Tuesday, April 3, 2012


Writing this I mean.  With nothing going on this week you have to start making things up..."did you hear the one about..."  nah, that doesn't work.

The Fed released minutes from the last meeting and there being no guarantee that there was to be a QE III, equity markets traded off.  I guess the stock boys really don't believe that good times are just around the corner like they keep telling us 'cause the only thing that seems to rattle their cages is free money.  Not much new in that.

Speaking of the Fed, the head hummer at the Dallas establishment essentially came right out and said it; "Break up the Banks!"  We spoke of this last week but this week they are in full cry.  Exciting.  Of course it's doesn't have a chance of happening but it does gives me something to write about.  How this is supposed to happen I'm not really sure (neither is the Fed).  More and more we hear the sound bites of things that cannot be done or should not be done rather than suggestions of what should be accomplished to get us out of this economic malaise that is becomming increasingly a world-wide phenomenon.  My problem with all of these calls for downsizing, cut backs, increased regulation and gereral distain for the business enviornment is that the reaction may well be a movement to seek tamer jurisdictions (already underway) resulting in an even greater loss of regulatory oversight in the Wild, Wild West of the corporate havens out there.  Yesterday, the United States became #1 in the world in corporate taxation.  Who says we're not a winner?  Wonder if they broadcast the Final Four in Bermuda or Lichtenstein?  



  1. Not buying it. You tell Jamie he has to split his capital into 2 companies, with no worse than 60/40 split, and let him tell you what goes where. So maybe he can do "bought deals" all the time. So maybe he needs to split up the derivatives operation, or scale it back to the capital base. So maybe he can't afford to clear and settle for 80% of the street, and there's a bit more incentive for other players to breakup the duopoly.

    They put together JP Morgan, Chase, Chemical, Bank One, WaMu .... He can certainly break up the retail - banks sell deposits every day.

  2. From today's WSJ Deal Journal:

    Nancy Bush just wants a decision.

    Break up the big banks, or don’t, but make a decision and free up the shares, says the long-time bank analyst.

    Bush, now of SNL Financial, says the “big-bank wars” are hurting bank stocks by keeping a “conglomerate discount” in place. Even Jamie Dimon’s much lauded J.P. Morgan isn’t immune.

    But Bush herself is “ambivalent” to whether or not the banks get broken up, she says she just wants a consensus.

    Breaking them up will boost shares, says Bush. So too will ending all the talk of breaking them up.

    Bush says she spoke with several buyside analysts that said “overwhelmingly and without exception” that bank stocks would rise the minute the big banks were ordered to break up.

    CLSA analyst Mike Mayo had raised quite a bit of noise about this idea in regard to J.P. Morgan before the New York bank’s analyst day earlier this year. Mayo said the bank would be worth more in parts and demanded answers. His analysis elicited a spirited defense from the management of the bank throughout their day.


    Carter here: will you be so adamant once Moynihan or Dimon decides it is in their shareholder's interest to bust up the shop? I betcha with the right incentives even Moynihan could find a way to break it up. Hell, you can argue he already is: found this quote dated 9/29/11 on CNBC in an article titled "Bank of America's Race to Sell": "In less than two years, Bank of America has sold 20 assets worth the market capitalization of Goldman Sachs."

    CCB stake, Canadia card business, Blackrock stake, MSRs, lots of its own RE (except the two HQ towers). Can't recall if they've sold USTrust yet. They'd probably love to sell Countrywide.

    Sells half its stake in China Construction Bank