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Posts Tagged ‘HSBC’

Buy Used Car from Barclays, BNP Paribas, GM, et al?

Posted by Larry Doyle on July 1st, 2014 8:08 AM |

In light of recent developments I am compelled to wonder why anybody might care to deal with the following organizations:

1. Barclays: New York Attorney General Eric Schneiderman lays out detailed allegations showing the bank to have engaged in a ‘pernicious fraud’ and lied to customers regarding the operation of its equity dark pool. In the process, Barclays allowed high frequency trading firms to act in a predatory fashion against other clients.

2. BNP Paribas: as Reuters details:

The bank essentially functioned as the “central bank for the government of Sudan” (LD’s edit: Sudan has long been regarded as a state sponsor of terrorism), concealed its tracks and failed to cooperate when first contacted by law enforcement, U.S. authorities said.


Does HSBC See Green Shoots?

Posted by Larry Doyle on May 12th, 2009 11:41 AM |

Are those green shoots or dandelions or a mix of the two?

As the “lawn” comes in, we hope the roots grow deep and the grass is lush. That said, we can not blindly accept a prospective landscaper’s vision of what our yard may look like next quarter or later this year. I don’t subscribe to using products like Miracle-Gro.  Given that virtually every “gardener” is employed or connected to “Uncle Sam’s Lawn Patrol,” who else can give us a “lay of the land”?  Let’s talk to the gardeners at HSBC!

HSBC purchased Household Finance in 2003. I am sure they regret making that purchase. HSBC was trying to emulate the “originate to distribute” model which filled the coffers of so many other Wall Street banks. The fact is, though, HSBC was literally the last entrant to the “lawn” party and their experience has been nothing short of a whole lot of crabgrass. 

As the WSJ reports, HSBC Points To More Pain In U.S., we receive a diagnosis on the U.S. economy that is much less sanguine but, in my opinion, more realistic than Uncle Sam’s gardening crew.  The WSJ highlights the fact: 

HSBC, which was among the first banks to signal the subprime-mortgage troubles that set off the global financial crisis, said its U.S. consumer-finance operation had seen a slight slowdown in the deterioration of its mortgage and other secured loans in the first quarter compared with the fourth of quarter of 2008 — a shift executives attributed in part to U.S. tax refunds, higher savings rates and the bank’s efforts to help borrowers by changing the terms of their loans.

While those signs of a slowdown in loan deterioration may be viewed as a “green shoot,” HSBC is an honest “gardener” and allows that the positive trend may not continue.

North America Chief Executive Brendan McDonagh attributed the change to several factors, including a seasonal bounce, tax refunds, loan modifications and the bank’s previous efforts to pull back in mortgage lending. “We are slightly encouraged by it, but I am reluctant to draw too many conclusions,” Mr. McDonagh said.

HSBC Chief Executive Michael Geoghegan said loan-loss rates could increase again in the third or fourth quarters of the year. “We expected two difficult years in consumer finance over all,” he said. 

Given the fact that HSBC is not connected to Uncle Sam’s gardening, I appreciate the honest assessment and “more realistic” prognosis. Miracle Gro may sell well on late night TV, but I prefer a “gardener” who is straight and honest while informing me that it may be a few years before the lawn comes in.

Speaking of lawns and gardening, here’s a shout out to my good friends Rocky and his pop!!


A Virtual Smorgasbord

Posted by Larry Doyle on March 2nd, 2009 4:24 PM |

On the heels of the news about AIG, Berkshire, and HSBC, the equity markets have found no support today and are down 4%. While the malaise of the markets has much of the focus, let’s review a few other items that I see on today’s menu:

1. In regard to AIG, current CEO Edward Liddy and former CEO Hank Greenberg have started some public feuding over the nature of AIG’s problems. Greenberg is trying to make the case that the risks underwritten at AIG occurred after his departure. Liddy responded that the culture, the compensation system, and the division housing the bulk of AIG’s risk all developed under Greenberg.  Wow!! When our country is screaming for leadership, we have senior executives playing the blame game and pointing fingers. How pathetic!! (more…)

What’s Driving the Market Lower Today?

Posted by Larry Doyle on March 2nd, 2009 9:50 AM |

markets-down-arrowStock markets are expected to open lower by another 1.5% on the open this morning. What’s driving them lower….again?

1. News that AIG reported an actual 4th quarter 2008 loss of $61 billion. The government will inject ANOTHER $30 billion into this black hole. WHY? Very simply because AIG is the largest holder of CDS (credit default swaps) that serve as insurance for a number of banks and money managers. These CDS cover a wide array of assets but primarily the sub-prime mortgage space. Kevin Doyle of 12th Street Capital, and a guest here on my weekly No Quarter Radio program back in early January, shares that the index that tracks the sub-prime market is at its lows. No surprise there.

While the various media outlets are highlighting this story now, I wrote extensively about AIG and How Does One Lose $125 Billion? on February 24th. I not only wrote about the losses, but also delved into the culture that developed over the years at AIG under Hank Greenberg.  Not a pretty picture and seemingly not a lot of integrity in that company. Now we pay. (more…)

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