Financial Biz Cheat Sheet: JP Morgan and Goldman Sachs Cause a Stir
JPMorgan Chase (NYSE:JPM) conducted eight months of consumer testing and has decided it won’t add the controversial debit-card fee on its customers. After Bank of America (NYSE:BAC) caused a stir with a new monthly $5 fee, Chase has joined other big banks including U.S. Bancorp (NYSE:USB), Citigroup Inc. (NYSE:C), PNC Financial Services Group Inc. (NYSE:PNC) and KeyCorp (NYSE:KEY) in deciding against it. However, it’s not necessarily because of pressure from Bank of America’s action. David Bowen who runs Key’s consumer product business said, “We looked at all options and quickly decided it didn’t fit with our overall strategy.”
MetLife, Inc. (NYSE:MET) announced plans to offer lower return rates on sales of it products in response to low interest rates in its investment portfolio. The firm will adjust terms on its client offerings, reallocate its investment portfolio holdings and hedges to protect the company from the market’s current low interest rates.
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MF Global Holdings Ltd. (NYSE:MF) stock continues to tank after it reportedly exhausted its revolving credit lines, valued at $1.3 billion earlier in the week. Looking for a lifeline, MF is in “advanced negotiations” to sell the firm to a small group of bidders, according to a CNBC report. The firm is hoping a deal can be reached either by Monday or possibly sooner.
Goldman Sachs Group Inc. (NYSE:GS) received an upgrade to Buy and an increased price target from $115 to $1135 by Rochdale Securities analyst, Dick X. Bove. It’s an analyst’s prerogative to change his mind: In May, Bove cut Goldman’s rating to a Sell and lowered its price target to $120 from $163. Why the change of heart? Bove believes Goldman has aired all of its bad news.
Not so fast Mr. Bove. Goldman (NYSE:GS) has been slapped today with a lawsuit in NY state court by Australia’s Basis Yield Alpha Fund for its investment in the Timberwolf CDO. The $1.07 billion suit alleges that the investment bank sold risky debt with the expectation its value would dive in value to an Australian hedge fund, causing insolvency. The suit alleges “fraud, breach of contract and negligence.”
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