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Morgan Stanley beats estimates: Morgan Stanley reported a third quarter profit of $1.6 billion, or 81 cents a share, up 57% from $1.02 billion, or 48 cents a share, in the year ago period. That easily beat the median Street forecast of 63 cents. Revenue rose 15% to $8.91 billion from $7.77 billion, also beating analysts' estimates of $8.17 billion. As with its peers on Wall Street, which reported earlier, the bank's results were helped by a rebound in securities trading. Return on equity jumped to 8.7%, up from 5.6% a year ago.
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S&P cuts Wells' outlook: Wells Fargo delayed until Wednesday its scheduled sale of 10-year bonds after S&P cut its outlook on the bank's credit rating to negative from stable, citing "increased business risks" stemming from the bank's phony accounts scandal. "Uncertainty has increased, in our view, regarding the scope and ramifications of the misconduct, the duration and magnitude of the reputational damage, the possible impact on the company's customer flows, and the potential consequences of ongoing legal and regulatory investigations." Wells has been rated A or above by S&P since at least 1990, making it one of the highest rated banks. Fitch warned earlier this month that it might cut Wells' credit rating.
Separately, former Wells CEO John Stumpf resigned as a board director at Chevron and Target.
Wall Street Journal
No breakups: Former Federal Reserve Chairman Paul Volcker doesn't appear to be a fan of breaking up big banks. "If you break up a $2 trillion bank into $400 billion or $500 billion banks,
Jumbo loan demand up: Underwriting rules — especially income requirements — are loosening in the jumbo mortgage business, enabling more people to qualify for loans. Both portfolio lenders and investors who buy loans from mortgage bankers have loosened their standards. "That's because jumbo loans, once considered risky investments due to their size, are now
Prospects rise: Young, first-time homebuyers are expected to return to the housing market "in droves" next spring, with the group expected to account for more than half of prospective buyers looking to buy homes, up from a third a year earlier, according to a study by Realtor.com. "The first-time buyer is ready to come back," said Jonathan Smoke, the website's chief economist. "The absence of first-time buyers has been one of the biggest abnormalities of the housing market in recent years," the Journal commented. "If they return, it could provide a
Financial Times
Blockchain for mortgages: Bank of China and HSBC are looking to enhance mortgage underwriting in Hong Kong using blockchain technology. The banks plan to use the technology behind bitcoin to provide
New York Times
A little lumpy: Goldman Sachs's third-quarter earnings weren't as good as the headline numbers would suggest, in fact, they look "