Good morning, New York
Groupon: on Friday, the business school accounting cautionary tale masquerading as an online discount deals-maker slipped out an earnings revision accompanied by a “material weakness” in its internal controls. Just six months after its going public. The company also had an inefficient reserve for refunds to consumers. All the grim details in this post.
China PMIs: the official reading for March paints a rosier picture than the HSBC/Markit index does. Differences in seasonal adjustments play an important role, with the official PMI usually rising at this time of year. Click here for a graph illustrating this and for more details on how the two indices compare.
India’s current account deficit doubled in the last quarter of the year compared to a year previous as exports have decreased even in the face of increases in imports, Izzy writes. ICAP analysts note that much of the slowdown is to down to India’s recent foray into monetary tightening to curb the country’s runaway inflation problem. While it might be working on that front, the move has also had the unintended consequence of dampening corporate investment in the country.
Credit event auctions that set settlement amounts for credit default swaps may be systemically biased, according to an academic study. The intuition behind the source of the bias in this post, and more gritty details of the study in this one.
LTRO funds may be returned early by some European banks. Senior bankers said Italy’s UniCredit, France’s BNP Paribas and Société Générale, and La Caixa in Spain are preparing to pay back up to a third of the money they borrowed – estimated at €80bn-€100bn in total. Early repayment is allowed from December of this year. Deutsche Bank and Lloyds have indicated privately that they’ll hold the funding to its full term. (Financial Times)
Europe’s rescue fund now stands at €700bn, a 40 per cent increase agreed on Friday achieved by not having existing bailouts deducted from the €500bn capacity of the permanent European Stability Mechanism. It’s now over to the Group fo 20 nations to decide whether Europe should get more help from the IMF. (Reuters)
AIG is looking to get back into the mortgage market by buying home loans. The programme and its details are still under consideration, and it would not begin until at least the fourth quarter of this year. (Financial Times)
World Bank president backs a bank for Brics. In an interview with the FT, outgoing president Robert Zoellick warned that pushing middle-income countries, such as China and Brazil, out of the World Bank system and forcing them to look for resources elsewhere would be a “mistake of historic proportions”. (Financial Times)
The Alternative Investment Fund Managers Directive is causing alarm among investment managers and banks, partly because it diverges from the advice of the European Securities and Markets Authority. In its current form, it is thought that the measures will increase the costs of alternative investments. (Financial Times)
Australia settled a wifi patent dispute with US companies. Australia’s scientific research agency, the Commonwealth Scientific and Industrial Research Organization, owns the patent for wireless local area networking (WLAN), having created the technology that underpins wifi in the 90s. The patent expires in 2013, but in the meantime the agency has been suing to be compensated for unlicensed use of the technology. The agency did not, however, ever apply for patents in Latin America, Russia, China or India. (Reuters)
Up to 1.5m card numbers in North America may have been stolen in a security breach of Global Payments, a processor of credit and debit card transactions involving brands such as Visa and MasterCard, the company said late on Sunday. (Financial Times)
Markets: Bourses are mixed at the start of the second quarter as the easing of eurozone tensions, continued central bank aid and residual hopes for an improving global economy continue to provide an undercurrent of support. (FT’s Global Market Overview) S&P 500 futures point to a positive open for the US. The release of the ISM manufacturing index, which is expected to show an increase for March, may provide further direction. (Bloomberg)