I would be willing to bet any OPY bulls out there that 2Q will be another big loss. The CIBC deal in January added over half a billion in annual expense to support a lavish capital markets biz just as the capital markets have shut down. I would be willing to bet that these losses much more than offset the losses from the strong retail and asset management businesses. Given the CEO's frugality, I give the capital markets business less than a year to live, especially since they paid nothing up front for them. Unfortunately, in the wake of the deal, they shuttered a capital markets business with much lower overhead. I would be very curious to hear any reasoned, rational contrary viewpoints to my post. Am I wrong?
The brokers will not benefit on the CIBC purchase, what a waste, they are stock traders , I looked up Josephthal , Prime Charter, Fahnestock and Oppenheimer , the regulators are all over this company , Their sub company Josephthal was a regulators nightmare. This company is hidding behind the GOOD Oppenheimer name, Its NOT CIBC OPPENHEIMER or OPPENHEIMER Mutual Funds. Like I said trading stocks in this market will skake out firms like this.
It turns out that the brokers are paying for the costs of the newly acquired capital markets business. Since this business is unprofitable the brokers are covering its operating expenses. The firm would be better off shutting this business down and increasing broker compensation. This would allow them to attract more brokers and grow this profitable division even faster.