March, 2009
UniCredit to seek €4bn aid
UniCredit, one of Italy’s top two banks, said Wednesday it will seek up to €4bn in state aid from the Italian and Austrian governments. UniCredit, which by some measures is the biggest lender in central and eastern Europe,
Big companies hoard cash
Big investment-grade companies in the face of economic uncertainty as they raise record amounts of debt in the bond markets while cutting dividends, share buybacks and capital expenditure. In the booming global issuance market for corporate debt,
Gold surges on Fed move
Gold futures staged an about-face to move higher in thinly traded after-hours screen trading after the Fed’s new plan to buy $300bn of government debt pressured the dollar and rekindled longer-term inflation concerns,
Hedge fund liquidations soar
Hedge fund liquidations hit a record high last year as poor performance and funding pressures forced almost 1,471 funds, or 15% of the industry, out of business – an increase of more than 70% from the previous full-year record set in 2005,
HBOS’s Hornby to forgo cash payment
Andy Hornby, the former chief executive of HBOS, which was taken over by Lloyds Banking Group, has agreed to give up about £700,000 in discretionary cash payments from the bank to try to defuse a potential row over rewards for failure,
Madoff’s accountant charged with fraud
Bernard Madoff’s long-time accountant was arrested on Wednesday and charged with securities fraud and other crimes as US prosecutors widened their investigation into one of the biggest investment frauds in history.
Overnight markets: Surprised
Asian stocks gained on Thursday, led by banks and commodity companies, after strong gains in the US as the Fed’s new plan to buy $1,000bn of bonds spurred speculation that lower borrowing costs will revive economic growth.
What does $1,000bn look like?
The US Federal Reserve intends to spend more than $1,000bn battling this financial crisis. But what does that mean, really?
Jess Bachman of Wallstats.com last week put the number into context:
One trillion dollars;
CDS update: Bear markets rally, too
This CDS report was written by Markit’s Gavan Nolan
European credit continued to lose ground as another round of grim economic data reminded investors that all bear markets have rallies. The Markit iTraxx Europe index was around 2bp wider at 191bp,
US Fed holds rates near zero, says will buy Treasurys and more MBS
The Federal Reserve said on Wednesday it will buy up to $300bn in longer-term Treasurys and increase the size of lending programs designed to lower mortgage rates by another $750bn.
The dollar slid against major currencies and fell to intra-day lows against the euro and the yen in the moments following the release of the Fed statement,
Gem of Tanzania found!
Oh ye gemologists and auditors of little faith.
Here it is – exclusively revealed by FT Alphaville (HT reader Bappu Lahiri) – the Wrekin gem.
Err… on Ebay.
A snip at – when we last checked – just £13.50.
Lombard: The race to the top in banking regulation
“We don’t know much about financial regulation, but we know what we don’t like.” The people have spoken and Lord Turner has listened.
His review could have marked the Financial Services Authority’s chairman out as the supervisor’s supreme hand-wringer,
Of rubies and RBS
Straight out of a cozy mystery novel this one.
Wrekin is a Shropshire-based construction company that collapsed last week – but that’s not the first time the business has experienced serious financial troubles.
FSA Auditing Services Ltd
Move over PricewaterhouseCoopers et al, there’s a new player in town.
Step forward the FSA.
Page 89 of the Turner Review (emphasis ours):
But there is also a strong case for bank regulators such as the FSA to be far more involved than in the past in the review and comparison of accounting approaches to fair value estimates and loan impairment provisions.
The Turner guide
Presenting a (very short) FT Alphaville summary.
The full review is here, including a worthwhile overview of the financial crisis to date, in section one (p. 29-61).
FSA chairman Lord Turner’s more salient recommendations from section two are as follows:
CDS report: European credit derivatives widen
European credit derivatives prices widened on Wednesday as grim UK jobless figures weighed on sentiment.
The Markit iTraxx Crossover index, comprised of 50 mostly junk-grade names, stood at 1,126 basis points,
Lunch Wrap
On FT Alphaville Wednesday morning,
- The wisdom of China’s online crowds.
- The latest front in the new Cold War.
- What price a warrant? The unaccountable Tarp.
- Dead cat bounce factoids.
The wisdom of China’s online crowds
HT to Standard Chartered for the title of this post and the research.
The bank’s China team are looking at Google Trends as an indicator of the country’s consumer appetite.
It’s not scientific per se (only 23 per cent of China’s population is online and of those only about 27 per cent use Google as a search engine) but it is interesting.
Markets live transcript 18 Mar 2009
Markets live chat transcript for the chat ending at 12:14 on 18 Mar 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) NH:Good morning and welcome to Markets Live
What price a warrant? The unaccountable TARP…
On the 20th October 2008, TARP warrant guidelines specified:
In all cases, the Treasury also must obtain warrants for common stock of the applicant. The terms of the warrants are explained in the Treasury agreements available on the Treasury web site.
Dead cat bounce factoids
Courtesy of Andrew Garthwaite and team at Credit Suisse.
The Great Depression:
And the Great Recession:
So far in this bear market, bear market rallies have been just 14% (with the largest being 24%).
Morning headlines
Fresh off the Bloomberg, UK unemployment data and BoE minutes.
The consensus for UK jobless claims was for +87,5000.
Tracking Bears
CNBC has found the bigger ones after their release into the wild one year ago.
Jimmy Cayne: Cayne was the chief executive of Bear Stearns for 15 years until months before its collapse, and he personally lost about $1 billion in net worth in it.
Have we already seen peak oil?
Everyone at The Oil Drum seems to think so, with a unanimous decision having been taken to publish this chart (via vbrief.com, click for a larger image).
World oil production is reckoned to have peaked in 2008 at 81.73m barrels/day – “oil”
A ‘game-changer’ for the euro – and a coming CHF bloc
Morgan Stanley’s currency expert and emerging markets strategist Stephen Jen has been quick to leap on the significance of the push to give the IMF extra funds to channel to Eastern Europe. Citing what he calls a “game changer”
Seppuku at AIG
It had to come at some point.
I would suggest [they] follow the Japanese example…take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide.- Senator Chuck Grassley,
Update from the battle against procyclicality
“In light of continued stress in financial markets” the Fed is delaying new rules that would have further limited the amount of restricted stuff that can be included in banks’ Tier 1 capital ratios. The new date for implementation is March 2011.
Further reading
Elsewhere on Wednesday,
- Spitzer on the ‘Real AIG Scandal’.
- More grist for the AIG mill.
- Duh, hedge funds bought AIG credit default swaps too.
- Goldman risks ‘TARP rage’.
- Meredith Whitney’s Citi call sent to the dustbin.