February, 2009
Central Europe bolsters currencies
Central Europe’s battered currencies rallied on Monday after four of the region’s central banks issued co-ordinated statements calling recent currency weakness unjustified and raising the possibility of intervention on forex markets.
Lloyds makes lending pledge
UK chancellor Alistair Darling is set to drop the £480m annual interest bill charged to Lloyds Banking Group on a taxpayer loan in exchange for a promise by the bank to provide billions of pounds in extra mortgage funding and loans.
JPMorgan slashes dividend 87%
JPMorgan Chase surprised investors late on Monday by slashing its quarterly dividend by 87% to preserve capital. The bank said it had cut the dividend from 38 cents a share to 5 cents to bolster its balance sheet against a potential “highly stressed environment”.
Murdoch to run Fox as Chernin exits
Peter Chernin, president and chief operating officer of News Corp, is leaving after failing to agree a new contract with Rupert Murdoch, who will step in and take direct control of the Fox studio and broadcast businesses that his right-hand man has run for 12 years.
Concerns grow over GE Capital
Investors’ discomfort with General Electric’s exposure to the troubled financial services industry deepened on Monday after an analyst warned that the conglomerate might need to inject more equity in its GE Capital division.
Cattles halts new lending
Specialist UK lender Cattles has stopped lending money to new customers, it said on Monday. Cattles’ main business, Welcome Financial Services, which provides secured and unsecured loans to customers with poor credit histories,
China to consolidate automakers
A Chinese government plan to strengthen the automobile sector aims to reduce the number of major auto-making groups through mergers to 10 at most from 14, the official China Securities Journal said Tuesday,
Japanese lender files for bankruptcy
SFCG, a lender to small businesses, filed for court protection on Monday with debts of Y338bn ($3.5bn), in Japan’s 10th and biggest corporate collapse so far this year. The company, formerly known as Shoko Fund,
HK court delays PCCW deal
The saga surrounding the $2bn privatisation of PCCW, Hong Kong’s largest telecoms firm, will drag on for at least another month, after a High Court judge gave the territory’s market regulator three weeks to present the results of its investigation into the alleged rigging of a shareholder vote earlier this month.
ADB’s lending revamp under threat
Controversial plans by the Asian Development Bank to change its lending criteria could be dropped, amid mounting concern in Washington that the overhaul will water down social and environmental standards for project financing.
Europe exodus widens at Merrill
Merrill Lynch is suffering an exodus of senior bankers in Europe. Among them, Ian Carton, co-head of global markets and financing in Europe, on Monday became at least the ninth high-profile managing director in the region to resign since mid-September,
Overnight markets: Sliding
Asian stocks slid on Tuesday following steep falls in the US and Europe, dragging the regional benchmark to the lowest in more than five years as the global recession forced companies to sell shares to bolster their balance sheets.
No money for the poor…
…in the UK at least.
This just out from Cattles, the leading doorstep lender. (Hat Tip – Paul Davies).
Emphasis ours.
The Board of Cattles announces that in order to preserve liquidity in the business,
Wincott Award for Online Financial Journalism – call for entries
FT Alphaville was lucky enough to bag the new Wincott online award last year. This year the judges are looking to widen their net beyond mainstream media – actively soliciting nominations from the financial and economic blogosphere.
Nationalisation, not preferred
Who needs stress tests? They’ve yet to begin – but already the US Treasury is keen to emphasise it stands behind the banks and will recapitalise — not nationalise — as needed.
Via Reuters, emphasis ours:
Me, myself and Meredith Whitney
Only last week superstar analyst Meredith Whitney – bankslayer, the anti-pandit, etc. – announced she would be leaving her present employer, Oppenheimer, and setting out on her own.
Welcome, then, Meredith Whitney Advisory Group.
Not just another protest song…
In ’67 there was the summer of love. In ’09, there’s the summer of RAGE.
From the Guardian:
Police are preparing for a “summer of rage” as victims of the economic downturn take to the streets to demonstrate against financial institutions,
CDS report: Banks under pressure
European banks remained under heavy pressure in credit markets on Monday as general concerns about financial weakness lingered and a further round of fears over the potential fates of junior bank bonds was awoken by UK government action on Friday.
(Tastefully) Bankrupt with ‘pessimism porn’
We read about pessimism porn over the weekend. That is, gorging oneself on dire economic forecasts and financial analysis.
Of course, we at FT Alphaville have been doing this for ages, but it’s nice to know there’s a term for it that’s gaining popularity.
The gold tooth indicator
Dennis Gartman of the Gartman Letter is a little confused about the recent gold spike. The recent bull run he suggests doesn’t have any sense of frenzy to it. Or as he puts it:
Indeed there is a sense of the collective market being resigned to the fact that gold shall quietly make its way higher…
Lunch Wrap
On FT Alphaville this morning,
- A Queen-sized deal at 3I.
- An heroic $3.6bn collapse in Japan.
- A US u-turn on tangible common equity.
- Bailing out the Emirates.
- More dispatches from the Eastern European crisis.
CEE’s western exposure
CEE currencies were on the ascent on Monday, alongside stocks in Warsaw. That was ahead of a much-awaited interest rate decision by the Hungarian central bank at 1pm GMT. The MNB was expected to hold rates despite worsening economic data which would normally warrant an interest rate cut just to support the forint.
Hillary Clinton is in China…
And on a mission…
Related links:
Clinton urges China to sustain US economic support – LA Times
China to US: We hate you – FT Alphaville
Markets live transcript 23 Feb 2009
Markets live chat transcript for the chat ending at 12:07 on 23 Feb 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello there PM:Almost on time today
Central banks live!
Dresdner brings us some good central bank news. Here are the charts.
That’s the 10-year nominal swap rate (x-axis) vs the 10-year IL swap rate (y-axis) in the US and Eurozone. Inflation-linked swaps have risen considerably of late,
Wishful thinking at the banks
The marketing departments at troubled banks obviously have their fingers crossed that they will still have a job – and are letting their hopes filter through into their copywriting.
Consider these pieces of junk mail,
Economist quote du jour
There’s a bit of irony surrounding the dinner-party guests of the moment (HT Alea).
Related link:
As economy sours, it’s sweet to be an economist – STL Today
One emirate for all, none for one
Fears over Dubai’s ability to service its debts led Abu Dhabi finally to stage a marked response at the weekend. In a ‘lender of last resort’-type move the emirate bought $10bn of Dubai bonds to help its neighbour raise funds.
Nomura calls for cash
As expected, Nomura, Japan’s biggest brokerage, confirmed on Monday that it’s planning to raise at least Y291.2bn ($3.1bn) selling new shares to boost capital. The company will sell 375m shares overseas and another 341.4m in Japan,