What's Important in the Financial World (3/18/2013)
HSBC Job Cuts
The restructuring of the financial services industry, which has ranged from 30,000 layoffs at Bank of America Corp. (NYSE: BAC) to cuts at Citigroup Inc. (NYSE: C) and Barclays PLC (NYSE: BCS), has reached multinational HSBC Holdings PLC (NYSE: HBC). According to the Financial Times:
Stuart Gulliver, HSBC's chief executive, said when he announced annual results last week that he would "fixate on costs" over the coming year and promised to find a further $1 billion of annual savings in 2013.
The job cuts target has still to be fixed but people close to the bank suggested up to 5,000 staff could go as part of the $1 billion savings plan. If HSBC maintained the recent rate of staff cuts to cost savings, the number would be closer to 10,000.
Chinese Home Prices
One of the most substantial concerns about the Chinese economy is that inflation in securities, food prices and real estate could create bubbles. The central government has hoped to keep this under control with mortgage rules. Recent data show that has not worked. Bloomberg reports:
China's new home prices posted the broadest advance since December 2011, a test for new Premier Li Keqiang as he seeks to prevent a bubble without damping economic growth.
Prices climbed in 62 cities of the 70 the government tracks in February from a year earlier, the National Bureau of Statistics said today. Beijing prices jumped 5.9 percent from a year earlier, the biggest since February 2011, while they advanced 8.1 percent in Guangzhou, the most since January 2011.
Brand new efforts to cool the market go into effect this month. However, they may be no more effective than the slew of such efforts instituted in the past.
Pay-TV Shake Up
Verizon Communications Inc. (NYSE: VZ) wants to turn the model for payment to creators of premium content on its head. Its proposal is to pay based on the audience that shows and movies produce. According to The Wall Street Journal:
Verizon Communications Inc. is proposing to shake up the pay-television business based on a simple premise: it wants to tie the fees it pays to carry TV channels to how many people actually watch them.
Verizon, whose FiOS TV is the nation's sixth-biggest pay-TV provider, with 4.7 million subscribers, has begun talks with several "midtier and smaller" media companies about paying for their channels based on audience size, according to Terry Denson, the phone company's chief programming negotiator. He declined to identify any of the media companies.
Under existing arrangements, distributors like cable and satellite operators pay a monthly, per-subscriber fee to carry channels based on the number of homes in which they agree to make the channels available, regardless of how many people watch those channels.
Filed under: 24/7 Wall St. Wire, Market Open Tagged: BAC, BCS, C, featured, HBC, VZ