January, 2009
Dow below 8,000 and falling
(And just in case we’ve not mentioned this before, FT Alphaville <3 Google Finance)
Ambrose Evans-Pritchard is SERIOUSLY ALARMED
In case you haven’t heard enough depressing news about sterling and feel like a supplementary dose of depression central, you simply must check out the latest blog post from Telegraph business editor Ambrose Evans-Pritchard.
CDS update: What Obama bounce?
This CDS report was written by Markit’s Gavan Nolan
Hope, optimism, expectation and, of course, change. Today’s inauguration of President Obama has generated a torrent of positivity in the media, with those four words unavoidable.
Whose fault was it?
So whose fault was this crisis? China’s or America’s?
Standard Chartered poses the question and comes to the enlightened conclusion that it was probably a crisis largely of the USA’s making, most likely due to the overextended period of low interest rates between 2002-2006.
Moody’s moves on RBS – and warns of heavy losses to come
Moody’s downgrades RBS (senior to Aa3 from Aa1), negative outlook
London, 20 January 2009 — Moody’s Investors Service today downgraded all long-term ratings of Royal Bank of Scotland plc (RBS) and of the holding company,
Text of Obama’s Inaugural Address
(Emphasis – of the bits related to markets/economics – FT Alphaville’s)
My fellow citizens: I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors.
Bloomberg, no UK AAA, no way
Or at least, not yet.
Bloomberg’s Chart of the Day is running with some startling text.
Jan. 20 (Bloomberg) — The U.K. government may lose its top AAA credit rating after taking a 70 percent stake in Royal Bank of Scotland Group Plc,
Markets live transcript 20 Jan 2009
Markets live chat transcript for the chat ending at 16:08 on 20 Jan 2009. Participants in this chat were: Stacy-Marie Ishmael, FT (SMI) Neil Hume, FT (NH) SMI:Morning SMI:Welcome to Alphaville NY’s inaugural (and inauguration) Markets Live
Safety among basket cases
The bank bailout is failing to reassure, sterling is tumbling, people are talking about currency crisis, the Telegraph is citing a rumour about a UK sovereign downgrade – what on earth is going on?
Are we really on the edge of a currency collapse that will make the ERM debacle look like a walk in the park?
There are some bleak takes on it all out there.
Markets Live – US edition
Not sure what to do while you wait for Obama to be sworn in? Watch financials melt down perhaps – BAC off 18 per cent, State Street down 50 per cent, Citi off 11 per cent…
Or you could join Neil Hume and Stacy Stacy-Marie Ishmael at 3.00pm (10.00am ET) for the first ever (official) transatlantic Markets Live.
AAA (Insha’Allah)
Guess what it says…
I’m pleased to inform you that Moody”s Investors Service has been voted “Best Islamic Rating Agency” – that is, best rating agency for Islamic finance ratings – by the readers
US Treasury to banks: Show us your dirty laundry
Well, it won’t be pretty but it is a step towards transparency.
Jan. 20 (Bloomberg) — The U.S. Treasury, under pressure to revive lending, is demanding monthly reports from the banks that received the most capital from the government’s $700 billion rescue program.
We ♥ 1992
From the same people that brought you: “RBS: we ? 1983” comes…
… Sterling: We ? 1992! (Click to enlarge)
Inside job
This is novel, a PLC done for insider trading. Well sort of.
From the FSA on Tuesday.
Wolfson fined £140,000 for delaying disclosure of inside information
The Financial Services Authority (FSA) today fined Wolfson Microelectronics plc (Wolfson) £140,000 for failing to reveal price sensitive information to the market as soon as possible.
Lunch Wrap
On FT Alphaville on Tuesday,
- Rogers says the UK is finished
- Nationalisation linkfest
- Inflation’s upside surprise
- Roubini, not even halfway there
- Public thrift, private profligacy
- Dead cat splat
- Goldman oil bulls are back
- Clarity on QE
- Hestrionics
On FT.com,
CDS report: Sovereigns rattle markets
Credit market indices were wider on Tuesday morning, weighed down by growing fears about the stability of the Eurozone economies, as the cost of buying credit protection for the sovereign debts of the UK,
Inflation’s upside surprise
UK December inflation came in higher than expected, though it still fell the most since 1992. From the FT:
UK inflation fell in December by the most since 1992 as the cut in VAT came into effect and stores slashed prices in an attempt to attract customers,
Markets live transcript 20 Jan 2009
Markets live chat transcript for the chat ending at 12:03 on 20 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:This is Markets Live NH:Our daily public display of our shredded nerves.
Roubini: Not even halfway there
Nouriel Roubini is just a day late to make the most depressing day of the year just that little bit more painful, but his latest missive is sure to continue the pain into Tuesday.
By his calculations we are not even halfway through the fallout from the financial crisis.
Public thrift, private profligacy
Here’s a chart from John Kemp at Reuters:
It shows the growth in nominal US GDP versus the growth of the financial sector, as measured by total credit market instruments outstanding.
Now consider this second chart:
Dead cat splat
Is this the most unconvincing bounce in UK stock market history?
Probably.
The market really has given up on RBS, with most analysts saying the equity is now not worth more than a few pennies.
Goldman oil bulls are back
Right, so it’s not exactly $200 a barrel but it is “a swift and violent rebound.”
Goldman’s Jeffrey Currie is quoted at a London commodities conference on Monday:
Jan. 19 (Bloomberg) — Goldman Sachs Group Inc.
Clarity on QE at the BoE. Or not.
Much was made in the news yesterday of the Bank of England now being allowed by the Treasury to undertake quantitative easing – “printing money” as it has pejoritively become known.
In fact, although details are still thin on the ground,
Hestrionics
An interview with RBS CEO Stephen Hester, presented with out comment (but with selected highlights).
From The Scotsman:
Q: What is the reason for today’s fall in RBS’s share price?
“Banks shares have,
Rogers: ‘The UK is finished’
So it’s time to sell the British peso, according to Jim Rogers, chairman of Singapore-based Rogers Holding. As sterling dropped to a record low of 127.44 against the yen and the weakest level since 2002 against the dollar (1.4133) on Monday night – on concerns the government will have to rescue more banks amid the worst recession since World War II – Rogers,
Further reading
Elsewhere on Tuesday,
- Obama can; The rest of the world, not so much.
- A look back at Bush’s tenure parts I, II and III.
- “Biblical debt jubilee may be the only answer.”
- Benign deflation? A study.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Insight: Christopher Wood – Western banks should follow the Swedish model
The Swedish model is not a pain-free panacea for banking’s woes,
Snap news
Breaking pre-market news on Tuesday,
- IG Group reports 47% revenue increase – statement
- Record reports $12.2bn fall in assets under management in Q4 – statement
- Corporate results/updates:
RBS slides despite lifeline
Royal Bank of Scotland on Monday night faced the prospect of full nationalisation after the state-controlled lender suffered a 67% plunge in its share price after revealing the biggest loss in Britain’s corporate history.