Research Zeitgeist: Top Posts and Hot Topics
No prizes for guessing this week’s hot topic - the group Bear hug.
Our popular Roundup and Update posts featured extensive analysis of JPMorgan’s Fed-sponsored Bear raid. This story will run and run as ravaged shareholders try (likely in vain) to find an alternative solution or at least get Morgan to pay more than the paltry $2 on offer.
Still, whatever one thinks of the merits of the deal and the wisdom of the Fed’s involvement, one has to be impressed by the deciseveness of messrs Bernanke, Paulson and Dimon. Some people probably spent as much time agonizing over their NCAA basketball tournament picks as these guys did pulling off a massive, complex and historic deal.
And where were the Sovereign Wealth Funds when they were needed? Either licking their wounds over the 40% losses they have already incurred on their investments or pouting over backlash that their moves are politically motivated. Another consideration may be that the “western expertise” that, for example, Chinese SWFs would hope to gain through their stakes in western financial firms doesn’t seem quite so valuable any more. In this context, news that Abu Dhabi and Singapore have agreed not to use their funds to further political aims may be moot.
Since earnings reports from Goldman Sachs, Lehman Bros and Morgan Stanley allayed the worst fears about US bank’s liquidity, inquiring minds are looking more closely at Europe’s banks, where the treatment of shaky debt varies from firm to firm, as CreditSights notes.
But the US banks are by no means out of the woods. Our most popular post of the week was Audit Integrity’s questioning of Citigroup’s risk management.
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