January, 2009
Will CDS spreads tumble in February?
Fortis certainly thinks so.
The bank’s analysis, which is based on Didier Sornette’s research into bubbles (think US housing and oil circa 2008), holds that recent increases in CDS spreads in both US and European markets have reached unsustainable levels and are due for a correction – sharpish.
The path to profitability
Citigroup head Vikram Pandit’s reorganisation missive has arrived…
Dear Citi Colleagues,
By now you’ve had some time to learn more about our plan to reduce our balance sheet and simplify our organization.
Cuomo subpoenas Thain in Merrill bonus investigation
Full statement below (H/T Joanna Chung)
Today, as part of our ongoing inquiry into executive compensation issues at institutions who have received TARP funds, my Office issued subpoenas seeking the testimony of former Merrill Lynch CEO John Thain,
Depression *alert*
Well, it’s finally happened – a mainstream investment bank calling not just a recession, but a depression. How depressing.
In a note entitled “Some inconvenient truths”, Merrill Lynch’s North American economist David Rosenberg elucidates (emphasis ours):
Defending Dick Fuld
Dealbook notes that Dick Fuld has a friend. It’s Harvey Miller of US law firm Weil, Gotshall & Manges, who defends the former Lehman CEO in the filing below – a motion in opposition to the NY State comptroller’s appointment of a bankruptcy examiner (Anton Valukas).
No jets for Citigroup after all
News of bailout-beneficiary Citigroup receiving a brand new $50m new corporate jet certainly did not go down well with US investors and taxpayers on Monday.
And yet Tuesday morning the bank was still insisting that proceeding with the jet’s delivery was actually more cost effective than cancelling the order.
‘Your hedge fund’s name here’
No, not an FT Alphaville advertising ploy (though you should contact us if you’re interested) but the advent of hedge fund registration in the US.
Finalternatives reports:
Less than a week into his administration,
‘Banks are hereby required not to be in a hurry to publish their audited annual accounts’
Yes, that’s right.
If you happen to be a bank in the United Arab Emirates you have most likely received the above request from the central bank, according to reports from the Zawya Dow Jones newswire.
Oh, Canadian oil sands
How you’ve suffered of late.
To wit, Merrill Lynch’s commodity analysts are asking on Tuesday whether mining the Canadian oil sands is even needed in the midst of a global recession?
Brent and WTI oil prices have dramatically decoupled in recent weeks,
Lunch Wrap
On FT Alphaville Tuesday morning,
- An audience with Bob Diamond.
- Yes, bankers are overpaid and no, it will not last.
- Gideon Gono, hyperinflator.
- Unprecedented oil ETF inflows.
- Caption Competition:
Yes, bankers are overpaid and no, it will not last
The below graph comes from this authoritative study of financial service industry wages in the US by Thomas Philippon and Ariell Reshef, which has just been published as an NBER working paper.
(It’s
CDS Report: Institutional buying lifts credit markets
Credit markets indices were tighter on Tuesday morning, with buying activity centred in the high grade space, traders said.
Trading volumes, however, remain generally thin, another trader said, noting that prices in equity markets were trending downwards.
Caption competition: ‘Is that you Ken?’
John Thain has left the building and he’s taking his commode on legs with him. So while we still can, we reprise the below picture. Caption suggestions for which are greatly welcomed. Keep ‘em clean.
Just what is it about failed-bank CEOs and cartoon characters?
Related links:
Markets live transcript 27 Jan 2009
Markets live chat transcript for the chat ending at 12:13 on 27 Jan 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder, FT (BE) NH:Good morning and welcome to Markets Live
Markets live transcript 27 Jan 2009
Markets live chat transcript for the chat ending at 11:01 on 27 Jan 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder, FT (BE)
NH:
Good morning and welcome to Markets Live
‘Unprecedented’ inflows into oil ETFs
Goldman Sachs’ energy analysts are the latest to warn of the unprecedented inflows into oil ETFs in their most recent research note. In fact they attribute the small spike in oil prices in the last few weeks largely to this,
Gideon Gono, hyperinflator
Quote (or rather quotes) du jour from Newsweek’s interview with Zimbabwe’s central bank governor, Gideon Gono:
I sit back and see the world today crying over the recent credit crunch, becoming hysterical about something which has not even lasted for a year,
Further reading
Elsewhere on Tuesday,
- Will January 26 2009 be remembered as the day corporate America slashed the most jobs ever?
- The Fed considers altering its forecasts: long-run trends may not be restored in three years.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Analysis: Madoff, the inside story
The FT’s Brooke Masters examines the saga of Bernard Madoff, from beginning to the present
Short View,
Snap news
Breaking pre-market news on Tuesday,
- Friends Provident reports “strong” capital position, bank funding through to 2011 – statement
- Corporate results: Adnams, Charter International, Hornby, Phoenix IT,
Companies cut 76,000 jobs in a day
Corporate bellwethers in the US and Europe slashed more than 76,000 jobs from their payrolls on Monday. US corporate groups such as Caterpillar, General Motors, Sprint Nextel, Texas Instruments, and Home Depot led the retreat,
Job cuts – the details
Caterpillar, the world’s largest maker of construction equipment, said it would cut 20,000 jobs as it reported an annual fall of more than 32% in Q4 profits – a month after slashing executive salaries and jobs at large plants.
Paulson & Co reaps £270m shorting RBS
Paulson & Co, one of the world’s biggest hedge funds, has made a profit of at least £270m betting on a fall in the share price of Royal Bank of Scotland over the past four months. The New York-based fund,
Thain admits $1.2m office refit ‘mistake’
John Thain on Monday said that spending $1.2m to redecorate his office last year was “a mistake”, but rejected suggestions he was solely responsible for speeding up bonus payments to Merrill Lynch staff ahead of its sale to Bank of America.
Investors to cut stakes in China banks
Sales of Chinese bank shares by overseas investors are expected to accelerate this year as western financial institutions divest stakes to help bolster balance sheets. Over the past few weeks, UBS and RBS have sold their holdings in Bank of China,
Pfizer seals $68bn Wyeth purchase
Pfizer on Monday unveiled a $68bn takeover of Wyeth, reasserting its flagging position as the world’s largest pharmaceuticals group and paving the way for a fresh bout of consolidation across the sector.
Fannie, Freddie could request $51bn
Fannie Mae and Freddie Mac could tap the government for up to $51bn in coming weeks, exceeding some Wall Street estimates, so they can continue to operate as the largest US residential mortgage providers,
Amex net profit plunges 79%
American Express said its customers reduced spending by 10% in the fourth quarter, sending its quarterly net income down 79% in what the credit-card company’s chief executive called the harshest operating environment “in decades”,