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Fannie and Freddie: Financial Winners

Thu, 23 May 2013 16:33:28 EDT

NEW YORK (TheStreet) -- Fannie Mae and Freddie Mac were the big winners among major financial names, on an otherwise weak day for the stock market.

Shares of Fannie Mae were up 15% to close at $2.10, while Freddie Mac was up 20% to close at $2.00. The two mortgage giants together are known as the government-sponsored enterprises, or GSEs, and were taken under government conservatorship in September 2008.

Fannie's shares have returned 708% this year, while Freddie's shares have returned 669%, as both companies have shown very strong profits. ...

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Immelt Pushes Harder to Shrink GE Capital

Thu, 23 May 2013 09:35:26 EDT

NEW YORK (TheStreet) -- General Electric has made great progress in shrinking GE Capital, and CEO Jeff Immelt on Tuesday said the company was considering spinoffs through public offerings as a way to meet its goals.

GE reported first-quarter operating earnings of $4.059 billion, or 39 cents a share, increasing from $3.567 billion, or 34 cents a share, during the first quarter of 2012. GE Capital contributed profit of $1.927 billion, or 47% of the parent company's operating earnings. Also see: GE Beats Estimates, Revenue Falls >>

Immelt has long stated that GE's goal is to grow its industrial earnings and shrink GE Capital sufficiently to have the conglomerate deriving 70% of earnings from its industrial business. ...

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JPMorgan Chase Wins Again

Wed, 22 May 2013 16:39:38 EDT

NEW YORK (TheStreet) -- JPMorgan Chase was again winner among the nation's largest banks on Wednesday, with shares rising over 1% to close at $53.63.

The strong action for JPMorgan's stock -- following a vote of confidence in CEO James Dimon by the company's shareholders on Tuesday -- ran counter to the broad market. The Dow Jones Industrial Average was down 0.5%, while the S&P 500 and Nasdaq Composite saw declines of 1%. Also see: Why JPMorgan Will Always Be a Better Villain Than Apple >>

In a strong bull market so far this year, one of the biggest questions for investors is when the Federal Reserve will finally pull back on its economic stimulus efforts, and how dramatically the central bank's policy will change. The Fed has kept the short-term federal funds rate in a range of zero to 0.25% since late 2008. Since September, the Fed has been expanding its balance sheet through net monthly purchases of $85 billion in long-term securities, in an effort to hold long-term rates down. ...

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PNC Considers Selling BlackRock Stake

Wed, 22 May 2013 09:51:20 EDT

NEW YORK (TheStreet) -- Shares of BlackRock have returned a whopping 42% this year through Tuesday's close of $291.69, and that's a very big deal for PNC Financial Services Group .

PNC of Pittsburgh "owned approximately 36 million common stock equivalent shares of BlackRock equity" as of March 31, according to the bank's 10-Q filing, with a carrying value of $5.6 billion. PNC "accounts for its investment in BlackRock under the equity method of accounting," according to the filing, "exclusive of a related deferred tax liability of $1.9 billion at both March 31, 2013." The bank's voting interest in BlackRock common shares is about 21%.

But the market value of PNC's common stake in BlackRock was $9.2 billion as of March 31, and the value of the BlackRock stake rose to more than $10.5 billion as of Tuesday's close. ...

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JPMorgan Chase: Dimon Winner

Tue, 21 May 2013 16:42:47 EDT

NEW YORK (TheStreet) -- JPMorgan Chase was the winner among the nation's largest banks on Tuesday, with shares rising 1.4% to close at $53.02.

The broad indices all rose on Tuesday, after Jim Cramer earlier called this year's very strong run for stocks "the most ignominious bull market of all time."

"The market has taken out a record set in 1927, set two years before the great crash, and that represents a remarkable statement about just how dangerous this stock market really is," Cramer wrote. The broad market was up for a 19th consecutive Tuesday. The previous record of market increases was 15 consecutive Tuesdays, set in 1927, two years before the market crash of 1929. ...

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Tornadoes Are Growing Threat From Population Movement (Update 1)

Tue, 21 May 2013 12:07:29 EDT

Updated from 111:30 a.m. ET to include comments from President Obama's address Tuesday morning.

NEW YORK (TheStreet) -- As terrible as the tornadoes in Oklahoma on Monday were, this is not a unique event, even in the city of Moore, which is about 10 miles south of Oklahoma City.

As of 10:00 a.m. ET Tuesday, rescue workers were in the midst of a massive effort to find survivors in the rubble in Moore and other suburbs of Oklahoma City, and the Oklahoma state medical examiner's office said 24 bodies had been recovered from the wreckage, according to a Reuters report. ...

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Now Is Not the Time to Insult Dimon

Tue, 21 May 2013 07:46:01 EDT

NEW YORK (TheStreet) -- The media has been making plenty of hay in advance of the nonbinding vote of JPMorgan Chase shareholders on whether or not to split James Dimon's dual roles as CEO and chairman of the board, but voting against Dimon would do nothing for investors.

There have been reports that Dimon has indicated he would consider leaving JPMorgan Chase entirely if the shareholder vote were to go against him.

And what would shareholders gain from Dimon's exit? ...

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Bank Stocks Do It Again: Financial Winners

Mon, 20 May 2013 16:44:04 EDT

NEW YORK (TheStreet) -- Capital One was the winner among the nation's largest banks on Monday, with shares rising 2% to close at $61.81.

The broad indices all ended with slight declines, but bank stocks continued their amazing run, with the KBW Bank Index rising 0.5% to close at 61.43. The KBW index is up 20% this year, after rising 30% during 2012.

Investors are looking ahead to Federal Reserve chairman Ben Bernanke's testimony before the joint congressional Economic Committee on May 22, ahead of the release of the minutes of the most recent meeting of the Federal Open Market Committee, on April 30 and May 1. Investors continue to wonder, as they must, when the central bank will slow the expansion of its balance sheet from monthly purchases of $85 billion in long-term securities, in an effort to hold down long-term interest rates. ...

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GE Capital to Pay $6.5 Billion Dividends to GE (Update 1)

Mon, 20 May 2013 11:23:27 EDT

8:09 a.m. ET with morning market action and comments from BernsteinResearch analyst Steven Winoker.

NEW YORK (TheStreet) -- GE Capital plans to churn out even more cash than it did last year.

The board of directors of General Electric's financial services subsidiary said on Monday it planned to pay the parent company a total of $6.5 billion in dividends during 2013, increasing from $6.4 billion during 2012. ...

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'Easy Money' Over for Bank of America Stock: KBW

Mon, 20 May 2013 10:31:51 EDT

NEW YORK (TheStreet) -- "We are more than happy to take some profits off the table."

This sums up KBW analyst Christopher Mutascio's downgrade of Bank of America's stock on Sunday to a "market perform" rating from "outperform."

Bank of America's shares closed at $13.43 Friday, just below their reported March 31 tangible book value of $13.46. The shares have returned 16% this year, after more than doubling during 2012. ...

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Big Bank Phobia: Glass-Steagall Would Be Folly

Mon, 20 May 2013 07:30:00 EDT

This is the third of a three-part series rebutting the three most popular approaches toward lowering the systemic risk of large U.S. banks. Part one tackles breaking up the banks and part two deals with capital vs. liquidity.

NEW YORK (TheStreet) -- Bringing back the complete separation of investment banks from commercial banks would not strengthen the U.S. financial system, but it would make future bailouts more likely.

This is the third of our three-part series rebutting the three major ideas for ending the perception that the nation's largest banks are "too big to fail," this time focusing on why bringing back the Glass-Steagall amendment to the Banking Act of 1933 would be a bad idea. ...

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Big Banks: Friday Financial Winners

Fri, 17 May 2013 16:26:19 EDT

NEW YORK (TheStreet) -- The nation's largest banks again led the way on Friday, as the broad indices pushed to record highs.

Dow Jones Industrial Average rose 1% to end at a new closing high of 15,354.40, while the S&P 500 was also up 1%%, ending the session at a record closing high of 1,666.12.

The KBW Bank Index was up 2% to close at 61.13, with all 24 index components showing gains. ...

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Big Bank Phobia: Liquidity, Stupid, Not Just Capital

Fri, 17 May 2013 08:00:00 EDT

This is the second of a three-part series rebutting the three most popular approaches toward lowering the systemic risk of large U.S. banks. Make sure to read Part 1, on breaking up the big banks and Part 3, on the folly of bringing back Glass-Steagall.

NEW YORK (TheStreet) -- The Federal Reserve's annual stress test process has done a lot of good, but the tests need to be broadened to include stresses to liquidity as part of the regulator's "severely adverse scenarios."

This is the second of our three-part series rebutting the three major ideas for ending the perception that the nation's largest banks are "too big to fail," focusing on the emphasis of regulators on making sure large banks have enough capital to avoid another government bailout. ...

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Regions Financial: Bank Stock Loser

Thu, 16 May 2013 16:31:31 EDT

NEW YORK (TheStreet) -- Regions Financial was the loser among the largest financial names on Thursday, with shares sliding more than 2% to close at $8.95.

The broad indices ended lower and the KBW Bank Index was down 1% to close at 60.16, following a mostly disappointing batch of economic reports:

The Department of Labor reported that initial unemployment claims for the week ended May 11 increased by 32,000 to 360,000, while the four-week moving average for jobless claims increased by 1,250 to 339,250, from the previous week's revised figure of 338,000. ...

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Big Bank Phobia: Not Too Big to Fail

Thu, 16 May 2013 08:22:43 EDT

This is the first of a three-part series rebutting the three most popular approaches toward lowering the systemic risk of large U.S. banks. Make sure to read Part 2, on liquidity vs. capital reserves and Part 3, on the folly of bringing back Glass-Steagall.

NEW YORK (TheStreet) -- There are three main approaches being taken by the enemies of large U.S. banks, and all of them are bad ideas.

Five years after the peak of the credit crisis, nearly three years after the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed, and more than two years since the last "final disposition" of government bailouts for the "big six" U.S. banks, it remains quite stylish for members of both political parties to continually bash the large banks, saying they represent a continued threat to the U.S. taxpayer. ...

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