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Barclays: At the Nadir

Barclays has lost 20% of its value since the beginning of the year as a result of two factors which will have no enduring impact: (i) a 10% increase in the 2013 bonus pool; and (ii) disappointing year-to-date results for

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Regional Banks: The Dynamics of Net Interest Margins at Selected US Banks

The role of CMA, MTB, and KEY as favored “asset sensitive” plays on rising rates leaves them over-valued relative to our regression model, and particularly to BAC and COF. Ironically, over the last 12-months BAC and COF were the only

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Bitcoin: Not a Bit and Not a Coin

The founding principle behind Bitcoin is to eliminate the need for, and hence cost of, intermediaries in a payments system. The two key functions of payments intermediaries are to process transactions securely and to mediate disputes. Bitcoin addresses the first

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Branch-Banking in the US: There’s an App for That

This note argues that the traditional role of branches, to provide secure transaction processing, will be taken over by apps not so much because banks are looking to reduce teller-costs but because the digital engagement of customers (whether in-branch, on-line,

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WMT and Retail

This morning, WMT reported Q4 ’13 results that were in line with expectations that already reflected previously reduced guidance (late January). FY ’14 guidance ($5.10 to $5.45) was disappointing relative to consensus ($5.55 coming into today), including guidance for operating

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Quick Thoughts – Capital One Joins Bank-Owned Payment Network

COF announced yesterday that it had joined clearXchange, a bank-owned payment network founded by JPM, BAC, and WFC. clearXchange focuses on P2P payments (enabled using the recipient’s e-mail address or mobile phone number) and now covers half the addressable market;

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Retail Sales and Retail Earnings

In our note last week, we commented on some dynamics that we saw during the holiday season that made us marginally more cautious on the U.S. consumer: Declines in per capita disposable income (Exhibit 1). A lower savings rate that

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Barclays: Normalized Forward Dividend Yield of 4%

The negative sentiment around Barclays, and cyclical component of the downturn in investment banking, creates a buy opportunity. It is not without risk given the potential legal/regulatory costs associated with alleged manipulation of the libor[1]/currency markets, but investors are offered

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Quick Thoughts – MCX to Work with Paydiant on Tokenization to Improve Security

The Target data breach has probably pushed back the launch date for MCX pilots to the second half of 2014. It must be hard for merchants to stomach since, while consumers associate the breach with a failure of security at

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Quick Thoughts: Barclays – Numbers do not Support Negative View of the Investment Bank

I have rarely seen such a gap between strong management execution and negative market sentiment. Barclays stock is down nearly 7% after the full-year conference call in London this morning; the headline earnings number had come out yesterday and been

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