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Dimon Beset by Bad WaMu Loans as JPMorgan Makes Overseas Pus

November 2, 2010

Brian Battle, Director at Performance Trust Capital Partners, comments on possible problems facing JPMorgan Chase from issues with foreclosure documentation possibly inherited with the bank’s purchase of Washington Mutual.

"That can be a big long-term problem, very expensive,” he said. “The whole can of worms is wide open.”

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Banks Want to Unload Foreclosures as Fast as Possible

November 1, 2010
Marketplace at American Public Media

Brian Battle, Director at Performance Trust Capital Partners, argues that it’s in a bank’s best interest to sell foreclosed real estate. “Sell it as fast as possible because it seems like housing is in a declining market,” he said. “So you’d rather sell it today than a year from now when prices are generally declining.”

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US STOCKS – Market Tumble on Rethink of Fed Stimulus

October 27, 2010

Brian Battle, Director at Performance Trust Capital Partners, comments on bond purchases by the Federal Reserve. “There are a lot of reasons to not like the market right now,” he said. “We’ve come a long way, it looks like the Fed won’t ease as much as we thought, and while earnings are OK, future prospects look iffy.”

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Battle: It Doesn’t Get Easier After Election Day

Oct 26, 2010
MarketWatch Morning Stock Talk

Brian Battle, Director at Performance Trust Capital Partners, tells MarketWatch’s Tracy Johnke that this period of uncertainly requires careful stock picking.

Election Day won't provide all the answers investors need, said Battle. "Just the fact that we get through the midterms might give us some indication of how things are going to go, but it might take two, or three, or four, even six more months to figure out what the regulatory landscape, tax landscape's going to be," he said.

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Chicago finds creative use for Build America Bonds

Oct 24, 2010
Chicago Tribune

Brian Battle, Director at Performance Trust Capital Partners, comments on Chicago’s plan to use a federal subsidy designed to facilitate the issuance of construction revenue bonds as a way to patch a hole in the city’s budget.

“If the city keeps doing one-time gimmicks or assets sales or borrowing from reserve funds to balance its budget, credit-rating agencies will look skeptically at that repetitive behavior,” Battle said.

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US STOCKS—Nasdaq Rallies 1 pct on Google, Banks Weigh on Dow

October 15, 2010

Brian Battle, Director at Performance Trust Capital Partners, discussed market concerns arising from documentation issues with foreclosures.

"The real downside potential of this issue is unknowable. It could be a multi-billion dollar problem,” said Battle. “This could end up being a problem with the financial system like we saw in 2008.”

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Stocks: Bracing for a rocky October

October 3, 2010

Brian Battle, Director at Performance Trust Capital Partners, discusses what the month of October may look like for investors.

Midterm elections: The stomach churning ahead of the midterm elections -- which could bring with it new regulation and tax policies -- is likely to keep investors from jumping in, said Brian Battle.

"Everyone takes their bets off the table before an election because of three levels of uncertainty," said Battle. "The first unknown is if conservatives re-take the House or Senate, the second is if they do, what their policies are going to be and whether they get them voted on, and the last thing is whether Obama vetoes it."
Earnings: The uncertain political climate is also causing businesses to exercise caution, said Battle.

"If Republicans do take the House, that will be good for companies and good for the markets because it will be a very pro-business environment," said Battle. "But until we have that clarity, it's really tough for corporations to make business decisions and project future earnings without knowing what tax policies and regulation will look like."

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Factory Activity Growth Slows in September

October 1, 2010

Brian Battle, Director at Performance Trust Capital Partners, is one of six market experts interviewed in this story to analyze manufacturing numbers for September released by the Institute for Supply Management.

"The data should take the wind out of the camp thinking there's no inflation to worry about, but the data is going to be unreliable on a month-to-month basis since the recovery is so uneven. It's going to be very volatile and there's a lot of uncertainty about the labor market and government policy,” said Brian Battle.

"The construction spending number is background noise, and while the sentiment number was good, a change of 1 point isn't a trend. If you graph the number over the past few months, it could signal that we have a little downdraft going here. It is very difficult to be an investor right now because signals are being crossed."

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Stocks Stumble at the Close

September 29, 2010

Brian Battle, Director at Performance Trust Capital Partners, evaluates the economy and the stock market performance during September.

After rallying to 4-month highs and gaining for a fourth straight week last week, stocks have been stuck in a rut, swinging between small gains and losses. "The economy still hasn't improved measurably," said Brian Battle. "If there is a recovery taking place, it's very uneven."

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Stocks Retreat, Treasuries Rally on Economy

August 25, 2010

Brian Battle, Director at Performance Trust Capital Partners, talks about the outlook for U.S. stocks on Bloomberg Television’s “In the Loop.”

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Battle Takes Fun Out of Today’s Gains: Meaningless

August 17, 2010
MarketWatch Morning Stock Talk

Brian Battle, Director at Performance Trust Capital Partners, talks about the U.S. stocks with MarketWatch’s Andrew O’Day.

"Historically, summer has been slow. The past couple of years that hasn't been true because of the depth of the crisis we endured after 2007, 8, and 9. But this might be getting back to normal,” Battle said. "We could be up or down 150 for no reason." He adds volume likely will be low and gains or losses almost meaningless, until we see "actual growth in earnings or projections, and that large U.S. manufacturers and providers see growth or can project growth. And we're not getting that."

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Illinois Paying for Its Big Debt

July 14, 2010
Chicago Tribune Business

Brian Battle discusses the issuance of another $900 million in Build America capital projects bonds by the State of Illinois. Battle said "Every time Illinois comes to market, the premium they have to pay gets higher because the market experiences Illinois debt fatigue." The secondary market, where previously issued bonds are bought and sold, provides a clue of what investors think bonds are worth at that moment, Battle said. If that proves to be the case, Illinois may have to pay a 1 percentage point premium to move its $900 million in bonds Wednesday, which would translate into another $10,000 a year for every $1 million in bonds issued. Battle declined to estimate a total extra cost, noting the 25-year issue is a collection of bonds with varying maturities. But a ballpark estimate, arrived through simple multiplication, reveals an annual premium of about $9 million. The state can still borrow, Battle said, "but it's paying more because it's a compromised borrower."

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Fear and Loathing in the Bond Market

May 19, 2010

Brian Battle discusses the rush into Treasurys following the heightened fear from the May 6 stock market flash crash. Battle said the 10-year could hit 3.25% soon. He also said that it’s likely that China boosted its position in April. "China and others are buying Treasurys because they are denominated in U.S. dollars. It's not because people love the U.S. government or its fiscal policies," he said.

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Rates are mixed after strong 30-year bond auction

March 11, 2010
Associated Press

Rich Berg discusses the results of a recent Treasury auction. Berg said the market at some point will get a jolt from weak demand at an auction. "It won't be a pretty ending but the problem is we don't know when the ending will come," Berg said. "We're waiting for the egg to be laid and it hasn't been laid yet."

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Independence Day for the Fed

January 29, 2010

Brian Battle comments on the anticipated next steps from the Federal Reserve. "The Fed's not political. You have to know that," joked Brian Battle, vice president with Performance Trust Capital Partners. a fixed-income trading firm in Chicago. "But can the Fed resist pressure to not do more if people start yelling about mortgage rates being too high?"

"The bond market would welcome an increase in the fed funds rate," Battle said. "There is no practical difference between rates at zero and rates at 0.5%, but it would signal that the Fed thinks the economy is really getting better and that it is reasserting its independence. That is what it needs to prove right now."

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Stocks sink on earnings woes

January 12, 2010

Stocks sink on earnings woes Brian Battle comments on the day’s market performance. "Everyone was expecting the fourth quarter to be better," said Brian Battle, vice president at Performance Trust Capital Partners. "I think the market has been taken aback by the fact that it may not have been as good as people had thought." He said that investors were not just reacting to Alcoa's miss, but also to the recent ho-hum economic news and all the focus on the bank sector this week.

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Stocks Hit New High for 2009

November 9, 2009
Associated Press

Stocks jump after G-20 pledge to aid economies Brian Battle comments on the day’s market performance. He said the strength of the carry trade is giving an artificial lift to a range of assets, including stocks. “There’s cheap money that’s going to be pumping its way into the system," he said. “That money is finding its home in the currency and commodity markets."

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Wall Street advances at the start of a holiday-shortened trading week

June 29, 2009

Brian Battle reacts to the day’s financial markets. “Trading will be thinner than usual, particularly toward the end of the week, with a lot of guys taking off early ahead of the holiday," Battle said. “It’s going to be very whippy, and we shouldn’t pay too much attention to the 100-point swings.  Regarding the Madoff verdict, Battle said that Wall Street would be relieved that he got the maximum.  But he said there might be concern that the scandal will mean increased government regulation of money management.

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TARP Repayment Go-Ahead Boosts Bank Sector

June 9, 2009
Dow Jones Newswires/The Wall Street Journal Online

Brian Battle discusses the day’s purchases in the government agency sector. The success of the three-year Treasury auction may have something to do with that, he said, but the real show will start tomorrow with the 10-year and 30-year Treasury auctions.

Fed fights a losing battle on bonds

April 30, 2009

Brian Battle discusses long-term rates on U.S. Treasurys.  “The bond market sold off because the Fed isn’t changing the amount of bonds they are going to buy," Battle said. “The bond market wants to test the Fed. There is a feeling that 3% is the magic number on the 10-year, so we’ll see if the Fed tries to drive it back down to that level," he said.  Battle said yields could go as high as 3.25% in the short-term, especially if stocks continue to rally and more economic data suggests that the economy may be close to hitting bottom.

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Stocks slip on flu, bank concerns

April 27, 2009

Brian Battle comments on the day’s financial markets.  “Airline and hotel stocks are getting hit today and that’s appropriate if the swine flu has a big impact on travel," he said. “But I think we’re more concerned that it’s the middle of the earnings reporting period and major companies are due out this week."  In addition, there are jitters ahead of the release of the stress tests next Monday. “We need to know who cleared and who didn’t, and for those who didn’t, what’s the federal government going to do about it?"

Treasurys, Stocks Applaud the Fed

March 19, 2009
The Wall Street Journal

Brian Battle comments on the Federal Reserve’s bond-market intervention. “It’s a shocking out-loud admission that credit markets remain troubled," Battle said.

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Mark-to-market rule compromise is on the way

March 11, 2009

Brian Battle offers some viable alternatives to the mark-to-market accounting rules:  He explained that one alternative would be to allow banks to develop a model and analysis of what they believe their illiquid assets are worth and what they forecast the securities will be valued in the following quarter, he said. In this approach, a bank must also explain the asset’s value if sold today. One hypothetical scenario:  A bank produces analysis and documentation that its asset is worth $80, its value will be $90 next quarter and it can get $50 in the market today.  Analysts and investors would become more or less confident in a bank’s assets valuations, as it becomes clear whether or not they meet these estimates.  “Some banks will become known as sandbaggers while others would be perceived more favorably because they met their modeled forecasts," he said.

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GE Shares fall to 15-year low as CDS costs soar

March 2, 2009
Dow Jones Newswire

Brian Battle reacts to the news about GE’s debt rating and dividend reduction. “It looks like they’ll be 0 for 2," he said, predicting a rating cut.

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How to close America’s confidence gap

February 26, 2009
Christian Science Monitor

Brian Battle comments on the government’s efforts to restore confidence in the U.S. economy. “There’s no confidence that we know what the rules are yet," he said. “It doesn’t help that the administration has spent a lot of time talking about how bad everything is."  Battle said the goal is for markets to start functionally normally again and that still hasn’t happened.

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Treasury promises to help homeowners, but the potential reality remains a mystery

February 11, 2009
The Chicago Tribune

Peter Cook reacts to the latest bank bailout. He said the plan largely appeared to be “warmed-over TARP One," he said.  Supply and demand imbalances in the mortgage market are the central problems that must be addressed, Cook said.

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Critics of mark-to-market accounting renew efforts to get it overturned

February 10, 2009
Medill News Service

Rich Berg discusses the web site Performance Trust launched to educate people on the mark-to-market issues affecting financial institutions. “Many people do not realize that the mark-to-market rules are having a disastrous effect in today’s distressed market because they are discouraging banks from taking on significant amounts of new lending, which is vital to economic recovery," Berg said.  “My fear is we will kill all the banks and then figure we should have made a change," he said. He likened the issue to a home loan where the appraised value of a home falls below the loan value and the homeowner is left to come up with the cash or face foreclosure.  “Lenders don’t want to be forced to come up with cash if the value of the loan or asset declines below cost," Berg said. He added that such rules make sense for investment banks, but for commercial banks it destroys capital and the bank’s ability to lend.  A better solution, Berg said, would be to allow banks to take impairments in the amount they expect to lose on an asset but not the entire asset.

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Bond market calls the Fed’s bluff

February 6, 2009

Brian Battle comments on efforts by the Federal Reserve to keep long-term interest rates down. “The government has to pay for stimulus somehow.  The market is fearful of the new supply," Battle said.  “Whether the Fed will do something or not, there is an implied threat," he said. “But I think another selloff is coming."

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Healthy payoffs lure investors to corporate bonds

February 3, 2009
Associated Press

Brian Battle discusses investing in corporate bonds.  He said investors who want to take the plunge on individual bonds should select companies that seem best positioned for hard times.  He singled out Caterpillar Inc., among others, as a “pretty good credit" despite declining demand for its heavy equipment in a global recession.  Still, he said, there is significant risk in most any individual corporate bond these days.

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Stocks drop on banks and Microsoft

January 22, 2009

Brian Battle comments on the day’s financial markets. “We’re back to the volatility levels we saw in November, where it’s up 250 one day, down 250 the next, only it’s going to feel more dramatic this time because the Dow is at 8,000," Battle said.

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Chicago-area execs offer bailout advice

January 21, 2009
The Chicago Tribune

Rich Berg was asked to comment on what the government should do to get banks to lend.  “Currently, financial institutions face potential mark-to-market accounting for ‘impaired’ loans and securities," Berg said. “Until this rule is changed, these institutions will be tight with lending."

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The job market is worse than you think

January 8, 2009

Brian Battle reacts to the latest government unemployment numbers.   He said it was important to note that the average workweek declined from 33.5 hours in November to 33.3 hours in December, and that spooked him more than the other numbers. “It looks like people that are still employed are working less," Battle said. “That portends more job cuts in the future.  Companies might be keeping people now, but eventually will have to let them go if they are working less."

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Stocks knocked by recession fears

January 7, 2009

Brian Battle comments on the day’s financial markets. “Attendance is higher and people are paying attention again to the numbers," Battle said. “I don’t think the job news is that surprising, but it’s a reminder that we continue to face a global economic erosion." He said some uncertainly about the timeline and content of an economic stimulus plan was also in the mix.

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