March, 2009
Lunch Wrap
On FT Alphaville this morning,
- Full details of the Geithner plan, just released.
- Geithner’s plan, in his own words.
- Fear and loathing on the Geithner toxic asset plan: early reactions.
- Lunch with Barclays’ John Varley.
The Geithner plan is out….
Full text available here.
Extract:
The Process for Purchasing Assets Through The Legacy Loans Program: Purchasing assets in the Legacy Loans Program will occur through the following process:
Banks Identify the Assets They Wish to Sell:
CDS report: European markets buoyed by US plans
European credit markets were boosted on Monday by growing hopes that US plans to deal with banks’ toxic assets will help revive the economy and avert a deep recession.
The Markit iTraxx Crossover index,
Euro-pain crisis
The Eurozone January trade deficit has come in somewhat wider than expected at €10.5bn versus a downwardly revised gap of €1.7bn in December.
According to Howard Archer, Chief UK and European Economist at IHS Global Insight,
Markets live transcript 23 Mar 2009
Markets live chat transcript for the chat ending at 12:04 on 23 Mar 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hi there! NH:Welcome!
Two views on Japan’s loose change
While much attention in the currency markets (and just about everywhere else) has been on the US and to a lesser extent, Europe, there are some odd moves afoot in Japan. Even as the yen heads south as the world’s second biggest economy flounders,
Short stoppers
The Australian Securities & Investments Commision (ASIC) takes rumours very seriously. So seriously in fact that is has invented a name for market speculation “rumourtrage”. It has also set up a hot line where snitches can report scuttlebut.
AIG follows own security memo, won’t admit it
Reuters reports AIG has taken down the sign on the front of its New York offices. Their reasoning?
According to the Reuters story…
A spokesman said the company had decided to replace the large AIG sign — outside the entrance to its property-casualty offices — as part of its plan to change that operation’s name to AIU Holdings Ltd.
Oil, the great inflation hedge
WTI crude is steadily going from strength to strength. On Monday, the front-month May contract was trading at $52.74 per barrel. That follows Friday’s expiry of the April contract at $51.06 per barrel.
Fear and loathing on the Geithner Toxic Asset Plan ’09
Oh dear. Something of a blogging war has erupted over the leaked outline of Tim Geithner’s toxic asset plan.
The New York Times outlined the skeleton of the proposed programme on Friday:
WASHINGTON – The Treasury Department is expected to unveil early next week its long-delayed plan to buy as much as $1 trillion in troubled mortgages and related assets from financial institutions,
Geithner – My Plan for Bad Bank Assets
From Monday’s Wall Street Journal:
Today, we are announcing another critical piece of our plan to increase the flow of credit and expand liquidity. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system.
Further reading
Elsewhere on Monday,
- Krugman’s despair.
- How Wall Street insiders are using the bail-out to stage a revolution.
- And another ‘revolution’ (and class-warfare) theory.
- That’s right,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
George Soros: Peripheral care should be the central concern
The chairman of Soros Fund Management explains how Special Drawing Rights could be the ‘systemic solution’ to the global crisis.
Snap news
The latest on Monday,
- Suncor close to buying Petro-Canada for $15bn – WSJ.
- Hammerson says it received acceptances for 98.6 per cent of rights issue — statement.
- LMS Capital posts 2008 net loss of £40.8m — statement.
White House to unveil assets plan
Tim Geithner, US Treasury secretary, will on Monday unveil details of a plan to take hundreds of billions of dollars of toxic assets off banks’ balance sheets. The plan, for the Treasury to put $75bn to $100bn of troubled asset relief funds into a public private investment scheme,
US urges investors to buy bad assets
Obama administration officials worked Sunday to persuade reluctant private investors to buy as much as $1,000bn in troubled mortgages and related assets from banks, with government help, reports the NYT.
Suncor moves on Petro-Canada
Suncor Energy is close to acquiring Petro-Canada for about $15bn in stock, uniting two of Canada’s biggest oil companies amid tepid demand for crude, reports the WSJ. The $15bn price tag would represent a roughly 30% premium for Petro-Canada.
SocGen cancels stock options
Société Générale bowed to growing public pressure over executive pay on Sunday as it cancelled a plan to award discounted stock options to four directors, including Daniel Bouton, non-executive chairman,
FSA to probe RBS allegations
The UK’s FSA watchdog is to examine whether there was any intimidation of non-executive directors at RBS before it was bailed out by taxpayers, after queries from Scottish Labour politician Lord Foulkes,
China drives up copper prices
Copper stockpiling by a secretive Chinese state organisation has helped trigger a rally of 28% in the price of the metal this year. China accounted for almost a third of global copper consumption last year.
UK could aid building society
The UK government is considering options to assist in the bail-out of Scotland’s largest building society, in what could be the first such assistance to the mutual sector since the credit crunch started.
MUFG to slash jobs, close branches
Mitsubishi UFJ Financial Group, Japan’s biggest bank, said on Monday it plans to close 50 branches and cut 1,000 jobs to continue slimming down its operations since its merger in 2005, reports Reuters.
Europe faces ‘wave of downgrades’
A further wave of profit warnings and downgrades is likely this year at European companies as equity strategists warn that executives and analysts remain too optimistic over the outlook. Analysts, who follow individual sectors and are guided by the companies themselves,
Warnings over US bonus ‘rage’
Plans by US lawmakers to curtail big Wall Street bonuses may have adverse effects on government rescue plans aimed at resolving the toxic asset overhang, warn investors and commentators. In particular,
German banker sues CIBC
A City banker is suing one of Canada’s biggest banks for making him redundant, allegedly because he is not Canadian, in one of the more unusual cases to emerge from the credit crunch. Achim Beck, a German national,
Weekend catch-up
In case you missed these stories:
Weavering collapse sparks regulatory concern
UK authorities are investigating the collapse of UK hedge fund Weavering Capital, as its founder protested that its failure was due to investor withdrawals,
Overnight markets: Up
Asian stocks and US futures rose on Monday, on fresh optimism that government stimulus efforts worldwide will revive lending and ease the economic slump. Futures on the S&P 500 Index climbed 1.4% after the gauge slid 2% on Friday.