February, 2009
The Weekender
This week on FT Alphaville,
- There was a US U-turn on tangible common equity.
- And a heroic collapse in Japan.
- Meredith Whitney struck out on her own.
- While Richard Bove resurfaced.
- Tier 1 became increasingly irrelevant.
[The Stanford Series] New details on alleged “massive Ponzi scheme”
Here are some of the amended allegations in the SEC’s filing, emphasis ours:
34. Contrary to SIB’s representations in the brochure about depositor security, SIB made, with Davis’s knowledge, at least $1.6 billion in undocumented “loans” to Stanford.
[The Stanford Series] From “investment fraud” to “massive Ponzi scheme”
The SEC has amended its complaint against R. Allen Stanford, Laura Pendergast-Holt and James Davies.
Here’s a summary of the allegations, emphasis FT Alphaville’s:
1. For at least a decade,
Fred Van Shred?
Amsterdam: the most civilised city in the world, some might say. Famously permissive (although no tobacco allowed in those reefers these days) and offering a tight social safety net for the disadvantaged.
A GDP primer
FT Alphaville ♥ John Kemp.
Quick tutorial
The real interest in gross domestic product(ion) (GDP) is as a measure of output
But it can be measured three-ways: output; expenditures (consumer spending,business investment,
The graphic global stimulus
From UBS, showing size of fiscal stimulus against interest rates.
Making the most ‘stimulised’ economies: South Africa, Singapore and China.
The shrinking US economy
The US Q4 gdp contraction has been revised to 6.2 per cent from a previous 3.8 per cent estimate. All we can say is ouch.
From Reuters:
NEW YORK, Feb 27 (Reuters) – The U.S. economy contracted more sharply than initially estimated in the fourth quarter, government data showed on Friday,
Sir Howard gets his way at Sony
Lo and behold! An uber-consumer-electronics king is born in Tokyo:
Sony on Friday unveiled a sweeping shake-up of its businesses and radical management changes aimed at better integrating its hardware and software operations and giving Sir Howard Stringer,
Eastern Europe gets €24.5bn
Eastern Europe has received its own special bailout after all. Well, not technically a bailout, it comes as “aid” via the World Bank, European Bank for Reconstruction and Development and the European Investment Bank in a bid support the region through its first technical recession since the breakdown of the communist system.
CDS report: markets move wider
European credit derivatives rose on Friday as the market followed the weakness in the stock markets amid continuing worries over the financial sector.
The Markit iTraxx Crossover index, which tracks 50 mostly junk-rated companies and is the best gauge to sentiment,
Lunch Wrap
On FT Alphaville Friday morning,
- LOLloyds results.
- Front page Fred.
- Regulator probing USO oil ETF.
- Tokyo’s final misery of the week.
- Krugman, Stats Guy and the ‘Japan’ parallel.
Markets live transcript 27 Feb 2009
Markets live chat transcript for the chat ending at 12:11 on 27 Feb 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
Is Robert Peston a government stooge?
Because the Daily Mail is asking.
The peg, of course, is the uproar over Sir Fred Goodwin’s outlandish pension pot, which happens to have completely overshadowed the British government’s blank cheque bailout of RBS.
Krugman, Stats Guy and the ‘Japan parallel’
The old “Japan parallel” debate continues to obsess pundits and observers – even more so as the US gets deeper into the zombie-bank mire. How much, or how little, the 21st century US economy resembles the late-20th century Japanese economy is the subject of an interesting reader response to Paul Krugman’s lament on his Conscience of a Liberal blog on Friday:
Tokyo’s final misery of the week: cause for false optimism
This is getting repetitive, we know. But rarely has Japan had such a run of shocking — in fact, record-breakingly bad — economic data. So it’s probably worth registering Tokyo’s final misery of the week — particularly so as it brings with it a possible indication that Japan is finally reaching what Macquarie Securities’ Japan economist Richard Jerram calls “the maximum pain”
Regulator probing USO oil ETF
The FT is reporting on Friday, along with all the other wires, that the CFTC is investigating the United States Oil Fund:
US federal regulators are investigating an investment vehicle that has amassed a 20 per cent stake in a crude oil contract traded in New York and London amid fears that its activities could be distorting the market.
LOLloyds results
Inadequate pro forma information – suggests Lloyds still struggling to understand what it has bought. P&L broadly in line with recent profit warning.
The view of one leading banking analyst to the annual result statement(s) published by Lloyds Banking Group on Friday.
Front page Fred
Move aside Posh Spice, we present Sir Fred Goodwin — the UK’s new front page darling:
He just won’t budge, what a greedy banker! – says The Times:
And it involved the Treasury, what a palaver…! says the Telegraph:
One bank’s pain is another bank’s gain…
Every time another bank founders, it’s worth remembering that at least one of its rivals is probably going to benefit, as corporate clients look to ditch the weak(er) for the strong(er). Greenwich Associates reminds us about those profiting from adversity,
Further reading
Elsewhere on Friday,
– The ‘fat-finger’ syndrome strikes again.
- Life after News Corp: What next for Chernin?
- UBS shareholders may be singing ‘hallelujah’, but don’t expect the messiah.
- Could laid-off Wall Streeters spark an entrepreunerial boom?
- Oh Sh*t…Even index arb isn’t safe.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
EU competition commissioner: How effective stimulus spending requires creativity
Neelie Kroes writes that governments have to address short-term problems but without undermining long-term recovery.
Snap news
The latest on Friday morning,
- Lloyds group final corporate results statement, asset protection scheme statement, HBOS preliminary results statement.
- Astrazeneca receives FDS complete response letter on seroquel XR- statement
- Corporate results from:
RBS taps UK Treasury for £25.5bn
Royal Bank of Scotland struck a landmark deal on Thursday that will see the government inject up to £25.5bn and insure £325bn of its assets. The deal – which came as RBS reported a net loss of £24.1bn
Lloyds next for Treasury scheme
Lloyds Banking Group, which has absorbed HBOS, is on Friday expected to reveal when it reports full-year results that the UK government is insuring up to £250bn of the bank’s assets. Barclays is also understood to have sounded out the government about participating in the asset protection scheme.
RBS to sell Asian banking assets
RBS plans to sell its Asian retail and banking assets as part of its restructuring plans to scale back its operations in Asia, where its presence greatly expanded after the acquisition of ABN Amro. The bank had signalled its retreat from the region last month with the sale of its $2.4bn stake in Bank of China.
Goodwin stands firm on RBS pension
Sir Fred Goodwin’s pension arrangements were at the centre of an escalating dispute on Thursday night as the former chief executive of RBS traded allegations over the terms of his departure with Lord Myners,
Obama forecasts $1,750bn deficit
President Barack Obama on Thursday unveiled the most expansive blueprint for federal government involvement in the US economy in more than a generation in a 10-year budget outline that showed this year’s deficit quadrupling to $1,750bn.
BofA subpoenaed for bonus list
The New York Attorney General’s office has subpoenaed Bank of America to submit a list of employees who got bonuses and the amounts they received, reports Reuters. The attorney general is “severely disappointed”
US bank failures pressure FDIC
The list of “problem” US banks grew by almost 50% in the fourth quarter, the Federal Deposit Insurance Corporation said on Thursday, fanning fears that further bank failures could put the agency’s deposit insurance fund under severe pressure.
Fannie to draw further $15bn
Fannie Mae said on Thursday it would draw more than $15bn of assistance from the US Treasury after a sixth consecutive quarterly loss – $25.2bn in the fourth quarter – drove its net worth below zero.