Receiving Wide Coverage ...
Still in charge: Almost forgotten in last week's senior management shakeup at Goldman Sachs is that the man who fills the corner office is still there and not going anywhere. "While Goldman [last] week underwent its most dramatic management reshuffling in a decade, Lloyd Blankfein remains firmly ensconced as chief executive — and appears likely to stay, having outlasted an impatient deputy and effectively restarted the clock on his new successors-in-waiting," the Wall Street Journal reports. "That means Goldman's strategy isn't likely to change much from the course set out in recent years: cautiously expanding into new areas while hawkishly defending its turf in the core businesses of trading and corporate banking."
One of the men elevated in the shakeup "is an unusual figure to climb so high at the well-connected Wall Street bank," the Financial Times says in a profile of the CFO in waiting, Martin Chavez. "For much of its 147-year history, Goldman has handed its top jobs to white, straight, Jewish males," the paper says. But the 52-year-old Chavez "is a gay Latino from Albuquerque and father to two surrogate-born toddlers. He has tattooed arms and talks publicly of how he went to Alcoholics Anonymous meetings in the late 1990s. He even left the bank at one point (not many people do that, and are allowed back)."
Wall Street Journal
ARMs talk: Several large lenders are talking up the benefits of adjustable-rate mortgages to consumers in the wake of the sharp rise in interest rates on 30-year fixed-rate loans. But last week's Federal Reserve rate hike blunts some of that selling point, as rates on ARMs, home equity lines of credit and other variable-rate loans are poised to reset higher.
It's hot: Just like their counterparts in the U.S., Europe and Asia, "Africa's biggest banks are investing billions in digital banking technology," the Journal reports, looking to "lure the continent's growing consumer class." Absa Bank, for example, a unit of Barclays Africa Group, was the first bank in the world to offer banking services through Facebook's messenger service, according to the Journal, and has lured designers and product managers away from Google and Amazon.
Settled: Moneytree, a Seattle-based payday lender, agreed to pay $505,000 to settle Consumer Financial Protection Bureau charges of deceptive online advertising and collection practices. "Friday's action indicates the CFPB is forging ahead with its enforcement activities, unfazed by uncertainty over its future following the election of Republican Donald Trump, who has pledged to roll back the Dodd-Frank financial overhaul law which created the consumer bureau," the Journal commented.
Down: The number of people working in compliance on Wall Street has dropped for only the second time since the financial crisis, the FT reports. New York lost a net 1,400 jobs in financial compliance between January and October this year, according to the Bureau of Labor Statistics and the New York City Independent Budget Office, while legal services lost 900 jobs. One wonders what happens after the regulation-hating Trump administration takes over.
Still struggling: New account formation at Wells Fargo dropped sharply for the third consecutive month since the phony accounts scandal came to light. The bank said it opened 41% fewer accounts last month compared to a year ago, while credit card applications dropped 45%.
Boom time: U.S. asset managers would be the biggest beneficiaries if the incoming Trump administration is successful in cutting taxes on earnings held overseas by American companies. Franklin Templeton and BlackRock have the biggest piles of cash offshore and would benefit the most from a one-time tax holiday and a lower tax rate on overseas earnings.
"This economy has gotten so conditioned to 2% and 3% mortgage rates that there is sticker shock." — Chris Whalen, senior managing director at Kroll Bond Rating Agency Inc.