March, 2009
The Weekender
On FT Alphaville this week,
- On Monday: Is Barclay’s spinning out of control?
- Valuing iShares.
- Meet the talented Mr Rolet.
- Point counter point: AIG, Goldman and the New York Times.
- Tuesday,
CDS wrap: The week in perspective
This CDS report was written by Markit’s Gavan Nolan
The credit markets have been dominated by two events this week, one expected, the other less so. Investors had been preparing for the roll of the CDS indices this week,
How big is the market for Lehman Brothers’ paraphernalia?
A quirky story popped on Bloomberg on Friday, according to which Lehman Brothers Holdings has negotiated the return of stacks of Lehman tokens that were – ah – “mistakenly” transferred to Barclay’s:
Tote bags,
CDS report: Credit markets rollin’
Europe’s credit derivatives indices rolled today, with the launch of the new iTraxx series 11 replacing many of the index’s underperforming names. As a result Europe’s crossover index of mostly junk rated borrowers’ CDS was being quoted at a mid-price of 920bp on this quiet Friday morning.
Lunch Wrap
On FT Alphaville this Friday morning,
- Welcome to planet Crock: the Northern Rock business plan.
- Note to the board of Barclays Plc… erroneous advise from Freshfields.
- Counterpoint: Barc’s remarkable run.
Markets live transcript 20 Mar 2009
Markets live chat transcript for the chat ending at 12:09 on 20 Mar 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Welcome! PM:It’s Friday
Wavering Weavering
As the FT reported last night, $639m-UK fund Weavering Capital has been put into liquidation following the discovery of a huge ($637m!) – and previously unknown about – derivative position with an offshore company controlled by the fund’s managing director,
QE and exploding pensions
Pensions, accounting and quantitative easing tend to be rather dry subjects.
But, if you put the three together, as Citi has in a research note, you get something quite interesting.
Here’s the basic premise…
Citi, Banamex and the peso
Citi’s Banamex saga has taken a rather ludicrous turn:
MEXICO CITY, March 19 (Reuters) – Mexico said on Thursday that foreign governments can own stakes in its banks given the crisis in global financial markets,
Welcome to Planet Crock
The business case approved in March 2008 had been developed on assumptions made by the Northern Rock management team in the Autumn of 2007 in planning for a wind-down of the company and later as part of the management team bid,
Further reading
Elsewhere on Friday,
- AIG rage obscures simple truths.
- The next AIG scandal (yes, really).
- The Fed’s new high-risk game with inflation.
- Perhaps it’s time to buy Tim Geithner a Bloomberg terminal.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Martin Wolf: Why the Turner report is a watershed for finance
The FT columnist writes: Lord Turner is the UK’s man for all seasons. A few years ago,
Snap news
The latest on Friday,
- New whistleblower claims over £1bn Barclays tax deals — The Guardian.
- Premier Foods says it received acceptances for 66.05 per cent of rights issue — statement.
- Empyrean Energy to raise £350,000 in rights issue — statement.
Commodities leap on Fed bond plan
Commodities prices surged on Thursday and the dollar weakened as investors sought protection against the risk of higher inflation by buying everything from oil and gold to copper and sugar. The Fed’s plan announced Wednesday to buy $300bn of US government debt triggered the stampede into commodities markets,
Wall St retreats on stimulus doubts
US stocks fell on Thursday as investors continued to react to the Fed’s plan to buy $300bn of Treasuries over the next six months and an extra $750bn of mortgage-backed securities. Financials fell as investors bet the plan would not help banks,
Weavering Capital collapses
A $639m London hedge fund collapsed on Thursday night after the discovery that the main asset of Weavering Capital’s flagship fund was a $637m derivatives trade with an offshore company controlled by the fund’s founder and chief executive.
House passes 90% tax on bonuses
Bankers face the threat of a punitive tax on bonuses amid the escalating row over AIG’s bonus payouts, after the US House of Representatives voted 328 to 93 on Thursday for a bill to claw back bonus payments to staff at bailed-out institutions.
IMF criticises US stability plan
The Obama administration’s plans to stabilise the financial system lack “essential details” and have left markets uncertain about how it intends to recapitalise the US banking sector, the IMF warns in a report issued days before the administration plans to unveil details of its plan for removing toxic assets from bank balance sheets.
US agrees $5bn aid for car suppliers
The US Treasury’s auto taskforce laid out $5bn in federal financing to suppliers on Thursday in a deal that protects the industry’s core but could spell the end for weaker companies. The package was broadly welcomed by the industry and investors,
BofA linked to Merrill writedowns
Bank of America was directly involved in accounting for writedowns that contributed to Merrill Lynch’s $15.3bn Q4 loss, its final reporting period before it was acquired by BofA on Jan 1, the FT has learned.
Goldman warns against closing fund
Goldman Sachs warned shareholders in its UK-listed fund of hedge funds they would have to wait until 2012 to get all their cash back if they voted against continuing the $522m fund. Goldman’s Dynamic Opportunities on Thursday called a continuation vote,
Citi plans reverse stock split
Citigroup said it would ask shareholders for the option to conduct a reverse stock split as part of an exchange offer that could give the US government as much as a 36% stake in the bank. The planned share exchange could lift the bank’s share count from 5.5bn to more than 21bn shares outstanding if all eligible investors participate.
Citi defends $10m office revamp
Citigroup, which has received $45bn under the US bank recapitalisation programme, on Thursday defended plans to spend $10m moving executive offices to another floor of its Park Avenue headquarters. It said the plans would consolidate two floors of suites into one and move executives to smaller offices.
BAA ordered to sell key airports
The UK competition watchdog on Thursday ordered BAA to sell three of its seven UK airports, ending its monopoly ownership of key airports in London and in Scotland. In the most draconian corporate divestiture ever demanded by the Competition Commission,
Chavez to nationalise Santander unit
Venezuela will go ahead with the nationalisation of the local unit of Spanish bank Grupo Santander, President Hugo Chavez said on Thursday, weeks after officials said the purchase was on hold, reports Reuters.
Apollo warns of property ‘black hole’
A “black hole” in the US commercial property market is set to add pressure on troubled banks’ balance sheets, the head of buy-out firm Apollo Management has warned, reports the FT. Leon Black, Apollo’s founder,
ThyssenKrupp to slash jobs
ThyssenKrupp is to be the first big German industrial company to slash thousands of permanent jobs because of the global recession, it emerged on Thursday, as the country’s largest steelmaker struggles with a sharp downturn in demand.