thanks to John Salvey for suggesting this article
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Sunday Night Reading: Economic Reality, CRE, Buffett’s Cash, More - Here are a few Tweets that caught my eye this weekend. Weekend Reading Quick Takes “You can’t print money to create a thriving economy, you need real produ...
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Qantas will pay up to about $79 million to resolve claims it sold tickets for canceled flights - Qantas Airways agreed to pay approximately 20 million Australian dollars to more than 86,000 customers who were sold tickets to canceled flights.
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China Is Buying Gold, Sending Prices to Record Highs - The global price of gold has reached its highest levels as Chinese investors and consumers, wary of real estate and stocks, buy the metal at a record pace.
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Everybody Else Is Reading This - Snowflakes That Stay On My Nose And Eyelashes Above The Law Trump’s New Birth Control […]
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Maximizing Employer Stock Options - Oct 29 – On this edition of Lifetime Income, Paul Horn and Chris Preitauer discuss the benefits of employee stock options and how to best benefit from th...
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Wayfair Needs to Prove This Isn't as Good as It Gets - Earnings were encouraging, but questions remain about the online retailer's long-term viability.
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Hannity Promises To Expose CNN & NBC News In "EpicFail" - *"Tick tock."* In a mysterious tweet yesterday evening to his *3.19 million followers,* Fox News' Sean Hannity offered a preview of what is to come from ...
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Don’t Forget These Important Retirement Deadlines - *Now that fall is in full swing, be sure to mark your calendar for steps that can help boost your tax-advantage retirement savings.*
from Wired Magazine - The Formula that Sank Wall St
from Business Insider - the 25 most valuable blogs
The 25 Most Valuable Blogs
Nicholas Carlson|Feb. 23, 2009, 2:24 PM
Multiplying traffic and CPMs, 24/7 Wall Street came up with a list of the twenty-five most valuable blogs.
This year, 24/7 pegged Gawker Media to the top, figuring Nick Denton's collection of sites are worth $170 million at an 8x operating income valuation.
Nick tells us 24/7 underestimates Gawker's traffic and overestimates its CPMs.
But this is all a game anyway, right?
Here's the rest of the list.
Gawker Properties -- $170 million.
Huffington Post -- $90 million.
The Drudge Report -- $48 million.
Perez Hilton -- $32 million.
Sugar, Inc -- $27 million.
TechCrunch -- $25 million.
MacRumors -- $21 million.
SeekingAlpha -- $11 million.
GigaOm -- $9.5 million.
Politico -- $8.7 million.
SmashingMagazine -- $7.7 million.
SearchEngineLand -- $4.5 million.
Boing Boing -- $3.6 million.
ReadWriteWeb -- $3.4 million.
SB Nation -- $2.7 million.
Destructoid -- $2.5 million.
Mashable -- $2.5 million.
Alley Insider sites -- $2.25 million.
/film -- $2.1 million.
The Superficial Network -- $2 million
Neatorama -- $1.5 million.
Daily Kos -- $2 million.
Talking Points Memo -- $1.2 million.
VentureBeat -- $1 million.
Wowowow.com -- $1 million.
Nicholas Carlson|Feb. 23, 2009, 2:24 PM
Multiplying traffic and CPMs, 24/7 Wall Street came up with a list of the twenty-five most valuable blogs.
This year, 24/7 pegged Gawker Media to the top, figuring Nick Denton's collection of sites are worth $170 million at an 8x operating income valuation.
Nick tells us 24/7 underestimates Gawker's traffic and overestimates its CPMs.
But this is all a game anyway, right?
Here's the rest of the list.
Gawker Properties -- $170 million.
Huffington Post -- $90 million.
The Drudge Report -- $48 million.
Perez Hilton -- $32 million.
Sugar, Inc -- $27 million.
TechCrunch -- $25 million.
MacRumors -- $21 million.
SeekingAlpha -- $11 million.
GigaOm -- $9.5 million.
Politico -- $8.7 million.
SmashingMagazine -- $7.7 million.
SearchEngineLand -- $4.5 million.
Boing Boing -- $3.6 million.
ReadWriteWeb -- $3.4 million.
SB Nation -- $2.7 million.
Destructoid -- $2.5 million.
Mashable -- $2.5 million.
Alley Insider sites -- $2.25 million.
/film -- $2.1 million.
The Superficial Network -- $2 million
Neatorama -- $1.5 million.
Daily Kos -- $2 million.
Talking Points Memo -- $1.2 million.
VentureBeat -- $1 million.
Wowowow.com -- $1 million.
How to Complain to a Company (from WSJ)
Take Complaint Up a Level
Loretta Chao. Wall Street Journal. (Eastern edition). New York, N.Y.: Apr 25, 2006. pg. D.1
Author(s): Loretta Chao
Column Name: Quick Fix
Publication title: Wall Street Journal. (Eastern edition). New York, N.Y.: Apr 25, 2006. pg. D.1
(c) 2005Dow Jones & Company, Inc.Reproduced with permission of copyright owner.Further reproduction or distribution is
prohibited without permission.
The Problem: Not being able to resolve a consumer complaint.
The Solution: Many companies have an "executive resolutions" department whose main purpose is to answer questions and
complaints directed to the company's top management. That is where you need to go.
To find it, call the company's headquarters -- not the toll-free customer-service line -- and ask for the department by name. (You can
get the main corporate number from the "company profile" on the corporate Web site.) Usually, you will be transferred directly to a
live representative, or be given a direct number to reach someone. A Verizon operator, for example, provided a separate 800
number and said to dial option three, which connected to a representative in the president's office. Other companies that can quickly
connect you to this department include Best Buy and Delta Air Lines.
The Caveat: In some cases your complaint may still be rerouted back to the call center.
Loretta Chao. Wall Street Journal. (Eastern edition). New York, N.Y.: Apr 25, 2006. pg. D.1
Author(s): Loretta Chao
Column Name: Quick Fix
Publication title: Wall Street Journal. (Eastern edition). New York, N.Y.: Apr 25, 2006. pg. D.1
(c) 2005Dow Jones & Company, Inc.Reproduced with permission of copyright owner.Further reproduction or distribution is
prohibited without permission.
The Problem: Not being able to resolve a consumer complaint.
The Solution: Many companies have an "executive resolutions" department whose main purpose is to answer questions and
complaints directed to the company's top management. That is where you need to go.
To find it, call the company's headquarters -- not the toll-free customer-service line -- and ask for the department by name. (You can
get the main corporate number from the "company profile" on the corporate Web site.) Usually, you will be transferred directly to a
live representative, or be given a direct number to reach someone. A Verizon operator, for example, provided a separate 800
number and said to dial option three, which connected to a representative in the president's office. Other companies that can quickly
connect you to this department include Best Buy and Delta Air Lines.
The Caveat: In some cases your complaint may still be rerouted back to the call center.
from ZeroHedge.com: When Government Intervenes in the Banks
Nationalization. What happens to owners of bonds and preferred shares when government bails out a bank? It depends (see the table in ZeroHedge.com). For Government Sponsored Enterprises, Fannie Mae and Freddie Mac, preferred dividend deferral. For Lehman and Wamu, bond default.
"As one can see from the maze of policy reactions in the above 8 cases (which are not exhaustive, there have been many more failures), the only things that have been consistent is that absent an outright (semi) liquidation as was the case in Lehman and WaMu, the debtholders were never impaired. ..However, while this may be true for senior debt instruments, the fate of junior debt as well as Hybrid/Preferred layers is not so certain. All nationalization would really do, would be to eliminate certain junior capital tranches. Indicatively, Citi and BofA have about $100 billion in junior instruments (preferreds and hybrids), while the other too-big-to-fail banks have roughly $160 billion among them (Wells, JPM, Morgan Stanley and Goldman), implying there is a U.S. tranche of over $360 billion of non-debt securities that could potentially be eliminated before debt impairments would have to occur."
"As one can see from the maze of policy reactions in the above 8 cases (which are not exhaustive, there have been many more failures), the only things that have been consistent is that absent an outright (semi) liquidation as was the case in Lehman and WaMu, the debtholders were never impaired. ..However, while this may be true for senior debt instruments, the fate of junior debt as well as Hybrid/Preferred layers is not so certain. All nationalization would really do, would be to eliminate certain junior capital tranches. Indicatively, Citi and BofA have about $100 billion in junior instruments (preferreds and hybrids), while the other too-big-to-fail banks have roughly $160 billion among them (Wells, JPM, Morgan Stanley and Goldman), implying there is a U.S. tranche of over $360 billion of non-debt securities that could potentially be eliminated before debt impairments would have to occur."
Financial Times: GM deadline nears
GM fights to avoid bankruptcy protection
By Julie MacIntosh and Nicole Bullock in New York and John Reed in Detroit and Bernard Simon in Toronto
Published: February 9 2009 19:37 | Last updated: February 9 2009 23:43
General Motors is working to convince key stakeholders to help it avoid the need to seek bankruptcy protection but, because such an effort would probably require more government money, its most critical task will be addressing the US Treasury’s concerns over the terms of its investment.
GM must present a plan proving its long-term viability to Congress by next Tuesday as a condition of the $13.4bn emergency bridge loan it was granted in December.
Several sets of negotiations are taking place simultaneously. They revolve around GM’s proposal to swap up to two-thirds of its debt for equity, and fresh concessions from the United Auto Workers, including the financing of a new union-administered healthcare fund.
Only advisers to the various parties are currently involved in the talks, which are expected to centre on due diligence issues for the next day or two, one person familiar with the negotiations said.
The US government has the power to either endorse GM’s plans or push it into bankruptcy and the US Treasury’s decision to hire advisers Cadwalader, Wickersham & Taft, Sonnenschein Nath & Rosenthal and Rothschild suggest it may be toughening its stance.
“The government is the biggest stakeholder here,” one person close to the matter said. “Unless they agree the plan is viable and they consent, the debt becomes due.”
If the government gives GM additional funding, the structure and terms of both its old and new investments could come up for debate, including whether taxpayers’ interests should come before those of current debtholders.
The government’s role as stakeholder reduces GM’s options. But it also gives it more weight in negotiations with unions, auto dealers and bondholders.
“The carrot is, this is in everybody’s best interest,” said Don Workman, a bankruptcy lawyer at Baker & Hostetler LLP. “The stick is, they’re saying that if we don’t do this consensually, GM and Chrysler will go into bankruptcy court and the judge will prime you.”
Separately, GM is negotiating with bankrupt Delphi, its largest supplier, to take over some of Delphi’s manufacturing plants, a person briefed on the talks said.
The move could give GM more flexibility in its negotiations with the United Auto Workers, the labour union.
Bondholders said their talks with GM were ongoing. The company’s long-term bonds were quoted at their low of 13 cents on the dollar. In an indication of the severity of the situation, the same bonds were quoted at around 80 cents a year ago.
Copyright The Financial Times Limited 2009
By Julie MacIntosh and Nicole Bullock in New York and John Reed in Detroit and Bernard Simon in Toronto
Published: February 9 2009 19:37 | Last updated: February 9 2009 23:43
General Motors is working to convince key stakeholders to help it avoid the need to seek bankruptcy protection but, because such an effort would probably require more government money, its most critical task will be addressing the US Treasury’s concerns over the terms of its investment.
GM must present a plan proving its long-term viability to Congress by next Tuesday as a condition of the $13.4bn emergency bridge loan it was granted in December.
Several sets of negotiations are taking place simultaneously. They revolve around GM’s proposal to swap up to two-thirds of its debt for equity, and fresh concessions from the United Auto Workers, including the financing of a new union-administered healthcare fund.
Only advisers to the various parties are currently involved in the talks, which are expected to centre on due diligence issues for the next day or two, one person familiar with the negotiations said.
The US government has the power to either endorse GM’s plans or push it into bankruptcy and the US Treasury’s decision to hire advisers Cadwalader, Wickersham & Taft, Sonnenschein Nath & Rosenthal and Rothschild suggest it may be toughening its stance.
“The government is the biggest stakeholder here,” one person close to the matter said. “Unless they agree the plan is viable and they consent, the debt becomes due.”
If the government gives GM additional funding, the structure and terms of both its old and new investments could come up for debate, including whether taxpayers’ interests should come before those of current debtholders.
The government’s role as stakeholder reduces GM’s options. But it also gives it more weight in negotiations with unions, auto dealers and bondholders.
“The carrot is, this is in everybody’s best interest,” said Don Workman, a bankruptcy lawyer at Baker & Hostetler LLP. “The stick is, they’re saying that if we don’t do this consensually, GM and Chrysler will go into bankruptcy court and the judge will prime you.”
Separately, GM is negotiating with bankrupt Delphi, its largest supplier, to take over some of Delphi’s manufacturing plants, a person briefed on the talks said.
The move could give GM more flexibility in its negotiations with the United Auto Workers, the labour union.
Bondholders said their talks with GM were ongoing. The company’s long-term bonds were quoted at their low of 13 cents on the dollar. In an indication of the severity of the situation, the same bonds were quoted at around 80 cents a year ago.
Copyright The Financial Times Limited 2009
Fitch downgrades Royal Bank of Scotland
PRESS RELEASE: Fitch Downgrades RBS Group Individual Rating1-19-09 1:02 PM EST
Fitch Ratings-London-19 January 2009: Fitch Ratings has today downgraded The Royal Bank of Scotland Group plc's (RBS Group) Individual rating and that of its main operating subsidiaries The Royal Bank of Scotland plc (RBS plc) and National Westminster Bank plc (NatWest) to 'E' from 'B/C'. NatWest's Individual rating has been subsequently withdrawn. Today's action follows RBS Group's announcement that it expects to report an attributable loss of between GBP7bn and GBP8bn for 2008, and that it has reached an agreement to replace GBP5bn of preference shares held by the UK government with new ordinary shares.
The three companies' Long-term Issuer Default Ratings (IDR) and Short-term IDRs are affirmed at 'AA-' (AA minus) and 'F1+' respectively. RBS Group's Support rating has been upgraded to '1' from '5' and its Support Floor has been revised to 'AA-' (AA minus) from 'No Floor'. The Outlook for the IDRs remains Stable, reflecting an expectation of continued strong government support for RBS Group.
Fitch has also downgraded RBS Group's and RBS plc's Tier 1 preference shares to 'BB-' (BB minus) from 'A+', and upper tier 2 hybrid capital instruments issued by group companies to 'BB' from 'A+' and placed all of these securities on Rating Watch Negative.
A full list of ratings actions is available at the end of this release.The loss will arise largely as a result of additional credit market write-downs, lower income in the group's Global Banking & Markets division, impairment provisions relating to Lyondell Basell Industries and Bernard L Madoff Investment Securities LLC, and rising credit impairments across a broad range of portfolios and exposures. In downgrading the Individual ratings, Fitch is signalling its concern over increasing risks and worsening operating outlooks for the group's main businesses, together with the unique challenges the group faces in integrating ABN AMRO businesses in increasingly difficult market conditions. RBS Group also announced that following completion of a review of the carrying value of goodwill, it expects to make a goodwill impairment charge of between GBP15bn and GBP20bn.
The agency views UK government actions to support RBS Group and the broader UK banking system as positive for creditors, but notes the potential for restricted operational flexibility as a result of conditions that could be imposed by the UK government, the group's controlling shareholder. Fitch expects to see some significant changes to the group's strategic direction and priorities following completion of a strategic review. The UK government has today announced fresh measures aimed at supporting the UK financial system and facilitating the availability of credit to UK borrowers. Fitch will comment separately on these particular initiatives but expects RBS Group to be an early user of the new schemes.
Following the announcement in October 2008 that the major UK banks would be recapitalised, underwritten by the UK government, the RBS Group is currently 58% owned by the UK government. The replacement of the government-subscribed preference shares with ordinary shares will increase the UK government's stake in RBS Group to close to 70%. This large government stake, together with ongoing official commitment to provide capital and funding support to the major UK banks, underpins Fitch's continued view of the very strong likelihood of support for the RBS Group, and supports the upgrade of RBS Group's Support rating and Support Floor, as well as a Stable Outlook on the group's IDRs.
The economic outlook for RBS Group's main operating markets (particularly the UK, US and Ireland) is negative over the short- to medium-term and there remains significant uncertainty over the depth and length of the current recession. Fitch expects to see steady pressure on the group's earnings and asset quality as these economies continue to weaken. In the UK, RBS Group has not been as aggressive as some competitors in the residential housing and consumer lending markets and this should offer some protection as these segments continue to weaken. The expected increase in loan impairment charges relating to the group's Regional Markets businesses is GBP0.4bn compared to its November interim management statement. However, its leading share of the UK SME market and significant commercial property and large corporate exposures, where some concentrations have arisen following the ABN AMRO acquisition, are likely to pose some problems. The outlook for commercial property in 2009 remains negative as economic developments continue to put pressure on asset values and rentals. Outside the UK, the group is likely to suffer from asset quality deterioration in the US and Ireland. In the US, Citizens has historically been a low-risk lender, but has an externally sourced portfolio of home equity loans that is showing rapid deterioration, and its core lending is unlikely to escape the problems being felt in the US housing market and by the broader US economy. In Ireland, Ulster Bank faces similar pressures to the UK; a deteriorating economic environment, an abrupt contraction in economic growth forecast, rising unemployment and a worsening outlook for commercial property. Fitch considers that this is likely to lead to weaker revenue generation, sharp rises in impaired loans and steep falls in operating profitability.
RBS Group's capitalisation currently appears adequate following the government's recapitalisation operations, but is expected to decline as problems relating to recessionary economies materialise. The replacement of government preference shares with common equity will add around 86bp to the group's core equity Tier 1 ratio, which is expected to be in the range of 6.9% to 7.4% at end-2008. The Tier 1 ratio is expected to be between 9.5% and 10%. The massive goodwill impairment will not impact regulatory capital, but confirms the huge destruction of shareholder value that came from the ABN AMRO deal. Fitch expects 2009 to be characterised by sharply declining asset quality and pressure on revenues, particularly in businesses more reliant on market activity, thereby impacting internal capital generation severely. The group's funding has stabilised following the implementation of UK government initiatives in October 2008. The RBS Group, as have other UK major banks, has become increasingly reliant on guarantee schemes for longer-term funding, and Fitch does not expect this to diminish in the near-term.
The downgrade of RBS Group's, RBS plc's and Natwest's Individual ratings to 'E' reflects Fitch's opinion that due to the scale of the problems, RBS Group and its main operating banks are clearly reliant on external support - and to a greater extent than most other banks. The future direction of the group's and operating subsidiaries' Individual ratings will depend upon the pace and severity of continued pressures in the operating environment, together with the group's success in integrating ABN AMRO, de-leveraging the group's balance sheet, and implementing a refocused, lower risk, strategy. An additional element of uncertainty is the potential for government pressure to be brought to bear on the group to increase lending volumes to specific economic segments within the UK and it remains to be seen how compatible the group's de-leveraging and de- risking strategy is with government objectives.
Fitch's downgrade of RBS Group's preference shares and upper tier 2 hybrid capital instruments reflects the agency's view that deferral risk has increased significantly for banks that are in receipt of public funds, as well as the group's weakened standalone coupon-servicing capacity, as reflected in its Individual rating. This risk is heightened by the recognition that there is significant capital and financial flexibility to be retained by deferring on such instruments as well as Fitch's opinion that the replacement of government preference shares with common equity will result in a significantly elevated risk that market investors in RBS Group hybrid capital could be expected to share this burden with the UK taxpayer. The upper tier 2 instruments have been rated one notch higher than preference shares at 'BB' to reflect their higher recovery prospects.
The following ratings actions have been taken today:
Royal Bank of Scotland Group plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: upgraded to '1' from '5'Support Rating Floor: revised to 'AA-' (AA minus) from 'No Floor'
Royal Bank of Scotland plc:Long-term IDR: affirmed at 'AA-('AA minus')' ; Outlook remains StableGuaranteed debt: affirmed at 'AAA' Senior unsecured debt: affirmed at 'AA-('AA minus')' Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort- term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
National Westminster Bank Plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Individual rating: downgraded to 'E' from 'B/C'; rating withdrawn Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
Ulster Bank LtdLong-term IDR: affirmed at 'A+'; Outlook remains StableShort- term IDR: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Ulster Bank Finance plc:Commercial paper: affirmed at 'F1+'
Ulster Bank Ireland Limited:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+ 'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
First Active Plc:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Greenwich Capital Holdings Inc.:US commercial paper: affirmed at 'F1+'
Citizens Financial Group, Inc.: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
RBS Citizens, NA (formerly Citizens Bank, NA): Long-term IDR: affirmed at 'A+ '; Outlook remains StableShort-term IDR: affirmed at 'F1'Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Senior unsecured debt: affirmed at 'A+'Subordinated debt: affirmed at 'A' Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Citizens Bank of Pennsylvania: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1' Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Charter One Bank, NA: Senior unsecured debt: affirmed at 'A+' Subordinated debt: affirmed at 'A'
ABN AMRO Bank NVLong-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus)Subordinated debt: affirmed at 'A+'Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on RatingWatch NegativeShort-term IDR: affirmed at 'F1+'Commercial Paper and short- term debt: affirmed at 'F1+'Support rating: affirmed at '1'Support Rating Floor: affirmed at 'A-' (A minus)Mortgage covered bonds: remain unaffected by today's action
Contacts: Gordon Scott, +44 (0) 20 7417 4307; James Longsdon, + 44 (0)207 417 4309.
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com; Tyrene Frederick-Mack, New York, Tel: +1 212- 908-0540, Email: tyrene.frederick-mack@fitchratings.com; Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, http://www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
(END) Dow Jones Newswires
01-19-091302ET
Copyright (c) 2009 Dow Jones & Company, Inc.
Fitch Ratings-London-19 January 2009: Fitch Ratings has today downgraded The Royal Bank of Scotland Group plc's (RBS Group) Individual rating and that of its main operating subsidiaries The Royal Bank of Scotland plc (RBS plc) and National Westminster Bank plc (NatWest) to 'E' from 'B/C'. NatWest's Individual rating has been subsequently withdrawn. Today's action follows RBS Group's announcement that it expects to report an attributable loss of between GBP7bn and GBP8bn for 2008, and that it has reached an agreement to replace GBP5bn of preference shares held by the UK government with new ordinary shares.
The three companies' Long-term Issuer Default Ratings (IDR) and Short-term IDRs are affirmed at 'AA-' (AA minus) and 'F1+' respectively. RBS Group's Support rating has been upgraded to '1' from '5' and its Support Floor has been revised to 'AA-' (AA minus) from 'No Floor'. The Outlook for the IDRs remains Stable, reflecting an expectation of continued strong government support for RBS Group.
Fitch has also downgraded RBS Group's and RBS plc's Tier 1 preference shares to 'BB-' (BB minus) from 'A+', and upper tier 2 hybrid capital instruments issued by group companies to 'BB' from 'A+' and placed all of these securities on Rating Watch Negative.
A full list of ratings actions is available at the end of this release.The loss will arise largely as a result of additional credit market write-downs, lower income in the group's Global Banking & Markets division, impairment provisions relating to Lyondell Basell Industries and Bernard L Madoff Investment Securities LLC, and rising credit impairments across a broad range of portfolios and exposures. In downgrading the Individual ratings, Fitch is signalling its concern over increasing risks and worsening operating outlooks for the group's main businesses, together with the unique challenges the group faces in integrating ABN AMRO businesses in increasingly difficult market conditions. RBS Group also announced that following completion of a review of the carrying value of goodwill, it expects to make a goodwill impairment charge of between GBP15bn and GBP20bn.
The agency views UK government actions to support RBS Group and the broader UK banking system as positive for creditors, but notes the potential for restricted operational flexibility as a result of conditions that could be imposed by the UK government, the group's controlling shareholder. Fitch expects to see some significant changes to the group's strategic direction and priorities following completion of a strategic review. The UK government has today announced fresh measures aimed at supporting the UK financial system and facilitating the availability of credit to UK borrowers. Fitch will comment separately on these particular initiatives but expects RBS Group to be an early user of the new schemes.
Following the announcement in October 2008 that the major UK banks would be recapitalised, underwritten by the UK government, the RBS Group is currently 58% owned by the UK government. The replacement of the government-subscribed preference shares with ordinary shares will increase the UK government's stake in RBS Group to close to 70%. This large government stake, together with ongoing official commitment to provide capital and funding support to the major UK banks, underpins Fitch's continued view of the very strong likelihood of support for the RBS Group, and supports the upgrade of RBS Group's Support rating and Support Floor, as well as a Stable Outlook on the group's IDRs.
The economic outlook for RBS Group's main operating markets (particularly the UK, US and Ireland) is negative over the short- to medium-term and there remains significant uncertainty over the depth and length of the current recession. Fitch expects to see steady pressure on the group's earnings and asset quality as these economies continue to weaken. In the UK, RBS Group has not been as aggressive as some competitors in the residential housing and consumer lending markets and this should offer some protection as these segments continue to weaken. The expected increase in loan impairment charges relating to the group's Regional Markets businesses is GBP0.4bn compared to its November interim management statement. However, its leading share of the UK SME market and significant commercial property and large corporate exposures, where some concentrations have arisen following the ABN AMRO acquisition, are likely to pose some problems. The outlook for commercial property in 2009 remains negative as economic developments continue to put pressure on asset values and rentals. Outside the UK, the group is likely to suffer from asset quality deterioration in the US and Ireland. In the US, Citizens has historically been a low-risk lender, but has an externally sourced portfolio of home equity loans that is showing rapid deterioration, and its core lending is unlikely to escape the problems being felt in the US housing market and by the broader US economy. In Ireland, Ulster Bank faces similar pressures to the UK; a deteriorating economic environment, an abrupt contraction in economic growth forecast, rising unemployment and a worsening outlook for commercial property. Fitch considers that this is likely to lead to weaker revenue generation, sharp rises in impaired loans and steep falls in operating profitability.
RBS Group's capitalisation currently appears adequate following the government's recapitalisation operations, but is expected to decline as problems relating to recessionary economies materialise. The replacement of government preference shares with common equity will add around 86bp to the group's core equity Tier 1 ratio, which is expected to be in the range of 6.9% to 7.4% at end-2008. The Tier 1 ratio is expected to be between 9.5% and 10%. The massive goodwill impairment will not impact regulatory capital, but confirms the huge destruction of shareholder value that came from the ABN AMRO deal. Fitch expects 2009 to be characterised by sharply declining asset quality and pressure on revenues, particularly in businesses more reliant on market activity, thereby impacting internal capital generation severely. The group's funding has stabilised following the implementation of UK government initiatives in October 2008. The RBS Group, as have other UK major banks, has become increasingly reliant on guarantee schemes for longer-term funding, and Fitch does not expect this to diminish in the near-term.
The downgrade of RBS Group's, RBS plc's and Natwest's Individual ratings to 'E' reflects Fitch's opinion that due to the scale of the problems, RBS Group and its main operating banks are clearly reliant on external support - and to a greater extent than most other banks. The future direction of the group's and operating subsidiaries' Individual ratings will depend upon the pace and severity of continued pressures in the operating environment, together with the group's success in integrating ABN AMRO, de-leveraging the group's balance sheet, and implementing a refocused, lower risk, strategy. An additional element of uncertainty is the potential for government pressure to be brought to bear on the group to increase lending volumes to specific economic segments within the UK and it remains to be seen how compatible the group's de-leveraging and de- risking strategy is with government objectives.
Fitch's downgrade of RBS Group's preference shares and upper tier 2 hybrid capital instruments reflects the agency's view that deferral risk has increased significantly for banks that are in receipt of public funds, as well as the group's weakened standalone coupon-servicing capacity, as reflected in its Individual rating. This risk is heightened by the recognition that there is significant capital and financial flexibility to be retained by deferring on such instruments as well as Fitch's opinion that the replacement of government preference shares with common equity will result in a significantly elevated risk that market investors in RBS Group hybrid capital could be expected to share this burden with the UK taxpayer. The upper tier 2 instruments have been rated one notch higher than preference shares at 'BB' to reflect their higher recovery prospects.
The following ratings actions have been taken today:
Royal Bank of Scotland Group plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: upgraded to '1' from '5'Support Rating Floor: revised to 'AA-' (AA minus) from 'No Floor'
Royal Bank of Scotland plc:Long-term IDR: affirmed at 'AA-('AA minus')' ; Outlook remains StableGuaranteed debt: affirmed at 'AAA' Senior unsecured debt: affirmed at 'AA-('AA minus')' Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort- term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+';Individual rating: downgraded to 'E' from 'B/C' Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
National Westminster Bank Plc:Long-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus) Subordinated debt: affirmed at 'A+' Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on Rating Watch NegativePreferred stock: downgraded to 'BB-' (BB minus) from 'A+'; on Rating Watch NegativeShort-term IDR: affirmed at 'F1+ 'Individual rating: downgraded to 'E' from 'B/C'; rating withdrawn Support rating: affirmed at '1'Support Rating Floor: affirmed at 'AA-' (AA minus)
Ulster Bank LtdLong-term IDR: affirmed at 'A+'; Outlook remains StableShort- term IDR: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Ulster Bank Finance plc:Commercial paper: affirmed at 'F1+'
Ulster Bank Ireland Limited:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+ 'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
First Active Plc:Long-term IDR: affirmed at 'A+'; Outlook remains StableSenior unsecured debt: affirmed at 'A+' Short-term IDR: affirmed at 'F1+'Commercial paper: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Greenwich Capital Holdings Inc.:US commercial paper: affirmed at 'F1+'
Citizens Financial Group, Inc.: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
RBS Citizens, NA (formerly Citizens Bank, NA): Long-term IDR: affirmed at 'A+ '; Outlook remains StableShort-term IDR: affirmed at 'F1'Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Senior unsecured debt: affirmed at 'A+'Subordinated debt: affirmed at 'A' Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Citizens Bank of Pennsylvania: Long-term IDR: affirmed at 'A+'; Outlook remains StableShort-term IDR: affirmed at 'F1' Long-term deposits: affirmed at 'AA-' (AA minus)Short-term deposits: affirmed at 'F1+'Individual rating: 'B/C'; on Rating Watch NegativeSupport rating: affirmed at '1'
Charter One Bank, NA: Senior unsecured debt: affirmed at 'A+' Subordinated debt: affirmed at 'A'
ABN AMRO Bank NVLong-term IDR: affirmed at 'AA-' (AA minus); Outlook remains StableSenior unsecured debt: affirmed at 'AA-' (AA minus)Subordinated debt: affirmed at 'A+'Upper Tier 2 instruments: downgraded to 'BB' from 'A+'; on RatingWatch NegativeShort-term IDR: affirmed at 'F1+'Commercial Paper and short- term debt: affirmed at 'F1+'Support rating: affirmed at '1'Support Rating Floor: affirmed at 'A-' (A minus)Mortgage covered bonds: remain unaffected by today's action
Contacts: Gordon Scott, +44 (0) 20 7417 4307; James Longsdon, + 44 (0)207 417 4309.
Media Relations: Julian Dennison, London, Tel: +44 020 7682 7480, Email: julian.dennison@fitchratings.com; Tyrene Frederick-Mack, New York, Tel: +1 212- 908-0540, Email: tyrene.frederick-mack@fitchratings.com; Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, http://www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
(END) Dow Jones Newswires
01-19-091302ET
Copyright (c) 2009 Dow Jones & Company, Inc.
Citi ratings downgraded by Fitch
Press Release Source: Fitch Ratings
Fitch Downgrades Citigroup's Individual and Preferred Ratings; Affirms 'A+' IDR
Friday February 6, 2009, 10:04 am EST
NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded the following ratings for Citigroup Inc. (Citi):
--Individual to 'C/D' from 'C'
--Preferred to 'BB' from 'BBB'.
These ratings are on Rating Watch Negative by Fitch. At the same time, Fitch has affirmed Citi's Long-term and Short-term Issuer Default Ratings (IDRs) of 'A+' and 'F1+', respectively, given Citi's systemic importance and the magnitude of support measures from the U.S. government. The Outlook for the Long-term IDR remains Stable. A list of Citigroup entities affected by rating changes is listed below.
Fitch's downgrade of Citi's Individual Rating reflects current and expected financial performance challenges. Citi recorded massive losses in fourth quarter-2008 (4Q'08) and faces the prospect of surging asset quality problems globally. Fitch recognizes Citi's efforts in building up its loan loss reserves and reducing problematic exposures across many different categories (including subprime ABS CDOs, Alt-A securities, leveraged finance, CMBS, monolines, and SIVs, among others). Nevertheless, global economic difficulties are causing the inflow of new problems ranging from U.S. and international consumer exposures to large corporate exposures. Consequently, provisioning needs are expected to remain quite elevated for 2009. The U.S. government's loss cap guarantee reduces the long tail risk on a U.S. portfolio of approximately $300 billion. That said, Citi's first loss exposure of $30 billion (above existing reserves) remains sizeable.
In addition to performance challenges, the following factors drove Fitch's decision to downgrade the Preferred Rating:
--a very high level of preferred in the capital structure; -- large servicing costs on preferred;
--the potential for the deferral to conserve capital.
Following the U.S. government capital injections, preferred and trust preferred instruments now total over $100 billion versus tangible common equity of $29 billion at year-end 2008. The cost associated with preferred and trust preferred is considerably higher in 2009 when compared to 2008. Quarterly costs associated with preferred and trust preferred instruments now total $1.8 billion including the new government preferred issues. When combined with a weak performance outlook, the magnitude of these ongoing costs raises the probability for deferral. (Please see commentary: Fitch Sees Elevated Risk of Bank Hybrid Capital Coupon Deferral in 2009 dated Feb. 4, 2009 available on Fitch's web site at www.fitchratings.com).The Individual Rating and Preferred Ratings could face incremental pressure depending on the scope of future losses by Citi. On the other hand, a return to profitability and positive internal capital generation are key factors towards stabilizing Citi's Individual and Preferred Ratings.
Citigroup Inc.
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Senior unsecured affirmed at 'A+';
--Subordinated affirmed at 'A';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative;
--Preferred to 'BB' from 'BBB'; remains on Rating Watch Negative;
--Long-term FDIC guaranteed debt affirmed at 'AAA';
--Short-term FDIC guaranteed debt affirmed at 'F1+'.
Citibank, N.A.
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Long term deposits affirmed at 'AA-';
--Short-term deposits affirmed at 'F1+';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative.
Citibank (South Dakota)
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Long-term deposits affirmed at 'AA-';
--Short-term deposits affirmed at 'F1+';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative.
Citibank Banamex USA
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Subordinated affirmed at 'A';
--Long-term deposits affirmed at 'AA-';
--Short-term deposits affirmed at 'F1+';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative.
Citigroup Capital III, IV, V, VI, VII, VIII, IX, X, XIV, XV, XVI, XVII, XVIII, XIX, XX, XXI, XXIX, XXX, XXXI, and XXXII
--Preferred downgraded to 'BB' from 'BBB'; remains on Rating Watch Negative.
Adam Capital Trust II, III, Adam Statutory Trust I-V
--Preferred downgraded to 'BB' from 'BBB'; remains on Rating Watch Negative.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contact:
Fitch Ratings
Joe Scott, +1-212-908-0624 (New York)
Eileen Fahey, CFA, +1-312-368-5468 (Chicago)
Media Relations
Tyrene Frederick-Mack, +1-212-908-0540 (New York)
tyrene.frederick-mack@fitchratings.com
Fitch Downgrades Citigroup's Individual and Preferred Ratings; Affirms 'A+' IDR
Friday February 6, 2009, 10:04 am EST
NEW YORK--(BUSINESS WIRE)--Fitch Ratings has downgraded the following ratings for Citigroup Inc. (Citi):
--Individual to 'C/D' from 'C'
--Preferred to 'BB' from 'BBB'.
These ratings are on Rating Watch Negative by Fitch. At the same time, Fitch has affirmed Citi's Long-term and Short-term Issuer Default Ratings (IDRs) of 'A+' and 'F1+', respectively, given Citi's systemic importance and the magnitude of support measures from the U.S. government. The Outlook for the Long-term IDR remains Stable. A list of Citigroup entities affected by rating changes is listed below.
Fitch's downgrade of Citi's Individual Rating reflects current and expected financial performance challenges. Citi recorded massive losses in fourth quarter-2008 (4Q'08) and faces the prospect of surging asset quality problems globally. Fitch recognizes Citi's efforts in building up its loan loss reserves and reducing problematic exposures across many different categories (including subprime ABS CDOs, Alt-A securities, leveraged finance, CMBS, monolines, and SIVs, among others). Nevertheless, global economic difficulties are causing the inflow of new problems ranging from U.S. and international consumer exposures to large corporate exposures. Consequently, provisioning needs are expected to remain quite elevated for 2009. The U.S. government's loss cap guarantee reduces the long tail risk on a U.S. portfolio of approximately $300 billion. That said, Citi's first loss exposure of $30 billion (above existing reserves) remains sizeable.
In addition to performance challenges, the following factors drove Fitch's decision to downgrade the Preferred Rating:
--a very high level of preferred in the capital structure; -- large servicing costs on preferred;
--the potential for the deferral to conserve capital.
Following the U.S. government capital injections, preferred and trust preferred instruments now total over $100 billion versus tangible common equity of $29 billion at year-end 2008. The cost associated with preferred and trust preferred is considerably higher in 2009 when compared to 2008. Quarterly costs associated with preferred and trust preferred instruments now total $1.8 billion including the new government preferred issues. When combined with a weak performance outlook, the magnitude of these ongoing costs raises the probability for deferral. (Please see commentary: Fitch Sees Elevated Risk of Bank Hybrid Capital Coupon Deferral in 2009 dated Feb. 4, 2009 available on Fitch's web site at www.fitchratings.com).The Individual Rating and Preferred Ratings could face incremental pressure depending on the scope of future losses by Citi. On the other hand, a return to profitability and positive internal capital generation are key factors towards stabilizing Citi's Individual and Preferred Ratings.
Citigroup Inc.
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Senior unsecured affirmed at 'A+';
--Subordinated affirmed at 'A';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative;
--Preferred to 'BB' from 'BBB'; remains on Rating Watch Negative;
--Long-term FDIC guaranteed debt affirmed at 'AAA';
--Short-term FDIC guaranteed debt affirmed at 'F1+'.
Citibank, N.A.
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Long term deposits affirmed at 'AA-';
--Short-term deposits affirmed at 'F1+';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative.
Citibank (South Dakota)
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Long-term deposits affirmed at 'AA-';
--Short-term deposits affirmed at 'F1+';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative.
Citibank Banamex USA
--Long-term IDR affirmed at 'A+'; Outlook Stable;
--Short-term IDR affirmed at 'F1+';
--Subordinated affirmed at 'A';
--Long-term deposits affirmed at 'AA-';
--Short-term deposits affirmed at 'F1+';
--Support affirmed at '1';
--Support Floor affirmed at 'A+';
--Individual downgraded to 'C/D' from 'C'; on Rating Watch Negative.
Citigroup Capital III, IV, V, VI, VII, VIII, IX, X, XIV, XV, XVI, XVII, XVIII, XIX, XX, XXI, XXIX, XXX, XXXI, and XXXII
--Preferred downgraded to 'BB' from 'BBB'; remains on Rating Watch Negative.
Adam Capital Trust II, III, Adam Statutory Trust I-V
--Preferred downgraded to 'BB' from 'BBB'; remains on Rating Watch Negative.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contact:
Fitch Ratings
Joe Scott, +1-212-908-0624 (New York)
Eileen Fahey, CFA, +1-312-368-5468 (Chicago)
Media Relations
Tyrene Frederick-Mack, +1-212-908-0540 (New York)
tyrene.frederick-mack@fitchratings.com
Warning on Hybrid PreferredStocks - Financials (Fitch)
PRESS RELEASE: Fitch On Bank Hybrid Capital In 2009
Fitch Ratings-London-04 February 2009: Fitch Ratings says that the risk of deferred interest payments on bank hybrid capital instruments (which share characteristics of debt and equity) has increased materially for the banks most under pressure in the current financial crisis, due to significantly lower operating earnings, or losses, combined with high levels of government support, according to a comment published today.
"Central to this matter is the question of the extent to which the government support that has flowed - and will, in Fitch's opinion, continue to flow - in the world's banking systems can be relied upon to extend to existing holders of deeply subordinated bank capital instruments," says Gerry Rawcliffe, Group Credit Officer in Fitch's Financial Institutions group.
Fitch does not believe investors should view such support as continuing endlessly. Absent evidence of a normalising of operating conditions, regulators may well exhibit some bias toward protecting taxpayer funds. This could include looking to put hybrids into deferral.
"In certain cases the investment risks faced by investors in these instruments is sufficiently material for Fitch to view them as not being of investment grade," says Rawcliffe
Fitch's hybrid capital rating criteria (July 2005) do not assume that government support would be forthcoming for these instruments, and that the key driver of hybrid capital ratings is the stand-alone strength of an institution, as expressed in its Individual Rating. Fitch believes that the current exceptional circumstances merit a conservative application of the existing criteria, especially given the uncertainty and opaqueness surrounding the regulatory considerations in respect of hybrid capital.
In response to the heightened risk of hybrid coupon deferral and, in extreme cases, outright principal loss, Fitch has already taken rating actions that have widened the number of notches between the Issuer Default Rating (IDR) and the rating assigned to the hybrid and preferred instruments for select issuers. Given that the deferral decision process potentially involves both regulatory and political considerations, and the possibility that the situation regarding bank hybrid capital could change very quickly, Fitch expects to maintain downgraded hybrid capital instruments on Rating Watch Negative. For instruments with low investment grade ratings, the Rating Watch Negative indicates that a move into sub-investment grade is a real possibility.
Fitch regards a deferral on a hybrid instrument as non-performance from a ratings perspective. Deferral will lead to the assignment of instrument ratings consistent with non-performing obligations, typically in the low 'B' to 'CCC'- 'C' range. Loss expectations will be derived from a combination of the expected duration of the coupon deferral and the cumulative versus non-cumulative nature of the instrument.
The full comment, "Fitch Sees Elevated Risk of Bank Hybrid Captial Coupon Deferral in 2009", is available on the agency's subscription website, www.fitchresearch.com.
Fitch Ratings-London-04 February 2009: Fitch Ratings says that the risk of deferred interest payments on bank hybrid capital instruments (which share characteristics of debt and equity) has increased materially for the banks most under pressure in the current financial crisis, due to significantly lower operating earnings, or losses, combined with high levels of government support, according to a comment published today.
"Central to this matter is the question of the extent to which the government support that has flowed - and will, in Fitch's opinion, continue to flow - in the world's banking systems can be relied upon to extend to existing holders of deeply subordinated bank capital instruments," says Gerry Rawcliffe, Group Credit Officer in Fitch's Financial Institutions group.
Fitch does not believe investors should view such support as continuing endlessly. Absent evidence of a normalising of operating conditions, regulators may well exhibit some bias toward protecting taxpayer funds. This could include looking to put hybrids into deferral.
"In certain cases the investment risks faced by investors in these instruments is sufficiently material for Fitch to view them as not being of investment grade," says Rawcliffe
Fitch's hybrid capital rating criteria (July 2005) do not assume that government support would be forthcoming for these instruments, and that the key driver of hybrid capital ratings is the stand-alone strength of an institution, as expressed in its Individual Rating. Fitch believes that the current exceptional circumstances merit a conservative application of the existing criteria, especially given the uncertainty and opaqueness surrounding the regulatory considerations in respect of hybrid capital.
In response to the heightened risk of hybrid coupon deferral and, in extreme cases, outright principal loss, Fitch has already taken rating actions that have widened the number of notches between the Issuer Default Rating (IDR) and the rating assigned to the hybrid and preferred instruments for select issuers. Given that the deferral decision process potentially involves both regulatory and political considerations, and the possibility that the situation regarding bank hybrid capital could change very quickly, Fitch expects to maintain downgraded hybrid capital instruments on Rating Watch Negative. For instruments with low investment grade ratings, the Rating Watch Negative indicates that a move into sub-investment grade is a real possibility.
Fitch regards a deferral on a hybrid instrument as non-performance from a ratings perspective. Deferral will lead to the assignment of instrument ratings consistent with non-performing obligations, typically in the low 'B' to 'CCC'- 'C' range. Loss expectations will be derived from a combination of the expected duration of the coupon deferral and the cumulative versus non-cumulative nature of the instrument.
The full comment, "Fitch Sees Elevated Risk of Bank Hybrid Captial Coupon Deferral in 2009", is available on the agency's subscription website, www.fitchresearch.com.
WSJ - optimize your Search Engine Optimization Results
THE DECODER FEBRUARY 5, 2009 It's a New Me (As Seen on Google)
By JULIA ANGWIN
Article
For years, I winced at what popped up when I Googled my name.
The top result of a search on "Julia Angwin" was an article I wrote for The Wall Street Journal in 2005 after I. Lewis "Scooter" Libby was indicted for leaking the name of CIA operative Valerie Plame.
How Are Your Google Results?
Have you tried to change the search results for your name? What worked? What didn't?
I hated seeing the story at the top of the list for a number of reasons: It was not a topic I normally wrote about; it had an underwhelming headline, "Novak's Role is Still Largely Unknown"; and -- most horrifyingly -- the story contained an error and had a correction appended to it.
Mysteriously, this article had become my hallmark online, showing up in my top-five search results for years. As a longtime media and technology reporter who is coming out with a book, I didn't feel the article represented my career. So a few months ago, I began trying to figure out how I could knock that story -- and a few others, while I was at it -- out of my search results. It was the beginning of a long and arduous introduction into the murky art of search-engine optimization, or SEO.
Lisa HaneyOne of the paradoxes of the digital age is that the boundless freedoms of the Internet also constrain our identity. Before the ubiquity of search engines you could go on a date or a job interview and construct a narrative about your life that fit the situation. No one in your book group had to know that you were a punk-rocker in high school. But it's much harder to package yourself in the Google era. Online, your digital identity often comes down to the top 10 links on your SERP, or search-engine results page.
Of course, Google is not the Internet's only search engine. But since it is the most dominant one, I only focused on improving my Google SERP.
My first thought was to try to remove the unwanted article from my SERP. But search-engine expert and consultant Danny Sullivan advised me that it is extremely difficult to remove items from Google search results.
If you can prove to Google that a Web site has stolen your Social Security, credit card or bank-account numbers and posted them online, then Google will consider removing the offending data, he said. Even in those cases, Google urges people to contact the Web site directly to seek removal. "They don't really intervene unless there is some good legal reason to do that," Mr. Sullivan told me.
Still, Google does encourage people to boost their results by creating content about themselves. "People should take control of their own presence," says Adam Lasnik, search expert at Google. The best way to do that, he advises, is to create original compelling content about yourself that is easily accessed by Google and earns links from authoritative and relevant Web sites.
For details, I turned to WSJ.com's search-engine-optimization consultant Alex Bennert, who advised me to bury the annoying article underneath more favorable material, such as my social-networking profiles on LinkedIn, Facebook and MySpace, as well as blogging site Twitter.
Next, I contacted Rhea Drysdale, a search-engine-optimization expert at OutspokenMedia.com. Ms. Drysdale explained that I needed to focus on linking my online presences to each other -- that is, my Twitter page would link to my LinkedIn page, which would link to my biography on my book-publisher's site. These interlinkages are key to understanding Google's page-ranking system. Google rates Web sites, in part, by how many links they have from other credible Web sites.
Ms. Drysdale explained that this interlinkage system was the reason that my Novak article had been appearing so high in my SERP. Using Yahoo's Site Explorer, a tool that identifies sites that are linking to a Web address, she found that the Novak article had 25 links from sites that included the Washington Post, Instapundit and 13 different places in the archives of a conservative blog.
By interlinking my sites, my efforts soon began to pay off. Two weeks into the project, the Novak article disappeared from the first page of my results. My LinkedIn profile jumped to the No. 1 spot.
“One lesson: You can work to boost your results, and then lose control in an instant.”
Soon, my results got another boost as I launched a new blog and a column on WSJ.com. Within a month of the launch of both, traffic and links to these sites pushed two older articles I had written down or off my top results altogether. Of course, it's easier for me to move my results because I'm a journalist. Every time I publish a new article on WSJ.com, it immediately becomes part of my SERP equation.
For most non-journalists who do not maintain their own blog or Web site, it's a bit harder to create such a steady stream of new content on topics they want to associate with themselves. But it's not impossible. Ms. Drysdale recommends submitting articles to Web sites such as Squidoo.com, eHow.com or Google Knol on topics on that show off your expertise. "It's a huge branding opportunity," she says.
Still, visibility has a downside, which I unwittingly learned. The day that Apple Inc.'s Chief Executive Steve Jobs announced his "hormonal imbalance," I went on camera with a colleague at WSJ.com to talk about the possible impact on Apple's business.
Within hours, Apple enthusiasts at MacDailyNews.com started trash-talking me and my colleague for allegedly casting aspersions on their leader. As a result, these posts, some of them quite vulgar and nasty, shot up near the top of my search-results page. Luckily, they sank back down to the fourth page of my results within two days.
The whole unpleasant experience was an object lesson in another aspect of SEO: It's never over. You can work to boost your results, and then lose control in an instant. Constant vigilance is required. That's why big companies hire experts to monitor their search results on a full-time basis.
Still, I hoped to strike the knockout blow for my SERP with the creation of a new personal Web site. With its launch approaching, I sent it to Ms. Drysdale, who made some specific technical recommendations. The front page was too graphical, she said. It needed to have more text that Google could categorize when its systems examined the site, a process called crawling. So the Web designer I was working with changed some of the text to make it more crawlable, sacrificing a beautiful typeface on the altar of SEO.
She also weighed in on the importance of the text and coding -- some of it invisible -- called metadata that's embedded in a Web site that helps search engines categorize the content. When building a page, Web programmers include a "title tag," which is displayed at the top of the Web browser and describes the page to a search engine.
For example, The Wall Street Journal's home page has a title tag that reads: "Business News, Finance News, World, Political & Sports News from The Wall Street Journal - WSJ.com." All those words help search engines categorize the content and are the exact words that appear in a Google search result.
Once my title tags and metadata were optimized, the site went live.
At Ms. Drysdale's recommendation, I used Twitter to "tweet" about the site, sending out a short text message. I also linked to my site from my Facebook and LinkedIn pages, as well as my "WSJ Community" profile.
For several days, I was greeted with a deafening silence. My SERP changed not at all as the site worked its way through the circuits at Google. Finally, 10 days later, my site appeared on the ninth page of my results and began slowly bubbling its way up to the top of my SERP.
And thus, I learned the final lesson of SEO: Patience is required.
Write to Julia Angwin at julia.angwin@wsj.com
Printed in The Wall Street Journal, page D1
Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit
www.djreprints.com
By JULIA ANGWIN
Article
For years, I winced at what popped up when I Googled my name.
The top result of a search on "Julia Angwin" was an article I wrote for The Wall Street Journal in 2005 after I. Lewis "Scooter" Libby was indicted for leaking the name of CIA operative Valerie Plame.
How Are Your Google Results?
Have you tried to change the search results for your name? What worked? What didn't?
I hated seeing the story at the top of the list for a number of reasons: It was not a topic I normally wrote about; it had an underwhelming headline, "Novak's Role is Still Largely Unknown"; and -- most horrifyingly -- the story contained an error and had a correction appended to it.
Mysteriously, this article had become my hallmark online, showing up in my top-five search results for years. As a longtime media and technology reporter who is coming out with a book, I didn't feel the article represented my career. So a few months ago, I began trying to figure out how I could knock that story -- and a few others, while I was at it -- out of my search results. It was the beginning of a long and arduous introduction into the murky art of search-engine optimization, or SEO.
Lisa HaneyOne of the paradoxes of the digital age is that the boundless freedoms of the Internet also constrain our identity. Before the ubiquity of search engines you could go on a date or a job interview and construct a narrative about your life that fit the situation. No one in your book group had to know that you were a punk-rocker in high school. But it's much harder to package yourself in the Google era. Online, your digital identity often comes down to the top 10 links on your SERP, or search-engine results page.
Of course, Google is not the Internet's only search engine. But since it is the most dominant one, I only focused on improving my Google SERP.
My first thought was to try to remove the unwanted article from my SERP. But search-engine expert and consultant Danny Sullivan advised me that it is extremely difficult to remove items from Google search results.
If you can prove to Google that a Web site has stolen your Social Security, credit card or bank-account numbers and posted them online, then Google will consider removing the offending data, he said. Even in those cases, Google urges people to contact the Web site directly to seek removal. "They don't really intervene unless there is some good legal reason to do that," Mr. Sullivan told me.
Still, Google does encourage people to boost their results by creating content about themselves. "People should take control of their own presence," says Adam Lasnik, search expert at Google. The best way to do that, he advises, is to create original compelling content about yourself that is easily accessed by Google and earns links from authoritative and relevant Web sites.
For details, I turned to WSJ.com's search-engine-optimization consultant Alex Bennert, who advised me to bury the annoying article underneath more favorable material, such as my social-networking profiles on LinkedIn, Facebook and MySpace, as well as blogging site Twitter.
Next, I contacted Rhea Drysdale, a search-engine-optimization expert at OutspokenMedia.com. Ms. Drysdale explained that I needed to focus on linking my online presences to each other -- that is, my Twitter page would link to my LinkedIn page, which would link to my biography on my book-publisher's site. These interlinkages are key to understanding Google's page-ranking system. Google rates Web sites, in part, by how many links they have from other credible Web sites.
Ms. Drysdale explained that this interlinkage system was the reason that my Novak article had been appearing so high in my SERP. Using Yahoo's Site Explorer, a tool that identifies sites that are linking to a Web address, she found that the Novak article had 25 links from sites that included the Washington Post, Instapundit and 13 different places in the archives of a conservative blog.
By interlinking my sites, my efforts soon began to pay off. Two weeks into the project, the Novak article disappeared from the first page of my results. My LinkedIn profile jumped to the No. 1 spot.
“One lesson: You can work to boost your results, and then lose control in an instant.”
Soon, my results got another boost as I launched a new blog and a column on WSJ.com. Within a month of the launch of both, traffic and links to these sites pushed two older articles I had written down or off my top results altogether. Of course, it's easier for me to move my results because I'm a journalist. Every time I publish a new article on WSJ.com, it immediately becomes part of my SERP equation.
For most non-journalists who do not maintain their own blog or Web site, it's a bit harder to create such a steady stream of new content on topics they want to associate with themselves. But it's not impossible. Ms. Drysdale recommends submitting articles to Web sites such as Squidoo.com, eHow.com or Google Knol on topics on that show off your expertise. "It's a huge branding opportunity," she says.
Still, visibility has a downside, which I unwittingly learned. The day that Apple Inc.'s Chief Executive Steve Jobs announced his "hormonal imbalance," I went on camera with a colleague at WSJ.com to talk about the possible impact on Apple's business.
Within hours, Apple enthusiasts at MacDailyNews.com started trash-talking me and my colleague for allegedly casting aspersions on their leader. As a result, these posts, some of them quite vulgar and nasty, shot up near the top of my search-results page. Luckily, they sank back down to the fourth page of my results within two days.
The whole unpleasant experience was an object lesson in another aspect of SEO: It's never over. You can work to boost your results, and then lose control in an instant. Constant vigilance is required. That's why big companies hire experts to monitor their search results on a full-time basis.
Still, I hoped to strike the knockout blow for my SERP with the creation of a new personal Web site. With its launch approaching, I sent it to Ms. Drysdale, who made some specific technical recommendations. The front page was too graphical, she said. It needed to have more text that Google could categorize when its systems examined the site, a process called crawling. So the Web designer I was working with changed some of the text to make it more crawlable, sacrificing a beautiful typeface on the altar of SEO.
She also weighed in on the importance of the text and coding -- some of it invisible -- called metadata that's embedded in a Web site that helps search engines categorize the content. When building a page, Web programmers include a "title tag," which is displayed at the top of the Web browser and describes the page to a search engine.
For example, The Wall Street Journal's home page has a title tag that reads: "Business News, Finance News, World, Political & Sports News from The Wall Street Journal - WSJ.com." All those words help search engines categorize the content and are the exact words that appear in a Google search result.
Once my title tags and metadata were optimized, the site went live.
At Ms. Drysdale's recommendation, I used Twitter to "tweet" about the site, sending out a short text message. I also linked to my site from my Facebook and LinkedIn pages, as well as my "WSJ Community" profile.
For several days, I was greeted with a deafening silence. My SERP changed not at all as the site worked its way through the circuits at Google. Finally, 10 days later, my site appeared on the ninth page of my results and began slowly bubbling its way up to the top of my SERP.
And thus, I learned the final lesson of SEO: Patience is required.
Write to Julia Angwin at julia.angwin@wsj.com
Printed in The Wall Street Journal, page D1
Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit
www.djreprints.com
The Best Financial Blogs (from 24/7 Wall Street )
January 21, 2009
The 24/7 Wall St. Twenty-Five Best Financial Blogs
It has been more than a year since we published our feature, “The Twenty-Five Best Financial Blogs.” A great deal has changed. Some of the blogs on the list are gone or no longer have regular posts. Others have grown and become better.
This is a list of independent blogs. However, several major media outlets have excellent blog sections including David Gaffen at WSJ.com, Fortune.com’s Apple 2.0 blog, BusinessWeek.com’s Fine On Media, and BloggingStocks at AOL (24/7 contributes content to this site). Obviously, these blogs have a level of financial support that independent blogs do not enjoy. Their writers are paid salaries. They have greater exposure due to their relationship with larger websites. They are excellent, but really should not be compared with websites operated by one person or a small group of individuals. Nevertheless, they should be recognized for their own commentary as well as the exposure that they give to independent blogs.
Financial information on blog sites is not readily available. Most financial blogs are much too small to bring in enough direct revenue to support their writers. Some have newsletters, but it is impossible to know what they yield. A number run Google AdSense links on their sites to generate ad revenue, but, based on data gathered from a few financial blogs, if a site is not in the top of its category as measured by audience tracking sites like Quantcast, Alexa and Compete, it is unlikely to have enough revenue to support even one or two people.
Financial blogs end up being either labors of love or ways to promote small money management or paid newsletter businesses. It would seem to be a tough way to make a living.
Over the last month, 24/7 Wall St. has looked at more than one hundred financial blogs The list came from those blogs mentioned at major media sites and the largest aggregators of financial blogs, SeekingAlpha and BloggingStocks. We also reviewed the lists of “blogrolls” – favorite blog lists – at long-established financial blogs like The Kirk Report and financial commentary sites like Minyanville
After we narrowed the number of financial blogs down to about 50, we tracked posts for several weeks before picking the final twenty-five.
Original content was our most important measurement: specifically, content that was well-written, well-researched and crisp. Blogs that were mostly aggregations of content from mainstream media did not make the cut. This meant that the majority of the copy had to be directly written by the blog's author(s).
Blogs that used profanity were also excluded from the list. It is well recognized that traders are a notoriously bawdy bunch. And, unfortunately, a number of these blogs are incredibly insightful. However, our aim was to create a list that avoided offending any of our reader’s delicate sensibilities.
Anonymous blogs also did not make the cut. It is too difficult to understand the agenda of a blog where readers cannot figure out the writer’s identity and potential motivations.
The final major metric was frequency of posting. If a blog had very good content, but the author only posts once or twice a month, it becomes too hard to follow without referring back to the same story and waiting for weeks for it to change.
24/7 Wall St. also looked at how well read the blogs were based on the number of other blogs that linked to each of the websites on our list. These figures were provided by Technorati, the internet’s leading blog search engine. (Because Technorati indexes more than 1.5 million new blog posts in real time, these numbers are subject to change.) This is the one audience or traffic metric that is universally available for all the websites on the list.
Here are Top Twenty-Five financial blogs, in no special order:
1. Mish’s Global Economic Trend Analysis (7,903 links). Although Mish (aka Mike Shedlock) is not an economist by training, he adroitly gets into the thick of economic data. Mish looks at comments made by the major media, so–called experts and government officials and serves up trenchant analysis based on his impression of their relevance and validity. The author is not afraid to attack conventional wisdom.
2. Footnoted.org (598 links). The blog’s author, Michelle Leder, digs through SEC filings and comes up with some of the best insights about the “hidden” comments found in 8Ks, 10Qs, and other government filings that rarely get as careful a review. This is one of the oldest financial blogs, founded in 2003.
3. Bill Cara’s Cara Community (389 links) analyzes the capital markets, stock movements, and the economy with an eye to technical guides including volatility, cash flows, trading volume, and price performance and is prolific almost beyond comparison.
4. Infectious Greed (3,822 links). Blogger, Paul Kedrosky, is considered one the preeminent financial market pundits. His site reflects the perspective of a former technology analyst, institutional money manager, and venture capitalist. Infectious greed provides a running commentary on global markets, economic trends, and emerging business trends.
5. Bespoke Invest, also known as “Think Big” (6,112 links), is the blog for a money management and research firm. The site provides a combination of technical analysis and commentary on macroeconomic trends, major sectors of the stock market, and currencies.
6. Angry Bear (2,447 links) is the product of a half dozen Ph.D economists, an historian, and financial professionals. The writers provide individual perspectives on broad sectors of the economy based on their unique training. They look at topics as varied as worldwide trade and industrial production as well as US government programs and regulations like Social Security.
7. The Big Picture by Barry Ritholtz (11,223 links) has recently moved from his long-standing site on typepad, where he's been since 2002, to http://www.ritholtz.com. Ritholtz is one of the most well-respected market and economic pundits and bloggers who manages money as his day job. Multiple posts a day on subjects as diverse as criticisms of the business press, digital media, and key economic indicators. Sophisticated analysis made clear by an unmistakably irreverent voice and excellent use of charts, tables, and graphs.
8. Naked Shorts (833 links) covers ETFs, hedge funds, monetary policy, and current events. Bangs on hedgies and the accounting profession and its practices. Not fond of the practices of many US government agencies.
9. A VC (2,777 links). Long-time venture capitalist Fred Wilson passes along his opinions on new technology and how it converges with emerging parts of the economy. Wilson talks in detail about where he is investing his venture capital money and why. His Union Square Ventures has taken positions in new ventures including Del.icio.us, Feedburner, and Twitter.
10. SeekingAlpha (63,563 links), the grandfather of financial blog aggregation, also has its own editors and columnists. This is by far the largest collection of financial blog posts in the world. Readers who want to find articles from hundreds of sites get a one-stop-shop at SeekingAlpha. If it were not for this web site, a large number of blogs would have almost no readers.
11. Clusterstock (1,613) links) follows and comments on business, the stock market, and economic news throughout the day. It has a staff of several outstanding writers lead by Henry Blodget. Articles by John Carney are particularly good. It is now combined with another strong site called Silicon Alley Insider.
12. 1440 Wall Street (1,216 link). Although the site is “intended for the institutional equities crowd,” we won’t hold it against them - it’s still very good. Covers money markets, sell side, buy side, private equity, Wall St. research, and media. Strong analysis. Strong on multimedia.
13. The Kirk Report (1,571 links). This is one of the oldest financial blogs and it has been consistently good. It has a number of articles which are simply links to other sites. Strong on stock analysis, market recommendations, and volume investing. Too bad some of the content requires being a “member.”
14. Calculated Risk (11,057 links) is among the most thoughtful and thorough financial commentary on the internet. Period. Tears apart poor economic assumptions. Gets to the heart of the elements that move the economy and markets. Big focus on housing and economic analysis
15. Abnormal Returns (1,009 links). Disregarding our own rules for what blogs should be on this list, this site is the only one that simply provides lists of links to other financial sites. However, there’s a reason we’re making an exception as these are carefully selected and come with good short intros. Links are regularly organized by subject.
16. TraderFeed (2,437 links). The author, Brett Steenbarger, is one of the most intelligent voices in the financial blog business. Strong on technical analysis, broad market commentary, and the psychology behind trading behavior.
17. Alpha Trends (1,046 links). Extremely strong technical analysis. Good video commentary which it claims is the highest subscription membership for financial videos on YouTube. Covers stocks, ETF, and index movement.
18. Econbrowser (6,597 links). Run by two professors, both with economic backgrounds. What readers would expect from academics looking at the markets. Indepth and often complex analysis of a broad range of topics from infrastructure to policy making to consumer spendings. More than any other site on this list, Econ Browser is not for sisses.
19. Peridot Capitalist (192 links). Written by a money manager, one of the oldest and better regarded financial blogs. Good corporate earnings analysis and looks at undervalued stocks.
20. Information Arbitrage (957 links) The author has been in the M&A and derivatives businesses for some time. Strong and rich commentary on current financial events, investment risks and rewards, and the current credit and economic crisis.
21. Maoxian (290 links). Strong pieces on day trading, technical trading, balance sheets, and ETFs. Strange graphics. Writer tries to be anonymous, but it hasn’t worked.
22. 10Q Detective (277 links). Writer has been an equity analyst. Good at digging through government filings to find information for investors which is both helpful and sometimes amusing. Good place to read how public companies “game” the process of SEC reporting.
23. Ticker Sense (538 links). This site may be the most well known for its weekly poll of financial blogger sentiments about the market. Written by money management firm Birinyi Associates. Has excellent analysis of global economy and major sectors of the stock market. Use of tables and graphs is among the best.
24. Upside Trader (356 links) Good technical analysis which follows the market carefully. Strong charting on individual companies. Great place for day traders.
25. Carl Futia (133 links). One of the best financial forecasting blogs. Employs various technical analysis including some he has developed. Notable for his thoughtful and approachable writing. Posts very regularly.
Douglas A. McIntyre and Ashley C. Allen
The 24/7 Wall St. Twenty-Five Best Financial Blogs
It has been more than a year since we published our feature, “The Twenty-Five Best Financial Blogs.” A great deal has changed. Some of the blogs on the list are gone or no longer have regular posts. Others have grown and become better.
This is a list of independent blogs. However, several major media outlets have excellent blog sections including David Gaffen at WSJ.com, Fortune.com’s Apple 2.0 blog, BusinessWeek.com’s Fine On Media, and BloggingStocks at AOL (24/7 contributes content to this site). Obviously, these blogs have a level of financial support that independent blogs do not enjoy. Their writers are paid salaries. They have greater exposure due to their relationship with larger websites. They are excellent, but really should not be compared with websites operated by one person or a small group of individuals. Nevertheless, they should be recognized for their own commentary as well as the exposure that they give to independent blogs.
Financial information on blog sites is not readily available. Most financial blogs are much too small to bring in enough direct revenue to support their writers. Some have newsletters, but it is impossible to know what they yield. A number run Google AdSense links on their sites to generate ad revenue, but, based on data gathered from a few financial blogs, if a site is not in the top of its category as measured by audience tracking sites like Quantcast, Alexa and Compete, it is unlikely to have enough revenue to support even one or two people.
Financial blogs end up being either labors of love or ways to promote small money management or paid newsletter businesses. It would seem to be a tough way to make a living.
Over the last month, 24/7 Wall St. has looked at more than one hundred financial blogs The list came from those blogs mentioned at major media sites and the largest aggregators of financial blogs, SeekingAlpha and BloggingStocks. We also reviewed the lists of “blogrolls” – favorite blog lists – at long-established financial blogs like The Kirk Report and financial commentary sites like Minyanville
After we narrowed the number of financial blogs down to about 50, we tracked posts for several weeks before picking the final twenty-five.
Original content was our most important measurement: specifically, content that was well-written, well-researched and crisp. Blogs that were mostly aggregations of content from mainstream media did not make the cut. This meant that the majority of the copy had to be directly written by the blog's author(s).
Blogs that used profanity were also excluded from the list. It is well recognized that traders are a notoriously bawdy bunch. And, unfortunately, a number of these blogs are incredibly insightful. However, our aim was to create a list that avoided offending any of our reader’s delicate sensibilities.
Anonymous blogs also did not make the cut. It is too difficult to understand the agenda of a blog where readers cannot figure out the writer’s identity and potential motivations.
The final major metric was frequency of posting. If a blog had very good content, but the author only posts once or twice a month, it becomes too hard to follow without referring back to the same story and waiting for weeks for it to change.
24/7 Wall St. also looked at how well read the blogs were based on the number of other blogs that linked to each of the websites on our list. These figures were provided by Technorati, the internet’s leading blog search engine. (Because Technorati indexes more than 1.5 million new blog posts in real time, these numbers are subject to change.) This is the one audience or traffic metric that is universally available for all the websites on the list.
Here are Top Twenty-Five financial blogs, in no special order:
1. Mish’s Global Economic Trend Analysis (7,903 links). Although Mish (aka Mike Shedlock) is not an economist by training, he adroitly gets into the thick of economic data. Mish looks at comments made by the major media, so–called experts and government officials and serves up trenchant analysis based on his impression of their relevance and validity. The author is not afraid to attack conventional wisdom.
2. Footnoted.org (598 links). The blog’s author, Michelle Leder, digs through SEC filings and comes up with some of the best insights about the “hidden” comments found in 8Ks, 10Qs, and other government filings that rarely get as careful a review. This is one of the oldest financial blogs, founded in 2003.
3. Bill Cara’s Cara Community (389 links) analyzes the capital markets, stock movements, and the economy with an eye to technical guides including volatility, cash flows, trading volume, and price performance and is prolific almost beyond comparison.
4. Infectious Greed (3,822 links). Blogger, Paul Kedrosky, is considered one the preeminent financial market pundits. His site reflects the perspective of a former technology analyst, institutional money manager, and venture capitalist. Infectious greed provides a running commentary on global markets, economic trends, and emerging business trends.
5. Bespoke Invest, also known as “Think Big” (6,112 links), is the blog for a money management and research firm. The site provides a combination of technical analysis and commentary on macroeconomic trends, major sectors of the stock market, and currencies.
6. Angry Bear (2,447 links) is the product of a half dozen Ph.D economists, an historian, and financial professionals. The writers provide individual perspectives on broad sectors of the economy based on their unique training. They look at topics as varied as worldwide trade and industrial production as well as US government programs and regulations like Social Security.
7. The Big Picture by Barry Ritholtz (11,223 links) has recently moved from his long-standing site on typepad, where he's been since 2002, to http://www.ritholtz.com. Ritholtz is one of the most well-respected market and economic pundits and bloggers who manages money as his day job. Multiple posts a day on subjects as diverse as criticisms of the business press, digital media, and key economic indicators. Sophisticated analysis made clear by an unmistakably irreverent voice and excellent use of charts, tables, and graphs.
8. Naked Shorts (833 links) covers ETFs, hedge funds, monetary policy, and current events. Bangs on hedgies and the accounting profession and its practices. Not fond of the practices of many US government agencies.
9. A VC (2,777 links). Long-time venture capitalist Fred Wilson passes along his opinions on new technology and how it converges with emerging parts of the economy. Wilson talks in detail about where he is investing his venture capital money and why. His Union Square Ventures has taken positions in new ventures including Del.icio.us, Feedburner, and Twitter.
10. SeekingAlpha (63,563 links), the grandfather of financial blog aggregation, also has its own editors and columnists. This is by far the largest collection of financial blog posts in the world. Readers who want to find articles from hundreds of sites get a one-stop-shop at SeekingAlpha. If it were not for this web site, a large number of blogs would have almost no readers.
11. Clusterstock (1,613) links) follows and comments on business, the stock market, and economic news throughout the day. It has a staff of several outstanding writers lead by Henry Blodget. Articles by John Carney are particularly good. It is now combined with another strong site called Silicon Alley Insider.
12. 1440 Wall Street (1,216 link). Although the site is “intended for the institutional equities crowd,” we won’t hold it against them - it’s still very good. Covers money markets, sell side, buy side, private equity, Wall St. research, and media. Strong analysis. Strong on multimedia.
13. The Kirk Report (1,571 links). This is one of the oldest financial blogs and it has been consistently good. It has a number of articles which are simply links to other sites. Strong on stock analysis, market recommendations, and volume investing. Too bad some of the content requires being a “member.”
14. Calculated Risk (11,057 links) is among the most thoughtful and thorough financial commentary on the internet. Period. Tears apart poor economic assumptions. Gets to the heart of the elements that move the economy and markets. Big focus on housing and economic analysis
15. Abnormal Returns (1,009 links). Disregarding our own rules for what blogs should be on this list, this site is the only one that simply provides lists of links to other financial sites. However, there’s a reason we’re making an exception as these are carefully selected and come with good short intros. Links are regularly organized by subject.
16. TraderFeed (2,437 links). The author, Brett Steenbarger, is one of the most intelligent voices in the financial blog business. Strong on technical analysis, broad market commentary, and the psychology behind trading behavior.
17. Alpha Trends (1,046 links). Extremely strong technical analysis. Good video commentary which it claims is the highest subscription membership for financial videos on YouTube. Covers stocks, ETF, and index movement.
18. Econbrowser (6,597 links). Run by two professors, both with economic backgrounds. What readers would expect from academics looking at the markets. Indepth and often complex analysis of a broad range of topics from infrastructure to policy making to consumer spendings. More than any other site on this list, Econ Browser is not for sisses.
19. Peridot Capitalist (192 links). Written by a money manager, one of the oldest and better regarded financial blogs. Good corporate earnings analysis and looks at undervalued stocks.
20. Information Arbitrage (957 links) The author has been in the M&A and derivatives businesses for some time. Strong and rich commentary on current financial events, investment risks and rewards, and the current credit and economic crisis.
21. Maoxian (290 links). Strong pieces on day trading, technical trading, balance sheets, and ETFs. Strange graphics. Writer tries to be anonymous, but it hasn’t worked.
22. 10Q Detective (277 links). Writer has been an equity analyst. Good at digging through government filings to find information for investors which is both helpful and sometimes amusing. Good place to read how public companies “game” the process of SEC reporting.
23. Ticker Sense (538 links). This site may be the most well known for its weekly poll of financial blogger sentiments about the market. Written by money management firm Birinyi Associates. Has excellent analysis of global economy and major sectors of the stock market. Use of tables and graphs is among the best.
24. Upside Trader (356 links) Good technical analysis which follows the market carefully. Strong charting on individual companies. Great place for day traders.
25. Carl Futia (133 links). One of the best financial forecasting blogs. Employs various technical analysis including some he has developed. Notable for his thoughtful and approachable writing. Posts very regularly.
Douglas A. McIntyre and Ashley C. Allen
GM and Chrysler Plan Due on Feb 17 (Assoc Press)
Chrysler, GM race clock to finish viability plans
The Associated Press
Monday, February 2, 2009
DETROIT: With just 15 days before a critical deadline to justify their government loans, General Motors Corp. and Chrysler LLC are trying to pull together restructuring plans that prove they can become viable again.
But as GM's board meets Monday and Tuesday to discuss its plan and other issues, several industry analysts and lawmakers are wondering if the automakers have enough time to negotiate such complex plans before Feb. 17, when they're required to submit at least the basics.
Both automakers have had to take billions in government loans to stay in business in the midst of the worst U.S. auto sales slump in 26 years. Under the loan terms, the companies must negotiate concessions from labor unions, bondholders and others, with a so-called "car czar" appointed by President Barack Obama to oversee the changes.
But Obama, who has been in office only two weeks, has yet to appoint such a czar. Because some of the loan terms imposed by the Bush administration are being disputed by the United Auto Workers union, both companies are in the position of having to meet loan terms that are still uncertain.
"Without knowing who's in charge and without knowing what approach the Obama administration is going to take, it does complicate the negotiating process that's going on," said Martin Zimmerman, a professor of business administration at the University of Michigan who specializes in government regulation and the auto industry.
Executives from both companies have said they can meet the deadline, but UAW President Ron Gettelfinger has said he doesn't think they have enough time. Gettelfinger has said he will approach the Obama administration about changing some of the loan terms, which he believes unfairly single out workers.
U.S. Sen. Debbie Stabenow, a Michigan Democrat, said Monday an extension of the deadline is an option. She said she hasn't been told when Obama will name a czar or how the administration will go about restructuring the industry.
"At this point, I don't think they have clearly defined exactly what this is going to look like. I'm strongly encouraging them to make sure there are advisers working with them who understand this industry," she said.
Government officials have contacted the Center for Automotive Research in Ann Arbor for information on the industry, said David Cole, the center's chairman.
"They are asking the right questions. That is really key," he said.
Cole, who declined to identify the officials, also wonders if the administration will have to extend the deadline, which is followed by a March 31 deadline to have the final plans in place.
"They've got a pretty fast clock on this," he said. "I think they realize how high the stakes are here, in terms of the potential impact on the overall economy."
Chrysler received $4 billion and expects to get another $3 billion after it shows the government its plan to become viable. GM has received $9.4 billion and expects to get $4 billion more when it files its plan.
Under the loan terms issued last year by the Bush administration, the companies must show an ability to repay the government loans and to achieve "positive net present value," which means that the present value of a company's expected net cash flows exceeds the initial investment in the company.
Both companies were in danger of running out of cash late last year, making the loans necessary for their survival.
The loan terms also set "restructuring targets" that include swapping a portion of the companies' bond debt for equity, as well as reducing labor costs so they are equal to the costs of Nissan Motor Co., Toyota Motor Corp. and Honda Motor Co. at their U.S. factories.
GM said it had identified most of its bondholders, a large undertaking as holders can be large entities or single individuals. Getting two-thirds of bondholders to agree to an exchange will be difficult, analysts say.
One of GM's largest bondholders — Pacific Investment Management Co. — last month removed itself from a committee representing company bondholders.
"PIMCO could be sending a clear message to GM and the existing committee that there needs to be more done on behalf of bondholders, or they could be holding onto these bonds because the government is going to have to bail (GM) out anyway," said Kip Penniman, a corporate bonds analyst with KDP Investment Advisors in Montpelier, Vermont, which has a "hold" rating on GM bonds. "They're attempting to leverage their position up. GM is going to have to bring something very attractive."
He said PIMCO's participation, or lack thereof, would likely influence other bondholders to take GM's offer or sit on the sidelines.
"It is a massive coordination problem. There are other elements of the plan," said Gregg Lemos-Stein, credit analyst for Standard & Poor's. "If one piece of the puzzle holds out, it could hold up the entire viability plan."
GM also is starting to lobby for tax relief, fearing that it could owe at least $7 billion if it swaps bond debt for equity. Stabenow said she and others were seeking an administrative or legislative fix.
"We can't place GM in a position in the middle of everything else with a $7 billion to $10 billion liability as a result of this loan," she said.
The Associated Press
Monday, February 2, 2009
DETROIT: With just 15 days before a critical deadline to justify their government loans, General Motors Corp. and Chrysler LLC are trying to pull together restructuring plans that prove they can become viable again.
But as GM's board meets Monday and Tuesday to discuss its plan and other issues, several industry analysts and lawmakers are wondering if the automakers have enough time to negotiate such complex plans before Feb. 17, when they're required to submit at least the basics.
Both automakers have had to take billions in government loans to stay in business in the midst of the worst U.S. auto sales slump in 26 years. Under the loan terms, the companies must negotiate concessions from labor unions, bondholders and others, with a so-called "car czar" appointed by President Barack Obama to oversee the changes.
But Obama, who has been in office only two weeks, has yet to appoint such a czar. Because some of the loan terms imposed by the Bush administration are being disputed by the United Auto Workers union, both companies are in the position of having to meet loan terms that are still uncertain.
"Without knowing who's in charge and without knowing what approach the Obama administration is going to take, it does complicate the negotiating process that's going on," said Martin Zimmerman, a professor of business administration at the University of Michigan who specializes in government regulation and the auto industry.
Executives from both companies have said they can meet the deadline, but UAW President Ron Gettelfinger has said he doesn't think they have enough time. Gettelfinger has said he will approach the Obama administration about changing some of the loan terms, which he believes unfairly single out workers.
U.S. Sen. Debbie Stabenow, a Michigan Democrat, said Monday an extension of the deadline is an option. She said she hasn't been told when Obama will name a czar or how the administration will go about restructuring the industry.
"At this point, I don't think they have clearly defined exactly what this is going to look like. I'm strongly encouraging them to make sure there are advisers working with them who understand this industry," she said.
Government officials have contacted the Center for Automotive Research in Ann Arbor for information on the industry, said David Cole, the center's chairman.
"They are asking the right questions. That is really key," he said.
Cole, who declined to identify the officials, also wonders if the administration will have to extend the deadline, which is followed by a March 31 deadline to have the final plans in place.
"They've got a pretty fast clock on this," he said. "I think they realize how high the stakes are here, in terms of the potential impact on the overall economy."
Chrysler received $4 billion and expects to get another $3 billion after it shows the government its plan to become viable. GM has received $9.4 billion and expects to get $4 billion more when it files its plan.
Under the loan terms issued last year by the Bush administration, the companies must show an ability to repay the government loans and to achieve "positive net present value," which means that the present value of a company's expected net cash flows exceeds the initial investment in the company.
Both companies were in danger of running out of cash late last year, making the loans necessary for their survival.
The loan terms also set "restructuring targets" that include swapping a portion of the companies' bond debt for equity, as well as reducing labor costs so they are equal to the costs of Nissan Motor Co., Toyota Motor Corp. and Honda Motor Co. at their U.S. factories.
GM said it had identified most of its bondholders, a large undertaking as holders can be large entities or single individuals. Getting two-thirds of bondholders to agree to an exchange will be difficult, analysts say.
One of GM's largest bondholders — Pacific Investment Management Co. — last month removed itself from a committee representing company bondholders.
"PIMCO could be sending a clear message to GM and the existing committee that there needs to be more done on behalf of bondholders, or they could be holding onto these bonds because the government is going to have to bail (GM) out anyway," said Kip Penniman, a corporate bonds analyst with KDP Investment Advisors in Montpelier, Vermont, which has a "hold" rating on GM bonds. "They're attempting to leverage their position up. GM is going to have to bring something very attractive."
He said PIMCO's participation, or lack thereof, would likely influence other bondholders to take GM's offer or sit on the sidelines.
"It is a massive coordination problem. There are other elements of the plan," said Gregg Lemos-Stein, credit analyst for Standard & Poor's. "If one piece of the puzzle holds out, it could hold up the entire viability plan."
GM also is starting to lobby for tax relief, fearing that it could owe at least $7 billion if it swaps bond debt for equity. Stabenow said she and others were seeking an administrative or legislative fix.
"We can't place GM in a position in the middle of everything else with a $7 billion to $10 billion liability as a result of this loan," she said.
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