March, 2009
Malaysia unveils $16.3bn stimulus
Malaysia unveiled an unexpectedly large M$60bn stimulus package on Tuesday aimed at preventing the export-reliant economy from sinking into deep recession. The extra state spending, amounting to 9% of GDP,
Cattles suspends three more execs
Cattles stock plunged 14% on Tuesday after the UK specialist lender said it had suspended another three executives as part of a widening investigation into bad debt provisions. The group also said it was in breach of banking covenants and now expected to have made a “significant” loss in 2008.
Japan’s Pacific files for bankruptcy
Pacific Holdings, one of Japan’s largest real estate investment fund sponsors, filed for bankruptcy protection with liabilities of Y163.6bn ($1.7bn) after failing to receive a capital injection from 10 Chinese investors to help repay part of its debts.
45% of wealth ‘destroyed’: Blackstone
Stephen Schwarzman, CEO of buyout group Blackstone, said on Tuesday that up to 45% of the world’s wealth has been destroyed in less than 18 months by the global credit crisis, reports Reuters. “This is absolutely unprecedented in our lifetime”,
Overnight markets: Up, up and away
Asian stocks surged on Wednesday, following strong rallies in US and European stocks after Citigroup and HSBC said earnings are improving and China’s factory spending jumped. Futures on the S&P500 Index added 0.3% after the gauge leapt 6.4% in New York on Tuesday,
Rally monkey or a dead cat?
You decide. (Note, the DJIA currently ahead +321.22 points).
Related links:
Monkey Sants – FT Alphaville
Dead cat splat – FT Alphaville
CDS update: Enter the inevitable bounce
This CDS report was written by Markit’s Gavan Nolan
The financial sector has been the catalyst of the recent market sell-off. Insurers, in particular, and banks have widened sharply amid great uncertainty over their stability.
LME copper inventories falling
Copper inventories at the London Metal Exchange appear to be declining after setting five-year highs last month on a fall in demand due to the global slowdown.
On Tuesday London Metal Exchange stocks shrank by 1.3 per cent to 512,025 tons,
Bernanke to take over the world
Is Ben Bernanke making a power grab?
This from his latest speech, “Financial Reform to Address Systemic Risk”, emphasis FT Alphaville’s:
How could macroprudential policies be better integrated into the regulatory and supervisory system? One way would be for the Congress to direct and empower a governmental authority to monitor,
Lloyds Banking Group – “Buy”
An unusual recommendation to come out of FT Alphaville, perhaps. But the investment case looks to be compelling – at the moment.
Ironically, it is from the statement released by Lloyds on Saturday regarding its participation in the HM Treasury’s Asset Protection Scheme (emphasis ours):
Valuing insurers, part deux
JP Morgan is taking the contrarian stance to the new-fangled view that insurers should be valued on tangible net asset value (TNAV).
Here’s the bank’s explanation of the TNAV valuation phenomenon:
Valuation.
CDS report: pain in the financials (again)
Credit investors are increasingly concerned about the state of the financial sector, demonstrated by record highs in financial sector CDS index spreads on Tuesday morning.
The senior financials CDS index breached record highs,
Lunch Wrap
On FT Alphaville Tuesday morning,
- The Leper List, Moody’s bottom rung.
- The sunlit, asset-backed uplands.
- Contango smashing.
- Does Japan really not look that bad?
- The roaring noughties and the crash of ’09.
Broad sunlit, asset-backed uplands
…well, hardly.
But guess which British bank is about to embark on a mammoth asset-backed financial offering?
From Moody’s yesterday:
London, 09 March 2009 –
Moody’s Investors Service has assigned a definitive rating of Prime-1 to the asset backed commercial paper (“ABCP”) issued by Churchill Loan Asset Securitisation Programme LLC (“Churchill”).
Contango smashing
The contango between the front-month April contract and the second-month May contract has been severely smashed over the last day.
Having averaged a difference of about $2 per barrel over the last couple of weeks,
Markets live transcript 10 Mar 2009
Markets live chat transcript for the chat ending at 12:09 on 10 Mar 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hi there – welcome to Markets Live
Japan ‘doesn’t look that bad’, really…
Lo, Japan no longer “looks that bad”, according to Paul Krugman, in an entry on his blog headlined “Japan reconsidered:
For a decade or so Japan’s lost decade has been the great bugaboo of modern macroeconomics.
The roaring noughties and the crash of ’09
From Doug Short (via Clusterstock):
Related links:
Flapper fashion – How to Spend It Magazine (page 26)
“Conspicuous consumption” Toynbee on HTSI – the Guardian
The system still needs saving
More from the FT’s Future of Capitalism series:
- Gillian Tett looks at the opacity that led us in to this mess here, while towards the bottom of that piece you will find Krishna Guha examining the macroeconomic dynamics of boom and bust.
Punter fatigue?
FT Alphaville has lost count (almost) of the spread betting companies which have told us business is booming in spite, or in some cases because of, the credit crunch. It’s all about the volatility you see.
A deflationary dragon with excess capacity
China has slipped into deflation for the first time in six years. Given its conspicuous excess capacity in a world of falling consumer demand, that now puts the country at great risk of copying America’s position (as a surplus country) in the Great Depression of 1929.
Abattoir finance
From Cattles:
On 20 February, 2009 the Board of Cattles announced a delay in the release of the Group’s preliminary results announcement for the year ended 31 December, 2008. Since then, an independent forensic review,
Pandit: ‘Our best quarter-to-date performance since the third quarter of 2007′
Strange, but true. Citigroup chief executive Vikram Pandit has dispatched a memo to staff saying that despite all the speculation over nationalisation, the bank has had its best profit performance in over a year during the first two months of 2009.
Irregular trading, HSBC edition
Yesterday HSBC saw its share price in Hong Kong take a rather nasty tumble – which pundits are still trying to explain. Obviously as far as HSBC is concerned, it was a technical incident, and not one that should deter investors from participating in the upcoming rights issue.
Further reading
Elsewhere on Tuesday,
- Cayne speaks.
- More Cayne – is it time for his rebirth?
- Japan reconsidered.
- KKR is not buying a $28 million chair (it says).
- Buffett, and other ‘fools’.
- Hedge-fund fees,
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Comment: The future of human beings is what matters
President of Brazil Luiz Inácio Lula da Silva writes he is not worried about the name to be given to the economic and social order that will come after the crisis,
Snap news
Breaking pre-market news on Tuesday,
- Cattles says it will need to restate the group’s financial statements for 2006-2007, is in breach of covenants – statement
- HSBC HK selloff caused by “technical factors”;
Merck buys Schering-Plough for $41bn
Merck on Monday announced an agreed $41bn takeover of its New Jersey rival, Schering-Plough, just six weeks after Pfizer’s $68bn takeover of Wyeth was unveiled. The deal, to create one of the world’s biggest drugmakers with combined sales of nearly $50bn,