Stifel Financial Corp., parent of Stifel, Nicolaus & Co. brokerage, will buy Butler Wick & Co., a brokerage based in Youngstown, Ohio, for $12 million in cash.
Butler Wick has 175 employees in 23 offices in Ohio and Pennsylvania.
FROM STAFF AND WIRE REPORTS
Christopher Boyce and Jim Gallagher
contributed to this report companies making payday loans.
NEW YORK – Goldman Sachs Group Inc. today reported its first quarterly loss since it went public in 1999, losing US$2.29 billion during its fourth quarter, but investors seemed unfazed and sent its shares higher.
The loss proves the turmoil in the financial markets has tripped up even the best-run financial institutions. The New York-based bank has long been considered the premier investment bank on Wall Street, and in recent quarters, the sturdiest amid the turmoil.
The Wall Street firm lost $4.97 per share in the quarter ended Nov. 30, compared with earnings of $3.17 billion, or $7.01 per share, last year.
Analysts polled by Thomson Reuters, on average, forecast a loss of $3.73 per share for the latest quarter. Over the past several weeks, analysts sharply slashed their estimates amid ongoing concern about investment losses. Just a month ago, analysts predicted Goldman would lose just 28 cents per share, with some analysts still predicting a quarterly profit.
Goldman's shares closed up $9.54 or 14 per cent, to $76 amid a broad rally on Wall Street. As of the close Monday, the shares were down 69 per cent in 2008.
Analysts attributed the strong stock performance today to investors finding the few bright spots among the gloomy results, noting that while fourth-quarter losses were big, they were not well beyond expectations.
Morningstar Inc. equity analyst Michael Wong said Goldman was able to shrink its total assets by 18 per cent to $885 billion during the quarter, and that has helped reduce leverage.
"They've been able to delever faster than anyone could have dreamed of, without taking extreme market-to-market losses," Wong said. "The confidence in the balance sheet is probably higher than in the past year."
Banks have been trying to reduce leverage – the amount of money borrowed compared to a company's capital – to help avoid cash shortages as losses have increased.
Denise Valentine, a senior analyst at Aite Group LLC, cited some bright spots, including full-year results in the asset management and securities services unit. Full-year revenue in the division grew 11 per cent to $7.97 billion.
"Reading between the lines, (investors) saw things were not as bad as they were expected to be," Valentine said.
The investment banking sector was turned on its head in September when Lehman Brothers filed for bankruptcy and Goldman and Morgan Stanley became bank holding companies. Like most banks, Goldman was hurt by the plunging value of its investments, especially at its principal trading desk.
Goldman reported negative revenue of $4.36 billion in its trading and principal investments unit. Negative revenue occurs when a company must reverse some previously recognized revenue because its value has declined. Overall, Goldman reported negative revenue of $1.58 billion, compared with revenue of $10.74 billion during the year-ago quarter.
The principal investment division lost $2 billion on corporate investments, $961 million from real estate investments and $631 million tied to the firm's investment in Industrial and Commercial Bank of China. Goldman purchased a minority stake in the Chinese bank in 2006. The loss tied to that investment was due to a decline in ICBC's share price.
Negative revenue from fixed income totalled $3.4 billion, as losses were widespread across the division, Goldman's chief financial officer, David Viniar, said during a conference call.
"This was really across the portfolio of equity assets and credit assets," Viniar said wired payday loan.
Ratings agency Moody's Investors Service said the losses were in line with expectations, but showed the bank is vulnerable to the current market downturn. Moody's cut Goldman's long-term senior debt rating to "A1" – still investment-grade – from "Aa3."
Goldman's quarterly loss came during a three-month period that brought sweeping changes to the investment banking sector – a sector essentially being rebuilt after the September collapse of Lehman Brothers and the sale of Merrill Lynch & Co. to Bank of America Corp.
With investors lacking confidence in the stand-alone banking model, both Goldman and Morgan Stanley quickly gained federal regulatory approval to become bank holding companies.
Morgan Stanley is scheduled to report fiscal fourth-quarter results Wednesday. Analysts predict the bank will post a loss, though not as severe as Goldman.
The banking structure change allows the pair to build large deposit bases to help fund operations – considered vital as credit markets have essentially shut down.
Viniar said Goldman will continue to build that deposit base through third-party distribution channels and its private wealth management business. He did add that Goldman would look at Internet banking and a possible acquisition in an effort to boost deposits. The bank is aiming to increase deposits to between $50 billion and $100 billion, from about $20 billion.
Also with the regulatory change, the banks now have wider and permanent access to a slew of funding options from the federal government, foremost the government's $700 billion bank investment program launched in October.
Goldman was among the first banks to receive funds – a total of $10 billion – as part of the program. The goal of the program is to spur the credit markets and get banks lending to each other and customers.
Goldman also received a boost when billionaire investor Warren Buffett invested $5 billion in capital and it raised an additional $5.75 billion through a public stock offering.
The security that comes with becoming a bank holding company – the structure that traditional commercial banks take – also could hinder future growth for Goldman as it looks to return to profitability. Goldman will come under closer regulatory scrutiny from the Federal Reserve and will have to ratchet down its leverage, which it parleyed into billions of dollars in quarterly profits amid the market boom.
David Easthope, a senior analyst with consultancy Celent, said Goldman will look markedly different next year because of the change in its structure and as it builds its deposit base. Gone will be the outsized profits based on proprietary trading and prime brokerage business seen earlier in the decade, he said.
The firm will be "relying on the traditional businesses that make Goldman Sachs the brand that it is," Easthope said. That means more focus on divisions like mergers and acquisitions and wealth management, he added.
For the full year, Goldman earned $2.04 billion, or $4.47 per share. Goldman had remained profitable through the beginning of the year, while other financial firms posted huge losses tied to the troubled housing and credit markets.
Weighed down by debt, media giant CanWest Global Communications Corp. isn’t ruling out possible asset sales after buying itself some wiggle room by renegotiating debt covenants and cutting 560 jobs across the company.
Leonard Asper, the chief executive of CanWest, said the conglomerate is "continuing to look at our asset base," but warned that observers shouldn’t assume that oft-cited properties such as the money-losing National Post or Australian TV network TEN would be on the block.
"We have to look at where the biggest bang for the buck is," he said during a conference call to discuss third-quarter earnings.
"There’s been some speculation about whether we should sell this TV channel or that newspaper … but in some places it doesn’t really help us to sell assets because we lose (operating income)."
CanWest yesterday posted a loss of $1 billion, or $5.73 a share, for the three-month period ended Aug. 31.
The loss was attributed in part to a $1.01 billion non-cash writedown on the goodwill and broadcast licences related to the company’s Canadian conventional television business – a move Asper said had been taken by other big media companies.
Revenue, meanwhile, rose to $725.9 million from $678.4 million a year earlier as the company benefited from last year’s acquisition of specialty TV-operator Alliance Atlantis Communications Inc.
CanWest, which also owns the Global television network and big city newspapers across the country, has come under increasing pressure in recent weeks as an economic recession threatens to further sap advertising revenue.
Analysts have expressed concern that the company is in danger of running out of cash to service its $3.7 billion worth of debt obligations creditscore.
"Given the high degree of operating and financial leverage across CanWest’s operations, we believe a deteriorating economy will remain a major headwind for the company," said Drew McReynolds, an analyst at RBC Capital Markets.
The debt load accumulated over the years as the conglomerate built its media empire.
It paid $3.5 billion in 2000 for Hollinger’s newspaper assets and last year partnered with Goldman Sachs in a complicated deal to buy Alliance Atlantis for $2.3 billion, although Goldman shouldered most of the upfront cost.
In a bid to fix its balance sheet, CanWest said this week it is cutting 560 jobs, or about 5 per cent of its global workforce. The company said the move would save $61 million a year.
As well, CanWest took steps earlier this month to improve the performance of the National Post, its flagship newspaper, by focusing more on profitable markets and cutting back on deeply discounted circulation.
The company has also renegotiated its debt covenants, allowing it a higher ratio of debt versus operating earnings through next year, according to John Maguire, CanWest’s chief financial officer.
Asper said certain parts of the business were poised to weather an economic storm better than others.
"Digital and specialty channel revenue is good, strong, and publishing revenue is a little more challenging. Conventional television revenue is the real tough one," he said.
Shares of CanWest dropped seven cents yesterday to close at 73 cents on the Toronto Stock Exchange.
OTTAWA–The International Energy Agency is warning that the oil companies are sowing the seeds of a new supply crisis and a return to sky-high prices.
The agency says oil producers are delaying expensive projects that would bring in much need supply, including some in Canada’s oil sands.
I.E.A chief economist Fatih Birol says he is worried that when demand rebounds, there may be another supply crunch like the one that occurred last summer.
The Paris-based agency, which advises rich countries on energry policies, says in a report released Wednesday it the world’s energy system is on an unsustainable path short-term cash loans.
It warns the result could be both oil shortages and “catastrophic and irreversible" climate damage.
The agency predicts oil demand will climb to 106 million barrels a day from the current 85 million.
It says to meet rising energy demand over the next two decades, the industry would have to invest a minimum of $26 trillion.
The U.S. dollar rose Thursday as investors responded to higher stock prices and a report that showed the nation’s economy shrank in the third quarter.
The euro fell 0.6% to $1.2973 from $1.2956 late Wednesday in New York.
Britain’s pound traded at $1.6444, up from $1.6375.
Against the yen, the dollar rose more than 1% to ¥98.544 from ¥97.235.
The dollar came under pressure earlier in the session as Asian and European markets rallied. But the greenback recovered as the rally’s momentum faded.
"There was some enthusiasm overnight from fed rate cut," said Vassili Serebriakov, currency strategist at Wells Fargo & Company’s foreign exchange division. "But some of that enthusiasm is wearing off," he added.
Currency traders often buy higher yielding currencies such as the euro and the pound when stock prices are rising and sell those currencies in favor of lower yielding currencies like the dollar when markets are volatile.
World markets were bolstered by the Federal Reserve’s decision Wednesday to lower its benchmark interest rate to 1%. Central banks in Asia also cut interest rates freecreditreport.com.
The Fed also announced plans to establish $30 billion swap facilities with central banks in emerging markets.
In Asia, major markets posted double-digit percentage gains. Japan’s Nikkei index climbed 10% while Hong Kong’s Hang Seng index surged 12.8%. In Seoul, the KOSPI shot up a record 12%.
European shares closed mostly higher. Germany’s DAX and the FTSE-100 in London both added more than 1% while the CAC-40 gained 0.15%.
Major stock indexes in the Untied States opened higher but trimmed gains at midday as investors responded to a government report that showed the nation’s economy shrank in the third quarter.
"The market is taking a step back after the weak GDP figures," said Gareth Sylvester, senior currency analyst at foreign exchange brokerage HiFx.
Gross Domestic Product, the broadest measure of the nation’s economy, fell at an annual rate of 0.3% in the third quarter after growing at a 2.8% rate in the second quarter.
The Treasury could pump $250 billion into U.S. banks in what Federal Reserve Chairman Ben Bernanke called on Tuesday a comprehensive attempt to end the credit crisis, restoring market confidence and sending Tokyo stocks up 14 percent.
Japan, which forced its big banks to write off billions of dollars in bad loans earlier this decade with state help, said it could inject public funds into regional banks to make sure that small firms facing a credit crunch can find cash.
The Treasury is due to unveil its plan at 8:30 a.m. EDT, with about half of the total figure likely to go to the top nine U.S. banks alone as part of a capital infusion aimed at getting banks to lend to each other again, people familiar with the plan said.
Fed Chairman Bernanke said in an article published on the Wall Street Journal’s website that the measures, which he did not detail, constituted a broad-based attempt to end the crisis.
“These steps will allow us to restore more normal market functioning and encourage private capital to further support the reinvigoration of financial markets,” he wrote payday advance.
The U.S. move follows pledges of more than 1 trillion euros ($1.36 trillion) by Britain, Germany, France and other European countries to bolster their banks.
Many countries have also taken action to reassure savers by guaranteeing bank deposits. South Korean Finance Minister Kang Man-soo was quoted as saying Korea could raise guarantees on deposits and might even guarantee banks’ foreign currency debt.
In response to the global moves, Japan’s Nikkei soared 13.8 percent when Tokyo reopened after a holiday and MSCI’s index of Asia-Pacific stocks outside Japan rose nearly 7 percent after hitting its lowest since December 2004 on Friday.
A utility consultant recommended more than 150 improvements to make St. Louis-based Ameren Corp.’s Illinois electric grid less prone to the kind of mass power outages that left hundreds of thousands of customers in the dark following storms in 2006.
The audit by Liberty Consulting Group was presented to the Illinois Commerce Commission during a meeting Wednesday in Chicago. The ICC in December 2006 ordered an investigation of Ameren’s network of poles and wires and its system for restoring power following a storm.
The 585-page audit identified dozens of areas for improvements, some of which the utilities — AmerenIP, CIPS and Cilco — have already taken steps to address. It said the overall condition of Ameren’s electric delivery system was "reasonably good."
"Overall, Liberty found that Ameren companies have done an acceptable job" of building and maintaining their electric distribution system, said Bob Stright, a principal of the Pennsylvania-based firm.
Ameren Illinois spokeswoman Victoria Busch said the utilities, which sell electric service to 1.2 million customers in the southern two-thirds of the state, cooperated with Liberty to help prepare the report and they continue to make improvements recommended in the audit. Many focus on responding better to storm-related outages, such as improving the call center and telephone systems.
The audit showed Ameren’s infrastructure was generally in good shape. "But there is room for improvement," she said.
High winds that accompanied thunderstorms on July 19 and 21, 2006, knocked out power for 300,000 Illinois customers for as long as 10 days, and an ice storm at the end of November snapped limbs and trees and led to 370,000 outages in Illinois for up to eight days. Fueled by angry customers and politicians, the commission ordered the investigation less than a week later.
Hundreds of thousands of AmerenUE customers in the utility’s home state also lost power during the 2006 storms for days at a time. Subsequent investigations by the Missouri Public Service Commission staff led regulators to adopt new rules that establish electric reliability standards and require utilities to file reports on infrastructure and tree-trimming activities.
In Missouri, AmerenUE is spending $100 million a year to "harden" its electric distribution system to make it more storm proof instant cash advance no fax. The spending is part of a larger capital spending plan called "Power On."
In Illinois, Ameren’s primary lapse was lack of oversight of its tree-trimming contractors, according to the Liberty audit. The utilities couldn’t have avoided some damage, but a better job trimming and removing trees can improve reliability and minimize the impact of future storms.
"Better tree-trimming would have reduced the number of outages," Stright said. "Ameren needs to inspect more of its contractors’ work."
The Liberty report also said Ameren didn’t systematically inspect electric poles for strength, likely contributing to the number of outages. And while inspectors found that the utilities worked hard to restore service following the storms, the company’s call center experienced "significant failures" that frustrated customers.
Liberty was hired by the commission and is being paid by St. Louis-based Ameren, according to a copy of the August 2007 contract between the firm and the ICC. It calls for Liberty to be paid up to $2.9 million, including continued monitoring of Ameren’s progress for up to three years, ICC spokeswoman Beth Bosch said.
The audit was delivered to the ICC staff on Aug. 15, but not presented to the commission until Wednesday — two weeks after the ICC approved a $162 million electric and natural-gas rate increase for Ameren.
Bosch said the audit wouldn’t have been a consideration in the rate case even if it had been presented to the commission earlier.
David Kolata, executive director of the Citizens Utility Board, disagreed. Such performance audits may be considered by regulators when setting rates, but it’s uncertain whether the Liberty audit would have had an impact on the commission’s decision in Ameren’s last rate request.
Nonetheless, problems identified in the audit shouldn’t sit well with Ameren customers, many of whom began paying more for electric service last week.
"The consumers that we talk to are skeptical about Ameren," he said. "This raises more red flags."
Kevin McDermott of the Post-Dispatch contributed to this report.
jtomich@post-dispatch.com | 314-340-8320
John Thain, the Merrill Lynch & Co Inc chief executive who engineered its sale to Bank of America Corp, will head investment banking, securities and wealth management at the new company.
But analysts don’t expect Thain, who has led two major companies, to remain in his new job for long. They look for him to aim for the top spot at Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) or seek a CEO job elsewhere.
“The fact is that he’s a CEO — he’s not going to stay long,” said Greg Donaldson, director of portfolio strategy at Donaldson Capital Management in Evansville, Indiana. Thain was previously CEO at NYSE Euronext Inc (NYX.N: Quote, Profile, Research, Stock Buzz).
A Merrill (MER.N: Quote, Profile, Research, Stock Buzz) spokeswoman declined comment on the announcement on Thursday. Jim Mahoney, a spokesman for Bank of America, said the bank expects Thain to be a “strong contributor” to the executive management team. “The issue of succession was not central to his conversations with (CEO Ken) Lewis,” he added.
Thain joined Merrill in December after the ouster of Stan O’Neal and was brought in to repair the financial service group after it wrote down $8.4 billion in soured mortgage securities in the third quarter of last year.
Thain has presided over substantial write-downs no fax payday loan. Merrill’s total tally is over $20 billion for this year, including a $5.7 billion write-down in the third quarter that was announced in July. Merrill’s troubles stem from aggressive risk-taking in complex securities during O’Neal’s tenure as CEO.
Many Merrill investors see Thain’s shepherding of the proposed sale to Bank of America as a master stroke that may have saved it from a worse fate. Bank of America had considered acquiring Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz), which later filed for bankruptcy protection.
Thain also avoided being forced to sell the investment bank at a fire-sale price, as happened to Alan Schwartz, who was CEO at Bear Stearns when JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) bought Bear in March.
Peace. Love. Hockey.
It’s not a theme typically associated with Canada’s national pastime, but two savvy Markham hockey moms have a decidedly different take on the sport they know and love, especially as it relates to chicks like them who play the game.
Puck bunnies they’re not. But these sisters-in-law wear their hearts, along with tongue-in-cheek slogans, on their sleeve when it comes to their perspective on the sport. And Lori and Cindy Nickerson’s goal these days is to shoot for the often forgotten feminine side of the casual hockey apparel and accessories market.
Sticking it to the man, so to speak, is at the core of their über cool clothing line simply called She Plays Hockey, since their years at the rink both playing and watching their kids play led to the discovery that girl-friendly gear – from hats to hoodies – was surprisingly scarce.
"Initially, we were sick of not being able to find clothing that represented girls who play the sport. There just wasn’t much stuff out there," explains Lori Nickerson.
"Girls that play hockey are girls, not boys. And we have our own attitude toward it," adds Cindy Nickerson.
They made tonnes of calls, asked a million questions and did their research, identifying a void in a niche market of the sports apparel industry that has until recently been overlooked. Their gear is meant more for off the ice or to wear out of the locker room as opposed to the more technical side of manufacturing equipment.
As it turns out they were on the right track, considering girls’ and women’s hockey has absolutely exploded in popularity over the past couple of decades. According to website hockeycanada.ca, female hockey across Canada has grown from 8,146 girls and ladies registered to play on a team in the 1990-91 season compared with a record 73,791 last year.
It appears to get the biggest boost in interest after each Winter Olympics. The first time women’s hockey was featured in the 1998 Winter Games in Nagano, Japan – in which the Canadian women’s team won silver – enrolment on recreational girls teams in Canada shot up by a remarkable 30 per cent that year.
Vicky Sunohara, who played centre for that team and again for Canada in the following two gold medal-winning Olympics in 2002 and 2006, is a big fan of the statement She Plays Hockey makes in both fashion and feminism, albeit with a lighthearted twist.
"They (the Nickersons) were selling their clothing at a hockey camp I was running in Whitby and they gave us the hoodies. They both play so they’re very passionate about the game," she notes.
Sunohara recalls girls’ hockey wasn’t very popular when the now 38-year-old was growing up in Scarborough, so there wasn’t much to choose from beyond oversized guys’ jerseys, although she got all the Peter Puck logo shirts she could get her hands on back then.
In fact the market has always catered more to girl figure skaters than to female hockey players, she says.
"A lot has changed in terms of women playing the sport. I think it’s cool that the apparel and their unique sayings are directed toward the female game," she says.
Cindy Nickerson, a forward on a women’s recreational team in Stouffville, is the creative force behind the cute expressions on their gear like "Sugar & Spice, but not on the ice", "You only wish you could play like a girl", "My goal is .. quick payday loan. to deny yours", "Peace. Love. Hockey" and "Pretty to look at, hard to catch".
"We want it to be empowering," she says.
Cindy does most of the research whereas Lori, who plays defence with another recreational team in Scarborough, is the business brains of the operation, doing the budget and the books since they started out three years ago in her basement.
The two are married to brothers and live about a five-minute drive from each other in Markham. They each have three kids, although five of six are boys.
The hockey-loving duo started out small, plugging their colourful, cuffed toques and T-shirts at various girls’ and women’s tournaments at arenas in the GTA.
"Three years ago we were cold calling hockey tournament organizers begging for an arena to sell at. Now our appearance is requested, but unfortunately we have had to turn down more than we can accept because of time constraints and family commitments," explains Cindy, whose 6-year-old daughter and 10 and 12-year-old sons are way into the sport.
But they’re hoping to grow the business now that her job in tech support is being outsourced overseas and Lori’s youngest son is now in school. They’ve had nibbles from local retailers, big and small, and are hoping to get their foot in the door with more of the independent sports stores and move up from there.
Word-of-mouth has helped them enormously. They’ve also managed to keep every aspect of the business local, from graphic design to manufacturing, with the `made in Canada’ branding almost as important to them as the ‘girl-power’ message.
"I came across the clothing line through a fellow Oakville Hornets’mother," says Mitch Maurice, wife of former Leafs’ head coach Paul Maurice and mom to 11-year-old peewee-level player, Sydney.
"There was an in-home sale of the items just before Christmas and I figured I’d look for a few unique things for my daughter. I like the quality, affordability and uniqueness of the products and she loves the colours, the mix-and-match options and the slogans. I’ll be checking at the rinks for the next opportunity to purchase some more," she adds.
Lori’s basement is now a storage space for their inventory, lined with dozens of clear bins packed with their trendy shirts, flannel pants, undergarments/long underwear, lunch bags and backpacks.
Naturally they all come in girl-friendly hues like baby blue, lime green and hot pink, along with regular shades, and are tailored for the female physique, as opposed to the baggy gear aimed at the guys that isn’t terribly flattering on the girls.
"The sayings are girlie and the logo, She Plays Hockey, is simple but it’s memorable.
"We’re doing clothing for girls, both kids and adults, but we’re not tomboys," says Lori.
NEW YORK — The state is launching an investigation into whether some traders used illegal tactics to drive down the stock price of several Wall Street firms.
Attorney General Andrew Cuomo told reporters Thursday that his office has received a "significant number" of complaints about short sellers, or investors who hope to profit by placing bets that a financial company’s stock will fall.
Short-selling is not illegal. But Cuomo said he will focus on whether short sellers engaged in conspiracy or spread rumors and bad information to influence the stock prices of Lehman Brothers Holdings Inc., American International Group Inc., Goldman Sachs Group Inc., Morgan Stanley and others.
Short-selling occurs when traders borrow shares of a stock they expect will fall and sell them cash advance loans. If the stock does indeed fall, the traders buy the cheaper shares to cover the borrowed ones and profit from the difference.
Naked short-selling occurs when sellers don’t actually borrow the shares before selling them. It’s a practice some say is partially responsible for the huge drop in the shares of investment banks such as Lehman, Merrill Lynch and Bear Stearns Cos., which JPMorgan Chase & Co. bought this year.
Cuomo said he believes the federal government has been "ineffective" in dealing with short sellers and said his office would go after traders found to be illegally using the practice to manipulate markets.
On Wednesday, the Securities and Exchange Commission a