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Pain Spreads to Biggest Banks - (online.wsj.com) In a sign of the pain rippling through the financial system from Wall Street to Main Street, investment-banking giant Goldman Sachs Group Inc. on Tuesday posted a rare quarterly loss while Bank of America Corp. lost its title as the nation's biggest bank as it pared back its struggling consumer empire. Results at Goldman were hammered by falling stock and bond prices and soft merger activity. The slowdown starved its once-roaring trading engine and sent Goldman to its sixth straight year-over-year drop in quarterly revenue. Bank of America posted a third-quarter profit, reversing a year-ago loss.
BofA loses rank as nation's biggest bank - (www.latimes.com) CEO Brian Moynihan hopes to reverse the company's struggling consumer empire just as rival JPMorgan Chase & Co. surpasses BofA's $2.2 trillion in assets. BofA earns $6.23 billion in the quarter, and shares jump 10%. Bank of America Corp. lost its title as the nation's biggest bank, and the mission for its beleaguered chief executive now is to convince Wall Street that it's better off for it. Brian Moynihan is tasked with turning around the company's struggling consumer empire just as rival JPMorgan Chase & Co. surpassed BofA's $2.2 trillion in assets. It marks the end of an era for a bank known for a near-obsessive zeal for acquisitions and growth, and the start of a new chapter in which the bank hopes to slim down to raise profitability. "We don't have to be the biggest company out there; we have to be the best," Moynihan has been telling his employees, investors and analysts. He believes the strategy will revive the company, which on Tuesday reported that revenue fell during the third quarter in five of its six main business lines.
Ghost of Lehman Brothers haunts European politicians and bankers - (www.washingtonpost.com) Bank of America Corp. lost its title as the nation's biggest bank, and the mission for its beleaguered chief executive now is to convince Wall Street that it's better off for it. Brian Moynihan is tasked with turning around the company's struggling consumer empire just as rival JPMorgan Chase & Co. surpassed BofA's $2.2 trillion in assets. It marks the end of an era for a bank known for a near-obsessive zeal for acquisitions and growth, and the start of a new chapter in which the bank hopes to slim down to raise profitability. "We don't have to be the biggest company out there; we have to be the best," Moynihan has been telling his employees, investors and analysts. He believes the strategy will revive the company, which on Tuesday reported that revenue fell during the third quarter in five of its six main business lines.
Spain Rating Cut for Third Time Since 2010 - (www.bloomberg.com) Spain’s credit rating was cut for the third time in 13 months by Moody’s Investors Service as Europe’s debt crisis threatens to engulf the nation.
Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels to A1 from Aa2, with the outlook remaining negative. Standard & Poor’s downgraded Spain on Oct. 14 to its fourth-highest investment grade, and Fitch Ratings cut it to the same level on Oct. 7, the day it also downgraded Italy. “Moody’s is maintaining a negative outlook on Spain’s rating to reflect the downside risks from a potential further escalation of the euro-area crisis,” it said in a statement. The company cited the “continued vulnerability of Spain to market stress” that is driving up the cost of borrowing, as well as weaker growth prospects. Spanish bonds fell.
THE NEW DIVORCE DEMAND: "You keep the house" - (www.businessinsider.com) "Getting the house" — once the end all, be all of divorce settlements — is becoming a recession-era hot potato for splitting couples. Reduced liquidity, homeowners insurance, underwater mortgages, shoddy neighbors, and a dour housing market spell doom for divorcees who can barely afford the payments, let alone the emotional stress of trying to rid themselves of the house or save it, writes Marcelle Sussman Fischler in Forbes. It's just another sign the financial crisis has changed our attitudes toward debt, perhaps for the worse. Despite good intentions to keep their kids in a stable environment or not wanting to go through the hassle of moving, this emotional decision often backfires when parents find themselves unable to make payments or sell their home to downsize. Such a decision could result in damaged credit, making it harder to secure a loan to start over in a new home or even rent in some areas.
No deal reached on scaling up euro zone fund: EU officials - (www.reuters.com)
France’s Ratings Pressure Handicaps Sarkozy as Europe Crisis Talks Climax - (www.bloomberg.com)
Banks Raided in EU Antitrust Probe Over Derivatives - (www.bloomberg.com)
Bank of Italy’s Saccomanni Says EFSF Must Be Operational Soon - (www.bloomberg.com)
Draghi Succession Fight Shows Italian Gridlock - (www.bloomberg.com)
Papandreou Vows Further Austerity Amid Strikes - (www.bloomberg.com)
Consumer Prices in U.S. Rise at Slower Pace - (www.bloomberg.com)
Housing Starts in U.S. Rose More Than Forecast - (www.bloomberg.com)
Mortgage applications slumped last week: MBA - (www.reuters.com)
Bernanke says Fed should keep a sharper eye on financial bubbles - (www.washingtonpost.com)
Deficit Panel May Need Push, Lawmakers Say - (www.nytimes.com)
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