Global Banking Business Gets Halved for U.K. Lenders

“U.K. banks’ share of global industry profit fell by half to 5 percent since 2007 as Chinese lenders gained during the financial crisis, according to research by The Banker magazine.

Chinese banks saw their share of pretax profit soar to 29 percent in 2012 from 4 percent in 2007, according to the study of 1,000 lenders published today.

U.K. bank earnings slumped in the period as companies including Royal Bank of Scotland Group Plc were bailed out by taxpayers and compelled to write down the value of loans, cut jobs and sell assets. Britain’s four largest lenders will have eliminated about 189,000 jobs by the end of this year from their peak staffing levels, bringing employment to a nine-year low, according to data compiled by Bloomberg….”

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Politicians will be politicians….

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“Nokia Oyj (NOK1V) agreed to buy Siemens AG (SIE)’s share in a six-year venture for 1.7 billion euros ($2.2 billion), giving the Finnish company full access to the phone-equipment maker’s cashflow for a less-than-estimated price.

Nokia will pay 1.2 billion euros for Siemens’s 50 percent stake in Nokia Siemens Networks, with the remainder as a secured loan from Siemens due a year after the deal is completed, the companies said today. Nokia doesn’t plan to integrate Nokia Siemens and may still decide to seek partners, Chief Executive Officer Stephen Elop said on a conference call….”

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“Two gauges of China’s manufacturing fell in June, underscoring a sustained slowdown in the nation’s economy as policy makers seek to rein in financial speculation and real-estate prices.

An official Purchasing Managers’ Index dropped to 50.1, the lowest level in four months, from 50.8, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. A private PMI from HSBC Holdings Plc and Markit Economics was 48.2, the weakest since September. Readings above 50 signal expansion. (CNGDPYOY)

Weaker gains in manufacturing and a cash squeeze in the banking system add to odds that Li Keqiang will become the first premier to miss an annual growth target since the Asian financial crisis in 1998. In the latest signal that policy makers will tolerate slower expansion, President Xi Jinping said local officials shouldn’t be judged solely on their record in boosting gross domestic product.

“Although new leaders have no intention to achieve a higher GDP growth, the current growth rate is quite close to the floor that new leaders have indicated to tolerate,” Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, said in a note today. The lower official PMI “could worsen concerns that the liquidity squeeze in June will hit economic growth,” Lu wrote….”

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“Samsung Electronics Co. (005930) lost $25.3 billion in market capitalization last month, more than the value of competitor Sony Corp., as sales of its flagship Galaxy S4 smartphone fell short of investor expectations.

Since the handset was released April 26, the company that sells nearly one of every three mobile phones has plunged 10.8 percent as JPMorgan Chase & Co. and Morgan Stanley lowered sales forecasts and cut profit estimates. Fifteen analysts cut second-quarter net income estimates for Samsung in June, according to data compiled by Bloomberg. The company declined to comment on its share price and S4 sales…”

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“Hedge funds cut wagers on a gold rally to a five-year low as a record quarterly drop drove prices below $1,200 an ounce for the first time since 2010 and Goldman Sachs Group Inc. forecast more declines.

Money managers reduced their net-long position by 20 percent to 31,197 futures and options by June 25, U.S. Commodity Futures Trading Commission data show. That’s the lowest since June 2007. Holdings of short contracts climbed 5 percent to 77,027, the second-highest on record. Net-bullish wagers across 18 commodities tumbled 9 percent, the most in 12 weeks….”

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“Big Japanese manufacturers turned optimistic for the first time since September 2011, indicating confidence in Prime Minister Shinzo Abe’s reflationary policies even after stock market volatility.

The quarterly Tankan (JNTSMFG) index for large manufacturers rose to plus four in June from minus eight in March, the Bank of Japan said in Tokyo today. A positive figure means optimists outnumber pessimists. The median estimate of 22 economists surveyed by Bloomberg Newswas for a plus three reading. Large companies from all industries plan to increase capital spending 5.5 percent in this fiscal year as the government looks to promote business investment….”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Japan, Italy, Spain, France,  and Germany …

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I have come across this subject many times, but never found a medium in which to communicate the message. This documentary has a lot of science behind it and will make you wonder WTF is really going on here.

At any rate, cheers on your weekend!

[youtube://http://www.youtube.com/watch?v=P7BqFtyCRJc 450 300] [youtube://http://www.youtube.com/watch?v=ZWrzqvL0r6Q 450 300]

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The above chart shows that the S&P does not recover until it interacts with the VIX. Does this chart suggest that equities have a way to go? Developing….

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“I have long held the opinion that the markets, all of them, have been buoyed by what the Fed and the other central banks have done which was to pump a massive amount of money into the system. There are various ways to count this but about $16 trillion is my estimation. The economy in America has been flat-lining while the economies in Europe have been red-lining and while China has claimed growth their numbers did not add up and could not be believed.

In other words, the economic fundamentals were not supporting the lofty levels of the markets which had rested upon one thing and one thing alone which was liquidity. I have also stated often enough that the long awaited reversal would take place either due to an “event” or due to a change in the Fed’s position where the liquidity was going to be stopped. In one of the clearest and most open meetings ever conducted by the Fed, in my opinion, they said quite clearly that the end to its liquidity operations was coming and while the postulated this and that if the markets did this and that the message was quite clear; we are going to unwind what we have we have done.

Yesterday was the first day of the reversal. There will be more days to come.

What you are seeing, in the first instance, is leverage coming off the table. With short term interest rates right off of Kelvin’s absolute Zero there was been massive leverage utilized in both the bond and equity markets. While it cannot be quantified I can tell you, dealing with so many institutional investors, that the amount of leverage on the books is giant and is now going to get covered. It will not be pretty and it will be a rush through the exit doors as the fire alarm has been pulled by the Fed and the alarms are ringing. There is also an additional problem here.

The Street is not what it was. There is not enough liquidity in the major Wall Street banks, any longer, to deal with the amount of securities that will be thrown at them and I expect the down cycle to get exacerbated by this very real issue. Bernanke is no longer at the gate and the Barbarians are going to be out in force….”

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“U.S. manufacturing activity growth slowed slightly in June as the pace of hiring and overseas demand weakened, making the second quarter the weakest for the sector in the last four, a survey showed.

Financial data firm Markit said its “flash,” or preliminary, U.S. Manufacturing Purchasing Managers Index fell to 52.2 in June from 52.3. A reading above 50 indicates expansion.

June’s 52.2 reading was also the average for the second quarter, behind the 54.9 average in the first three months of the year and the worst showing since the third quarter of 2012.

“Slower growth in the goods-producing sector looks likely to have acted as a drag on the wider economy,” said Markit chief economist Chris Williamson. The U.S. economy grew at a 2.4 percent rate between January and March.

Markit’s output index rose to 53.9, a three-month high, from 52.7 in May while the gauge of new orders also rose to its highest level since March, offering some hope. But the pace of hiring slowed to 50.4 from 52.6, reflecting the weakest rate of job creation since January 2010….”

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“Either things in China are now very serious (and Jean-Claude Juncker has been hired as chief propaganda officer), or the BOC hired Erin Callan as CFO. Either way, for now at least, the Bank of China “is fine”…”

Full look

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Gapping up

 

Gapping down

 

Full Look

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Full report – ANN, FDX, HPQ, LTD, NEM, SODA, S, WMT, WY, DIS,

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In Play ,

On the Wires

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Strange indeud…

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“Four large U.S. banks have failed to comply with key elements of a landmark $25 billion mortgage settlement, an independent monitor said Wednesday.

The report shows that lenders continue to bungle their dealings with struggling homeowners seven years after the bursting of a national housing bubble.

Bank of America Corp., BAC -0.61%J.P. Morgan Chase JPM -1.05% & Co.,Citigroup Inc. C -0.97% and Wells Fargo WFC -0.44% & Co. each failed to meet at least one of 29 standards for providing timely and accurate relief to homeowners at risk of foreclosure, Joseph A. Smith Jr., the independent monitor responsible for overseeing the settlement, said.

The bank lapses show that some homeowners still face challenges despite an improving housing market and a legal settlement designed to provide more transparency and accountability from lenders.

“Delays in the foreclosure process result in homeowners falling further behind,” said Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, during a Wednesday news conference. “This is unacceptable.”

Mr. Donovan warned that banks that fail to correct continued missteps will face “serious consequences,” including “hauling them back into court.” ….”

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“SandRidge Energy Inc. SD +2.17% on Wednesday ousted Chief Executive Tom Ward after dissident investors pushed for his removal. But the founder’s fall is being cushioned by about $90 million, one of the larger severance packages seen in the energy industry.

Mr. Ward’s departure wasn’t a surprise. SandRidge came under fire last year from activist investors for Mr. Ward’s high pay, a weak stock performance and its dealings with businesses controlled by Mr. Ward and his family. A spokesman for Mr. Ward said he wasn’t available to comment.

In March, the Oklahoma City company settled a proxy fight with a big activist shareholder, agreeing to either fire Mr. Ward or give control of its board to the activist, hedge fund TPG-Axon Capital LP. SandRidge appointed four directors nominated by the investor at that time.

SandRidge promoted President and Chief Financial Officer James Bennett to CEO. Mr. Bennett, who will remain president, worked in private equity before joining SandRidge in 2011….”

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“Micron Technology Inc. (MU) reported third quarter fiscal 2013 earnings per share of 4 cents beating the Zacks Consensus Estimate of 3 cents per share. After posting losses in the past seven quarters, this quarter’s beat seems to be a sigh of relief for Micron. The beat can be attributed to favorable memory market condition that led to higher shipments and improved average selling price (ASP). Nevertheless, lackluster PC demand and macro uncertainty remained headwinds.

Revenues

Micron reported revenues of $2.32 billion, up 6.7% year over year and 11.5% sequentially. The quarter’s revenues came above the Zacks Consensus Estimate of $2.26 billion. The improvement was mainly due to higher DRAM and NAND shipments.

DRAM revenues grew 23.0% from the prior quarter aided by 6.0% hike in sales volume and 16.0% surge in ASP. NAND sales grew 7.0% sequentially due to an 8.0% increase in ASP. NOR flash sales remained flat sequentially.

Higher DRAM ASP was the effect of balancing supply with slowing PC demand. NAND fundamentals improved due to continuous growth in SSD sales.

Operating Results…”

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