February, 2009
KIA rethink on Dow Chemical deal
The Kuwait Investment Authority would consider increasing its support for Dow Chemical’s disputed takeover of Rohm and Haas if the terms of the deal were changed to account for the downturn, said sources close to the deal.
$9.3 bn drains from quant funds
Quantitative investment managers suffered a net outflow of $9.3bn in the third quarter last year as they fled the financial sector in favour of IT and materials stocks. The activities of quant funds, which use statistical models designed to identify patterns in financial markets,
Asian hedge fund assets plunge 36%
Asian hedge-fund assets fell 36% in 2008, shrinking more than the global average, as the biggest market declines since the Great Depression prompted performance losses and investor redemptions, according to Hedge Fund Research,
UK recession ‘worst for 100 years’: Balls
Britain is facing the “most serious global recession for over 100 years”, Ed Balls, children’s secretary and formerly Gordon Brown’s key economic adviser at the Treasury, warned in a speech, saying the financial crisis could be worse than the Great Depression of the 1930s.
Japan faces ‘unimaginable’ contraction
Japan’s economy faces an “unimaginable” contraction, the chief economist of its central bank warned Monday, as figures revealed surging bankruptcies and a big fall in machinery orders. The warning from Kazuo Momma,
Nissan to cut 20,000 jobs
Nissan Motor said Monday it would eliminate 20,000 jobs, or 9% of its global workforce, as it became the fourth big Japanese carmaker to abandon hopes of posting a profit this year. Nissan, 44% owned by Renault of France,
Close Brothers names new chief
Close Brothers has appointed Preben Prebensen, 52, to be its chief executive, ending a search that started last September when Colin Keogh said he was stepping down. Prebensen will take up the role at the UK merchant bank on April 1,
Bullion sales hit record level
Investors are buying record amounts of gold bars and coins, shunning risky assets for the relative safety of bullion amid renewed fears about the health of the global financial system. The US Mint sold 92,000 ounces of its popular American Eagle coin last month,
Overnight markets: Timid
Asian material and consumer stocks fell Tuesday after President Barack Obama said the US faces a “full- blown crisis.” Utility companies gained as oil traded near a three-week low. Futures on the S&P500 Index dropped 0.7% after Obama’s comments,
Moody’s calls a bottom in US housing
Step forward, Mark Zandi of Moody’s, so that we at FT Alphaville may hail your bravery, your verve, your iconoclasm. Or at the very least, your willingness to make a bold call.
Mark Zandi believes US house prices will stabilize by the end of the year.
CDS update: Markets rally, technically
This CDS report was written by Markit’s Gavan Nolan
European credit markets outperformed their equity counterparts with ease today in a rally driven by technical factors. The Markit iTraxx Europe and HiVol tightened more than the Crossover index in percentage terms,
Lex versus Wolf
It’s a while since we’ve heard from The Epicurean Dealmaker. Maybe he’s retired, hurt.
But this should fix that – a snap blog at FT.com to debate the vexed issue of bankers’ bonuses.
Martin Wolf’s opening salvo is here – itself a reaction to a Lex note penned by FT Alphaville escapee Helen Thomas
And now everyone’s on the case:
Losing control
The markets seem prepared to test the Fed’s mettle (HT John Kemp).
Related links:
Playing chicken with the Fed – Kemp at Reuters
Rescuing banks, then Treasuries – FT Alphaville
So Leng Rio Tinto
The departure of Leng, deputy chairman of India’s Tata Steel , likely opens the way for Rio to seal a deal with Chinalco, analysts said. Leng was named as Rio’s next chairman just over three weeks ago.
Rescuing banks, then Treasuries
Yields on US Treasuries are continuing to rise — despite the best efforts of the US to keep them down.
Monument Securities’ Stephen Lewis has this to say about it today:
US policymakers need to take the Treasuries market’s behaviour seriously.
“Filling the system full of money is insufficient to threaten a rise in inflation”
Citi’s US economist Steven Wieting is less than impressed by those who contend – with varying degrees of seriousness – that the country is heading for hyper-inflation because of the rapid expansion of the monetary base currently underway.
BG proves that if at first you don’t succeed….
BG Group seems hell-bent on proving its resolve and determination to expand into Australia’s fledgling coal seam methane gas industry with an A$796m ($534m) takeover bid launched Monday for Pure Energy Resources.
Through an efficient market glass, darkly
When they write a history of the Great Moderation, as it looks like the early noughties may come to be known, one thing that might be noted, was all the mistakes people made in the trading/banking fraternity,
State of credit
There’s been much talk recently of a possible turning in credit conditions.
This chart from Deutsche Bank sums up the issue nicely. As can be seen most recently, yes, there’s been a reduction in the number of US banks reporting a tightening of credit conditions — but at the same time,
CDS report: Hammerson, Fortis grab spotlight in quiet markets
Hammerson made headlines in what were generally subdued credit markets on Monday. The UK property group announced a £584.2m rights issue backstopped by shareholders to fortify its balance sheet as declining property prices brought it close to breaking bank covenants.
Lunch Wrap
On FT Alphaville Monday morning,
- Barclays’ exploding balance sheet, and other things.
- Another depression *alert* – this time from the IMF.
- UK rights issues: sell the rumour, buy the fact.
Depression *alert* – international institution edition
One from a major IB economist, one from a major politician and now one from a major global organisation.
Feb. 7 (Bloomberg) — Advanced economies are already in a “depression” and the financial crisis may deepen unless the banking system is fixed,
Markets live transcript 9 Feb 2009
Markets live chat transcript for the chat ending at 12:16 on 9 Feb 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) NH:Okay – welcome everyone NH:This is Markets Live,
Sell the rumour, buy the fact
That at least appears to be the way to play UK rights issues.
Mining company Xstrata and Cookson, the engineer, have both enjoyed extremely positive responses (in share price terms) to their respective cash calls – and so too has Hammerson.
Goldman’s sober new masters of a battered universe
We all know how yesterday’s hero on Wall Street can transform overnight into tomorrow’s villain.
But what about those dull blokes in the corner, the ones who rake over deals and pick financial nits to spoil everyone’s fun – the risk managers that everybody preferred not to think about? Could they be the swinging dicks of tomorrow?
Risk management,
Further reading
Elsewhere on Monday:
- It did not have to be this way….
- Mark-to-market RIP?
- The (US) stock market’s worst-ever 10-year stretch
- Design your own stimulus plan – it’s easy!
- A
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Lloyd Blankfein: we must not destroy risk
The Goldman Sachs CEO writes on the mistakes banks made, the need for strong risk management, dynamic regulation and a reform of compensation.
Obama hardens bail-out line
Barack Obama’s administration has stepped up pressure on US lawmakers, threatening to force them to work through their one-week recess starting Friday, to get the $800bn economic stimulus package enacted as soon as possible.