This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Dumbest Things on Wall Street This Week: April 5

1. Monte's Fall

Molte Grazie, Banca Monte dei Paschi di Siena! We needed a little Italian insouciance for this week's Dumbest list.

The beleaguered Italian bank casually posted on its Web site Saturday that customer deposits fell by "a few billion euros" in the wake of recently disclosed derivative losses at the lender. The startling lack of specificity led to a 3% drop in the bank's stock when it opened for trading Monday. And on Tuesday Italy's stock market regulator was forced to ban short sales of the stock after it sank an additional 12%.

Last week, Monte dei Paschi reported a higher-than-expected net loss for 2012 as a result of a rise in provisions for bad loans and 730 million euros in losses on the potentially fraudulent derivatives trades which were brought to light in February. Nevertheless, the bank, Italy's third largest, did not offer any guidance on its first quarter results.

"The illicit nature of the derivatives trades and their consequence on the bank's assets exposed the bank to reputational damage that was immediately translated into . . . the withdrawal of a few billion euros in deposits," the bank said in a document for shareholders attending its April 29 meeting.

Don't worry guys. It's like Mussolini said when he was hanging out in Loreto Square: Oggni in figura, domani in sepoltura.

Monte dei Paschi sued Nomura Holdings and Deutsche Bank on March 10th for their roles in sticking the bank with losses on structured-products deals. Nomura stated that it "acted fairly and responsibly with the client at all times, and strongly refutes any suggestion to the contrary." For its part, Deutsche Bank said "it will vigorously defend itself" and considered the claim "groundless."

As for Monte's brass, the bank's chief financial officer said after the earnings were released last Thursday that it was "quick in recovering ground in March" on lost deposits in February.

Good for you guys. Glad you saw an uptick in March. But we can almost guarantee that your nonchalant Web disclosure -- and this week's ensuing stock selloff -- will cause even more Italian depositors to give you the boot.

Congratulations to Lorraine Rothman from Staatsburg New York for winning our April Fools Quiz! Thanks to all the readers who sent their entries. Here are the answers: 1.) C, 2.) A, 3.) D, 4.) D, 5.) C, 6.) D, 7.) A, 8.) B, 9.) B, 10.) A, Bonus: D.

-- Written by Gregg Greenberg in New York City.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.
5 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DELL $0.00 0.00%
FBN $0.00 0.00%
AAPL $109.18 -1.10%
RPRX $7.20 -2.30%
FB $88.20 0.06%

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs