What's Important in the Financial World (10/3/2012)

Banks Should Abandon New York?

Infamous bank analyst Dick Bove believes that banks are treated so badly by the State of New York that they should abandon the location and move to alternate places. After the New York Attorney General filed suit against J.P. Morgan Chase & Co. (NYSE: JPM) on issues of the sales of mortgage-backed paper, Bove, who works at Rochdale Securities, wrote:

Management should consider the benefits of moving their headquarters elsewhere. Shareholders should not be forced to pay for continuous lawsuits because these banks are in New York.

If the industry was located in Charlotte, North Carolina it would not be facing constant hostility, it would be supported by a government that wants its business.

The financial services sector is already bleeding jobs in New York City. In the unlikely event that they take Bove’s advice, that would worsen.

Apple Brand Gains on Coca-Cola

Interbrand has released its “Best Global Brands of 2012,” which contains no surprises. Coca-Cola Co. (NYSE: KO) remains at the top of the list with a brand value of $77.8 billion. Apple Inc.’s (NASDAQ: AAPL) brand valuation jumped 129% to $76.6 billion. The move nearly mirrors the rise in its share price. Apple is almost certain to take the top slot next year. At the other end of the list are Research In Motion Ltd.’s (NASDAQ: RIMM) BlackBerry, which had a drop in value of 39% to $3.9 billion. Viacom’s (NASDAQ: VIA) MTV lost 12% of its value and fell to $5.6 billion. Nokia Corp.’s (NYSE: NOK) value fell 16% to $21 billion. It is surprising that Nokia and BlackBerry did so well. The Interbrand method of valuation is fuzzy, perhaps because it wants to gain new clients for its brand-building business.

Gasoline Prices on the Rise

The drop in gasoline prices is over for now. The average per-gallon price of regular nationwide, according to the AAA Fuel Gauge, was $3.782, compared to $3.780 the day before and $3.805 a month ago. Given the drop in oil prices, gas prices logically should have fallen more. But concerns about supply, the instability of Iran and OPEC’s plans for early next year have kept prices high. Refinery activity in the United States may play a part as well. The problem is worse than its seems, when several of the most populous states are taken into account. Prices are above $4 in California, Connecticut and New York, and just below that level in Michigan, Illinois and Massachusetts. If the fiscal cliff is reached, these gas prices could be the last straw to break the back of consumer spending.

Douglas A. McIntyre