February, 2009
Forex failure continues in Poland
It’s getting bleaker by the minute in Eastern Europe. In case you didn’t catch the latest from the Telegraph’s Ambrose Evans-Pritchard, he warned at the weekend how a growing crisis in Eastern Europe could cause nothing less than a total collapse in the West,
HSBC ‘only needs $20-35bn’
Michael Helsby just won’t let it lie.
The Morgan Stanley banks analyst caused a stink last month when he declared that HSBC had a capital requirement of $27-42bn. Analysts at rival houses were quick to issue their own notes dismissing Helsby’s thesis – all of which were dutifully distributed by HSBC’s PRs.
Goldman calls bottom in oil, again
Goldman Sachs is calling a bottom in the market, again. Here’s their reasoning – which, by the way, is still very much based on their old reasoning, just accelerated:
The faster than expected pace of OPEC cuts and continued low temperatures are likely accelerating rebalancing in the global oil market.
Lloyds ‘needs to raise £11.2bn’
Okay, this is from someone who would probably describe himself as being ‘cautiously bullish’ on the British banking sector – Tom Raynor at Citi.
Profit warning raises capital concerns — In previous research (Darkest Before the Dawn — 27 January 2009) we estimated that Lloyds Banking Group (LBG) could get through the economic downturn by raising as little as £3bn in equity at 60p per share.
South of the Border, down Bernanke’s way
There must be some sort of mystical, cosmic, possibly karmic, significance in this: Fed Chairman Ben Bernanke’s childhood home in Dillon, South Carolina, is being sold after foreclosure.
… Mr. Bernanke’s family sold the property more than a decade ago.
The Tsy/Frannie connection
More grim dispatches from the US Treasury market. The WSJ runs today with a story on the popping of the Treasury bubble. Although the market is closed, there’s plenty of anticipation that with Obama signing another $800bn+ of taxpayers money away into the bailout ether,
CDS report: Presidents’ Day calm
London credit derivatives traders reported a relatively quiet morning on Monday, with volumes dampened by the President’s Day holiday in the US. There was a distinct lack of cheer as European credits managed to give up some of the gains they had made over the past week,
Lunch Wrap
On FT Alphaville Monday morning,
- The Kanjorski meme and the end of the world, redux.
- Domino theory, Eastern European edition.
- Japan’s real problem – too much cough medicine.
- Rated “R”
The Kanjorski meme and the end of the world, redux
It looked on Wednesday last week like Felix Salmon had had the last word on what he earlier dubbed the Kanjorski meme – a little piece of web flotsam alighted upon by a number of blogs, among them FT Alphaville – the gist of which went something like this:
The ‘IP week’ love-in begins
The week of Valentine’s Day is always an important day in the oil industry calendar, for it usually marks the beginning of International Petroleum Week (aka IP week) in London.
For those not in the know,
Markets live transcript 16 Feb 2009
Markets live chat transcript for the chat ending at 12:09 on 16 Feb 2009. Participants in this chat were: Paul Murphy, FT (PM) Bryce Elder (BE) PM:Okay – welcome everyone PM:Doomy pedant — the spam is annoying.
Hire American, or, no foreign bankers for you
Remember the Buy American clause of the proposed economic stimulus?
Meet Hire American.
Apart from the Buy American provisions restricting government spending to US companies, other items in the bill could also give cause for alarm.
Japan’s real problem – too much cough medicine
Now, at last, some real insight into the palpitating heart of Japan’s economic troubles.
Some may have thought that finance minister Shoichi Nakagawa simply had a little jetlag, helped along by imbibing a little too much Italian wine at the lunch for G7 finance ministers in Rome.
Carbon indulgences
As if things couldn’t get much worse, the banking crisis is also exacerbating global warming.
The below chart, from the European Climate Exchange (via Hellasious at Sudden Debt), shows how.
It’s the price of EU-traded futures on carbon dioxide emissions.
China to US: We hate you
[This post also contending as an entry into the Minitrue meme files.]
On Thursday last week, Reuters filed this story. It’s actually based on an FT story from Wednesday – an interview with Luo Ping,
Domino theory, Eastern Europe edition
From today’s FT:
Ukraine’s name, by some accounts, means “at the edge” – which is where its economy finds itself today. Austria’s finance minister warned last week of the risk of an economic “catastrophe”
Further reading
Elsewhere on Monday,
- “Being a financial news anchor must seem like owning an ice cream parlor where spinach is the only flavor on the menu”.
- Preprivatization?
- Gold, gold, gold – only gold.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Comment: Co-ordinated inflation could bail us all out
Tim Leunig, reader in economic history at the London School of Economics, writes: Recessions are not unusual,
Snap news
Breaking pre-market news on Monday,
- Lancashire reports $119m pretax profit, sees “extraordinary opportunities” – statement
- Songbird rules out covenant breach – statement
- Corporate results:
Funds ramp up Porsche case
Hedge funds have gained more ammunition for their legal complaints against Porsche after the German sports carmaker revealed it had made almost €400m ($514m)by placing bets on several German blue-chip shares,
Rio seeks to soothe UK shareholders
Rio Tinto, the mining group locked in an acrimonious battle with some key shareholders over plans to raise $19.5bn in fresh capital from Chinese state-owned metals group Chinalco, is in talks with investors about possible concessions including altering the structure of the deal.
UK toughens stance on bonuses
The UK government on Sunday suggested it would veto payments to senior staff in lenders partly or wholly owned by the taxpayer. Lloyds Banking Group has defended plans to pay its staff bonuses, reported to total £120m,
Anxious eye on Lloyds shares
The UK government will monitor the share price of Lloyds Banking Group on Monday, as it seeks to avoid marking this week’s first anniversary of the nationalisation of mortgage lender Northern Rock by taking another bank into public ownership,
Wall St to lobby over US rescue plan
Wall Street banks are planning to lobby the Obama administration to reconsider its plans for “stress testing” their financial health and proposals for capital injections that could leave it as a key shareholder in many of those institutions. Some banks argue that under Obama’s $2,000bn financial rescue plan,
Japan GDP shrinks more than feared
Japan’s economy shrank at an annual 12.7% pace last quarter, the most since the 1974 oil shock, as recessions in the US and Europe triggered a record drop in exports, reports Bloomberg. GDP fell for a third straight quarter in the three months to Dec 31,
Land Securities set for £750m issue
Land Securities the UK property company is poised to launch a discounted rights issue later this week in the latest demand for emergency funds from investors in the beleaguered sector. The issue is set to target as much as £750m and to be fully underwritten,
Europe rights issues lift stock supply
The amount of stocks in Europe is increasing for the first time since 2005 as the financial crisis forces companies to raise new money from shareholders, reports Bloomberg. If history is a guide, higher prices for equities will follow.
Fresh questions over Stanford
An offshore bank at the centre of two US federal investigations recently curtailed financing commitments to two small US companies, reports the WSJ. Stanford International Bank of Antigua recently failed
Hedge funds face new redemptions
Hedge funds are facing a second round of redemptions after several big investors hit by Bernard Madoff’s alleged $50bn fraud began liquidating portfolios, according to leading hedge fund managers. The scale of the redemptions is not as bad as the heavy withdrawals that hammered the industry in October and November,