Rich and Co.

Money Management Relevant Headlines: The Good, the Bad, The Impossible

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Here is our take on some of the news starting the week:

  • “BlackRock Inc., which oversees about $4.7 trillion, bought Greek debt last week, benefiting from prices that were overly depressed by investor concern”
  • China Investing – A Really Bad Idea – “A fifth of China’s stock market remains frozen as the number of companies resuming trading slows to a trickle…“China was moving from an emerging market to a developed market,” Padamadan said. “Now it’s probably regressed and it’s probably on the verge of becoming a frontier market.”
  • Gulp! – Chaos in Commodities Markets:  “Doubling down on the debt of drillers and miners is coming back to bite money manager Franklin Resources Inc. amid a prolonged commodities slump…Losses are accelerating in bonds that the firm’s been buying up for the past two years as prices on everything from crude to iron ore resume declines. Debt of coal producer Peabody Energy Corp., in which Franklin was the biggest public holder as of March, plunged 51 percent in the past two months.”  !!
  • Champaign Toasts to Money Management!  “Morgan Stanley reported profit that beat analysts’ estimates as a jump in trading and brokerage fees led to the biggest revenue increase among the six largest U.S. banks…Morgan Stanley posted the only increase in bond trading among the biggest U.S. banks and generated record profit in its wealth-management unit for the fourth time in five quarters. Chief Executive Officer James Gorman has used growth at the brokerage to avoid revenue declines that plagued other Wall Street firms….The brokerage division…as assets in fee-based accounts climbed. The unit had a 23 percent pretax margin, and the bank has said it can reach a margin of 22 percent to 25 percent by the end of this year even without help from higher markets or interest rates.”
  • Wealth Management Asia Likely a Dead End – “Global investment banks will find it more costly to unlock wealth in Asia as regulatory changes make accessing domestic markets tougher, according to management consultancy Oliver Wyman…Societe Generale SA said last week it has reorganized so that in Asia, commercial strategies are determined locally rather than regionally by product…Asia remains a “challenge for many global investment banks as revenue pools shift onshore and the cost of accessing them increases…Global banks need to increasingly comply with local capital, liquidity and other regulatory requirements, making them typically focus on a smaller set of markets.”

I’ll bet Asian wealth management as an truly gobal business never happens.  The cultures are too closed.


Written by Rich and Co.

July 20, 2015 at 5:16 pm

Posted in Uncategorized

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