January, 2009
Merrill delivered bonuses before BofA deal
Merrill Lynch took the unusual step of accelerating bonus payments by a month last year, doling out billions of dollars to employees just three days before closing its sale to Bank of America. The timing is notable because the money was paid as Merrill’s losses were mounting and Ken Lewis,
JPMorgan, BofA CEOS buy shares
The chief executives of Bank of America and JPMorgan bought some of their companies’ stock in the last week, a sign of confidence in the struggling banking sector, reports Reuters. Ken Lewis, BofA’s chief executive,
GM gains $5.4bn in federal aid
General Motors said Wednesday it had received a delayed payment of $5.4bn under the emergency funding provided by the US government to keep it in business, reports Reuters. GM said late Tuesday that it would have run out of cash and faced bankruptcy if it had not been given the second loan tranche from the US government.
BlackRock profits fall 84%
BlackRock, one of the world’s biggest fund management companies, suffered an 84% annual drop in Q4 earnings, as investors pulled money from hedge funds and performance fees plunged. BlackRock, which is 49% owned by Merrill Lynch,
SocGen sees break-even in final quarter
Société Générale, France’s second biggest bank, sought to reassure markets saying in a trading update on Wednesday that it expected to have broken even in the last three months of 2008 and to make €2bn ($2.6bn) in full-year net profit.
Cognetas in bank talks at portfolio companies
Cognetas, the private equity group spun out of Electra three years ago, is in talks with lenders about restructuring the debts at four of its portfolio companies, after it lost control of two investments last year.
Tullow placing raises concerns
Tullow Oil’s successful £400m share placing in London on Wednesday raised concerns about bankers’ increasing use of capital-raising structures that some shareholders say circumvent the rules protecting their rights.
India’s Larsen frontrunner for Satyam
Indian engineering and construction firm Larsen & Toubro is likely to present a revival plan to the board of fraud-hit Satyam Computer Services, reports Reuters citing local media reports. Larsen was a front-runner for acquiring Satyam,
US Bancorp earnings down 65%
Profits at US Bancorp fell by 65% in the fourth quarter, dragged down by credit and securities losses. Q4 net income for the Minnesota-based bank, the sixth largest US commercial bank, declined to $330m from $942m in the same period last year.
Geithner pledges ‘dramatic’ action
The Obama administration will take action on a “dramatic scale” to revive credit markets and strengthen banks so they are able to lend, Treasury secretary-designate Tim Geithner said Wednesday. Testifying to the Senate committee considering his nomination,
Banks lobby for eastern Europe funds
Leading international banks operating in central and eastern Europe have clubbed together to lobby the EU and the ECB to extend their anti-crisis policies to ease the credit crunch in the region. The group of nine,
Japan exports plunge record 35%
Japan’s exports plunged by a record in December, signaling companies will be forced to shut factory lines and fire more workers, driving the economy deeper into recession, reports Bloomberg. Exports plummeted 35% from a year earlier,
RAB shakes up management
A management reshuffle at RAB Capital will see a new chief investment officer and chief risk officer, after the UK hedge fund manager on Wednesday announced a sharp drop in assets under management and performance fees,
SEC accuses fund manager of $300m fraud
The US SEC on Wednesday accused Arthur Nadel, a missing Florida-based hedge fund manager, of falsely overstating by about $300m the value of investments in six funds he advised. The actual value of the funds’ assets is only about $506,000,
Overnight markets: Mostly up
Asian stocks bucked their downward trend on Thursday, led by banks and drug companies, on optimism that governments worldwide will step up measures to ease the financial crisis and the global recession.
Rough times for diamonds
Barclays’ Bob Diamond may not be the only diamond having a rough time of late.
It seems in times of financial crisis and general economic malaise global appetite for diamonds can go down just like the Barclays share price.
Bank picture du jour – redux
We know how much you all loved the first picture, so here’s a new improved version.
Hat Tip to one FT Alphaville reader who writes:
The ‘Normalised’ bit is with them sized so they’re all the same for initial capitalisation- so it’s easier to compare relative proportional ‘shrinkage’.
CDS update: Financials cast pall over markets
This CDS report was written by Markit’s Gavan Nolan
European credit indices moved wider today as the pall hanging over the UK financial sector refused to lift. The Markit iTraxx Europe index was trading around 172.5bp,
The UK finds a friend
Not everyone has given up on the UK. Graham Secker, equity strategist at Morgan Stanley, reckons the plunge in sterling is a reason to buy the FTSE 100.
The reason? Historically, periods of sharply depreciating GBK GBP are usually positive for UK equities,
The UK has nothing left to sell, official
It looks like it’s all over for the Great British Krona – the currency of the realm has officially hit a 23-year low of 1.3618 versus the dollar on Wednesday afternoon.
To quote Jim Rogers (he who broke the Bank of England with George Soros on Black Wednesday in 1992):
Tear 1 capital
It is not just bank shareholders suffering at the moment. Spare a thought for investors in Tier 1 bonds, otherwise known as hybrid capital.
As you can see from the above screen shot, Barclays is trading at 15-20 on the pound and RBS even lower.
Morgan Stanley: UK on track for zero CPI inflation by summer
The UK’s savers are understandably jittery about sterling’s recent performance, and the the possibility that further weakness will lead to “out of control” inflation and the erosion of their life savings.
Pesto vs. McFall
This should make for fun TV: Robert Peston is to face off against John McFall, Labour chairman of the Treasury select committee, next month.
The Treasury select committee raised the question of whether journalists should be muzzled to protect financial stability when it started its inquiry last month into the causes of the banking crisis.
Flying like it’s 1991
Airline tickets, which have so far managed to resist deflationary pressures, may be moving towards a rather pronounced collapse.
Yesterday, we saw a JP Morgan economist speculate that the 34 per cent 12-month increase in air fares contained in the UK’s December inflation figure was on the verge of a “reversal”.
Dear Hector Sants…
John McFall, chairman of the Treasury Committee, has penned a letter to the FSA’s Hector Sants expressing his deep concern over “anecdotal evidence” that the monsters of Mayfair have been allowed to run amok on defenceless UK banks.
A moderating MPC?
The minutes from the Bank of England’s Monetary Policy Committee’s January meeting are out, and shock, horror — they considered not cutting rates at all.
Some arguments could be made for leaving Bank Rate unchanged.
Bank picture du jour
A caveat – We have received a slew of complaints in the comments and more than one email about this picture. One reader notes, for instance, that the graphic “just happens to make JPM look like the best bank by far.