Posts from Wednesday Jan 13 2010

Hurry! The Peter Cummings sale has started!

Re-started, actually.

Mark Kleinman at Sky.com had news on Wednesday, that Lloyds Banking Group is auctioning off a portfolio holdings in scores of British companies, together worth something in the region of £400m. Read more

Geneva snow havoc!

Let’s face it, snow in southern England is a bit of a rarity.

Consequently, it’s quite understandable that when the occasional dump occurs transport chaos, truancy and mindless sledging-related accidents are common place. Read more

Shell and the analyst mind meld

Isn’t it great when City analysts think alike?

Take those who follow Shell. On Tuesday of several of them decided to cut their earnings forecasts — all at the same time. Read more

Hersbury?

Six days to go to Kraft’s deadline for raising its bid for Cadbury, and suddenly this pops up on the Associated Press wire:

The Hershey Co. continues to work on a bid to acquire British candy maker Cadbury PLC without the help of Italian candymaker Ferrero International. Read more

Testimony the FCIC should really be hearing…

Harley Bassman, a veteran strategist on the US rates trading desk at BoA Merrill Lynch, is hanging up his boots after more than 25 years on Wall Street. Or at least his widely read RateLab strategy note is going on “indefinite hiatus.”

Here is his final dispatch: Read more

Doppel-dip?

Related links:
German gloom – Money Supply
German GDP contracts 5% in 2009 – FT
Is there a double dip risk in Fermany? – A Fistful of Euros

One Search Platform To Rule The Middle Kingdom? (updated)

It didn’t take long for Wall Street to figure out which company stands to benefit from Google’s decision to end the controversial censorship of its search service in China.

Baidu, the Chinese-language Internet search provider. Read more

Crunch TV – FCIC in Washington

Tune in now…

“It is our hope that together we can rebuild the American people’s belief in a financial system that puts Americans to work, fulfills their dreams and provides the foundation for a new era of broadly shared prosperity.” Read more

Chilled markets

That’s the CBOE Vix – a favourite Wall Street gauge of investor anxiety. Read more

[Redacted]

Using the word `Redacted’ about 840 times in a single 16-page document is begging for trouble. Read more

A Q4 refining headache for the oil majors

Shares in Royal Dutch Shell took a bit of a walloping on Wednesday as reports circled the city the company was guiding analysts lower on fourth-quarter numbers:

 Read more

Lunch Wrap

On FT Alphaville Wednesday morning,

- Attack of the acronyms at SocGenRead more

Gilt auction Wednesday

Last week FT Alphaville wrote that an auction of £2.25bn worth of 2049-dated gilts was widely expected to be the real test of markets’ demand for UK government debt, having fewer of the supporting factors that helped lift sentiment for an earlier £4bn 2015 gilt-offering.

And on Wednesday, we get the results of the £2.25bn auction. Read more

Markets Live transcript 13 Jan 2010

Live markets commentary from FT.com 

The return of cheap commodity funding

Deutsche Bank on Tuesday revealed it was issuing “three-year market contribution securities” linked to the Deutsche Bank Liquid Commodity Index – Mean Reversion Plus.

The SEC filing, brought to our attention by Thomson-Reuters columnist John Kemp, summed up the securities as follows: Read more

Tiger Airways burning bright…

Meet Tiger Airways, a Singapore-based budget carrier set up in 2004 to serve the Australasian market.

Read Tiger Airways IPO prospectus, filed today, Tuesday, with the Monetary Authority of Singapore. Read more

Surely he can’t still be bearish?

So began the presentation of Albert Edwards at SocGen’s ‘Alternative Strategy’ event at London’s Marriott Hotel Grosvenor Square on Tuesday.

In front of a packed Westminster Ballroom — we reckon around at least 400 people turned up — Edwards revealed, much to the surprise of no one, that ‘yes’ he was still bearish. Read more

Attack of the acronyms at SocGen

That’s CDOs of RMBS to be specific.

And the erstwhile structured finance favorite (plus some revaluing of CDS) is behind the fourth-quarter profit warning issued by the French Bank on Wednesday morning. Read more

Further reading

Elsewhere on Wednesday,

- Helpful suggestions for the Financial Crisis Inquiry Commission. Read more

Pink picks

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

Robert Reich: Why Obama must take on Wall Street
It has been more than a year since all hell broke loose on Wall Street and, remarkably, almost nothing has been done to prevent all hell from breaking loose again, writes former US labor secretary, Reich. In fact, close your eyes and you could be back in the wilds of 2007. Bankers are still making wild bets, still devising new derivatives, still piling on debt. Read more

Snap news

Breaking pre-market news on Wednesday,

- Societe Generale warns of €1.4bn charge relating to stricter assumptions related to its valuations of RMBS-heavy CDOs – statement. Read more

Overnight markets: Down

Asian stocks fell on Wednesday, reports Bloomberg, while copper and oil declined after China raised the amount banks have to hold in reserve. Hong Kong’s Hang Seng Index slumped the most in seven weeks.

Asian markets (Wed)
Nikkei 225 down -86.66 (-0.80%) at 10,792
Topix down 4.94 (-0.52%) at 949
Hang Seng down -501.18 (-2.24%) at 21,825 Read more

US, UK banks face political heat

Bankers on both sides of the Atlantic struggled to quell anger over their bonus pay-outs on Tuesday as Congress prepared a new probe into executive compensation and US officials worked to claw back all bail-out costs. US bank stocks fell on investor concerns about the Obama administration’s plans to charge banks for the estimated $100bn in government losses on its main bail-out fund. Lenders with large deposit bases, which are likely to bear the brunt of the planned levy, were worst hit, with Bank of America and Citigroup dropping more than 3%.

Outcry on Wall St’s levy plan

Wall Street reacted with disbelief and resignation to the Obama administration’s plans to impose an industry levy to pay for the financial bail-out. With executives such as Goldman Sachs’s Lloyd Blankfein and JPMorgan’s Jamie Dimon due in Washington on Wednesday to testify before a congressal inquiry into the financial crisis, senior bankers said they felt under siege. In private, financial executives vented their anger at the levy plan but avoided public criticism – another sign of Wall Street’s fears of a public backlash.

Google to end China censorship

Google has said it will end the controversial censorship of its search service in China and risk expulsion from the most populous internet market, following what it claimed were Chinese-based attempts to hack into its systems and those of other international companies, reports the FT. It also cited attempts to break into its Gmail system and efforts to trick “dozens” of human rights activists in order to access their email. Bloomberg adds that Google last week told US secretary of state Hillary Clinton of its China plans.

Banks braced for Basel battle

Banks are preparing to fight a proposal by global regulators to sharply increase capital requirements for institutions that bring in outside investors to fund subsidiaries, warning it will cripple their ability to expand in emerging markets. The banks fear the provision would hit the capital stocks of a wide range of UK, European and Japanese financial institutions, as they deal also with pressure to increase their regulatory capital. Analysts said the proposal was one of the most “draconian” parts of a reform package put forward in December by the Basel committee on banking regulation.

RBS a ‘prisoner of market’

Stephen Hester, chief executive of Royal Bank of Scotland, has warned that the UK-backed lender has no choice but to pay large bonuses to top employees as it has become a “prisoner of the market”. He told a panel of MPs that RBS would pay the “minimum we can get away with” but that failure to pay market rates would limit its ability to keep and motivate talent. The heat on bonuses is also rising in Washington, where top US financial executives will testify on Tuesday before a bi-partisan inquiry into the causes of the financial crisis.

CIT eyes ex-Merrill CEO Thain

CIT Group is ramping up its search for a new chief executive to replace longtime chief Jeffrey Peek, who steps down this week, and former Merrill Lynch CEO John Thain is among the candidates under consideration, reports the WSJ.  A person familiar with the situation said Thain had been approached for the job but cautioned that talks were “extremely preliminary”. CIT, a major lender to small businesses, exited from bankruptcy protection in December after eliminating more than $10bn of debt from its balance sheet.

Greece condemned on data

Greece was condemned by the European Commission on Tuesday for falsifying data about its public finances and allowing political pressures to obstruct the collection of accurate statistics. In a damning report, the Commission said Greece’s figures were so unreliable that its budget deficit and public debt might be even higher than claimed last October. At the time, Greece estimated its 2009 deficit would be 12.5% of GDP, far above 3.7% predicted in April. See also FT Alphaville on a “Greek tragedy“.

Bermudan group eyes Ireland

XL Capital, the Bermudan insurance and reinsurance group, has become the latest in the industry to announce plans to move its legal domicile to Ireland, which is finding favour as a growing insurance market and as a stable, low-tax home. Mike McGavick, chief executive, acknowledged the risk of a clampdown on tax havens by US lawmakers, but said there was more to the proposed move of its legal domicile away from the Cayman Islands, where it is registered despite its Bermudan base.