January, 2009
Investors shun mega-buy-out groups
Investors are turning hostile to “mega-buy-out” groups as many of their heavily leveraged, multi-billion-dollar takeovers of large companies are hit by the financial crisis, according to research to be published Monday.
Oil traders shift from WTI
Oil traders are quietly pricing some of their deals away from the West Texas Intermediate contract, traditionally the world’s most important oil benchmark, as it is being distorted by record inventories at its landlocked delivery point.
Deripaska returns as Rusal CEO
Oleg Deripaska, the Russian billionaire, is to return as chief executive of Rusal, one of the world’s biggest aluminium producers, after being re-elected by the board, the company said Sunday. Deripaska,
Overnight markets: Optimistic
Asian stocks advanced on Monday, led by commodity and finance companies, amid optimism that efforts by various governments to end the credit crisis will bolster corporate earnings. US markets are closed Monday for a holiday.
The Weekender
This week on FT Alphaville,
- Some speculation about a UK bad bank, surely not?
- A failure of communication at the BoE
- A socialist shopper was born
- Zimbabwe makes a statement: all quiet!
- Vikki Pandit was not having a good Monday
- Were things really that bad in China?
- ‘Gordon’s devaluing,
Moody’s warns on Citi
Moody’s on Friday put Citigroup Inc’s long (senior debt at A2) and short-term (Prime-1) ratings under review for possible downgrade, citing “further deterioration in Citibank’s standalone creditworthiness that is represented by its relatively low tangible common equity ratio and growing pressures on its franchise value.
CDS wrap: It’s not different this time
This CDS wrap was written by Markit’s Gavan Nolan
The financial sector’s worst days were in the past. That was the conventional wisdom prevailing in the markets until recently. Governments across the globe recognised the systemic risk inherent in the financial system and were prepared to do everything in their power to avert a catastrophic collapse.
Investor appetite for emerging market funds returns
Funds dedicated to emerging markets suffered in recent months, as investors withdrew more than $41bn during the year to Dec. 3, 2008.
But since then, appetite for emerging markets appears to have returned:
You call this a recession?
So banks are being hammered, US industrial production fell twice as much as expected and things are generally looking pretty grim — but hey, cheer up, people!
Things could be worse, and in fact they have been,
And now for the Asian domestic bond collapse…
Uh oh. Asian domestic currency fixed-income trading appears to be collapsing, say Greenwich Associates.
The Stamford-based research firm’s most recent Asian Fixed Income research in fact points to some very alarming figures – a 47 per cent drop in domestic currency fixed-income trading in India,
Treasuries tumble
The government bailing out Bank of America’s risky purchases = more demand for risky assets? Funny that.
Related links:
Tide turning for treasuries – FT Alphaville
Countrywide: “Don’t believe everything you see on TV”
Bryce Elder pointed us to a fascinating story over at MSNBC.com, which details Countrywide’s own lawyers mocking its loan modification offers as “mere commercial puffery”:
In marketing, advertising and testimony before Congress,
Clash of the activist investors: ‘Man of Steel’ sued by the ‘man who can’
There is a rather nice irony about a clash between rabble-rousing activist investors, particularly when two of the more dogged types – Carl Icahn and Warren Lichtenstein – go head to head.
After news earlier this week of an intriguing (some say “ingenious”
Lunch Wrap
On FT Alphaville Friday morning,
- So where’s the good bank?
- To save or not to save?
- Ken Lewis: “We’re good at this”
- Citigroup rumours redux
- Another Eastern European meltdown?
- The fine print
- Bad bank brewing
- Banks,
Another Eastern European meltdown?
Recent swiss franc strength has started to court some concern at the Swiss National Bank. Reuters reports SNB board member Thomas Jordan in particular voiced his worries on the swissie’s recent 7 per cent rise against the euro.
CDS report: EU nation default risk touches record high
The cost of insuring debt issued by the Irish government leapt higher this morning as Europe’s beleaguered credit derivatives traders swallowed hard on last night’s news the Irish state had finally decided to bail out Anglo Irish bank.
“We’re good at this”
…losing money, that is. Not due diligence or canny dealmaking.
Selected excepts from Ken Lewis (Banker of the Year) on the Bank of America/Merrill Lynch conference call, September 15th, 2008.
Enjoy!
…we could have rolled the dice and possibly could have got it at a cheaper price.
JPM: The fine print
Slide 21 of JP Morgan’s fourth-quarter earnings presentation makes for interesting reading.
You can see the whole thing here via Calculated Risk, but here’s the small stuff from the bottom:
Firm-wide Level 3 assets are expected to be approximately 6% of total firm assets at 12/31/08
Level 3 assets,
Markets live transcript 16 Jan 2009
Markets live chat transcript for the chat ending at 12:07 on 16 Jan 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) Izabella Kaminska, FT (IK) NH:Welcome!
To save or not to save?
A $200 dress? Or a relatively minor bump for your 401(k)? A years worth of Starbucks? Or £1,000 in your savings account? That is the question…
There’s a bit of a debate brewing about the structure of Obama’s planned $825bn stimulus.
So where’s the ‘good bank’?
While British politicians continue to procrastinate over the wisdom of a ‘bad bank’ rescue scheme for the sector, a strange thing happened on Friday: shares in UK banks went up.
Ironic given that the FSA’s shorting ban has now been lifted.
Citigroup rumours redux
Granted, that Citigroup is in a somewhat precarious position is no surprise.
The stock was hammered yesterday, falling 15 per cent (to $3.83) on rumours of the bank’s imminent nationalisation.
This,
Bad bank brewing
Well, maybe.
Contrary to an earlier blog-entry from Pestowire, the Telegraph is reporting that the Treasury is indeed planning a ‘bad bank.’
From the paper:
Treasury plans ‘bad bank’ to buy toxic assets
A state owned “bad bank”
Further reading
Elsewhere on Friday,
- The 10 most unethical people in business.
- How a brokers’ note (on HSBC) set the hyenas onto each other.
- Church of England Seeks Fund Manager–Belief in God Not Required.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Joseph Stiglitz: Do not squander America’s stimulus on tax cuts
The Nobel prize winning economists says when Barack Obama, president-elect, last week proposed to use nearly 40 per cent of the stimulus for tax cuts,
Snap news
The latest on Friday,
- Anglo Irish Bank to open and close EGM, suspends shares — statement.
- Polar Capital assets under management fall 22 per cent — statement.
- Ryanair update on offer for Aer Lingus — statement.
BoA secures state rescue package – US Treasury statement
Here are the official details. (emphasis ours).
Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of America Washington, DC — The U.S. government entered into an agreement today with Bank of America to provide a package of guarantees,