Over the past several months, we’ve received great feedback on our weekly news summaries, including a few suggestions on how these posts can be more helpful to our readers. We’ve taken this feedback to heart, and have decided to change our “weekly news roundup” feature to focus on major stories breaking in the financial services industry. Moving forward, Our Two Cents will be authored by members of BlissPR’s Financial Services Practice Group.
Our news highlights will focus on our group’s areas of expertise, including: banking, bankruptcy, insurance, asset management, investing, markets and private equity. We’ll also point out who we believe are “social media stars” – those in the FS industry who are truly leading the way in these still-uncharted waters. So without further ado, here is this week’s financial services news roundup:
Banking & Bankruptcy: It’s only mid-February and the toll of banking failures already stands at 20. It seems someone forgot to inform the banks that there is a recovery going on out there. The four failures which happened late Friday cost the Government an expected $1 billion. One of the largest failures, year to date, was that of California based La Jolla Bank, who had $3.6 billion in assets. In a deal with the FDIC, La Jolla’s operations were sold to One West Bank which was launched in early 2009, to purchase the remains of IndyMac Bank. The three other failed banks were named as George Washington Savings bank, Marco Community Bank and The La Coste National Bank. For more on this story please click here.
Speculation is mounting that MGM Mirage could be on the verge again of entering Chapter 11. Following their disappointing earnings last week, the rumors are circulating that this time they won’t be able to patch things up and that bankruptcy is looming ever closer. Like Blockbuster which we discussed earlier this year, it seems that bankruptcy talks around MGM Mirage are a regular occurrence. Given their huge exposure to the Las Vegas Strip which many analysts believe is not going to see a turnaround in the near term, it’s not surprising that Chapter 11 fears are surfacing yet again. TheStreet.com has a nice analysis of the situation here.
Credit Cards: New credit-card regulations go into effect today (the second iteration of changes Americans have seen since President Obama signed the Credit CARD Act last year). The changes are aimed to help protect consumers and make account terms easier to understand and more transparent. But, credit card companies can still raise interest rates and impose annual fees on new cards, and there is no cap on how high interest rates can go. The bill’s provisions are filled with loopholes, outlined in the Washington Post here. This week, look for coverage of what Americans should do for the best deal on their credit card, and explanations of new tactics banks are undertaking to get around the regulations, as well as a preview to the next, and last, implementation date for the regulations: August 22, 2010.
Markets: There’s plenty to keep your eye on this week, with a number of earnings and some important meetings. Today we wait as the senate is slated to hold a procedural vote on a $15 billion legislation aimed at job creation. Broadly speaking, the market is concerned about the pace of spending and basically anything that points us towards another stimulus package is going to feed into that anxiety. Some important retail numbers to watch include Nordstrom earnings on Monday, Target reports on Tuesday and the Gap’s earnings are due out on Thursday while the department store company reports full results Tuesday. On Thursday the White House also plans to hold a bipartisan health-care meeting with lawmakers and has promised to publish its version of overhaul legislation by Sunday. And lastly, let’s not forget Bernanke’s semi-annual monetary policy report, which he is expected to deliver to Congress and the Senate Wednesday and Thursday respectively. To read more about Congress confronting the jobs bill, click here.
So there you have it, the Financial Services Practice Group’s “Two Cents” on what’s news in finance this week. Stay tuned for next week!
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