Financial Business: JP Morgan Disses Morgan Stanley and Goldman, Citigroup’s Cost Cutting

The Cheat Sheet

Bank of America might be on the chopping block, at the very least it may be cut up into tiny pieces. A group of consumer advocates, academics and economists, led by consumer advocacy organization Public Citizen, plan to file a petition with the federal government and other regulators today. It will likely have minimal practical impact but is a dramatic criticism of regulators’ failure to act.

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Citigroup may cut more jobs this year at its securities and banking arm. This includes investment banking. The firm invested almost $1 billion in its investment bank last year, but last week reported a 29% drop in the parent unit. Citi has already announced cuts of 5,000 jobs across the entire company.

Flagstar Bancorp drops over 20% premarket. This after the bank holding company showed a wide loss in the fourth quarter, which was more than analysts expected.

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Morgan Stanley and Goldman Sachs have been downgraded by JPMorgan Chase & Co . Dropping it from Neutral to Overweight, analysts with JPM cite potential new calculations for capital risk from new methodologies emanating from the Dodd-Frank Act as an overhang on shares.

Piper Jaffray trades lower after a loss in the fourth quarter. A large impairment charge and continued weak demand for capital markets services could be to blame. Assets under management came in flat year-over-year and up 8.9% quarter-over-quarter largely due to equity market appreciation.

Morgan Stanley CEO James Gorman tells CNBC in a video that his company is well equipped to meet Basel III capital requirements. Also, he states that there is no need to raise additional funds in the near-term, and reiterates Morgan Stanley’s commitment to buying a 14% stake in Morgan Stanley Smith Barney from Citigroup . The purchase takes priority over dividends and buybacks.

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