February, 2009
Yet another bank(er) bamboozlement
Remember those mistresses of the universe? The ones that set up this support group – Dating a Banker Anonymous – to provide comfort to the downtrodden wives and girlfriends of hard up IB-ers?
Well, brace yourselves,
Musings on human welfare: The FSA at parliament…
Quote du jour from Lord Turner, chairman of the FSA, addressing the parliamentary Treasury select committee:
It is unlikely that some complex trading instruments will exist in the future. I am unsure they added much to the sum of human welfare.
Channel 12 – a doomed plan to save British commerical broadcasting?
That’s what you’d get by putting together Bertelsmann-owned Channel 5, the loss-making state-owned Channel 4, and ITV, the monopoly holder of the channel 3 franchise in the UK.
A two-dimensional version of this three cornered merger idea was discussed here earlier during Wednesday’s Market Live – namely,
Tempting fate
Dare we put up a bubble chart? Apparently we do. From Zero Hedge.
Related links:
The Merrill bubble – Zero Hedge
Salaries from a bygone era – FT Alphaville
Stressing the stress tests
The US banking stress tests are set to begin today. We’re still awaiting details but here’s what we know so far.
The tests are part of US Treasury Sec Tim Geithner’s financial stability program and involve assessing the ability of America’s biggest banks to withstand “stress”
CDS report: European bank’s bulging balance sheets
Pressure eased on Europe’s banks in the credit markets on Wednesday after Fed chairman Ben Bernanke soothed concerns over the fate of large US banks by saying no institution would be fully nationalised in the near-future.
Lunch Wrap
On FT Alphaville on Wednesday morning,
- A self-propelled pyramid? The mystery of USO series.
- Salaries from a bygone era.
- Olden day deleveraging.
- Core capital lite: absorbing losses.
Korea’s weak won and the ‘Japan factor’
As noted earlier, the yen’s marked U-turn back down against the dollar this week has revived debate about how much a flailing, export-oriented economy such as Japan’s could benefit from a weaker currency.
A self-propelled pyramid?
Stephen Schork of the Schork report jumps on the United States Oil Fund issue on Wednesday. He too is blaming the size of the ETF for current distortions in front-month Nymex WTI contracts.
He refers specifically to the March/April roll when spreads moved from $3.26 to $8.18 and expired at $1.09.
Incredible
Presented (almost) without comment.
The Credit Today Awards 2009 celebrates its 10th Anniversary!
The Credit Today Awards 2009 is celebrating its 10th anniversary this year. The established awards ceremony,
Markets live transcript 25 Feb 2009
Markets live chat transcript for the chat ending at 12:12 on 25 Feb 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Okay PM:It’s 11.02
Salaries from a bygone era
Bankers Ball has just published its first ever Wall Street salary and compensation report. Talk about bad timing.
The IB lifestyle site is fully aware of the irony though, having titled the survey results:
Welcome to “core lite”
As banks seemingly everywhere talk to their governments about fresh capital injections, Simon Samuels of Citigroup has issued an untimely reminder that this capital will only serve a purpose if it is available to absorb losses.
Olden day deleveraging
Okay, this is really creepy – images from the Muir Hunter Museum of Bankruptcy at Kingston University.
Hat tip Jason Kilborn at Credit Slips, who has compiled a comprehensive collection of links for those wanting to the research the history of bankruptcy.
Merrill Lynch: “My bad”
Merrill Lynch filed its annual report yesterday, revealing an addition $500m loss. Oops.
Restated, the company, bought by Bank of America last year, had a $27.6bn loss in 2008, instead of the $27.1bn previously reported.
The end of the yen’s ‘safe haven’ status?
More horrible numbers out of Tokyo on Wednesday, with news that Japan’s exports plummeted an annual 45.7 per cent in January, resulting in a record trade deficit amid collapsing demand for the country’s cars and electronics.
Further reading
Elsewhere on Wednesday,
- Five ways for us chumps to fight back.
- “What moron negotiated this deal … and why does “liquidity” matter?”
- Interview with the ghost of JP Morgan.
- The beginners’ guide to tangible common equity.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Alistair Darling on cleaning up the banks
The UK Chancellor of the Exchequer writes it is important that banks’ equity continues to be owned by institutional and individual investors as well as by the government,
Snap news
The latest on Wednesday,
- AIG gets bids for asset management unit of around $500m – Reuters.
- Segro says amendments to covenents successfully achieved — statement.
- Sibir Energy to carry out investigation into real estate deals,
Bernanke calms nationalisation fears
US stocks leapt on Tuesday after Fed chairman Ben Bernanke told Congress that stress tests of big US banks from this week are unlikely to see any of them nationalised outright. His remarks signalled that the government intends to support major banks as going concerns in the private markets,
Merrill hit by unseen $500m charge
Ineffective internal controls at Merrill Lynch caused the firm to understate its 2008 losses by more than $500m, the investment bank said on Tuesday in its annual report. Merrill, which was acquired by Bank of America on Jan 1,
Citi nears deal with Treasury
Citigroup and the US Treasury are nearing agreement on a deal to give the US government a stake of about 40% in the troubled bank in return for strengthening its capital base. No agreement has yet been reached and the government has yet to approve Citi’s plan,
Iceland ends threat to UK over assets
Iceland’s new government has dropped plans to take the UK government to the European Court of Human Rights over its use of anti-terror laws to freeze Icelandic assets, ending the most vicious spat between the UK and Iceland since the 1970s cod war.
UK banks haggle with Treasury
Two of Britain’s biggest banks were engaged in last-minute haggling with the Treasury about the terms of a £500bn plan to insure toxic assets, as chancellor Alistair Darling urged them to “clean up their balance sheets and rebuild…” Darling believes his plan – dubbed “Operation Broom” – is a one-off chance for RBS and Lloyds Banking Group to restore their credibility,
Japan exports plummet – again
Japan’s exports plunged an annual 45.7% in January, resulting in a record trade deficit amid collapsing overseas demand for the country’s cars and electronics, reports Bloomberg. The shortfall widened to Y953bn ($9.9bn),
Tokyo eyes share scheme
Japan’s government could buy shares to prop up the ailing stock market in a desperate attempt to limit the economic fallout from tumbling equity prices. Kaoru Yosano, the new finance minister, said the government was examining measures including a 1960s scheme involving two consortia that spent Y400bn ($4.1bn) to shore up stock prices over two years.
AIG may scrap strategy
AIG may scrap a plan to repay a $60bn US government loan by selling businesses, after failing to find enough promising bidders, reports Bloomberg. The insurer’s CEO Edward Liddy, who took charge in September,
GE denies unit needs more cash
General Electric on Tuesday disputed an analyst’s suggestion that the division may need more cash, saying a recent $9.5bn equity infusion into the conglomerate’s GE Capital unit would cover its obligations should the finance arm trip a fixed-charge covenant on its debt.
German CDS spreads hit record
The cost of bankruptcy protection on German debt has reached an all-time high on spill-over from the financial crisis in Eastern Europe and concerns about the stability of Germany’s banking system, reports the Telegraph.
China corporate debt to gain
China’s unsecured corporate bonds may gain on government plans to allow insurers to buy the debt with their Rmb 3,300bn ($483bn) in assets, reports Bloomberg. The China Insurance Regulatory Commission will require insurers to set up internal credit-rating systems before allowing them to invest in debt not backed by a third party.