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morning scan

Morning Scan: Earnings, Earnings, Earnings … and More Earnings

Editor's Note: Morning Scan will not publish on Friday, April 18 in observance of the Good Friday holiday. Receiving Wide Coverage ... Big Investment Bank Earnings: Morgan Stanley's profits rose 18% year-over-year, thanks to a strong performance by its fixed-income division. Meanwhile, Goldman Sachs reported a drop in first-quarter profits, in part due to its fixed-income division. Goldman did, however, beat analyst expectations. …

Morning Scan: Bad Morning at B of A; Yellen Hints at More Bank Regulation

Breaking News This Morning ... B of A Earnings, Etc.: Bank of America reported a $276 million loss compared with a $1.48 billion profit a year earlier, largely due to legal expenses. (In case you may have missed it, Bank of America has been on a bit of settlement tear of late. And, the Journal notes this morning that the bank has settled mortgage-backed securities claims with the monoline insurer Financial Guaranty Insurance Co., which is…

Morning Scan: Not So Fast, Citi; Facebook Eyes Mobile Payments

Receiving Wide Coverage ... Second Look at Citi: Don't be fooled by Citi's earnings. General consensus among news outlets is that profits may have bested expectations, but relief — more than accolades — is in order. "After two preceding quarters, in which Citi failed to meet already lowered expectations, a revelation of fraud in Mexico and a rejection of Citi's capital-return request by the Federal Reserve, discovering the ball hadn't been yanked away this time was…

Morning Scan: Citi Surprises; More Say on Executive Pay

Breaking News This Morning ... Citi Earnings: Citigroup reported a 4% rise in quarterly profits year-over-year, besting analyst estimates. Similarly to Wells Fargo, however (see below), revenue at Citi fell slightly year-over-year. Wall Street Journal, New York Times Receiving Wide Coverage ... Wells, JPM Earnings, Take Two: A few news outlets are out with second takes on Friday morning's bank earnings. (Quick recap: Wells was up; JPMorgan Chase was down.) "Wells Fargo's ascension punctuates the industry upheaval that…

Morning Scan: JPM Misses, Wells Hits, Data Bleeds

Breaking News This Morning ... 1Q Earnings: JPMorgan sharply down (NYT, WSJ), Wells Fargo sharply up (NYT, WSJ). Receiving Wide Coverage ... Fake Bankers?: Bankers were told by regulators on Thursday to upgrade systems in use to protect customer information. The warning involves the Heartbleed security flaw and came from a group of regulators acting as the Federal Financial Institutions Examination Council, the Times reports. Members include the Federal Reserve, Federal Deposit Insurance Corporation and the Office of…

Morning Scan: A Peek at the Fed; B of A Settles Again; Dimon Letter

Receiving Wide Coverage ... A Look Behind the Curtain: The Fed held a video conference in March to discuss whether to ditch its 6.5% unemployment rate target. The Financial Times said the meeting helped shape the Fed's decision later in the month to adjust its position on forward guidance. The policymakers were concerned that their decision would be misunderstood. Meanwhile, Fed officials are worried about persistently low inflation. …

Morning Scan: Leverage Ratio Could Leave $68B Capital Gap; New Security Threat

Receiving Wide Coverage ... Tough New Big Bank Requirement: The eight biggest banks in the U.S. may have to add up to a total of $68 billion in capital to meet a new leverage ratio finalized by regulators. Under the rule, banks with more than $700 billion of assets will have to must meet a 5% leverage ratio, and 6% at their federally insured banking units. The ratio, approved by the Office of the Comptroller of…

Morning Scan: Regulators Act on Leverage Ratio; Volcker Rule CLO Exemption

Receiving Wide Coverage ... Leveraging Up: Regulators are slated to finalize a new rule on Tuesday mandating the amount of loss-absorbing capital big banks must hold on their books. Banking agencies last summer proposed raising the leverage ratio to 5% for bank holding companies and 6% for their insured subsidiaries. Those figures are expected to hold steady at the final vote, though how the ratio is calculated could be fine-tuned. Wall Street Journal, Financial Times, American…

Morning Scan: Diamond's African Voyage; BlackRock's Shuffle; BNY Mellon Showdown

Receiving Wide Coverage ... BlackRock Planning Ahead: Global investment firm BlackRock is shifting and promoting several of its key executives in a move interpreted as succession planning for the day Laurence D. Fink, the firm's co-founder and chief executive, decides to step down. Charles S. Hallac, its current chief operating officer, will become co-president on June 1 alongside Robert S. Kapito, current president of the firm. Robert Goldstein, current head of institutional client business, will become…

Morning Scan: So, Basically, B of A Has Been Pulling a JPM in Recent Months

Receiving Wide Coverage ... B of A Nears CFPB Settlement: Anonymice tell their favorite news outlets that Bank of America is nearing an $800 million-plus settlement with the Consumer Financial Protection Bureau over allegations it force credit card customers to buy other products. The CFPB has levied fines against American Express, Capital One, Discover and JPMorgan Chase over similar allegations, but the B of A fine is expected to be the largest. As the Journal notes…

Morning Scan: Masters Exits JPM; Citi's Mexican Unit Fraud Problems Spark Crime Inquiry

Receiving Wide Coverage ... Another Big JPM Exit: Well, Jamie Dimon's C-Suite is certainly … dynamic. Following very recent news of potential Dimon successor Mike Cavanagh's departure, Blythe Masters, head of JPM's commodities unit, has resigned. Masters' exit shouldn't come as a surprise — to the public or to JPM executives. The bank just sold its physical commodities business — which was the subject of a $410 million settlement with the Federal Energy Regulatory Commission last…

Morning Scan: More Big Bank Personnel Changes; Goldman Faces EU Fine

Receiving Wide Coverage ... Lots (and Lots) of Personnel Changes: News broke late yesterday that Wells Fargo was shuffling around some of its senior executives. Timothy Sloan is vacating his chief financial officer position to take over as Wells' head of wholesale banking. He replaces David Hoyt, who is retiring. John Shrewsberry, currently head of securities, will take over Sloan's CFO position. Wells didn't offer much of an explanation for the changes. CEO John Stumpf issued…

Morning Scan: Let's All Talk About High-Speed Trading

Receiving Wide Coverage ... Yellen Speech: Janet Yellen gave her first public speech as Federal Reserve chair Monday. General consensus among news outlets is that her speech — which included stories about individuals struggling in the job market — was, at least in part, aimed at getting investors to calm down about interest rates coming down sooner than expected. (Scan readers will recall the market took a tumble a few weeks ago after Yellen seemingly laid…

Morning Scan: Another Forex Probe; RBS Close to Naming New CFO

Receiving Wide Coverage ... Swiss Forex Probe: A Swiss watchdog has launched an investigation into whether eight banks manipulated the foreign currency exchange market. The banks include Barclays, Citigroup, Credit Suisse, JPMorgan Chase, Royal Bank of Scotland and UBS. The Swiss Competition Commission joins a host of other global regulators, including those in the U.K. and the U.S., that are trying to figure out whether financial firms manipulated currency markets. New York Times, Financial Times, Wall…

Morning Scan: Lehman Pay Out Hits $80 Billion; Wal-Mart Vs. Visa

Receiving Wide Coverage ... Lehman Payout: Lehman makes its fifth semi-annual payout to creditors next week, a bigger-than-expected $17.9 billion, pushing its total payments to creditors above $80 billion. The Wall Street Journal notes that most of the money to be distributed "involves money Lehman entities owe each other." Reuters says, "The payout will include $12.8 billion to third-party creditors and affiliates, plus $5.1 billion to other Lehman debtors and affiliates." Creditors will now reap 26.9…

Morning Scan Déjà Vu: Fed Rejects Citi's Capital Plan; B of A Settles Over Bad Mortgages

Receiving Wide Coverage ... Stress Tests, Part II: Citigroup bore the brunt of bad press associated with the Federal Reserve's second round of stress test results, given that the bank had its capital plan rejected by the central bank for the second time in three years. The Journal calls the Fed's decision — which appears to be based on "qualitative" measures — "a surprising blow to Chief Executive Michael Corbat's effort to bolster the bank's reputation…

Morning Scan: Who's Left to Succeed Jamie Dimon Now?

Receiving Wide Coverage ... Another One Bites the Dust: Since JPMorgan Chase let $6 billion get swallowed by its London Whale, the bank has lost or replaced most of the senior executives below CEO Jamie Dimon, including its chief financial officer, co-chief operating officer, chief risk officer, chief compliance officer, co-head of litigation, chief investment officer, chief information officer and head of consumer banking. Now you can add to that list Mike Cavanagh, co-head of JPMorgan…

Morning Scan: Five Madoff Associates Found Guilty; SEC Probes Complex CLO Deals

Receiving Wide Coverage ... Cue 'Law & Order' Theme: Five of Bernie Madoff's former employees were found guilty Monday night of aiding and covering up the largest investment fraud in U.S. history, putting to rest the myth that Madoff worked largely alone to swindle more than $17 billion from customers. Each potentially faces decades in prison, though the five defendants are likely to appeal. Madoff, who initially confessed to the scheme in 2008, is serving a…

Morning Scan: Fang Fang 'Retirement' Proves JPM Bribery Investigation Has Teeth

Receiving Wide Coverage ... Fang Fang 'Retirement' Shows JPMorgan Bribery Probe Has Teeth: JPMorgan's Sons and Daughters program, which you'll recall was allegedly set up to prevent the bank from inappropriately hiring the progeny of high-ranking Chinese government and business officials and ended up fostering the questionable hiring of such elite youngsters, burst back into the news Monday with the announced departure of Fang Fang, J.P. Morgan's chief executive for China investment banking and vice chairman…

Morning Scan: Banks — Stress Tested, But Plans Not Yet Approved

Receiving Wide Coverage ... Stress Tested: The results of the Federal Reserve's stress tests are here and, wouldn't you know, 29 of the 30 largest financial firms could weather a big economic downturn — a sign, the Journal says, "that many will get the green light soon to reward investors by raising dividends and buying back shares." (Hey, look, here's what Discover is asking for.) The one outlier here was Zions Bancorp, which would have fallen…

Morning Scan: Yellen Presser Rattles Markets; JPM Commodities Deal, Day Two

Receiving Wide Coverage ... Different Fed Chair, Slightly Different Story: The Federal Reserve, pretty much as expected, will continue to reduce its monthly bond-buying program by $10 billion. (For those keeping track, that means the Fed will now pump $55 million back into the economy each month.) But, during her press conference, Chair Janet Yellen also seemingly laid the groundwork for a future interest rate hike. And the markets … well, they didn't really like that…

Morning Scan: JPM Agrees to Sell Commodities Unit; Barclays Bonus Shaming

Receiving Wide Coverage ... Sold: Well, we knew this was coming. Anonymice are telling their favorite news outlets JPMorgan Chase has agreed to sell its commodities trading business to Mercuria, a Switzerland-based energy trading house. Their lips are sealed about how much Mercuria will pay for the unit, but its assets are believed to be valued at $3.3 billion. The deal comes as many big banks are scaling back on their commodities business amid growing regulatory…

Morning Scan: Amex's Business Travel Deal; Wall Street, Surprising No One, Rallies Against 'Big Bank' Tax

Receiving Wide Coverage ... Sold: American Express has sold half of its corporate travel business to a group of investors led by Certares for $900 million. The news should come as no surprise, given Amex copped to struggles (and associated job cuts) in its travel business in early 2013. Its new deal is expected to close in the second quarter. Amex's consumer travel business has not been affected. The firm told Dealbook it plans to use…

Morning Scan: Nakamoto Says He's Not That Nakamoto; ARMs Make a Comeback

Receiving Wide Coverage ... It Wasn't Me: Dorian S. Nakamoto, the man who was hounded by the media after Newsweek claimed he was the "Satoshi Nakamoto" who invented Bitcoin, has categorically denied any involvement with the cryptocurrency. Through his lawyer (Financial Times, TechCrunch). For less sensational but much more interesting developments in the Bitcoin world, read about the new wallet-and-vault services Xapo (New York Times, PaymentsSource) and CryptoCorp (Bitcoin Magazine) and the programmable "meta-coin" Ethereum (The…

Morning Scan: GE to Spin Off Card Unit; DOJ Scolded; Target Breach Preventable?

Receiving Wide Coverage ... Credit Card Revival: General Electric is planning an initial public offering for its credit card unit, demonstrating the "renewed investor enthusiasm for the card business after some issuers were hit hard by defaults following the 2008 financial crisis," according to the Wall Street Journal. The planned IPO is in line with GE's desire to curb its involvement in the banking sector. The unit, which could be valued up to $20 billion, is…

Morning Scan: Bonus Bonanza; Tax Dodge; Raskin to Treasury

Receiving Wide Coverage ... Don't Worry, Be Wealthy: On Wall Street, profits are down and the number of workers is shrinking. But for survivors, bonuses continue to swell. Bonus payouts to New York's Wall Street employees rose 15% on average last year to $164,530, according to figures compiled by state comptroller Thomas DiNapoli and reported in the New York Times. (Average Wall Street pay, including salary and bonuses, was $360,700 in 2012, the most recent period…

Morning Scan: The Bombshell Bill That's Neither a Bombshell Nor a Bill

Receiving Wide Coverage ... Unsurprising Housing Finance Plan Manages to Surprise Investors: The legislative outline for housing finance reform released Tuesday by Democratic Sen. Tim Johnson and Republican Sen. Mike Crapo was relatively short on details. But its broad strokes were familiar to anyone who's been paying attention to its progenitor, a bill authored by another bipartisan pair on the Senate Banking Committee. Still, many investors were seemingly caught off guard. Fannie Mae's common shares plunged…

Morning Scan: Silk Road Mom Hits SXSW; Wells Fargo Reverses P2P Ban

Receiving Wide Coverage ... Bitcoin and South by Southwest: Add James Gorman, chief executive of Morgan Stanley, to the list of financial head honchos mystified by Bitcoin. Gorman told Maria Bartiromo, a host on the Fox Business Network, that he found the crypto-currency and all the news around it — including the recent Newsweek story about its supposed founder — "totally surreal." "I'm not sure I understand it," Gorman told Bartiromo on Monday, adding that he…

Morning Scan: M&A Double Dipping; Foreign Banks Flock to Fed

Receiving Wide Coverage ... Both Sides Now: If the folks in mergers and acquisitions look discouraged today, it's probably more than a bad case of the Mondays. A Delaware judge hearing a case about the conflicts of interest that possibly arise when bankers advise both the buyer and seller in the same deal has found that RBC acted improperly when its bankers tried getting in on both sides of a 2011 merger in the health care…

Morning Scan: Media Loses Mind After Newsweek Maybe Unmasks Creator of Bitcoin

Receiving Wide Coverage ... The Father of Bitcoin? Newsweek kicked a media-filled hornet's nest yesterday when reporter Leah McGrath Goodman purported to have found the creator of Bitcoin. The person in question? A 64-year-old Japanese engineer living in California named Dorian Satoshi Nakamoto, or, legally, Satoshi Nakamoto, the name that first appeared on a white paper introducing the cryptocurrency in 2008. Goodman's article, containing numerous details on Nakamoto's life and several interviews with family and friends,…

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