Investment banks are struggling in Wall Street’s third-quarter earnings season following a drop in mortgage refinancing and a downturn in trading. How well do you know the big banks? Test yourself by matching the financial giant to the quote about their earnings reports.
If you’re keeping score, one correct answer: Back to business school, #financebros. Two correct answers: Meredith Whitney won’t respond to your LinkedIn request. Three correct answers: Belated congratulations on your Gentleman’s B at Harvard. Four correct answers: A hedge fund recruiter calls you at least once a week. Five correct answers: This is partnership material. Six correct answers: Maybe @GSElevator should start following you on Twitter. Seven correct answers: You’re either Michael Duvally or a quant.
The financial firms are JPMorgan Chase, Wells Fargo, Citigroup, Bank of America, BlackRock, Goldman Sachs and Morgan Stanley.
1. “It’s pretty straightforward: Whenever regulators go after the big financial institutions and corporations, it’s very good business for the law firms that represent them,†said Allen D. Applbaum, a co-leader of global risk and investigations at FTI Consulting and a former federal prosecutor.
2. “It is a quarter,†the bank’s chief financial officer reiterated several times, sounding frustrated while discussing poor performance.
3. “This was the best third quarter that wealth management has had â€" ever,†the bank’s chief financial officer said.
4. “Weak mortgage banking clearly stole the show,†said Shannon Stemm, a financial services analyst at Edward Jones. “That said, they’re able to continue their consecutive earnings growth.â€
5. “Fundamentals continue to be outweighed by policy decisions and global growth is dictated more by central bankers and elected officials than business leaders,†the bank’s chief executive said.
6. “It is growing its more stable businesses like wealth management and reducing risk in the more volatile businesses like fixed income,†said Ms. Stemm.
7. “I can’t think of a significant business that had revenue growth year over year,†the bank’s chief financial officer said.
The answers are below.
A look back on our reporting of the past week’s highs and lows in finance.
FRIDAY, OCT. 18
Morgan Stanley Helped by Stock Trading Unit | Under the leadership of James P. Gorman, the bank has changed tack to focus on less risky areas of the business. DealBook »
Madoff’s Sons Cleared in London Trial | A judge concluded that neither Andrew or Mark Madoff had any knowledge of their father’s Ponzi scheme. DealBook »
HSBC to Appeal $2.46 Billion Judgment | The long-running securities fraud lawsuit in the United States is related to a consumer-loan and credit-card business that the British bank acquired more than a decade ago. The New York Times »
THURSDAY, OCT. 17
Like That Athlete? Buy a Share | In a twist on fantasy sports, a company plans to sell stock in the future financial performance of the N.F.L. running back Arian Foster. DealBook »
SAC Deal Could End Its Advisory Business | Winding down its business of managing money for outside investors is said to be part of a plea agreement being negotiated with prosecutors. DealBook »
Revenue Fall at Goldman Sachs Raises Concerns | There is some concern that the pull back is not short term and could be the new normal. DealBook »
WEDNESDAY, OCT. 16
Investors Cheer Deal but Worry About Reruns | The deal was far from a permanent solution. And investors were tabulating what the long-term costs of the political turmoil could be. DealBook »
A Regulator Cuts Its New Teeth on JPMorgan in ‘Whale’ Case | The settlement with the Commodity Futures Trading Commission could portend a wave of other actions against banks and hedge funds that build outsize trading positions. DealBook »
Jury Rules for Cuban in Setback for S.E.C. | The loss in the Mark Cuban case could reignite concerns about the agency’s struggles in the courtroom. DealBook »
Despite Loss in Mortgages, Profit Soars for Bank | Bank of America reported a sharp rise in third-quarter earnings, but the bank’s mortgage operations faltered, underscoring that home loans remain a challenging business for the nation’s banks. DealBook »
BlackRock Posts 14% Rise in Profit | The giant money management firm is now managing a record $4 trillion after customers put more money into its stock mutual funds and exchange-traded funds. DealBook »
An Activist Investor Is Urging Darden to Break Itself Up | Barington Capital is calling for the 2,100-restaurant empire to be broken into as many as three separate businesses, according to a letter sent to its board. DealBook »
TUEDAY, OCT. 15
Stalemate in Washington Puts Unpredictable Strain on a Vital Debt Market | The market where Wall Street firms borrow billions of dollars of short-term debt each day remains vulnerable to shocks. DealBook »
Bank Expected to Admit Fault in Trading Loss | For JPMorgan Chase, fines totaling billions of dollars are no longer sufficient to placate the government. Now the bank’s regulators want something stiffer: a mea culpa. DealBook »
Sharp Rise in Revenue for Twitter | As Twitter prepares to hit the road to begin peddling its stock to the public, the company disclosed new revenue numbers that may help it persuade investors to buy the shares. DealBook »
Citigroup Hurt by Lower Profit From Fixed-Income Trading | Grappling with a tepid mortgage market and a broad slowdown in its fixed-income business, the nation’s third-largest bank by assets reported disappointing third-quarter earnings growth. DealBook »
Deal Professor: A Push to End Securities Fraud Lawsuits Gains Strength | A behind-the-scenes fight at the Supreme Court could end shareholders’ ability to sue companies for securities fraud, writes Steven M. Davidoff. DealBook »
MONDAY, OCT. 14
Buyout Firms Are Chasing Sky-High Sums for Next Moves | Nearly 2,000 private-equity firms are making pitches to state retirement systems, corporate pension funds and wealthy investors to raise nearly three-quarters of a trillion dollars. DealBook »
DealBook Column: The Bloodlust of Pundits Swirls Around Jamie Dimon | There is an almost bizarre disconnect between the headlines and what the people who matter are seeking, writes Andrew Ross Sorkin. DealBook »
Moncler Files to Go Public on Milan’s Stock Market | The cold-weather apparel maker is the latest fashion company to pursue a stock listing, driven by investors’ desire to tap into luxury retail. DealBook »
Divining the Future: Chastening the Giant Banks | Banks have lost some of their swagger, but they’re back in fighting form. Will they always be too big to fail? The International New York Times »
SUNDAY, OCT. 13
Legal Bills Rising, Cohen Is Said to Plan Art Sales | The billionaire hedge-fund manager has put two major paintings by Andy Warhol and an abstract canvas by Gerhard Richter up for sale. DealBook »
WEEK IN VERSE
‘Nerd Versus Jock’ | MC Frontalot on the eternal battle at the heart of finances and fantasy sports. YouTube »
‘Family Affair’ | Mary J. Blige tries to get SAC excited about operating as a family office. YouTube »
THE ANSWERS
1. JPMorgan Chase; 2. Goldman Sachs; 3. Bank of America; 4. Wells Fargo; 5. BlackRock; 6. Morgan Stanley; 7. Citigroup
