US Finance World

The market caps of the largest financial stocks (non-insurers or REITS) have risen significantly since the March 2009 bottom, and below we provide a list of the largest 20 in the S&P 500. The largest S&P 500 financial stock is currently Bank of America (BAC) at $181 billion. This is just under $3 billion larger than JP Morgan (JPM). At the bottom on March 9th, JP Morgan was more than twice the size of Bank of America.

Through large blocks of stock issuance and price appreciation, Citigroup’s (C) market cap has risen from $5.75 billion to $118.5 billion in just over a year, making it the fourth largest financial company ahead of Goldman Sachs (GS), US Bancorp (USB), American Express (AXP), and Morgan Stanley (MS).

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Free money from the Fed, and bail-outs from various governments allowed US Bank employees to pull off a marvelous trick, thereby freeing them from the normal contraints of Capitalism. They paid out more in dividends than they made in each of the past 3 years: by $8B in 2007, $41B in 2008 and $30B in 2009. Net operating income (NOI) for the banks was $102B for 2007, $10B for 2008 and $17B for 2009. This is obviously unsustainable, and makes the crooks from the Tech Boom look like amateurs- while the Techies based their fraud on the greater fool theory, the Bankers simply paid off their owners, and gave themselves raises.

The streams here in the Northeast US yesterday, following a solid 2 day rain, are akin to those of income enjoyed by US Banks- spilling over at record-setting levels.As promised, today’s musings will focus in more detail on US Banking sector incomes, expenses and the future of Too Big To Fail.

Banks always and everywhere make the bulk of their income from lending and the US sub-species is no exception to this rule.

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Citigroup’s (C) share price has dipped slightly from its recent closing high of $4.27 following the Treasury Department’s announcement that it will sell its $7.7 billion shares “over the course of 2010 subject to market conditions.” Longer term, however, analysts generally welcome the move as it will remove the uncertainty associated with the Treasury’s stake.

Morgan Stanley will serve as the government’s advisor on the sale. The government will sell between 8% and 10% of average daily volume each day following Citigroup’s earnings report on April 19.

Sandler O’Neill analyst Jeff Harte said the sale of the US Treasury’s shares could drive up Citigroup stock prices over time (WSJ Blogs). Harte contends that concrete signals of a U.S. departure from Ci

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Yesterdat morning I received an email from Charles Schwab (SCHW) offering to reduce my margin interest by up to 30%, depending on my willingness to borrow. It strikes me as unusual, but also very interesting, because this represents an aggressive attempt to increase lending activity.

Perhaps banks are finally realizing that the very steep yield curve gives them a fabulous opportunity to make money by lending more. Their prior reluctance to lend was undoubtedly driven in part by concerns that the economy was fragile and credit risks were high, but those concerns are likely beginning to fade.

Once a recovery gets underway, it becomes self-perpetuating as confidence rises and risk-taking resumes.

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Expect the banks contained within the other sovereign nations that we covered to follow suit within the next few quarters.

From Capital.gr: Moody’s Downgrades Five Greek Banks

Moody’s Investors Service said Wednesday it downgraded the deposit and debt ratings of five of the nine Moody’s-rated Greek banks due to a weakening in the banks’ stand-alone financial strength and anticipated additional pressures stemming from the country’s challenging economic prospects in the foreseeable future.

[Moody's is late to the party, but their logic is solid, see "Greek Crisis Is Over, Region Safe", Prodi Says - I say Liar, Liar, Pants on Fire! followed by our forecast of the weaker vs. stronger Greek banks (premium content subscribers only) - Greek Banking Fundamental Tear Sheet]

The affected banks are: National Bank of Greece (to A2 from A1), EFG Eurobank Ergasias SA (to A3/Prime-2 from A2/Prime-1), Alpha Bank AE (to A3/Prime-2 from A2/Prime-1), and Piraeus Bank (to Baa1/Prime-2 from A2/Prime-1). Moody’s

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Teenagers have become more financially-minded because of the recession, new research has suggested.

NatWest’s 2010 MoneySense Research Panel has found that adolescents are more considered in their approach to planning, budgeting, spending and saving than they were a year ago.

The poll, which surveyed over 10,000 12 to 19-year-olds across the UK, assessed the financial aspirations of the participants.

It discovered that 67 percent of those questioned believed themselves to be more monetary-savvy after the economic downturn.

Gary Milner, director of operations at the Personal Finance and Education Group, explained the profound effect a recession can have on youngsters.

He said: People will learn lessons from any sort of crisis especially when it’s one that affects them personally or one that they can see affecting others.”

The statistics also disclosed that boys are more likely to save than girls – with 33 per cent of young males stating they put their money away, compared with 24 per cent of females.

I’m sure everyone has had days, weeks, months or even years of feeling snowed under with work, stressed and like they have little time for family or friends. Within a small business it seems that this is compounded, with less people to delegate to and, if you are the small business owner, a vast majority of tasks falling to yourself.

Planning how to manage your time is not a waste of time! Once you have decided how to plan your time you will become much more efficient saving yourself a lot of time, which you can then spend with your family and friends.

Here are some key ways to improve your time management:

- Track your time The first step to successful time management is to find out where you are wasting time. K

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The credit card reform Congress passed last year ended “over limit” penalties –- typically $35 fees applied when cardholders charge more than their credit lines allow -– unless customers opt in. At least for consumers –- not so for business credit cards, which the CARD Act does not regulate at all. Now, with two sets of rules, confusion abounds.

Consider what happened to Kevin Reeth, the 39-year-old CEO and co-founder of Campbell, Calif.-based Outright, a 10-employee online bookkeeping service for small businesses. He got an American Express SimplyCash Business Credit Card last spring, shortly after the startup raised a $2 million round of seed funding. Despite all that cash in the bank, Outright’s American Express card came with a $3,000 credit limit — Reeth says the company told him that Outright, founded in June 2008, was too new to qualify for more credit. He’s been hit twice with $35 over limit fees since Oct. 1, 2009, when A

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