January, 2009
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Zbigniew Brzezinski on the Group of two that could change the world
The former national security adviser to the Carter administration says the relationship between the US and China has to be a comprehensive partnership,
Snap news
Breaking pre-market news in London on Wednesday:
- RBS confirms disposal of 4.26% (£1.6bn) stake in Bank of China – reduction of £4bn in RWAS – statement
- UK Govt releases details of £20bn Enterprise
Citigroup moves towards break-up
Citigroup plans to break itself up by separating higher risk US consumer finance and securities businesses from its global commercial banking operations in an attempt to ensure its survival, the FT reported,
RBS sells Bank of China stake for $2.4bn
Royal Bank of Scotland raised about $2.4bn by offloading its stake in Bank of China at around an 8 per cent discount to the lender’s closing price in Hong Kong on Tuesday, the FT reported, citing people familiar with the sale.
Germany to ban excessive borrowing
Germany will change its constitution to ban excessive public borrowing and impose strict new rules to ensure the extra debt created by its latest fiscal stimulus package is paid off as soon as possible,
Container freight rates hit zero as trade sinks
Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October,
Mandelson unveils small business plan
Taxpayers will commit to guaranteeing up to £21bn of bank lending for small and medium-sized businesses until 2011, under plans being unveiled on Wednesday by Lord Mandelson. Business on Tuesday night gave a guarded welcome to the government move,
UK banks withdraw unused credit lines
Banks are cutting back on the unused credit facilities of large companies, a survey of the 137 top businesses in the UK revealed, in the latest sign of how the credit crisis is hitting UK plc. Banks pulled,
Bernanke calls for banking clean-up
Ben Bernanke called for fresh efforts to clean up the US banking system during a speech in London on Tuesday, warning that fiscal stimulus measures alone would not be enough to overcome the economic crisis.
US declares former UBS banker Weil a fugitive
The former head of UBS AG’s wealth management business, Raoul Weil, was formally declared a fugitive on Tuesday after failing to surrender to US authorities on charges of conspiring to help wealthy Americans hide assets from US tax authorities.
Fund to repay investors in securities not cash
GoldenTree Asset Management, a credit hedge fund, is offering investors who want to withdraw money securities instead of cash, triggering protests from those who in many cases lack means to dispose of such instruments,
Traders profit as ship-stored oil doubles
Oil companies and traders are storing enough oil in supertankers to supply the world for one day, in one of the most striking signs of supply outstripping demand as the impact of the economic crisis overshadows a string of Opec production cuts,
Overnight markets: Edging higher
Asian markets rallied for the first time in five days, as a rebound in oil boosted energy producers and technology companies rose on speculation mergers and cost- cutting measures will bolster profits,
Getting the most out of FT Alphaville – a how-to guide
FT Alphaville is more than just a blog – we also offer an RSS feed, a Twitter feed, and two e-briefings, as well as a mobile site for readers on the go. And of course, there’s the Long Room, our members-only comment and analysis area.
Citigroup ditches ‘universal banking’, will adopt ‘good bank, bad bank’ structure
Now here’s a cracking story from the FT’s US business editor Francesco Guerrera:
Citigroup is to break up its 10-year old “universal banking” business model by separating large parts of its troubled investment bank and US consumer finance businesses from its global commercial banking business in a dramatic attempt to ensure its survival.
Fertilising profits
Ah, fertiliser.
In these days of intensive farming, you can’t live without it. Despite that, fertiliser prices go largely overlooked as economic indicators. They do, however, provide a very useful insight into what you can expect on the supply side in soft commodities – in grains in particular.
CDS update: Technically unfavourable
This CDS report was written by Markit’s Gavan Nolan
European credit indices continued to widen today as investors took profits from the recent rally and technicals become less favourable. The Markit iTraxx Europe index was trading around 169bp,
GE, that’s awful
Shares in economic bellwether GE fell more than 5 per cent on Thursday after BarCap said the company’s profit might be driven largely by tax gains.
BarCap analyst Robert Cornell argued in a note that more than half of its forecast Q4 profit for the conglomerate could come from tax benefits :
UK bank run over
Details of the UK government’s plan to kick-start lending are starting to leak and those hoping to see the creation of a ‘bad bank’ are likely to be disappointed. For the moment at least.
What’s expected to be announced on Wednesday morning is a scheme to help small and medium-sized companies refinance some £20bn of debt that falls due for repayment this year.
Trading like it’s 1697
Notable events in 1697:
* Peter the Great sets out to travel in Europe officially incognito as “Artilleryman Pjotr Mikhailov”.
* The Spanish conquest of the Yucatan is complete with the fall of the Itza Kingdom.
On your marks, get set, devalue
Just when every other country appears to be racing to devalue its currency, the poor Japanese yen just can’t stop strengthening. Its rise against the euro Monday was accompanied by a splurge of bad news,
Bernanke on QE and the exit strategy
Exerpts from the Stamp Memorial Lecture at LSE – currently being given by Ben Bernanke (emphasis, and notes, ours):
Credit Easing versus Quantitative Easing
The Federal Reserve’s approach to supporting credit markets is conceptually distinct from quantitative easing (QE),
Lunch Wrap
On FT Alphaville on Tuesday morning,
- On return free risk and the bond bubble
- Signs of life in the corporate bond market
- Why Citi’s selling
- BlueGold coins it
- Every commodity crash
CDS report: sentiment sours
Expectations of significant losses by Japanese electronics group Sony and a string of gloomy announcements from European retailers have spoiled the mood across European credit markets.
The iTraxx list of European investment grade companies was trading around 169.7bp this morning,
Every commodity crash has a silver lining
Commodities may have had a disastrous run on Monday, but if you look at the energy complex in detail it wasn’t as bad as is being made out.
Firstly, the Brent contract as traded on ICE is staying firmly above the $40 per barrel mark,
BlueGold coins it
It is always hard to be sure who has the best-performing hedge fund, but London’s BlueGold looks like it could be the winner for last year.
With a rise of 210 per cent, tripling investors’ money, the oil and commodities specialist set up in February soared ahead of rivals – most of whom lost money.