Big losses and having to raise $20 billion has been too much for AIG’s (AIG) largest investors. They are expected to get their way today. The AIG board will jettison CEO Martin Sullivan.
According to The Wall Street Journal, AIG Chairman Robert Willumstand, a former high level fellow from Citigroup (C) may get the job.
Once Sullivan is gone, the AIG balance sheet will be just as ugly.
Douglas A. McIntyre
Dick Fuld, CEO of Lehman (LEH), may lose his jobs soon. Someone has to step in if the brokerage’s stock keeps falling. The company board knows that. Lehman’s COO and CFO has already been pushed out. The brokerage’s comments on its earnings call did not encourage investors. Fuld simply took responsibility for losses, but did not offer to pay back the billions of dollars he had lost stockholders.
Where does the firm turn?
The first place is Goldman Sachs (GS), where everyone else in the financial community looks for management. The company is considered the best run on Wall St. The most logical candidate there is Jon Winkelried. He is currently president and co-chief operating officer. The key piece of his resume is that he ran Goldman’s investment banking division.
The other financial firm which most investors still admire is JPMorgan (JPM). Since Jamie Dimon, the company’s CEO, is only 52, no one is likely to get promoted into his job soon. That may make it more likely that the people below him could leave. Steven Black, who co-CEO of the investment banking division, is probably the strongest candidate from the bank if Lehman needs a new chief.
The most likely "dark horse" candidate is former Morgan Stanley (MS) president, Zoe Cruz. She was let go at the investment bank, but many people believe that she was simply sacrificed by CEO John Mack to save his job. She was a senior exec at MS for years, and knows Wall St. well.
In the minds of his board, Fuld may already be gone, and the they may already be looking for his replacement.
Douglas A. McIntyre
A large number of the banks and brokerages in the US and EU have turned to sovereign funds in Asia and the Middle East to replenish their reserves after taking huge losses on mortgage-backed securities and other stupid investments.
Many of the companies which have collected sovereign money have subsequently sold off to 52-week lows on concerns about more bad news, Citigroup (C) being a prime example. Due to these price drops and the resulting loses taken by the country funds, worries have emerged about of whether they will "rescue" banks in the future.
The answer may be "yes" . Barclays (BCS) is roaming Asia, hat in hand, to bring in more capital. According to The Times, "The first opportunity (to invest) is being offered to the China Development Bank and Temasek, a Singaporean government investor." Barclays will probably have to accept awful terms, but at least it won’t be turned away.
Now troubled US banks have a place to beg where they still might find an open wallet or two.
Douglas A. McIntyre
| Today’s top tickerspy Indexes | |
| Regional Bank Sto... | +1.4% |
| Hospital Stocks | +1.1% |
| Rubber and Plasti... | +1.0% |
| Casino Stocks | +1.0% |
| Hotel Stocks | +0.9% |
 | |
| |
RSS Updates
Email Updates
