Daiwa Bank is being ordered to shut down all of its U.S. operations in 90 days, according to the Associated Press.
The AP reported the Federal Reserve and other state banking regulators announced today that Daiwa, involved in a $1.1 billion bond trading scandal, has agreed to cut all activities in the United States.
According to AP, the regulators said Daiwa ``engaged in a pattern of unsafe and unsound banking practices and violations of law over an extended period of time that are most serious in nature.''
Chrysler Corp., Highland Park, Mich., announced today its board will review the company's corporate governance procedures and board membership to evaluate whether incremental changes would be in the long-term best interests of the company and all of its shareholders. The review, to be conducted jointly by the board and Chrysler's senior management, will involve direct consultation with Chrysler shareholders.
In a statement, Chrysler Chairman Robert J. Eaton cited two factors that influenced the board's decision: the recently received proposals from Kirk Kerkorian on corporate governance and board membership, and recent meetings between senior Chrysler executives and a number of Chrysler shareholders.
The company expects to complete the governance review within 90 days.
Analysts' corporate earnings forecast error rates are rising significantly, according to David N. Dreman, chairman of Dreman Value Advisors, in research he presented today at the University of Chicago's Center for Research in Security Prices seminar on behavioral finance.
A study he co-wrote shows analysts' forecasting errors as a percentage of reported earnings for 1,221 New York Stock Exchange and American Stock Exchange companies for all quarters between 1973 and 1990. The errors rise almost steadily from 31% in 1973 to 65% in 1990, and he notes the errors are increasing even though analysts have more online corporate data than ever before and other better sources of information.
Mr. Dreman believes, in part, peer pressure and institutional consensus push people toward favorite stocks and away from unfavored ones.
Political uncertainties contributed to worldwide market declines in October, according to Morgan Stanley Capital International. The MSCI World Index fell 1.7%, while the MSCI Europe Australasia Far East Index dropped 2.8%. Nor did emerging markets fare well: they declined 3.9%.
Year to date, the World Index is up 11.8% and EAFE is up 2.6%, while the Emerging Markets Free index is down 9%.
Among the political problems contributing to market falls last month: the debate over the U.S. budget, which threatens a default on U.S. interest payments, and Quebec's vote on secession, which was narrowly defeated Oct. 30. There were a few strong performing markets last month. The best performers, in dollar terms, were Venezuela, 30.7%; Turkey, 9.4%; and Switzerland, 4.1%.