We have a few decent highly-placed financial markets professionals who send in their insight into the market from time to time. Here's an uncompromising view sent in by one of our favourite commentators:
Reuters reports that HSBC is cutting 120 investment banking jobs as it is to stop selling and trading mortgage-backed securities. 100 jobs will go in the US due to the closure of the mortgage-backed desk there, with the other losses coming in London. The firm is also to cease research coverage of the US healthcare sector.
It's got to be bad out there when Morgan Stanley discloses that it's mortgage traders lost $3.7bn on a complicated subprime related trade (which could result in further losses), and the market breathes a huge sigh of relief.
The pressure is really on at Citi, with calls growing daily for the company to be broken up in the name of shareholder value. Some feel that chairman Robert Rubin shouldn't be on the look-out for one CEO, but several - folks who can run various parts of the empire and stay with their units post break-up. And, in the meantime, several rival firms are thought to be interested in acquirin Citi assets.
We reported earlier this week that Deutsche Bank has a bit of a rat problem on the equities floor at its main London Wall building. We also alluded to the fact that, a few years back, UBS had a mice issue at 100 Liverpool St. Well, it seems that the UBS mice are alive and kicking, as the bank still has vermin on the premises.
Rumours and speculation abound, and it's difficult to sort out the fact from the fiction. However, the subprime fallout only looks like getting worse. Here's a run down of what's happened in the last few days.
Bloomberg unearthed a nice little bit of info Wednesday, reporting that the $16.7bn Goldman Sachs has set aside for bonuses in the first 9 months of the year is more than enough for firm staff to club together and acquire rival Bear Stearns, which currently has a market cap of around $14.7bn.
Despite confirming that it may have to write off up to $11bn in US subprime and related assets in the fourth quarter (in addition to the $7 billion of costs for bad debt, bond and loan losses from the third quarter), a Citi memo obtained by The New York Times announcing the formation of a sub-prime portfolio group to sort out the mess claims that the company remains a 'leader' in credit businesses!
Fortune magazine has partnered again with London think-tank AccountAbility and for-profit consultancy CSR Network to rank the largest global companies by the quality of their commitment to social and environmental goals. Here's the Top 20, and the rank of other firms of interest:
Here's some edited remarks made by Bank of America boss Ken Lewis on receiving the British American Business US Transatlantic Business Award in New York last week. We alluded to it last week, but this puts some more meat on the bones.