January, 2009
CDS update: Well, that was quick…
This CDS report was written by Markit’s Gavan Nolan
European credit’s 2009 rally came to a halt today in a mixed session. The Markit iTraxx Europe was trading around 163bp, about 7bp wider than Friday’s close.
How to get credit moving, UK edition
We’ve had the SLS, the HM Treasury Credit Guarantee Scheme (CGS) and the Bank Recapitalisation Fund; so what next for the great British banking sector?
While the idea of ‘bad bank’ is being batted around,
Can the last one out please turn off the lights?
It’s an obvious correlation really, but here goes anyway. Waning industrial activity and general consumer malaise leads to reduced appetite and consumption of electricity.
Merrill Lynch has noted the link and suggest looking at global power generation for a good snapshot of the economy.
Wanted: minder for island paradise
Seeking Caretaker of the Islands of the Great Barrier Reef.
Must be keen on water sports, turtles, whales, white sand beaches and blogging. Salary: £72,000 for six months. Application deadline: Feb 22.
Hedge fund winners and losers in 2008
From a memorable year – numbers courtesy of HSBC Private Bank.
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Sure, not all the numbers are end-December, but it must be a fair bet that Mulvaney avoided a Christmas seizure that might have seen the firm surrender its convincing lead over second-placed Tulip Trent.
Agencies, bubbling over
One benefactor of concern over a treasuries bubble has been the market in agencies debt. Last month, for instance, investments in agencies returned 1.55 percentage points more than treasuries, according to Barclays.
So begin the (serious) sovereign downgrades…?
Not just developing world sovereigns either. From S&P today (emphasis ours):
Jan 12 – Standard & Poor’s Ratings Services today said it had placed its ‘AAA’ long-term foreign and local currency sovereign credit ratings on the Kingdom of Spain on CreditWatch with negative implications.
The Irish find a scapegoat
The Irish government have found someone to blame for the country’s economic malaise – Gordon Brown.
Here are some snippets from an interview given by finance minster Brian Lenihan to the Irish Independent at the weekend.
CDS report: RWE hit on Essent talk
RWE was the worst performer in broadly positive credit derivatives markets Monday morning, as the cost of protecting the German utility’s debt against default rose strongly on talk that it would announce a €10bn deal for Essent later in the day.
Lunch Wrap
On FT Alphaville on Monday morning,
- Lloyds Banking Group – ‘Yours, taxpayer’.
- Worst quarter for dividends, ever.
- QE confidential.
- Are things really that bad in China?
- The socialist shopper.
Are things really that bad in China?
When petrochemical prices fell to multi-year lows in November 2008 it was deemed a key indicator of deteriorating demand for Asian exports.
As the FT put it (our emphasis):
The drop in petrochemicals prices goes well beyond the fall in oil prices,
Handouts for homeowners
Another Barney made headlines over the weekend. The US’s House Financial Services Committee chairman and Massachusetts congressman Barney Frank has submitted a proposal to overhaul the Tarp.
The document,
Markets live transcript 12 Jan 2009
Markets live chat transcript for the chat ending at 12:14 on 12 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Welcome to NEW Markets Live. PM:Good morning
Worst quarter for dividends. Ever.
Well, almost.
S&P Index Service’s Dividend Record actually says Q4 08 was the worst quarter for dividends since 1956. Which is when records began.
Dividend Record tracks 7,000 firms, so it’s pretty comprehensive.
A tough week for Vikki Pandit…
Looks like Vikram Pandit is in for a busy week, as the Citigroup CEO nears finalisation of the deal to spin off Citi’s Smith Barney brokerage unit into a joint venture controlled by Morgan Stanley, even as ugly noises on Capitol Hill annd elsewhere grow ever-uglier about Citi’s deal on mortgage payments – and what promises Citi may have made in order to gain its handsome capital injection.
STATEMENT ON THE RAMPANT FRAUDULENT ACTIVITIES ON THE STOCK EXCHANGE, THE INSURANCE AND PENSION FUND INDUSTRIES AND THE BANKING SECTOR
Yes, it’s Zim-time once again.
There are reports around that Zimbabwe plans to issue a series of Z$20bn and Z$50bn bank notes. But this seems a strange move: aside from the fact that virtually all goods and services in Zimbabwe are now priced and charged in foreign currency,
The socialist shopper
Luxury shopping has become something of a disgraced activity of late. It doesn’t look good to splash £1,000 on a slouchy bag when your average plebian is coping with basic mortgage payments.
Hence we’ve seen luxury online retailer Net-a-Porter offering to mail purchases in non-descript brown packaging instead of their usual glossy black be-ribboned bags.
QE confidential
Wanted:
Outstanding communication skills; candidates must be able to make a strong contribution to the MPC’s communications, explaining policy decisions to the public.
- Ad for external member of the MPC.
Lloyds Banking Group – ‘Yours, taxpayer’
HBOS today announces that, as at 11.00 a.m. on 9 January 2008, being the latest date for receipt of valid acceptances and settlement in full under the Open Offer, it had received valid applications in respect of 17,692,895 Open Offer Shares,
Further reading
Elsewhere on Monday,
- The bond bubble has burst: Investors, ignore this at you peril.
- The end of Wall Street – a three-part video account.
- Go long, young man…
- Smith Barney mathematics.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Frederic Mishkin: In praise of an explicit number for inflation
Former member (governor) of the board of governors of the Federal Reserve Frederic Mishkin explains why adopting an explicit,
Snap news
The latest on Monday,
- Lloyds TSB and HBOS announce results of placing and open offer — statement.
- Inchcape considering potential equity issue — statement.
- New Star Asset Management receives approaches — statement.
Gorman tipped to succeed John Mack
Morgan Stanley’s James Gorman may become the likely successor to chief executive officer John Mack by taking charge of the firm’s brokerage joint venture with Citigroup, reports Bloomberg. Mack, 64,
Private equity eyes HBOS assets
HBOS has been informally approached by private equity groups about buying its housing subsidiaries, Keepmoat and Apollo, reports The Independent. The Scottish bank, due to merge with rival Lloyds TSB this week,
Satyam shares seen gaining
Shares in Satyam Computer Services could jump on Monday after the Indian government stepped in to appoint a three-man board in a bid to restore confidence in the outsourcing company rocked by the country’s biggest corporate scandal,
Downturn hits rates of debt recovery
Investors face the prospect of much steeper losses on the debts of distressed companies in the credit crunch than in previous downturns. The combination of the severity of the downturn and the complex structure of corporate debts in the credit boom is reducing rates of recovery of funds invested in companies that default.
Half of Madoff loss borne by foreigners
Roughly half the estimated losses from Bernard Madoff’s alleged $50bn “Ponzi” are being borne by non-US investors, according to an analysis of available data. While most of the small individual investors appear to be in the US where Madoff’s main business was based,
Schroders lines up for UK’s New Star
About 10 potential buyers, including Schroders, have submitted first-round proposals for New Star, the struggling UK fund management group. Other parties that submitted indicative proposals for the asset manager,
Peloton founder tries again
Geoff Grant, co-founder of failed hedge fund Peloton Partners, has succeeded in launching another fund, highlighting how quickly investors can forgive managers of failed funds. California-based Grant Capital Partners has backing close to $100m from Société Générale,