February, 2009
Carlyle offers IMO debt deal
The Carlyle Group, the private equity fund, has told creditors it would stump up £25m to keep control of its buy-out of IMO Carwash, in exchange for its creditors writing off debt. It is the second time Carlyle has had to pump money into IMO Carwash and highlights how buyout groups are struggling to keep control of their investments,
Taylor Wimpey nears creditor deal
UK housebuilder Taylor Wimpey is in the final stages of discussions to restructure its £1.55bn debt pile, ahead of deadlines next month for debt repayments. The company is expected to strike a deal with its banking syndicate and holders of its private placement bonds in time to seek the approval of other bondholders,
Goodyear to slash 5,000 jobs
Goodyear, the biggest US tyremaker, on Wednesday said it would slash 5,000 jobs, or nearly 7% of its workforce, and freeze salaries amid weak demand. The move comes less than a week after beleaguered US car parts suppliers formally requested $25.5bn of emergency aid from the Treasury,
Oppenheimer’s Whitney resigns
Meredith Whitney, the analyst whose prescient bearish warnings on Citigroup and other banks have earned her a strong following, has left Oppenheimer & Co to set up her own research and advisory firm, reports the FT.
Overnight markets: Mixed
Asian stocks rose for the first time in four days on Thursday after a mixed performance in Europe and the US, as a weaker yen brightened the earnings prospects for Japanese exporters and Australian commodity producers reported higher profits.
Moody’s joins S&P, downgrades MBIA
Following S&P and in response to MBIA’s restructuring plan, Moody’s downgraded the bond insurer to B3 from Baa1 on Wednesday, and put MBIA Illinois (the new-fangled muni-only bit of the company) on watch for possible upgrade.
CDS update: Telecoms hit by eastern European exposure
This CDS report was written by Markit’s Gavan Nolan
European credit indices were resilient today in another session dominated by the eastern part of the continent. The Markit iTraxx Europe index was slightly tighter at around 171bp,
[The Stanford Series] Stanford’s AIM foray
What’s more, there’s quite a lot of evidence to suggest that a lot of Stanford’s “investments” were in the kind of micro-cap stocks beloved of pump-and-dump operators. That’s not investing in something liquid and then seeing it freeze up,
MBIA gets junked
Well, nearly.
(BN) *MBIA INSURANCE CORP. CUT TO BBB+ FROM AA BY S&P
Triple B+ is in the lower end of the investment grade spectrum, but it’s a far cry from that gilded triple-A of yore.
And here’s the statement (our emphasis):
More ‘lessons from Japan’
Martin Wolf is in “particularly fine form” in his reassessment of Japan’s lost decade, as Naked Capitalism’s Yves Smith notes on Wednesday, adding – quite rightly – that on the whole, “the implications are not good”.
A ‘cancer’ in the oil markets?
Olivier Jakob at Petromatrix has commendably taken a strong stance against the USO ETF fund over the last few weeks, or rather, exposed to what degree the fund’s market inexperience is causing all sorts of mayhem for the WTI contract.
[The Stanford Series] Stanford’s mysterious billions
The Stanford Financial empire is crumbling. And it is a very, very messy collapse. Not only do American regulators face the problem of the group’s size and complexity; they are also faced with the fact that the bulk of the Stanford companies are spread outside of the Unites States.
UBS: No Eastern European meltdown
UBS have appointed themselves defenders of the East, apparently. U B of ‘Save our Eastern Europe.’
They’re taking issue with recent reports of imminent EE/CE “meltdown”.
We don’t normally respond directly to articles in the financial press,
CDS report: Banks stage small recovery
Europe’s banks staged a little recovery on the credit markets during Wednesday morning after a previous session of heavy sell-offs following fears over their exposure to eastern European markets.
Results from major European banks,
Lunch Wrap
On FT Alphaville Wednesday morning,
- What does the ‘F’ stand for in FINRA?
- Five reasons to remain bearish on CEE.
- The WIR bank model, or back to barter.
- The crudely illustrated implausible returns of Stanford International.
Markets live transcript 18 Feb 2009
Markets live chat transcript for the chat ending at 12:09 on 18 Feb 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello PM:This is Markets Live — AV’s chat
[The Stanford Series] What does the ‘F’ stand for in FINRA?
FINRA, the Financial Industry Regulatory Authority, describes itself as “the largest non-governmental regulator for all securities firms doing business in the United States.” It’s basically a private agency set up by the financial industry to regulate itself,
Econ blog wars
I cannot help but think what Keynes and Hayek, friends who engaged in profound and respectful private and public debate about economic policy for decades, would make of the ugly and childish econoblog culture which Krugman and DeLong have helped create.
“Europe is now the epicenter”
More from Credit Suisse, this time from Stuart Sparks – fresh stress at the sovereign level.
The exposure of Western banks to emerging europe is leading markets to price in a full below “institutional credit event,”
We ‘hate you guys’ even more now…
Say what you want about US economic decline, yawning fiscal deficits and flailing stock and property markets. Foreign investors still want a piece of it – or more than a piece, judging by the FT’s report on Wednesday about the surprising surge of foreign money into the US in December.
5 reasons to remain bearish on CEE
…courtesy of Credit Suisse’s Andrew Garthwaite.
(1) There has been an extreme increase in EMEA (ex Russia) leverage over the past decade. This was funded largely by foreign debt as shown by the deterioration in the region’s current account position (from a surplus of nearly 6% of GDP to deficit of – 6% in 2008;
The (crudely) illustrated implausible returns
Stanford International’s return on investments against the DJIA.
Related links:
The Stanford series – FT Alphaville
Two lessons of the Stanford affair – John Gapper’s blog, FT.com
Further reading
Elsewhere on Wednesday,
- The Wile E. Coyote syndrome.
- The new currency trade: Gold vs all-else.
- Trader Panzner: Abandon all hope all ye who open this book…
- 13 unexpected consequences of the financial crisis.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Stanford Bonanza
John Gapper’s blog: Two lessons of the Stanford affair
So Sir Allen Stanford has been accused by the SEC of a “massive fraud”
Snap news
The latest on Wednesday,
- Societe Generale posts €87m fourth-quarter profit — Bloomberg.
- London Capital announces record profit in 2008 — statement.
- Corporate: Brixton says it’s considering disposals and equity raisings,
US charges Stanford with ‘massive’ fraud
Sir Allen Stanford, the billionaire Texan and cricket bankroller, was charged by US securities regulators on Tuesday over a “massive” investment fraud through his Antigua-based offshore bank. The SEC alleged that Stanford International Bank,
RBS to pay £950m in bonuses
Royal Bank of Scotland, which is 70% UK government-owned, will pay staff bonuses worth up to £950m for 2008, despite its £20bn taxpayer bail-out, under a government-approved deal that on Tuesday intensified the furore over rewards to bankers.
Eastern Europe fuels rush for safety
Fears of banking turmoil in eastern Europe on Tuesday triggered warnings that European financial institutions exposed to the region could provoke a stampede into the dollar and US bonds. The turmoil was prompted by a report from Moody’s (see separate report) which warned that west European banks with east European subsidiaries were at risk of downgrades.