Dire Straits wisely observed back in 1985 that it’s nice — but possibly derisible — to have people give you money for nothing.
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The great, the good and the simply pompous of finance have been gathering in Davos, Switzerland for the annual World Economic Forum on Tuesday.
Lucky for us — the great uninvited — the rise in social media means we too can feel part of the buzz and economic hot air conjecture. Read more
Just-released UK GDP figures show Britain’s economy emerged from recession in the last quarter of 2009.
But the fourth-quarter figure, a growth of 0.1 per cent, is very much below the Bank of England’s own expectations. The central bank was forecasting something like a 0.4 or 0.5 per cent Q4 growth as its base-case scenario in its last inflation report: Read more
It must have been, what, a couple of days since someone from Pimco last fired a broadside at the UK?
So, the top man, Admiral Bill Gross, has now taken it upon himself to deliver another round of cannon fire. Read more
From the FT — some giant leaps for robot-kind in the world of trading:
The arms race in trading technology is set to intensify this week as Thomson Reuters, the news and market data company, on Monday unveils a service for “high-frequency” traders allowing them to make split-second trading decisions based on news articles “before the information moves the market” . . . Read more
Live markets commentary from FT.com
While Greece may have side-stepped immediate funding catastrophe with its successfully placed five-year bond issue, that’s not to say there aren’t further trials for the sovereign issuer down the road.
For example, here are some of the challenges facing Greek finance minister Georges Papaconstantinou in the not-too-distant future, according to Barclays Capital: Read more
CLSA’s Christopher Wood in an extra edition of his weekly Greed & Fear newsletter highlights a timely criticism of the US approach to fixing the financial system by David Stockman, Ronald Reagan’s former director of the Office of Management and Budget.
In a harsh comment article originally published in the International Herald Tribune last week, Stockman lashes out at bankers, regulators – particularly the Fed – and just about everyone outside of the Reagan administration. Read more
After six quarters the UK’s longest, and possibly deepest recession since the second world war has ended – but only JUST.
Q4 GDP rose 0.1 per cent quarter-on-quarter, well below forecasts. (A 0.4 per cent rise was expected). Read more
Here’s something we missed last week — the US Treasury’s Tarp warrant report.
The US government, you’ll remember, received a bunch of long-dated options in return for bailing-out various banks — to the tune of $205bn — in 2008 and 2009. Banks had the option to buy back those warrants, at a fair value agreed with the Treasury, via a bidding process. Read more
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: When nations turn into hoarders
Earlier this month Britain’s minister for food and rural affairs, gave a speech in which he argued that “Food security is as important to this country’s well-being as energy security”. With energy, even more than with food, the British are beginning to question their reliance on purchasing supplies on the open, world markets, writes the FT’s Rachman. This month, supplies of natural gas ran so low that almost 100 large industrial users were temporarily cut off. Read more
Asian markets fell on Tuesday, reports Bloomberg, amid concerns about financial stocks including the effect of requirements imposed by Beijing on some Chinese banks to meet tougher reserve ratios.
Nikkei 225 down -144.67 (-1.38%) at 10,368
Topix down -15.70 (-1.68%) at 918.89
Hang Seng down -329.41 (-1.60%) at 20,269 Read more
International alarm over Greece’s debt crisis abated on Monday when investors flocked to buy the government’s first bond issue of the year, suggesting the country may face less difficulty than feared in meeting its short-term financing needs. Investors placed about €20bn ($28bn) in orders for the five-year, fixed-rate bond, four times more than Athens expected. But the bond carried a record high interest rate spread over German bonds, the eurozone benchmark.
Stephen Green, chairman of HSBC and the British Bankers’ Association, has hit out at the “distorted” structure of bank bonuses, predicting future pay-outs will be lower and more rationally calculated. Green told the FT that the different ways banks set bonuses had led to “wrong and frankly inflated numbers”. HSBC, which already defers at least 40% of executive bonuses in line with new regulatory minimums, has signalled no big revamp of its bonus structures. See video interview here.
Apple on Monday fuelled anticipation about its expected launch of a tablet computer with a 50% leap in quarterly profit and a strong hint from CEO Steve Jobs that the maker of iPhone aims to ride its popularityinto the corporate market. On the day Jobs said he would announce a “major new product” on Wednesday, Apple reported another blowout quarter, as net income soared to $3.38bn or $3.67 a share, from $2.26bn or $2.50 a year earlier, well above estimates. IPhone sales doubled to 8.7m units shipped in the quarter.
Dubai’s standing in financial markets took another hit on Monday after S&P withdrew its credit rating on an investment vehicle owned by the emirate’s ruler. S&P said “insufficient” information had been provided about Dubai Holding Commercial Operations Group, controlled by Sheikh Mohammed bin Rashid Al Maktoum, and said its cash flow position was “likely to be materially weaker” than previously thought. DHCOG includes hotel chain Jumeirah and Dubai Properties.
Four large hedge funds on Monday sued Porsche and two former executives for more than $1bn over its failed takeover attempt of Volkswagen, launching one of Germany’s largest damage claim battles. The funds – Elliott, Glenhill, Glenview and Perry Capital – filed suit in New York to try to recoup losses incurred when VW’s share price surged on Porsche’s takeover attempt. The funds accuse Porsche and its former CEO and CFO of market manipulation.
Jabre Capital, the Geneva-based hedge fund run by former GLG Partners star trader Philippe Jabre, is to shut its flagship fund to new money from investors in efforts to ensure its returns are not curtailed by its size. The fund – the $2bn Jabcap Multi Strategy – will “hard close” for two years when it reaches $2.5bn. The fund returned 85.1% to investors in 2009, more than recouping its 36% loss in 2008 and becoming one of the industry’s top performers over the past year.