Posts from Thursday Feb 4 2010

“A fraud against the American people”

The banker backlash continues – and in some style.

Thursday afternoon, New York attorney general Andrew Cuomo’s has taken the case against Ken “we’re good at this” Lewis public. Read more

Presenting the UK’s second most widely held share

Banco Santander:

 Read more

Santander’s prudent provisioning, or not?

From Santander’s 2009 result statement on Thursday:

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Chart du jour – sovereign risk

H/T Olivetree Securities

A knee jerk reaction

The price action in the 10-year UK gilt in the wake of the Bank of England’s decision to put its quantitative easing programme on hold — but with an important caveat…

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Lunch Wrap

On FT Alphaville Thursday morning,

- The contagion spreads, parte dos. Read more

Bank of England holds interest rates, pauses QE

The Bank of England opted not to surprise markets on Thursday; deciding in its latest policy meeting to keep interest rates at 0.5 per cent and pause its quantitative easing program at £200bn.

Here’s the release, with our highlights: Read more

China: First the banks, now the corporates

First it was the banks and now, in a slightly less dramatic but possibly more potent warning to any investor who ever contemplated buying shares in a listed Chinese company, it’s the corporates. As the FT reports on Thursday:

Chinese regulators have imposed a partial ban on listed companies raising capital from equity markets to repay bank loans or replenish working capital, amid a general tightening of liquidity and official curbs on soaring bank debt in the country. Read more

Markets Live transcript 4 Feb 2010

Live markets commentary from FT.com 

And here’s the corporate contagion

A couple of weeks ago, FT Alphaville noted missing Greek corporate contagion.

This Thursday we’ve found it. Read more

Day III

By Matthew Kennard.

Wednesday was all about investment security and Africa. The conference was addressed by South African mining minister, Susan Shabangu, who made noises a lot of people in room liked. In the media conference after she promised that there would be no nationalisation of mines while she was alive: “Maybe when I’m dead – and rest assured I’m not dying next week,” she said. Read more

The scale of sovereign short-selling

The sovereign debt most targeted by short-sellers is not what you might expect, according to DataExplorers.

We’re not entirely sure of the methodology here, but the short-selling specialist has presented this interesting chart. It shows short-selling for selected sovereign debt (excluding sales as part of repo transactions) from smaller and developing economies: Read more

The contagion spreads, parte dos

More pain for Europe’s peripherals on Thursday morning:

 Read more

Filling the central bank void

Some thoughts to ponder before the Bank of England’s much-anticipated QE announcement later on Thursday.

FT Alphaville has worried before about what might happen once the Federal Reserve ends its $1.25 trillion buying-spree of mortgage-backed securities (MBS). The central bank is due to stop buying MBS in March, when it ends its quantitative easing (QE) is scheduled to end. Read more

Sovereign CDS is spreading

The SovX Western Europe index went above 90bps for the first time on Wednesday:

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The cost of sticky accelerator pedals

That’s the share price chart of Toyota, which overnight said it expected costs and lost sales from its sticky accelerator pedals to total $2bn. Read more

Deutsche Bank, the flow rider

Deutsche Bank reported net income of €5bn for the year 2009 on Thursday, compared to a €3.9bn loss in 2008.

This, we would say, is a pretty impressive turnaround in anyone’s business. Read more

Kontrast and Kompare

Preliminary guidance for Kraft’s bond seems to be out.

The below is courtesy of Marc Ostwald at Monument Securities

Media-fuelled Goldman bonus neurosis

Even in the bold new era of “bonus rage”, rarely has so much limelight been focused on one individual banker’s remuneration. This stirring headline and breathless report from Thursday’s New York Times (our emphasis):

With Bated Breath, Rivals Await Blankfein’s Bonus  Read more

Five reasons why punters will continue to love FX

In the late noughties, banks and and platform providers seemed to go forex mad.

Some even decided to go after the retail buck — an area traditionally considered far too small for any big interbank player to care about. Read more

Further reading

Elsewhere on Thursday,

- Meet the market’s biggest losersRead more

Pink picks

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

Martin Lukes: Notes from the inside
Lukes refuses to let prison bars get in the way of his burning ambition to give the closing keynote speech at Davos. He is former chief executive of a-b glöbâl, and was incarcerated in Florida for insider trading. Read more

Snap news

Breaking pre-market news on Thursday,

- Deutsche Bank reports net income of €5bn for the year 2009, versus €3.9bn loss in 2008 – statementRead more

Overnight markets: Down

Asian stocks and currencies fell on Thursday, reports Bloomberg, on concerns about the region’s economic recovery prospects after Australian retail sales unexpectedly fell and New Zealand’s jobless rate rose to its highest in more than 10 years.

Asian markets
Nikkei 225 down -64.67 (-0.62%) at 10,340
Topix down -6.20 (-0.68%) at 909.48
Hang Seng down -320.24 (-1.55%) at 20,402 Read more

Moody’s warns on US credit rating

Moody’s Investors Service warned on Wednesday that America’s triple A sovereign credit rating would come under pressure unless tougher action was taken to tackle the US budget deficit. Adding to  intensifying concern among investors, Moody’s said the US faced a trajectory of debt growth that was “clearly continuously upward”. The White House this week forecast a $1,565bn budget deficit for 2010, representing 10.6% of GDP – the highest such ratio of debt to GDP since the second world war.

China curbs capital-raisings

Chinese regulators have imposed a partial ban on listed companies raising capital from equity markets to repay bank loans or replenish working capital, amid a tightening of liquidity and official curbs on soaring bank debt in the country. At least 34 companies, mostly in the industrial and real estate sectors, have cancelled or reduced plans to raise money through private placements or secondary offerings in recent weeks.

Lazard breaks ranks on pay-outs

Lazard broke ranks with its Wall Street rivals on Wednesday by accelerating promised cash payments to staff in the fourth quarter in a move that pushed the investment bank into the red.  In a bid to retain and recruit top bankers, Lazard is also accelerating payment of deferred cash awarded in 2008. It is also speeding up the vesting of restricted stock promised to Bruce Wasserstein, the former CEO who died in October. In total Lazard set aside $615.5m for pay and benefits in the final quarter, compared with $221.9m a year earlier.

Hands weighs plea on Citi loans

Guy Hands will have to ask investors in his Terra Firma private equity group to inject another £100m after admitting that EMI’s recorded music business will not be able to meet the terms of loans from Citigroup this year. The accounts show that EMI Music will fall far short of critical covenants on its debt when these are tested later this year, and could suffer more shortfalls next year. Hands paid £4.2bn for EMI just before debt markets collapsed.

Spanish, Portugese banks slide

Spanish and Portuguese banks plunged in late trade on Wednesday, ending a three-day rally of European shares, amid rising concerns about eurozone’s peripheral countries. The cost of insuring debt against default for Portugal, Greece and Spain rose after Portugal’s debt agency IGCP cut its planned treasury bill placement to €300m from €500m. Banco Espirito Santo de Investimento in Portugal lost 7% as 10-year Portuguese bond spreads widened over German bunds. Spain’s Banco de Valencia and Banco Popular also slid.

Pressure mounts on Toyota

The crisis engulfing Toyota deepened on Wednesday when US transportation secretary Ray LaHood urged owners of more than 2m recalled cars and trucks to “stop driving” them and take them to dealers for repair. Toyota shares slid by more than 5% in New York before LaHood amended his remarks saying he meant owners should have vehicles fixed. Toyota has suspended US sales of key models pending repairs to sticky accelerator pedals. Also on Wednesday, Tokyo ordered Toyota to investigate complaints of defective brakes on its best-selling, hybrid Prius vehicle.