January, 2009
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Lex: Fiscal to arms
A fiscal tsunami is soon to wash across the globe with barely a ripple of dissent. That is in spite of oceans of conflicting economic research on whether fiscal packages actually raise output during downturns.
Snap news
The latest on Friday,
- Consortium of private equity firms and a Chinese firm are expected to bid for Rio Tinto minerals units within weeks – Reuters report.
- Banking IT services firm Misys expects revenue to exceed high teens growth – statement.
Germany takes Commerzbank stake
The German state on Thursday injected a further €10bn into Commerzbank and took a 25% stake to shore up the country’s second-largest lender and enable it to complete the takeover of Dresdner Bank, its ailing rival.
Congressional panel slams Tarp
A Congressional oversight panel on Friday will issue a scathing report on the Treasury’s implementation of the $700bn financial-rescue package, reports the WSJ. The report, by the five-member congressional oversight panel,
UK interest rates cut to 315-year low
The Bank of England on Thursday urged the Treasury to hasten plans to ease the flow of credit to companies, as it cut official interest rates to a 315-year low of 1.5%. Warning of “an unusually sharp and synchronised downturn” in the global economy,
Lehman to spin off buyout arm
Lehman Brothers’ private-equity arm has reached agreement with its collapsed parent to spin out into an independent firm, while taking in a new investment from South African luxury-goods billionaire Johann Rupert,
Citi in $1.4bn loss over LyondellBasell
Citigroup is to suffer a $1.4bn loss on its loans to LyondellBasell, the chemical group that placed dozens of its subsidiaries under bankruptcy protection this week after failing to restructure $26bn in debt.
US buyout group nears Waterford rescue
KPS Capital Partners, a US private equity company, has signed a letter of intent to buy the “major assets” of Waterford Wedgwood from the administrators of the Ireland-based luxury tableware manufacturer.
Satyam fights for survival
Satyam Computer Services, the company at the centre of one of India’s largest corporate scandals, was on Thursday fighting for survival as managers moved to appoint a new auditor and an investment bank to find a buyer.
Merrill disassociates itself from Satyam
Attention in the Satyam fraud scandal has focused on Satyam’s non-executive directors and PwC, Satyam’s auditors, but shocked investors are also expected to question the role played by Merrill Lynch,
Kingfisher, UBM, shake up City broking
Two of the City of London’s biggest banks have lost their corporate broking mandates with FTSE companies, signalling the start of what could be one of the biggest shake-ups of banking relationships the City has seen.
Madoff ordered $150m transfer
Bernard Madoff ordered his UK company to transfer about $150m to his US firm just weeks before he allegedly confessed to running a $50bn fraud scheme, two former employees of Madoff Securities International said.
UK insurers face scrutiny after £5.25m Aon fine
The UK insurance industry faces a crackdown on bribery overseas after the financial watchdog imposed a £5.25m fine on the UK broking arm of Aon, the US insurance broker, over suspected corruption in Asia,
Hedge funds see record losses in 2008
Hedge funds lost 18.3% in 2008, their worst year on record, as managers misjudged the severity of the global financial crisis, reports Bloomberg. A gain of 0.42% in December lessened the average loss for the full year,
TD Ameritrade to buy options broker
TD Ameritrade, the US online broker, signaled its intention to expand its presence in derivatives trading on Thursday by agreeing to take over thinkorswim, an online options broker, in a cash-and-shares deal worth $606m.
Bank of Korea cuts rate to record low
The Bank of Korea cut its benchmark interest rate by a half-point to a record low on Friday, saying the economy is deteriorating faster than expected as domestic demand and exports falter, reports Bloomberg.
Ex-KGB officer bids for Evening Standard
Alexander Lebedev, a former KGB lieutenant-colonel, a deputy of the Russian State Duma and billionaire banker, approached Daily Mail & General Trust last month with an offer to buy the Evening Standard,
Kohn gains support for NY Fed post
Support is building on Wall Street for Don Kohn, vice-chairman of the Federal Reserve Board, to succeed Timothy Geithner as president of the New York Fed. Kevin Warsh, a current Fed governor, has been seen as the front-runner to replace Geithner,
Merrill’s investment banking chief quits
Greg Fleming, head of investment banking at Merrill Lynch, is leaving scarcely a week after it was acquired by Bank of America. Once considered a candidate for the top job at Merrill after the ouster of Stan O’Neal in 2007,
Overnight markets: Patchy
Asian stocks fell on Friday led by automakers and technology companies, as job cuts and weak profit reports added to concern the global recession is deepening, despite a small rise in US stocks overnight.
CDS update: Retailers outperform in Europe, but disappoint in US
This CDS report was written by Markit’s Gavan Nolan
European credit continued to outperform equity today in a session dominated by domestic monetary policy and results across the Atlantic. Credit investors were unimpressed by the Bank of England’s decision to cut rates by 50bp to 1.5%.
$30 per barrel by Feb say Goldman
Goldman Sachs energy analysts Arjun Murti on the equities side and Jeff Currie on commodities have just presented their thoughts for the market in 2009 — a follow up to their outlook published earlier last month.
Commerzbank statement: German govt to take 25% stake
Statement just out from CBK (emphasis ours):
Commerzbank AG / Corporate Action/Acquisition
08.01.2009
Release of a UK Regulatory Announcement, transmitted by DGAP – a company of EquityStory AG.
Quants fight for a better world
Mr Emmanuel Derman and his pal Mr Paul Wilmott have assembled in New York City and written a manifesto – the Financial Modelers Manifesto, no less.
Stung by the abject failure of financial market models in general,
Commerzpanic
Who said market runs on banks were a 2008 affair?
Commerzbank was pummelled in Frankfurt on Thursday after this report in our erstwhile sister-publication, Financial Times Deutschland:
Exklusiv Coba braucht frische 10 Milliarden
Basically,
Blowing bubbles, US treasuries edition
Forget what you might have heard. There is no bubble in the US government bond market, according to Goldman Sachs.
And how has Goldman come to this rather surprising conclusion? With the help of Sudoku,
Blind trust
How exciting. Among other things, Hank Paulson gets to find out just how much money he’s lost when he leaves office next week.
Upon becoming Treasury Secretary, Paulson was required to put his wealth into a blind trust.
Lunch Wrap
On FT Alphaville Thursday morning,
- BoE cuts rates by 50 bps.
- Best ever Christmas for Sainsbury.
- Bailing out bank assets.
- What is Lloyds TSB up to?
- Quantitative easing in the UK.
CDS report: Issuance keeps lid on market
The recent rally in European credit markets looks like it’s losing a little steam, as companies like VW and National Grid rush to raise money in the bond markets, creating a weight of supply and a lid on any further improvement in spreads.
BoE cuts rate 50bps
… taking the base rate to its lowest level since the foundation of the Bank in 1694.
From the Bank of England (emphasis ours):
The Bank of England’s Monetary Policy Committee today voted to reduce the official Bank Rate paid on commercial bank reserves by 0.5 percentage points to 1.5%.