Posts from Thursday Jan 7 2010

How thick is Tim Geithner’s skin?

The AIG CDS story has been smoldering for so long now that most ordinary mortals are left either confused or bemused, or both.

What is it that Janet Tavaoli keeps rabbiting on about? Are those Bloomberg guys obsessed, or what? Read more

(Not so) deceitful journalism (updated)

Interesting story published earlier on from the New York Times’ Dealbook site on Thursday:

Starting in November 2008, the Federal Reserve Bank of New York under Timothy Geithner began urging American International Group, the huge insurer that the government had bailed out, to limit disclosure on payments made to banks at the height of the financial crisis, e-mail messages obtained by DealBook show. Read more

China’s new New Deal

Keeping with Thursday’s China theme here on FT Alphaville, a mildy diverting report has just landed from HSBC.

It examines how the change in government investment policy will affect the construction, healthcare and education markets and how it could lead to a splurge of consumer lending. Read more

Why this is not the onset of a new secular bull market

By David A. Rosenberg, chief economist at Gluskin Sheff.

I move markets, therefore I am a US NFP

On Friday, the preliminary December numbers for US non-farm payrolls will be published.

Consensus is for a decline of 8,000 after November’s 11,000 drop — a smaller-than-expected fall for most of the market, even the occasionally-clairvoyant economists at Goldman Sachs. Read more

Lunch Wrap

On FT Alphaville Thursday morning,

- An extra 4.04bps in China. Read more

Markets Live transcript 7 Jan 2010

Live markets commentary from FT.com 

More on that gilded Gilt auction

UK debt: Hot cakes or hot potatoes?

Wednesday’s successful gilt auction prompted a wave of patriotic commentary. This, for instance, is from The Independent’s David Prosser who says Britain’s bonds are literally selling like warm pastries: Read more

How do you say competitive devaluation in Japanese?

More goings-on in Asia this Thursday morning, as Japan’s new finance minister broke with his predecessor, saying he favours a weaker yen over a strong one.

Naoto Kan‘s currency-opining promptly led to the below move currency move: Read more

China, iron ore and Frank Timis (updated)

You can’t keep a good man down.

On Wednesday, the irrepressible Frank, ‘I do a lot of good work for charidee’, Timis was back with another deal — this time for his iron ore play African MineralsRead more

That extra 4.04bps in China

Europe is waking up to falling shares across Asia this Thursday morning:

 Read more

Further reading

Elsewhere on Thursday,

- A stark raving mad ECB exec?
 Read more

Pink picks

Comment, analysis and other offerings from Thursday’s FT,

Gillian Tett: Japan and US in Libor seesaw
As 2010 gets underway, investors around the world are breathlessly watching to see what might happen to the dollar next – in relation to the yen, euro and other currencies, writes the FT’s Tett. Over in Tokyo, however, some senior financial officials are now quietly fixated on another measure – the level of the three-month yen Libor rate, relative to that of the dollar. Read more

Snap news

Breaking pre-market news on Thursday,

- Sainsbury reports strong Christmas trading, with third quarter like for like sales up 3.8% – statementRead more

BIS fears revival of ‘aggressive behaviour’

The Bank for International Settlements will gather top central bankers and financiers for a meeting in Basel this weekend amid rising concern about a resurgence of the “excessive risk-taking” that sparked the financial crisis, writes Henny Sender in the FT. In its invitation, the BIS cited concerns that “financial firms are returning to the aggressive behaviour that prevailed during the pre-crisis period”. The BIS, known as the central banks’ bank, outlined in a restricted note to participants some specific proposals that it believes could create a healthier financial system. Those proposals including lowering return-on-equity targets for the banks as a way to discourage such risk taking.

China to target “moderate” expansion

China’s central bank sold three-month bills at a higher interest rate for the first time in 19 weeks after saying that it will target a “moderate” expansion in lending in the fastest-growing major economy, Bloomberg reports. The People’s Bank of China offered 60 billion yuan ($8.8 billion) of bills at a yield of 1.3684 percent compared with 1.3280 percent on Dec. 29, according to a statement posted on its Web site. Bloomberg said the increase added to signs that the government won’t allow a repeat of last year’s record expansion in credit.

FDIC looks at linking levies to bank pay

The contribution of American banks to the Federal Deposit Insurance Corporation, the fund that insures depositors’ savings, could be linked to regulators’ assessment of bank pay plans, under preliminary discussions being held by top banking watchdogs. The FDIC said on Wednesday that its board would meet next Tuesday to consider proposed rules on “employee compensation”.

Japan names new finance minister

Japan’s prime minister, Yukio Hatoyama, moved swiftly to contain the damage caused by Hirohisa Fujii’s decision to step down as finance minister, naming Naoto Kan , deputy prime minister, as his replacement. Mr Fujii, 77, who was admitted to hospital late last month for high blood pressure and exhaustion, resigned for health reasons.

Dubai’s DP World seeks London listing

DP World, the world’s fourth-largest container terminal operator, is seeking a stock listing in London after two years of poor share price performance in its home market of Dubai. The plan by the subsidiary of Dubai World, the troubled government-owned conglomerate, is the latest blow to financial markets in the emirate, which were badly hit by last month’s debt crisis. The decision will bring back to the London market most of the former businesses of P&O, the container ports and ferries operator that DP World took over for £3.92bn in March 2006.

Accounting rules over M&A spread confusion

Accounting for mergers and acquisitions is failing investors because companies do not understand new reporting requirements and the rules themselves need improvement, according to a study from the Financial Reporting Council. The FRC said it had come to its conclusion after companies complained that new accounting rules for M&A, so called IFRS 3, were “costly and difficult”, while investors said the rules were “not useful”.

Argentina’s central bank chief defies call to resign

Martín Redrado, Argentine central bank governor, on Wednesday defied a demand by President Cristina Fernández for him to quit in an intensifying row over the use of central bank funds to pay off debt. The president’s surprise request – which came as Argentina prepares a bond swap designed to reopen access to international capital markets eight years after its $100bn default – was delivered by her cabinet chief Aníbal Fernández on Wednesday morning.

MOST settles Chinese derivatives lawsuit

Morgan Stanley has ended a confrontation with a Chinese company over disputed hedging contracts in an out-of-court settlement that may yet provide a worrying precedent for similar disputes. The dispute with China Haisheng Juice Holdings was the most public of many between foreign investment banks and dozens of mainland Chinese companies over loss-making derivatives deals.

Debt-for-equity swap at Man City

Manchester City became the latest English Premier League club to clear its long-term debts in anticipation of tougher financial rules being drawn up Uefa, European football’s governing body, after it announced that its Abu Dhabi owner had converted his £305m loans into equity. Sheikh Mansour bin Zayed Al-Nahyan, who bought the club in September 2008, has invested up to £400m to help fund a player spending spree that mirrors Chelsea’s transfer bonanza under Roman Abramovich.

Goldman to exit Sumitomo Mitsui

Goldman Sachs looks set to sever its financial ties to Sumitomo Mitsui Financial Group, putting an end to a relationship that began in the late 1980s. The Goldman move is part of a planned Y889bn capital raising by Japan’s second-biggest bank.

Citi hit by legal action in bankers’ pay row

Citigroup is embroiled in a legal row with a former senior executive whose multi-million dollar severance package was frozen last year at the height of the political storm over bankers’ pay. The decision by Kevin Kessinger, a former head of technology, to take legal action to force Citi to resume paying his severance is likely to fuel the debate over Wall Street’s compensation just as banks are set to announce 2009 bonuses.

Rivals seek UK scrutiny of Orange merger

A group of mobile phone operators has called for the proposed merger between Orange and T-Mobile to be investigated by UK regulators rather than Brussels. O2, the UK’s largest mobile network operator, and 3, the smallest, said the UK competition authorities were best placed to look at the planned joint venture between France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK.

Overnight markets

Asian markets
Nikkei 225 down -53.22 (-0.50%) at 10,678
Topix unchanged 0.00 (0.00%) at 670.00
Hang Seng down -46.56 (-0.21%) at 22,370

US markets
S&P 500 up +0.62 (+0.05%) at 1,137
DJIA up +1.66 (+0.02%) at 10,574
Nasdaq down -7.62 (-0.33%) at 2,301 Read more