Posts from Wednesday Feb 24 2010

Hummer, RIP [Updated]

Say farewell to the Hummer, that gas-guzzling vehicle beloved of rappers, would-be oligarchs and the handful of people who actually need to scale mountains in a four-wheel drive.

As AP reported on Wednesday: Read more

Dimon, most wanted

Jamie Dimon is a wanted man in Atlanta.

 Read more

CDS report: Cocktail hour in Athens

Markit’s Otis Casey wrote this CDS report

If the volatility in the sovereign CDS market is not enough to get the blood going then reports that protesters and Greek police were clashing in Athens today might. The protest against deficit reduction measures apparently numbered in the tens of thousands. A small group of protesters threw Molotov cocktails and debris at police. Perhaps in an effort to calm tensions, European Council President Herman Van Rompuy applauded Greece‘s efforts in taking responsibility for cutting its budget deficit and indicated that the EU was preparped to “take determined and coordinated action if needed to safeguard stability in the euro area…”. CDS on Germany was unchanged to 1 bps wider. Read more

Blame the weather? Again?

WHACK! Another slap in the face for the US economy.

From Reuters on Wednesday: Read more

Meddling Mandy

This looks ominous.

From the Takeover Panel, via RNSRead more

A Grεεk bank run smackdown

Some potentially positive news for Greek banks, for once, and some possible embarrassment for financial blog Zero Hedge on Wednesday.

Harvinder Sian, head of European rates at RBS, is taking the excitable blog to task for its Tuesday story about Greek nationals pulling money out of local banks. Read more

Shorts smoked live?

On Rule 201, 204 etc — SEC deputy commissioner Kathleen Casey and others

Ben touching briefly…

It’s that time again on Capitol Hill. Fed chairman Ben Bernanke is up before the financial services committee, promising to “begin today with some comments on the outlook for the economy and for monetary policy, then touch briefly on several other important issues.”

Cutting to the meatRead more

We are sailing, we are sailing

Not sure how this squares with Tuesday’s dismal consumer confidence report, but it would seem at least one demographic in the US is spending – the old.

Carnival, the dual listed cruise company, has just reported a record ‘wave season’ on Wednesday afternoon. Read more

The great Chinese FX reserve injection

Worried about Chinese banks? Pfiff.

Standard Chartered has some intriguing reasons why you don’t need to be – all revolving around the strength of the banks’ sovereign backer, the People’s Republic of China. Perhaps you’ve heard of it? Read more

‘Italy’s worse, and the Germans stole our gold’

Quick! Someone get Theodoros Pangalos some media training, or at least a copy of ‘How to win friends and influence people’.

From Reuters on Wednesday: Read more

Chinese bubbles, ghost towns edition

Bubbles? Misleading economic data? In China? Don’t be ridiculous.

On the other hand, via the FTRead more

On those ‘epic’ declines in bank lending

Great headline from the Wall Street Journal on Wednesday: ‘Lending falls at epic pace‘.

Of course, with a headline like that, one would expect a less-than-uplifting tale: Read more

The return of the SFP

Cast your mind back to the turbulent days of November 2008.

Markets were roiled in the aftermath of Lehman Brothers’ collapse and money market fund troubles. The Federal Reserve was massively expanding its balance sheet to help restore liquidity to the system. Eventually the US Treasury halted its Supplementary Finance Program (SFP), a scheme started in September 2008 to help finance and manage the Fed’s balance sheet, to help accommodate this. Read more

Let the games begin…

You can imagine the look of glee on Mike Ashley’s chubby face (he’s the one on the right by the way). Read more

Lunch Wrap

On FT Alphaville Wednesday morning,

– Stress-testing BBVA and SantanderRead more

Markets Live transcript 24 Feb 2010

Live markets commentary from 

Stress-testing BBVA and Santander

The price action in BBVA and Banco Santander on Wednesday morning:

 Read more

Ryanair and Gatwick guessing

Ryanair could shift many of its flights from Stansted to Gatwick if the Sussex airport’s new owner lives up to promises to improve its services and keep charges down . . .

That’s from the Evening Standard earlier this month, based on comments from Ryanair COO Michael Cawley made as the Irish carrier presented its third-quarter results. Read more

Of princelings, turtles and Chinese private equity

It’s all on for “princeling”, “turtles” and even foreign private equity groups in China’s fast-growing buy-out industry, as Carlyle Group on Wednesday unveiled yet another agreement with a Chinese partner — this time to launch a local currency fund focused on smaller company investments.

Barely a month after announcing a deal with the Beijing municipal government to create a renminbi-denominated fund for local currency investments across China, Carlyle seems anxious to build on its carefully established foothold in the country. Read more

A Euro(max IV) default event

Meet Euromax IV.

Euromax IV is a €200m CDO backed by mezzanine residential and commercial mortgage-backed securities (RMBS and CMBS) . It appears to have been put together in 2003 by Hypo Real Estate. Read more

Further reading

Elsewhere on Wednesday,

Questions and answers about the financial crisis. Read more

Pink picks

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

Martin Wolf: No easy way out of the  mire
Anybody who looks carefully at the world economy will recognise that a degree of monetary and fiscal stimulus unprecedented in peacetime is all that is prodding it along, not only in high-income countries, but also in big emerging ones. The conventional wisdom is that it will also be possible to manage a smooth exit. Nothing seems less likely. So let us consider the endgame, instead. Read more

Snap news

Breaking pre-market news on Wednesday,

– Barratt Developments warns recovery in housing market depends on availability of higher loan to value mortgages – statementRead more

HSBC retreats on pay awards

HSBC has ditched controversial plans to award its top executives hefty increases in their base salaries, after shareholders opposed its plans to raise CEO Michael Geoghegan’s salary by about 36% to more than £1.4m ($2.2m) this year and the salary of Douglas Flint, finance director, from £700,000 to £900,000, reports the FT. The UK bank’s retreat follows moves by top UK bank executives to waive their annual bonuses. Geoghegan is entitled to a performance-related bonus this year of up to 400% of his salary worth about £4.3m.

Citi to sell hedge-fund business

Citigroup is in advanced talks to sell its fund-of-funds business to SkyBridge Capital, a New York-based alternative-asset manager with about $4bn in assets, reports the WSJ. No agreement has yet been signed, and the proposed sale price was not known. The move comes as part of Citi’s push to sell off non-core businesses in its $547bn pool of assets.

Beijing set to halt Hummer deal

The deal by a Chinese company to acquire General Motors’ Hummer brand is facing rejection by Beijing, throwing the landmark deal into disarray. Sichuan Tengzhong Heavy Industrial Machinery is making a last-minute effort to gain regulatory approval from China’s commerce ministry to buy Hummer after GM and Sichuan Tengzhong, a provincial machinery company, had set a deadline of this week to conclude the $160m acquisition. The sides had already extended that deadline by a month in the absence of regulatory approval.

Weather chills global recovery

Hopes for a swift global recovery suffered a setback on Tuesday as freezing winter weather fuelled a sudden drop in spending and confidence across several advanced economies. Although policymakers predicted a bumpy rebound in global economic health, negative data in the US and Europe contradicted analysts’ predictions and hit key equity markets. Markets were most unnerved by an unexpected fall in the US consumer confidence index, from 56.5 in January to 46 this month, its lowest since last April.

Wall St bonuses up 17% to $20bn

Wall Street bonuses exceeded $20bn last year, rising 17% from 2008 as US banks emerged from their worst downturn in decades, according to a Tuesday report by New York State comptroller Thomas DiNapoli. The banking industry’s profits are likely to have exceeded $55bn, almost triple the previous record, as shares rallied and debt markets reopened. The average taxable bonus rose to $123,850, although at Goldman Sachs and other large Wall Street banks, annual payouts were well below the highs of 2007.

Austrian lender hit by merger talk

Shares in Raiffeisen International slid more than 12% on Tuesday after the Austrian lender said it was considering a merger with Raiffeisen Zentralbank Oesterreich, its unlisted mutually owned parent. Raiffeisen International rushed out preliminary full-year results to coincide with the announcement late on Monday, but the better-than-expected report was eclipsed by doubts about its growth prospects. Full-year net profit fell from €982m to €212m in 2009, as provisioning for bad loans jumped from €780m to €1.74bn.