Big Banks Are Padding Profits With ‘Reserve’ Cash; As Revenue Slows, Some Banks Increasingly Use Loan-Loss Reserves to Boost Income

Big Banks Are Padding Profits With ‘Reserve’ Cash

As Revenue Slows, Some Banks Increasingly Use Loan-Loss Reserves to Boost Income

MICHAEL RAPOPORT

Updated Oct. 25, 2013 7:23 p.m. ET

Federal regulators have warned banks to be careful about padding their profits with money set aside to cover bad loans. But some of the nation’s biggest banks did more of it in the third quarter than earlier this year. J.P. Morgan Chase JPM +0.55% & Co.,Wells Fargo WFC +0.40% & Co., Bank of America Corp. BAC +0.64% and CitigroupInc., C -0.18% the nation’s largest banks by assets, tapped a total of $4.9 billion in loan-loss reserves in the third quarter, up by about a third from both the second quarter and the year-ago quarter after adjustments. All the banks except Citigroup showed significant increases compared with the second quarter. Read more of this post

Ford finally finds its place in China; Just five years ago, Ford was thought to be hopelessly behind in China. But sales in the country so far this year have reached 647,849, an eye-popping 51% higher than a year ago

Ford finally finds its place in China

October 25, 2013: 5:00 AM ET

Just five years ago, Ford was thought to be hopelessly behind in China. But sales in the country so far this year have reached 647,849, an eye-popping 51% higher than a year ago.

By Doron Levin

FORTUNE — After a slow start, Ford (F) has finally found its footing in China. Alan Mulally ought to count such a feat among his signal achievements as CEO at the auto giant. Sales so far this year have reached 647,849, an eye-popping 51% higher than a year ago. Just five years ago, Ford was barely selling 250,000 vehicles a year and thought to be hopelessly behind. The last few months have been trending toward an annual sales rate of 1 million vehicles. Read more of this post

Oil’s $5 Trillion Permian Boom Threatened by $70 Crude

Oil’s $5 Trillion Permian Boom Threatened by $70 Crude

Bryan Sheffield, a third-generation oil wildcatter in Texas’s Permian Basin, knows what he’ll do if crude drops to $80 a barrel: shut down half his drilling rigs and go on a takeover hunt for weaker rivals. Sheffield is among producers who’ve together invested $150 billion in the Permian since 2010 seeking their piece of an oil trove estimated to be worth as much as $5 trillion. As the money pours in, risks are mounting of a bust as analysts including Marshall Adkins of Raymond James & Associates Inc. forecast crude is heading down to $70 a barrel next year, a price that would slow drilling in the most expensive U.S. shale formation. Read more of this post

Indonesian Oil, Gas Exploration May Halt Over Land-Tax Issue

Indonesian Oil, Gas Exploration May Halt Over Land-Tax Issue

Work at 19 Indonesia exploration wells may halt after the finance ministry shifted the cost of land and building taxes for oil and natural gas projects. The companies that operate the wells have temporarily halted orders for drilling rigs because they are required to pay the tax before starting exploration, according to Aussie Gautama, planning deputy at SKK Migas, the country’s upstream oil and gas regulator. The suspension may hamper effort to find potential resources of 1.6 billion barrels of oil and 3.7 trillion cubic feet of gas reserves, Gautama said. Read more of this post

Upcoming Elections May Hinder Asian Reforms; Indonesia and India are both slated to hold national elections next year –in April and July in Indonesia, and by the end of May in India

October 24, 2013, 10:59 PM

Upcoming Elections May Hinder Asian Reforms

NATASHA BRERETON-FUKUI

The U.S. Federal Reserve’s decision to keep its easy monetary policy in place for now has given Asia time to prepare for the eventual drawback of foreign capital. But upcoming elections mean policy makers are unlikely to take the hard decisions needed to make their economies more resilient once the Fed does move. Indonesia and India, the two Asian economies hit hardest this summer when investors pulled out of emerging markets in anticipation of Fed tightening, are both slated to hold national elections next year –in April and July in Indonesia, and by the end of May in India. Read more of this post

Najib Drives Malaysian Shift to Fiscal Prudence as 6% GST Planned from April 2015

Najib Drives Malaysian Shift to Fiscal Prudence as GST Planned

Malaysian Prime Minister Najib Razak took steps for a shift toward fiscal prudence, scrapping sugar subsidies and unveiling plans for a consumption tax in 2015 while softening the impact with handouts to the poor. The government will implement a goods and services tax of 6 percent in April 2015, while corporate and personal income tax rates will be lowered after the new levy comes into force, Najib said in his 2014 budget speech yesterday. The fiscal deficit will shrink to 3.5 percent of gross domestic product next year from 4 percent in 2013, meeting targets set previously, the finance ministry said in a report. Read more of this post