January, 2009
Harbinger puts limits on withdrawals
Harbinger Capital, the activist US hedge fund headed by Philip Falcone that shot to fame in 2007 with a lucrative bet against subprime mortgages, joined the list of funds restricting withdrawals for investors a day before the end of last year.
US extends bank probe to Europe
A US investigation into potential sanctions violations over alleged money transfers to Iran has expanded to involve nine European banks. Authorities suspect that some money transferred through the US banking system might have helped finance Iran’s nuclear and missile programmes,
UK banks weigh corporate debt plan
UK banks could pursue a plan that would give faltering companies a way to offload bad debt in order to stave off further bankruptcies and job losses, reports the WSJ. Under the proposal, UK banks – possibly in partnership with the government – would set up a fund aimed at preventing corporate defaults.
Snowball poised for RBS Insurance bid
Patrick Snowball, the former head of Aviva’s UK operations, has teamed up with BC Partners and Apollo Management for a possible bid for Royal Bank of Scotland’s insurance assets, put up for sale last year in a multi-billion pound auction.
‘Greed’ blamed for UK pub closures
Private equity groups and property investors are having a “pretty disastrous” impact on the British pub industry, the founder and chairman of pub group JD Wetherspoon has warned. Tim Martin, an industry veteran of 30 years,
Banks rip up credit derivatives
Big investment banks ripped up more than $30,000bn worth of credit derivatives last year, or almost half the record total outstanding at the start of 2008, according to TriOptima, which organises so-called compression cycles where trades are torn up.
Weekend catch-up
In case you missed these stories:
- Rubin to quit Citigroup after 10 years
Robert Rubin, the former US Treasury secretary, on Friday said he would leave Citigroup after a controversial decade on its board,
Overnight markets: Gloomy start
Asian stocks fell on Monday, led by commodity producers and industrial companies, as the worsening global recession weighed on demand for raw materials. Japan was closed for a holiday but other markets extended last week’s fall in US and European stocks.
Roche readies fresh $44bn Genentech buy-out attempt
Roche of Switzerland is preparing a fresh offer for Genentech, the US biotech in which it already owns a 56 per cent stake.
The bid, to be pitched at around $95-a-share, is likely to be placed in front of Genentech’s board ahead of Roche’s year-end figures,
The Weekender
This week on FT Alphaville,
- Waterford Wedgwood got shattered.
- The tide began to turn for treasuries.
- Someone was a gold seller.
- Oil price rally came too late for LyondellBasell.
- There was a little bit of commodity rebalancing.
On the success of quantitative easing
So yesterday the UK press discovered quantitative easing. The Daily Mail:
LET’S PRINT MORE MONEY! LABOUR’S BIG IDEA TO FIX BRITAIN’S ECONOMIC CRISIS
…
Zimbabwe is an example of an economy where reckless printing of money has led to stratospheric levels of inflation,
Developing ebbs and flows
Money is flowing — into emerging markets anyway.
This chart, from Merrill Lynch’s EM equity strategists, shows global inflows to emerging market funds together with the MSCI World. The funds have seen their biggest weekly inflow since May,
US Dec non-farm payrolls fall by 524,000
Phew, what a relief.
After all sorts of dreadful whisper numbers the payroll numbers are bad, but not as bad as some may have feared.
WASHINGTON, Jan 9 (Reuters) – U.S. employers slashed payrolls by 524,000 in December,
Bailing out the bad guys
“Black Barts not black swans”
“Wall Street perpetrated a massive fraud on the American taxpayer.”
“Value-destroying financial meth labs.”
Janet Tavakoli, author of Dear Mr Buffett, is pretty straightforward.
Talking down sterling
You’ve slashed the interest rates,
You’ve raised the debt,
You’ve crumpled manufacturing,
And yet…
The currency just won’t stay down anymore.
Is this the situation in which the UK now
Lunch Wrap
On FT Alphaville Friday morning,
- Rio offloads assets to private equity.
- Ponzi meets Treasuries bubble.
- Time for an Exxon M&A move?
- New Year sales, Federal Reserve edition.
- All calm on the Allianz front.
CDS report: Banks suffer as market rallies
European banks were under pressure in generally more positive credit markets on Friday, after the German government’s €10bn capital injection for Commerzbank underlined the difficulties still faced by banks even after widespread bailout packages.
Time for ExxonMobil to make an M&A move?
Bernstein Research thinks 2009 could be the year ExxonMobil changes the competitive landscape of the oil industry forever.
How is it likely to do this?
By buying BG and forging a joint venture with Petrobras.
For FHLB’s sake
FHLB.
Free Hubris Loans for Banks.
Find Huge Lumps of Bucks.
Or, simply, the Federal Home Loan Banks, one of the biggest providers of funding for US mortgages — and it may be in trouble. From Bloomberg:
Markets live transcript 9 Jan 2009
Markets live chat transcript for the chat ending at 12:10 on 9 Jan 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Welcome! PM:This is markets live – ft alphaville’s daily market commentary
Pssst, anyone want a JGB?
Japan, which boasts the world’s biggest government bond market but “fortunately keeps most of its paper at home”, wants to ramp up overseas sales of JGBs and is kicking off with an investor road show to the Middle East,
Calculating your comeback
Another great graphic from the NYTimes (see earlier, Rent vs. Buy) – this time a tool to calculate how long your comeback will take.
Calculate your financial comeback
(HT Ritholtz)
Real estate vs equities: Equities all the way
Real estate or equities – which promises better value right now? Some have argued that whatever rise we’re seeing in housing sales at the moment is being driven by speculators who, as soon as housing prices begin to recover, send a fresh wave of property onto the market and so hamper a recovery.
Break clause
Too good to be true.
Widely reviled Highly successful estate agency Foxton’s has breached its banking covenants. BC Partners – the private equity firm that bought the company at the peak of the market gave a press conference yesterday.
Deutsche Bank’s mythology of commodities
Commodities bulls are facing something of an epic year, according to Deutsche Bank. But not in a good way.
From the bank’s 70-page 2009 Commodities Outlook issued this morning:
At the beginning of last year we likened commodities to the Sirens in Greek mythology.
All calm on the Allianz front
The German government’s unexpected capital injection into Commerzbank late on Thursday may have revived some of those 2008 emergency banking bailout jitters, but – all in all – analysts seem fairly unrattled by the move.
New Year sales, Federal Reserve edition
From the FRBNY:
Purchases of agency MBS by investment managers acting as agents for the System Open Market Account (SOMA).
(Click image for a sharper version)
Hope they kept the receipt!
And from Brad Setser at the CFR,
Ponzi meets treasuries bubble
Well, Goldman aside, talk of a bubble in US treasuries is gaining pace.
To wit, the latest missive from Bill Gross, managing director of Pimco, the world’s biggest bonds fund. In his investment outlook,
Rio offloads assets to private equity
Desperate? Well wouldn’t you be if demand collapsed and you had $40bn of debt.
From Reuters:
HONG KONG, Jan 9 (Reuters) – A Chinese company and private equity firms are among the groups expected to submit final bids for Rio Tinto’s borates and talc units,
Further reading
Elsewhere on Friday,
- The decline of Davos Man.
- Getting ahead in a bailout nation.
- Quantitative easing: A modern way to print money or therapy of last resort?
- At this point, all John Thain does is write memos announcing that his “friends”