January, 2009
Brown accuses RBS of ‘irresponsible risks’
Gordon Brown on Monday unveiled a second bank rescue package including powers for the Bank of England to lend up to £50bn directly to businesses, as he accused Royal Bank of Scotland of taking ”irresponsible risks” as the bank’s shares collapsed.
Lex on UK bail-out Part II
Much of Monday’s UK bail-out package for banks “simply unstitches bits of the October bail-out that went wrong”, in Lex’s view. Government guarantees against extreme losses on dud assets may persuade lenders to stop hoarding capital,
Fiat poised to take Chrysler stake
Chrysler and Fiat are in talks about creating a joint venture that would give the Italian carmaker a significant stake in Chrysler. Insiders said the companies had signed an MoU on a deal to give Fiat a 35% stake in Chrysler and an option to buy a majority,
UK Treasury gives go-ahead to ‘print money’
The UK Treasury on Monday gave the Bank of England the power to print money and buy assets direct from companies and banks. In a sweeping set of banking announcements, the Treasury said the Bank would set up a new facility allowing it to buy up to £50bn of high-quality corporate assets that could also be used to boost money supply,
S&P trims Spain’s rating as euro slides
Spain on Monday became the first country to lose its triple A credit rating from S&P since Japan in 2001, spurring a slide in the euro as the economic outlook for Europe worsened. S&P said it had downgraded Spain’s long-term sovereign debt because of its deteriorating public finances.
Irish banks plunge on nationalisation fears
Shares in Allied Irish Banks and Bank of Ireland halved on Monday amid investor fears that the Irish government may be forced to nationalise the two largest domestic lenders. Bank of Ireland shares fell 54% to 34 cents while AIB fell 58% to 60 cents and Irish Life & Permanent,
Norilsk eyes metal mega-merger
An ambitious plan to create one of the world’s biggest mining groups through the merger of up to five Russian companies has been proposed by two billionaire tycoons. Oleg Deripaska and Vladimir Potanin,
Permira issues capital call letters
Permira, the private equity group, has issued capital call letters to raise $917.8m from its investors for its acquisition of NDS, the set-top box company, in the first test of its revised fundraising structure.
Eurozone economy to shrink 1.9% this year
Europe’s economy will start to emerge from recession in the second half of this year, provided that financial markets stabilise and governments rapidly implement their fiscal stimulus plans, the European Commission predicted Monday.
Denmark unveils bank loan package
Denmark will offer up to Dkr100bn (€13.4bn) in loans to recapitalise its struggling banks and encourage them to restart lending as the country’s economy continues its slide into recession. The political agreement,
UBS buys AIG’s commodity index business
UBS on Monday announced it would buy the commodity index business of AIG, the struggling US insurer, after it spent the past two months divesting non-core commodities activities. The Swiss banking group said it would pay $15m to AIG Financial Products for the business,
Abu Dhabi SWF exits Gatwick race
Six consortiums have submitted bids of up to £2bn for Gatwick Airport, but the Abu Dhabi Investment Authority (ADIA), the world’s largest sovereign wealth fund, is understood to have dropped out, reports The Times.
Richemont sees austere times for luxury goods
Richemont on Monday issued a grim warning about the outlook for expensive jewellery, watches and accessories, as the world’s second largest luxury goods company said sales had fallen 12% in the crucial third quarter,
Pearson gives market upbeat outlook
Pearson met or exceeded its previous guidance for 2008 in all its businesses, the publisher said Monday, bucking a run of bearish announcements from rival educational, book and newspaper companies. The owner of the FT said in a trading update it expected full-year headline earnings growth of about 20%,
GLG hires Pendragon founders
UK hedge fund GLG Partners is hiring the founders of smaller firm Pendragon Capital in a move that signals how the tricky markets are making it increasingly tough for small managers to go it alone, reports the WSJ.
Cerberus takes its own medicine
Cerberus Capital Management, the private equity group specialising in stripping costs out of struggling companies, is taking some of its own medicine with plans to cut 10% of its 275 members of staff. While Cerberus is the latest in a string of big buy-out groups to announce cost-cutting measures,
Overnight markets: Bail-out gloom
Asian stocks slumped on Tuesday, led by commodity producers and banks, after RBS’s forecast of the biggest loss in UK corporate history heightened concern about deepening global recession and financial stocks were driven down in key markets.
Fitch’s contrario call on Spain
S&P is none too impressed with the Kingdom of Spain, but Fitch thinks the outlook for the country is, at the very least, ‘stable’.
The ratings agency today affirmed Spain’s triple-A rating, citing “the headroom which exists in the government’s balance sheet to absorb the fiscal shock associated with the forthcoming recession and measures to support the banking sector”.
Forex failure begins in Poland
Poland’s forex exposure as related to foreign-currency denominated mortgages has been well documented here on FT Alphaville. But in case anyone was of the view that the market was just too small to have a severe impact on the economy,
PIGS to S&P slaughter
Hot on the heels of Greece comes the latest sovereign downgrade: Spain’s been stripped of its triple-A rating by S&P.
About time too, one might say. From the FT:
Spain on Monday lost its triple-A sovereign credit rating from Standard & Poor’s when the rating agency downgraded the country’s long-term debt because of its deteriorating public finances.
A Surprisingly Hopeful Consensus
… is the title of the latest note from Teun Draaisma. But it is not the Morgan Stanley strategist who is positive but the 250 clients who turned up to his recent Global Insights Day, only to be forced to partake in an interactive vote.
DB: Den Brunnen erst zudecken, wenn das Kind ertrunken ist
That’s horses, stable doors, and bolting to English speakers. Or perhaps, it’s more appropriately translated in all its gruesome idiomatic glory: children, wells, drowning and well-covers. (Refit words to horse-bolting metaphor accordingly.)
So long,
The Royal Penny Dreadful (Update – trading at 10p at 14.33)
Not much further to say on RBS — down 22p or 63 per cent at 13p. We’ll let the picture do the talking…
Lunch Wrap
On FT Alphaville Monday morning,
- Introducing Her Majesty’s AIG.
- Barclays, the bouncing bank.
- UniCredit’s Eastern exposure.
- Twisting Treasuries.
- Citi’s Nikko Cordial: to go or no?
- IB salary datapoint of the day.
FSA relaxes bank capital rules
Right at the bottom of the FSA’s rather mealy Statement on Regulatory Approach to Bank Capital this morning (most of which is a thoroughly anodyne recap on existing policy) is this:
We have also been working with these banks to seek to ensure that the application of the current International Basel Accord,
The mark-to-market Tarp
The Congressional Budget Office has done some number-crunching on the $700bn-Tarp. Turns out banks and car companies aren’t great investments.
Recall that the Treasury has so far spent $247bn of the Tarp’s $350bn first tranche (the second tranche of $350bn was made available for use on Friday).