5 Highlights From the Week's Financials News
Dec 7th 2012 5:30PM
Updated Dec 7th 2012 5:32PM
The financials sector is never short on news, but if you're short on time, let me do the hard work for you. I've dug through the Fool's financial sector coverage over the past week to highlight five stories you don't want to overlook.
Read on for this week's highlights.
1. Why Heads Are Rolling at Citigroup
On Wednesday, when Citigroup announced upcoming "repositioning actions," most people heard "job cuts." To be exact, 11,000 of them. John Maxfield explains why, while the moves are bad news for some Citigroup employees -- especially at the holidays -- it might be good news for investors: A more nimble Citigroup could "make the bank more competitive in the post-financial-crisis world of heightened capital requirements and lower fee income."
That's fine and good, but Matt Koppenheffer warns investors: Not so fast. While he grants the moves might be meaningful in a positive way, he warns investors to keep a close eye on new CEO Michael Corbat to confirm these "repositioning actions" are only the first steps in a positive new direction for Citibank.
2. Look Who Won't Be Buying in the Brokerage Sector
The takeover rumblings surrounding TD AMERITRADE and E*TRADE were squashed earlier this week by TD's CEO Fred Tomczyk, who cited "balance sheet issues" as one of his reasons for staying away from the discount brokerage. Eric Volkman suggests the company might want to spend its money in other ways anyway (like paying a bigger dividend to shareholders).
Volkman acknowledges that there's value in E*TRADE, however, and wonders if someone else might do well to purchase the $2.4 billion company.
3. Bank of America's Moynihan Hits the Nail on the Head
Amanda Alix's prayers have been answered. Yours, too? At an investor conference in New York on Tuesday, Bank of America CEO Brian Moynihan confirmed the bank is "planning to increase mortgage lending, starting with this very quarter." Alix suggests the big bank is in a great position to do so given rising deposits, and decreasing interest on them. B of A also wants to be prepared to ace the Fed's 2013 stress test. So, is this another move in the right direction for the bank? The answer to that question might come with the bank's final decision on whether or not to risk another customer kerfuffle over more fees.
In other B of A news, Alix invites you to share her popcorn as we all watch the highly entertaining Bank of America vs. MBIA scuffle play out.
4. There Are 6 Reasons to Fear Annaly and Chimera
Questionable accounting, nepotism, and a board that ignores shareholders are only a few of the problems at mortgage REITs Annaly Capital Management and Chimera Investment Corp. . John Maxfield spells out all six signs.
5. Will These Big Banks Be Next to Pony Up?
Amanda Alix recaps for us: "16 of the world's largest banks are involved in probes related to the LIBOR rate-setting scandal." This week comes news that Switzerland-based UBS is on the verge of settling up with authorities for its part in the controversy, leaving U.S. megabanks JPMorgan Chase , Bank of America, and Citigroup in the naughty corner, waiting their turn.
Alix warns that fines and fees aren't always the only punishment, either. With a messy enough settlement can come damage to banks' reputation, too.
It seems like Bank of America is always in the news. To learn more about the most talked-about bank out there, check out our in-depth company report on B of A. The report details the bank's prospects, including three reasons to buy and three reasons to sell. You can click here to get access.
The article 5 Highlights From the Week's Financials News originally appeared on Fool.com.Abbie Redmon has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Annaly Capital Management. Motley Fool newsletter services recommend TD AMERITRADE Holding. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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