March, 2009
Opec back in the driving seat
Anyone superstitious should beware: not only is today Friday the 13, but the ides of March falls this coming Sunday. So it’s the perfect weekend for arguably two of the world’s most important leadership groups to be meeting to decide on tackling the financial crisis.
A mark-to-market history lesson
Republicans’ Thursday testimony on mark-to-market accounting has emerged.
You can read the whole thing here, but we found this bit of particular interest:
Mark-to-market (“fair value”) is a major cause of the current financial disaster.
eParental Careers
Shades of a gigolo fantasy going on here, we suspect, but hey ho…
I have swapped the red braces for apron strings. And it’s been a bit of an eye-opener.
Some of the yummy mummies I have been working for have (I understand) been boasting about having a male Mary Poppins.
The bad news on US Trade
The US trade deficit narrowed to $-36.0bn in January from a revised $-39.9bn in December and compared with consensus expectations for $-38bn .
Good news right?
Well, not necessarily. The devil,
Solution to credit crunch found!
Just make everyone — including the banks — look attractively trustworthy.
From Rice University (HT Alea)
New research suggests that a person’s appearance may play a role in whether they are deemed trustworthy by financial lenders.
Another sacred cow, slain (or, Fitch downgrades Berkshire Hathaway)
Once upon a time, the merest suggestion that certain entities known as “bond insurers” or “monolines” might be stripped off their triple-A ratings was enough to send markets into a right panic.
Once upon a time,
Swiss QE, déjà vu
So Switzerland’s starting quantitative easing?
This chart, of the Swiss money supply (M1) between 2003 and 2008 begs two particular questions:
Just when did QE really begin and how far up is that line going to go?
(HT Sean Corrigan of Diapason Commodities)
Related links:
CDS report: Better tone no help to insurers
European credit markets saw a strong decline in the cost of protecting many companies against default on Friday as the week’s rally in equity markets brought a bout of optimism back to debt investors too,
Lunch Wrap
On FT Alphaville Friday morning,
- Cramer capitulates.
- Comparing bears.
- All about bottoms.
- The Swiss franc factor.
- BU57.
- Hooray! The chief exec’s gone!
- Barclays’ dilemma in Markets Live.
Cramer capitulates
In case you didn’t know, there’s an undeclared war going on between the Daily Show’s Jon Stewart and America’s Business channel CNBC.
Quick summary:Satirical comedian Jon Stewart found Rick Santelli’s little rant about “loser mortgage holders”
Comparing bears
A Little, Small, Wee Bear, a Middle-sized Bear, and a Great, Huge Bear.
Related links:
Four bad bears – Dshort
The death of equity – FT Alphaville
Markets live transcript 13 Mar 2009
Markets live chat transcript for the chat ending at 12:14 on 13 Mar 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) NH:Welcome! NH:It’s Friday
All about bottoms
Anthony Bolton, now president of investment at Fidelity International, is among heavyweight investment gurus to have called the bottom of the market in recent days, as he explains in a video interview this week with FTfm.
The Swiss franc factor
For those concerned about the prospect of a round of competitive currency devaluations, the Swiss National Bank’s abrupt move on Thursday to intervene to push down the Swiss franc raised alarm bells.
It was the first time a leading central bank has intervened in the forex markets since Japan sought to weaken the yen in 2004,
BU57
New car registrations in Europe were down 18.3 per cent in February versus the previous year according to data from the European Automobile Manufacturers Association (ACEA). As the chart below shows the numbers have now been falling steadily since about April last year.
Hooray! The chief exec’s gone
A cruel market reaction on Friday to news that Sir Tony O’Reilly is to retire as chief executive of Independent News & Media: shares in the Irish publisher jumped 80 per cent at the opening.
But then put that in context:
Further reading
Elsewhere on Friday,
- The revenge of Karl Marx.
- Stop the bail-out! Four better alternatives.
- The “too-big-to-fail” list.
- The price of a sterling crisis.
- Hedge fund datapoint of the day.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Paul Kennedy: Read the big four to know capital’s fate
Paul Kennedy professor of history and director of International Security Studies at Yale University suggests today’s leaders should look to the works of Adam Smith,
Snap news
The latest on Friday,
- Babcock & Brown enters voluntary administration – statement.
- Swiss Life in talks with Talanx over MLP – Reuters.
- John Lewis weekly dept store sales down 2.1 pct – statement.
GE hit by credit-rating cut
General Electric on Thursday lost its triple A debt rating as S&P downgraded the company, citing mounting concerns over its finance arm. S&P, which first assigned GE a triple A in 1956, dropped the group and its lending division,
KKR eyes Phoenix for Alliance Boots
KKR has made an approach to acquire Phoenix, the German drug wholesaler that is part of the faltering empire of Adolf Merckle, the German billionaire who committed suicide in January. The US buyout group,
Babcock & Brown teeters
Australian investment firm Babcock & Brown faced collapse on Friday after a small group of foreign investors voted against its rescue plan, saying the plan favoured B&B’s key bankers, reports Reuters.
Rating cut for Buffett’s Berkshire
Billionaire Warren Buffett’s Berkshire Hathaway had its top-level AAA credit rating cut by Fitch, which cited concern about the potential for losses on the insurer’s equity and derivatives holdings,
BofA chief sees profitable year
Ken Lewis, chief executive of Bank of America, said on Thursday that the bank was profitable for the first two months of 2009 and expected to make money for the full year. Lewis joins Jamie Dimon, chief executive of JPMorgan Chase,
FSA to ‘frighten’ with tough stance
Senior executives at troubled UK banks have been targeted by London’s securities watchdog for close scrutiny over their decisions in the run-up to the crisis, FSA chief executive Hector Sants warned on Thursday.
Madoff jailed ahead of sentencing
Bernard Madoff, the man behind one of the largest fraud schemes in history, told a Manhattan court on Thursday that he was “deeply sorry and ashamed” as he pleaded guilty to all 11 charges of cheating thousands of investors and was jailed ahead of his June 16 sentencing.
Congress starts Merrill probe
House Democrats have begun an investigation into whether Merrill Lynch misled Congress about its plan to grant bonuses, reports Bloomberg. Edolphus Towns, chairman of the House committee on oversight and government reform,
Swiss spark talk of ‘currency war’
The Swiss National Bank moved to weaken the Swiss franc on Thursday, the first time a big central bank has intervened in the forex markets since Japan sought to weaken the yen in 2004. The bank’s move,
Welch slams ‘dumb’ share price focus
Jack Welch, regarded as the father of the “shareholder value” movement that has dominated the corporate world for more than 20 years, said it is “a dumb idea” for executives to focus so heavily on quarterly profits and share price gains.
Roche claims Genentech victory
Roche, the Swiss pharmaceuticals company, on Thursday claimed victory in its protracted takeover of Genentech, winning backing from the US biotechnology group’s independent directors after raising its bid for the 44% of the company it does not own to $47bn.