Warns on Portuguese Debt (NY Times via Reuters) "Moody's Investor Service warned on Tuesday it may downgrade debt-ridden Portugal's A1 rating by one or two notches after a review that will take up to three months, citing weak growth prospects and high borrowing costs. Portugal has moved into the eye of the storm in Europe's debt crisis, with markets worried it will be next to take a bailout after Ireland and Greece, although Moody's said its solvency was not in question. The cost of insuring Portuguese sovereign debt against default rose in response and the euro slipped a touch."
TD-Bank Agrees to Buy Chrysler Financial for $6.3 Billion (CNBC via Reuters) "Toronto-Dominion Bank has agreed to buy Chrysler Financial from private equity firm Cerberus Capital Management for $6.3 billion, making Canada's No. 2 bank one of North America's top five bank-owned auto lenders. TD said Tuesday the purchase consists of net assets of $5.9 billion and about $400 million in goodwill. The bank does not intend to issue common equity in connection with the deal. Under the terms of the agreement, TD's U.S. unit — TD Bank — will acquire Chrysler Financial in the United States, and TD will acquire Chrysler Financial in Canada."
Controversial 'Net Neutrality' Rules About to Pass FCC \(Wall Street Journal\) "The top communications regulator won support to pass contentious new rules for Internet traffic, a move likely to face legal challenges and create uncertainty about Internet regulation. The Federal Communications Commission is set to approve on Tuesday Chairman Julius Genachowski's proposed rules governing net neutrality—a concept aimed at preventing Internet providers from interfering with web traffic. The rules are expected to bar providers from discriminating against legal Internet traffic and require more transparency. They also would let broadband providers for the first time charge more to companies that want faster service for delivery of games, videos or other services."
Why the 'Jobs Number' Doesn't Tell the Full Story (Bloomberg) "Among the many statistics that economic policymakers look to, none matters more than the "jobs number," and 2010 was the year it refused to drop. Today the national unemployment rate hovers near where it began the year, just shy of 10 percent. For all its totemic power, the jobs number masks a messier reality. It is only an estimate, like a poll or a Nielsen rating, the product of a complex process of research and calculation. Without understanding the assumptions built into the figure, we can't fully understand what it can and cannot tell us. "
CNBC's Christina Cheddar Berk: Retail Strong Heading into Holidays (CNBC) "Cash registers are continuing to ring up big sales in the final days before Christmas, easing fears of a front-loaded holiday season. Customer Growth Partners President Craig Johnson expects this holiday season to surpass 2007's total sales record of $508 billion. This means that not only will this holiday season post the strongest year-over-year growth since 2005's 6.1 percent gain, but it could be the best since 1999's 8.8 percent increase, he said."
"Funding Fight Looms on Health and Finance Laws" (WSJ) "A Senate deal to fund the federal government until March doesn't include money to launch new health care and financial industry regulations, setting up an early Republican victory in the battle over spending priorities. The deal to fund the government until March 4 is expected to come to the Senate floor for a vote Tuesday. The estimated $218 billion measure is expected to clear the Senate and House before a Tuesday Dec. 21 deadline, when current government spending authority expires. If the resolution passes without funding to ramp up President Barack Obama's health-care overhaul or beef up agencies that regulate Wall Street, the fate of those regulatory efforts will be decided after Republicans assume control of the House and gain votes in the Senate."
Nobel Prize-winning economist Robert Shiller says that his key valuation indicator is flashing warning signs.
The Fed is in the early stages of an analysis on changes in bond market liquidity, amid signs that liquidity may be less resilient than in past.
Janus Capital acquired a majority interest in Kapstream Capital and said Kapstream's Palghat will support Bill Gross as co-portfolio manager of the Janus Global Unconstrained Bond strategy.