March, 2009
The Eastern European carry-trade meltdown, reviewed
As reported here previously, much of the panic surrounding western European exposure to CEE fragility was focused on a particular set of BIS figures, a number amounting to some $1,700bn ‘reflecting total foreign claims’ from the region.
Models read Clusterstock?
Yes. That’s right. Not quant-type modellers, but real, actual, commercial, fashion-type models.
In case you’ve missed it ex- Goldman Sachs investment banker-turned-male model David Webb has hit the headlines in recent weeks.
Mammon anonymous at the Evening Standard
He’s a man who has been heavily involved in disastrous banking mergers.
Bespectacled, married, in his late 40s and drives a Maserati.
[One unhappy client] now refers to him as the ELF, which does not stand for Erudite Likeable Fellow.
Questioning the J-curve
J-curve. Noun. Economist jargon.
The shape of the trend of a country’s trade balance following a DEVALUATION. A lower EXCHANGE RATE initially means cheaper EXPORTS and more expensive IMPORTS, making the current account worse (a bigger DEFICIT or smaller surplus).
CDS report: artificial relief
The mood in credit derivatives markets improved on Wednesday, with indices across the board performing better, although some analysts saw the relief rally as artificial on grounds there was still no follow-through buying of cash bonds.
Lunch Wrap
On FT Alphaville Wednesday morning,
- How to make a lot of money from UK banks.
- Dear UBS shareholders…
- Genius or dingbat?
- Libor, revisited.
- Less maestro, more ingenue.
- HSBC,
Less maestro, more ingénue
From Mr Alan Greenspan:
There are at least two broad and competing explanations of the origins of this crisis. The first is that the “easy money” policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today’s financial mess.
Anything but therm in the US
Natural gas prices in the United States are falling, and falling much more than usual. The benchmark Henry Hub contract traded on Nymex closed at six-year lows of $3.840 per mmBtu on Tuesday, even despite below-average temperatures which are usually supportive to prices.
Markets live transcript 11 Mar 2009
Markets live chat transcript for the chat ending at 12:10 on 11 Mar 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Okay NH:hello PM:It’s 11.02
A suspension of space for airlines
A sign of the times for airlines:
March 10 (Bloomberg) — European Union regulators proposed to suspend an obligation on airlines to use their airport slots at least 80 percent of the time to avoid losing them,
HSBC, the bouncing bank
Yep, one of the world’s biggest banks, continues to trade with all the volatility of a penny dreadful.
The recent price action.
The shares were down 20p at 380p on Wednesday, having touched 363p at one stage.
Libor revisited
It’s been a while since anyone really paid much attention to Libor.
Back in September, when Lehman failed, the daily Libor numbers from the BBA were anticipated with a rather grim hawkishness. Now though,
Genius or dingbat?
This man, Stephen Wolfram, reckons he is close to unveiling the next generation of search – the next step beyond Google.
No, wait. He says it’s a “new paradigm for using computers and the web.”
Wolframalpha.com will offer answers to questions,
Dear UBS shareholders, with hindsight we’re kind of sorry
Here’s outgoing chairman Peter Kurer and new CEO Oswald Gruebel’s grovelling attempt to explain UBS’s outstanding 2008 losses to shareholders – which by the way are now up to CHF 20.9bn versus a previous CHF19.7bn,
How to make (a lot of) money from UK banks
It’s one of those headlines guaranteed to make hedgies who’ve had a bad – or even just mediocre – year weep into their balance sheet: “Paulson May Make $428 Million Shorting Lloyds, HBOS”.
As Bloomberg reports on Wednesday:
Further reading
Elsewhere on Wednesday,
- What Cuomo is really looking at.
- Credit-protection madness.
- Debunking the Citi memo.
- Citigroup questions.
- Grantham: shift to stocks before ‘rigor mortis’ sets in.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Why the G20 must focus on sustaining demand
The danger is not of doing nothing, but rather of doing too little. If such timidity fails,
Snap news
The latest on Wednesday morning:
- UBS reports CHF20.9bn loss, more than initially reported – statement
- Cairn Energy to raise up to £120 million in share placing – statement
- Corporate results:
Citi lifts markets – for a change
Global stock markets rallied on Tuesday after an unexpectedly bullish statement from Citigroup lifted bank stocks and fuelled investor hopes for the battered financial sector. The S&P500 ended 6.4% higher at 719.60 after closing at a 12-year low on Monday.
Citi sees strong start to 2009
Citigroup had its best profit performance in over a year in the first two months of 2009 and generated revenue of more than $19bn despite uncertainty over its future, chief executive Vikram Pandit said in a memo to Citi’s 300,000-plus global staff.
Bernanke calls for powerful regulator
The US needs an overarching regulatory authority to prevent a repeat of risks building up across the financial system, Ben Bernanke said on Tuesday. In remarks that echo calls on Capitol Hill for a powerful co-ordinating regulator,
Madoff set to admit 11 charges
Bernard Madoff, the broker accused of the biggest investment fraud in history, is set to plead guilty on Thursday to 11 federal felony charges that could carry a life sentence. Madoff, 70, however, has not reached a plea agreement with federal prosecutors investigating what he described in December as a $50bn Ponzi scheme.
Safra offers clients compensation
Clients of the Safra Group have been offered compensation for money lost in the alleged $50bn Ponzi scheme run by Bernard Madoff Investment Securities. The Safra Group, which includes one of Brazil’s biggest banks and private banking operations in the US and Europe,
Moody’s warns on Eastern Europe
Moody’s, which triggered a storm of selloffs last month with a warning on banks exposed to Eastern Europe, called Tuesday for more differentiation of credit risks in the region, reports the WSJ. In a new report,
US companies halt 401(k) payments
A wave of US companies are suspending payments to their staff 401(k) retirement plans in a bid to cut costs. Saks, GM, McClatchy, J.Crew, FedEx, UPS, Coca-Cola Bottling, Reader’s Digest, Motorola, Regions Financial and Sprint Nextel are among the growing list of companies to have suspended contributions in recent months.
HSBC seeks to calm investors
HSBC on Tuesday sought to calm investors unnerved by steep falls in its share price in Hong Kong this month. HSBC’s HK-traded shares recovered 13.9% on Tuesday, closing at HK$37.60, following a 24% fall on Monday,
Shorting windfall for Paulson
Paulson & Co, the hedge-fund firm that made $3bn-plus betting the US housing market would collapse, may have made £311m since September by short selling Lloyds Banking Group and HBOS, reports Bloomberg.
Lyondell creditors seek probe
Lyondell Chemical creditors want to investigate the merger of Lyondell and Basell AF, which they say loaded the company with unmanageable debt while paying out $12bn to Lyondell’s former shareholders,
US Senate passes $410bn spending bill
The US Congress gave its final approval on Tuesday to a $410bn omnibus spending bill to fund government activities until the end of September after Democrats prevailed in a week-long struggle to round up the necessary votes.
Atlantic stimulus rift grows
Disagreements between the EU and US over how to combat the global recession widened on Tuesday as EU governments indicated reluctance to pile up more debt to fight the collapse in output and jobs. Finance ministers from the 27-nation bloc insisted in Brussels that the EU did not need to adopt another fiscal stimulus plan,