January, 2009
When it comes to UK housing — “We’ve only just begun…”
… sang Karen Carpenter in the early 70′s chart-topper. And it could make a comeback as an unlikely signature tune for the UK housebuilding sector.
That’s the view of Alastair Stewart, anyway.
Lunch Wrap
On FT Alphaville on Thursday morning,
- HSBC still needs $20-30bn of capital
- Oh no it doesn’t
- Trading down to Primark
- WTI is a chocolate oven-glove
- Buiter goes pamphleteering
- Riduzione,
CDS report: Financials cast gloom on credit markets
Sentiment remains bleak in credit markets as gloomy retail news from the US and Europe, as well as fears of more negative economic data to come, added to an already soured mood on Thursday morning.
Markets are still stinging from Deutsche Bank’s announcement of a record €4.8bn loss for the fourth quarter on Wednesday and rumours that HSBC,
‘WTI about as useful as a chocolate oven-glove’
As FT Alphaville has been reporting for weeks now, WTI has lost is losing its position as the global oil-price benchmark.
In case anyone still disputes the fact, Thursday’s WTI/Brent spread has reached a preposterous $9 dollars.
Luxury (not) for the masses
So, it seems Tiffany’s and Abercrombie & Fitch, two of the most stubborn retailers in refusing to lower their prices during a global recession, have got their comeuppance.
Tiffany’s reported yesterday that holiday sales fell a whopping 21 per cent,
Roubini: Let me count the ways it was a sucker’s rally
Here it comes…. the latest bit of insight from ‘Dr. Doom,’ a.k.a Nouriel Roubini.
And, of course, he was right again — it’s all been a sucker’s rally:
I have been predicting for a while that the most recent bear market sucker’s rally would lose its steam and — like the previous bear market rallies in the last 18 months — US and global equities prices would head again towards new lows.
Markets live transcript 15 Jan 2009
Markets live chat transcript for the chat ending at 13:00 on 15 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Welcome to Markets Live PM:This is FT Alphaville’s daily markets related chat.
Russia vs Ukraine, the costs
Right, it’s the 15th January – the annual Ukraine/Russia gas stand-off should be over by now.
But it’s not.
Not to over-escalate the affair but it’s actually getting quite bad. For Russia in particular.
Riduzione, réduction, reduktion
Mon dieu, the euro’s trading at a five-week low ahead of the European Central Bank’s interest rate meeting today.
Consensus is for a 50bp reduction in the current official rate of 2.5 per cent, but some are predicting deeper cuts of 75bp or even 100bp.
‘Why HSBC DOESN’T need to raise $20-$30bn of capital…’
Just to stir the pot, here’s a piece of commentary from the specialist sales desk at UBS – dissing Morgan Stanley’s aggressive sell note on HSBC, which argued that the bank might have to raise upwards of $20bn.
‘Why we STILL think HSBC needs $20-30bn of capital and to halve its dividend’
Seconds out, round two.
The furious row debate over Wednesday’s controverisal note from the Morgan Stanley banking team on HSBC rumbles on.
Having seen his work criticised by rivals and belittled by HSBC’s PR company,
Buiter goes pamphleteering
Not much of a surprise here, but former Bank of England member and prolific blogger Willem Buiter is poised to make a big push today for the UK to join the eurozone.
Buiter is joining 31 academics and financial figures,
Trading down to Primark
How’s this for outperformance? Revenues at Associated British Foods were up 21 per cent in the 16 weeks to January 3rd, up 15 per cent at constant exchange rates.
The UK-listed food producer, which also owns discount retailer Primark,
Further reading
Elsewhere on Thursday,
- The Bailout Game.
- Before the call: JPMorgan’s earnings…
- “I am both saddened and outraged …”.
- Can Citigroup’s Vikram Pandit pull off the banking equivalent of the retreat from Gallipoli in World War One?
- How To Properly Escape Capture Following Your Massive (or Relatively Massive) Financial Fraud:
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper on Citigroup
Dick Parsons is ideally suited to take over at Citigroup. After all, his previous job at Time Warner was to untangle an ill-conceived and poorly-executed merger that left a giant company adrift.
Snap news
The latest on Thursday,
- HMV completes £25m equity placing — statement.
- BNP Paribas may bid for Caceis — Reuters.
- OFT preliminary view on ITV contract rights — statement.
- Corporate:
BofA pushes for further injection
The US banking sector was shaken on Wednesday by concerns over news that Bank of America is counting on a new multibillion-dollar capital injection from the government, reports the FT. People close to BofA said it had told the government it wanted to scrap its takeover of Merrill Lynch last month after realising the depth of Merrill’s Q4 losses.
Deutsche Bank warns on annual loss
Deutsche Bank will make its first annual loss in five decades after losing €4.8bn in a turbulent last quarter that exposed weaknesses at the bank, according to Josef Ackermann, chief executive. The deep quarterly loss will push Germany’s largest bank to a net loss of €3.9bn in 2008.
Citi plunges on financial woes
Citigroup shares plunged Wednesday, closing down 23% to $4.53, the lowest level since the government’s $300bn bail-out of the group in November just $24.7bn, after news that Vikram Pandit, Citi’s embattled chief executive,
Lex: Citi’s changing future
So much for a fresh start, says Lex. Citigroup has sealed its retail brokerage JV with Morgan Stanley and is planning to spin off higher-risk portions of its consumer finance and investment banking businesses.
Citi fund deals investors a blow
Citigroup’s Corporate Special Opportunities hedge fund is returning only 3 cents on the dollar to investors, highlighting the problems facing the alternative investment unit once headed by Citi’s current chief executive,
Investors pull $150bn from hedge funds
Investors withdrew close to a net $150bn from hedge funds last month despite moves by dozens of funds to halt or suspend redemptions. The record December figure, equivalent to about 10% of industry assets,
Nortel files for bankruptcy protection
Nortel Networks, the Canadian telecoms equipment maker, filed for bankruptcy protection on Wednesday, becoming the sector’s first big victim of the global downturn. Nortel said the bankruptcy process would allow it “to deal decisively” with its cost and debt burden and effectively restructure operations,
JPMorgan chief sees bleak year ahead
The US financial and economic crisis will worsen this year as hard-hit consumers default on credit cards and other loans, Jamie Dimon, chief executive of JPMorgan Chase, has predicted. Dimon, whose bank will report Q4 results on Thursday,
HSBC shares slide on broker warning
HSBC shares fell 8% to a 10-year low of 588¾p in London on Wednesday after Morgan Stanley slashed its target price to 455p and said the UK’s biggest bank needed to raise between $20bn-$30bn of equity and halve its dividend in order to bolster its balance sheet.
Lebedev revives Evening Standard bid
Alexander Lebedev, the Russian billionaire and former KGB officer, is in close discussions with Daily Mail & General Trust to buy a controlling stake in its London evening paper, the Evening Standard. A person close to the talks said a conclusion was likely in coming days,
Satyam shares sink with bailout hopes
Shares of Satyam Computer tumbled as much as 30% on Thursday after one of its directors dashed investor hopes for a government bailout of the fraud-stricken Indian company, reports Reuters. Satyam is a financially viable company,
Cuban seeks dismissal of suit
Mark Cuban, the investor and owner of the Dallas Mavericks basketball team, is asking a federal court to dismiss a civil suit brought by the Securities and Exchange Commission in November that accused Cuban of insider trading reports the WSJ.
Blackstone staffer on insider trading charge
A staffer in Blackstone’s financial advisory group was charged by the SEC with insider trading in connection with the 2006 acquisition of supermarket chain Albertson’s by a group including Cerberus Capital,
Davies quits StanChart for government
Mervyn Davies, chairman of Standard Chartered bank, was on Wednesday hired by Gordon Brown to head Britain’s trade promotion efforts. Davies will become trade minister, replacing Digby Jones. But his remit will also take him into Brown’s inner circle of advisers grappling with efforts to restore credit to the economy.