Moody's (MCO) said yesterday that "higher than previously expected credit losses" (what did Moody's previously expect, zero credit losses? - but I digress) has led the rating agency to put 23 banks on watch for lower ratings.
In my blog on April 29, 2008 ("Post-takeover announcement plays"), we looked at the results of buying the stock of companies that are being acquired on the date of the takeover announcement. We saw that out of 62 companies that announced takeover bids between March and July of 2007, fifty-seven of the deals were successfully completed, two had failed, and three had not closed as of the time of writing. (I haven't gone back to the original data to see what happened to these last three deals.) The average return was 2.9% and the average holding...
It has been an interesting trading day thus far in Japan. Stocks have moved triple-digits up and down, including a 350 point surge from the day’s low, all to finish the morning session up a modest 30 points. During that time, the Nikkei 225 fell as low as 7,486, taking it to a 26-year low — forget about the post-bubble trough! Initial selling was obviously induced by futures trading, in addition to media reports about banks needing to raise capital.
Weighing particularly heavy is a Kyodo News report citing sources close to the matter, saying Mitsubishi UFJ (JP: 8306)...
Major government recapitalization programs in 1997 and 2003 helped Japanese banks garner $4.77 trillion of assets. Risk aversion may have helped Japanese financials avoid the worst of subprime, but Barron’s saysit’s also meant low return-on-equity [ROE]. Japan’s current economic woes preclude investments there, so banks like Mitsubishi UFJ (MTU) and Mizuho Financial (MFG), whose ROE are 0.56% and 0.33% respectively, are looking abroad for growth opportunities.
For all the analysts and pundits in the financial media, there is still no better judge of a company's health and future prospects than the owners and executives of those companies themselves, along with major institutional shareholders.
That's why insider buying and selling is a critical piece of data that is monitored by people who invest for a living.
Last Monday we thought the credit crunch had reached its peak with the US government nationalization of Fannie Mae (FNM) and Freddie Mac (FRE). It now appears that this was just the prelude. There were those who predicted when this crisis first broke, that it would not blow over without at least one financial giant disappearing from the map, and Monday's turmoil saw the demise of not one giant, but two. Yet the crisis...
Financials and Retailers have been some of the worst performing stocks of the bear market that started last October. There are some stocks in these groups that have managed gains in this market, however. Below we highlight Retailers and Financials in the Russell 1,000 that are in the black since 10/9/07. The relative strength of these names is worth noting.
Below are some additional thoughts on the latest MUFG-UB offer (these comments were originally posted in response to an article published by Reuters; edited for style/formatting).
UnionBanCal's (UB) Special Committee is very opportunistic and knows what it is doing. It has effectively taken its minority stake hostage vis a vis its board representation and a long-standing one at that for the Chief of the Committee. At the end of the day, there is absolutely no “reputation risk” as MUFG (MTU) fears. Why? Nobody on Wall...
$58 a share — no! $63 a share — no! $73 a share — oh, sure, might as well, especially in this market. Hats off to Mr. Farman and company for helping the little guys at Union Bank (UB) get paid. Still scratching your head about what Mitsubishi UFJ (MTU) is thinking? Keep scratching.
For more background see both the Financial Times exerpt below and last week’s “Mitsubishi UFJ Overpaying for UnionBanCal.” As stated then, this is a “safe” acquisition...
Stock News 
Hickey and Walters (
What a nice weekend!
