January, 2009
Market turbulence hits banks
A day of market turbulence on both sides of the Atlantic saw Ireland nationalise its third-biggest lender while in the US, several banking stocks slid to fresh multi-year lows, with Bank of America shares falling 18% and Citigroup – due to report quarterly results Friday – down 15%.
BofA secures federal aid package
The US government agreed late Thursday to invest $20bn more in Bank of America and backstop $118bn of its assets to help the lender absorb Merrill Lynch and prevent the financial crisis from deepening,
Merrill’s woes anger BofA executives
Forget the culture clash that was expected in Bank of America’s acquisition of Merrill Lynch, which was completed at the start of this month. BofA executives are livid about the true depths of the problems at Merrill,
Dublin nationalises Anglo Irish Bank
The Irish government on Thursday night nationalised Anglo Irish Bank, the country’s third-largest lender, after the collapse of its share price accelerated in recent days amid fresh reports of large scale deposit withdrawals.
Russia considers merger of metals giants
The Kremlin is considering a plan to merge some of Russia’s largest metals companies into a conglomerate in which the government would take a substantial minority stake, in exchange for writing off some of the crushing debts of the tycoons who now control the companies,
Goldman, TPG, eye Heidelberg stake
Private-equity firms including Goldman Sachs’ buyout arm are considering an investment in HeidelbergCement, the building-materials maker owned by the family of late German billionaire Adolf Merckle, reports the WSJ.
Citi expected to show steep Q4 loss
Citigroup’s Q4 results to be announced Friday are expected to show a loss of $6bn to $10bn and provide details of its planned break-up. Investors on Thursday drove down Citi shares amid intensifying fears that the government will have to rescue the troubled financial group,
ECB cuts rates to three-year low
Eurozone interest rates were cut on Thursday by half a percentage point to 2%, the lowest level in more than three years, as the ECB said it expected the single currency area’s recession to deepen and signalled borrowing costs could fall further.
Lex: The ECB and the euro
The ECB is not cutting rates fast enough. That, at least, is what markets believe, says Lex. Thursday’s 50bp rate cut to 2% is all very well. It takes the ECB’s cumulative rate cuts since October to 225bp.
JPMorgan sees Q4 earnings slump
Jamie Dimon, JPMorgan Chase’s chief executive, on Thursday attacked a proposed law to allow US judges to modify mortgages, saying it would have a “chilling effect” on consumer lending. Dimon’s criticism of the planned legislation,
MUFG warns of $3.2bn share trading loss
Mitsubishi UFJ Financial Group said Thursday it would book a Y288bn ($3.2bn) loss on its share portfolio in the third quarter through December. The move brings the total losses at Japan’s largest banking group from its share portfolio this fiscal year to Y428bn.
Distressed asset indices fall sharply
Indices tracking the value of the trillions of dollars of distressed assets that continue to blight bank balance sheets fell sharply this week amid continuing signs of financial distress. The declines,
UBS faces pay-out calls over Madoff ties
UBS could face new pay-out claims after a Luxembourg judge on Thursday ordered the Swiss bank to repay €30m ($39m) to a French financial group that had invested in funds linked with Bernard Madoff, the US financier charged with running a $50bn fraud scheme.
Merkin funds subpoenaed in Madoff case
Andrew Cuomo, the New York attorney-general, has issued subpoenas to three investment funds run by Ezra Merkin, former chairman of GMAC, General Motors’ financing arm, as part of a new probe related to the alleged $50bn fraud by Bernard Madoff.
Intel warns of deteriorating market
Intel on Thursday warned of rapidly deteriorating margins as its production lines ran on reduced capacity. The world’s biggest chipmaker kicked off what is certain to be a grim earnings season for tech companies by reporting a 90% fall in profits and a drop in revenues it said was unprecedented in the past 20 years.
Mizuho names new CEO
Mizuho Financial Group appointed Takashi Tsukamoto as chief executive officer, ushering in new leadership after subprime-related losses crippled earnings and a deepening recession pushed the Japanese bank to forecast its smallest annual profit in six years,
Schröder to join TNK-BP board
Gerhard Schröder, the former German chancellor, is to become an independent director of TNK-BP, the Anglo-Russian joint venture, as part of a peace deal to resolve the conflict between its shareholders.
Overnight markets: Rising anxieties
Asian stocks rose on Friday, paring the benchmark index’s steepest weekly loss in two months, as the weaker yen boosted Japan’s electronics and auto producers and speculation grew that China will pass another stimulus package.
The financial system is broken – but we won’t tell you how to fix it
Paul Volcker and the Group of 30 are none to0 impressed with banks, hedge funds, private equity, regulators, central banks, ratings agencies…you get the picture.
Why? Because as Arminio Fraga Neto put it at a press conference on Thursday,
Anglo Irish Bank to be nationalized
Well, at least some of the rumours doing the rounds today were true . Another European bank has received a government seal.
From Reuters:
* Irish fin ministry says to nationalise Anglo Irish Bank
California: “Insolvent within weeks”
Sovereign defaults are very much in the news, what with S&P downgrades, rating watches, negative outlooks et cetera on a number of European countries.
Add to those the world’s eighth largest economy,
Madoff, Finra, and the woman who would be SEC chair
Mary Schapiro is Barack Obama’s nominated candidate for the post of SEC Chair. Today she faced a grilling from the Senate, which by all appearances, should have been a tough one.
Why? Primarily because of the Obama camp’s pointed recent criticism of SEC incumbent Chris Cox.
Not just a refinery, a super refinery
In case you may have missed it, there’s a big new kid on the refining block – Reliance Petroleum and its Jamnagar refinery. At peak production the site will be capable of processing a whopping 580,000 barrels per day making it the world’s biggest refinery complex.
Bank nationalizations would “surprise” FDIC
Via Bloomberg (H/T Paul J Davies):
Jan. 15 (Bloomberg) — Federal Deposit Insurance Corp. Chairman Shiela Bair today said he would be “very surprised” if U.S. banks were nationalized.
“I’d be very surprised that happened,” Bair told reporters in answer to a question about U.S.
CDS update: Considerable volatility
This CDS report was written by Markit’s Gavan Nolan
The considerable volatility in European credit indices continued today, with little sign of a consistent pattern. A rate cut of 50bp by the ECB was expected and did little to encourage protection sellers.
The perfect storm
A common theme is that, notwithstanding the ongoing banking crisis, the world’s governments have finally got a grip on the task in hand. Although a deep and protracted recession looks all but unavoidable,
Markets live transcript 15 Jan 2009
Markets live chat transcript for the chat ending at 16:39 on 15 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) Stacy-Marie Ishmael, FT (SMI) PM:Howdy
Emergency Markets Live session 3.45 GMT
No peace for the wicked.
Citibank was down 25 per cent soon after the opening in New York. Bank of America lost 20 per cent. Rumours of outright nationalisation of Citi this weekend are doing the rounds.
Painful deleveraging. Coming soon.
Cazenove produced a note earlier this week focussing on European banks. All of whom, forget not, operate with very high levels of leverage. Although Euro-specific, the note has implications for all banks.
A JPM jolt
Markets were expecting the worst when JP Morgan said it was going to publish its full-year results a week early.
Turns out those fears now seem to be unfounded. The bank has just reported a $5.6bn net profit for 2008,