March, 2009
CDS wrap: An outbreak of “initiativitis”
This CDS report was written by Markit’s Gavan Nolan
In the UK, Gordon Brown has been accused by his critics of “initiativitis” – a tendency to announce swathes of new initiatives with little inherent substance.
Zimbabwe datapoint du jour – prices are falling
We missed this, but on Wednesday the BBC – citing official statistics - reported that prices in Zimbabwe had begun to fall after years of “galloping inflation”:
Prices of goods bought in US dollars,
The week in securities litigation
Last week, US regulators warned of “rampant Ponzimonium”, and said they were investigating “hundreds” of possible scams in the aftermath of Madoff.
If the newsflow this week was any indication, those warnings might be more than merely hyperbolic.
The FSA guide to insider dealing
No, we’re not sure of the point either. Click for a sharper image.
The chart accompanies this timeline in the case of the FSA versus McQuoid and Melbourne.
At Southwark Crown Court on Friday,
L&G and the trouble with CDOs
On Wednesday, UK insurer L&G’s preliminary annual results revealed the following clarification:
We have separately identified our CDO investments, which have previously been classified within ABS. Of the total £1,004m of CDO investments,
Switch to Fitch?
Percentage of CDOs registering events of default, by presence of agency rating:
(Chart reproduced with kind permission from a paper by Anna Katherine Barnett-Hart, Harvard)
California’s nightmare
Things are already extremely rotten in the state of California, and are likely to worsen, according to forecasts by two teams of homegrown economists.
SignonSanDiego.com reports, (emphasis FT Alphaville’s):
US energy prices fall as fuel efficiency standards revealed
A bit of profit taking, and some new and much stricter rules on fuel efficiency in the United States from President Obama’s administration, as reported by Reuters:
- RTRS-U.S. RAISES STANDARDS FOR AUTO FUEL EFFICIENCY FOR MODEL YEAR
- RTRS-FIRST EVER INCREASE INCREASE FOR PASSENGER CARS REQUIRES 30.2 MILES A GALLON – TRANSPORTATION DEPT
- RTRS-SPORT UTILITIES,
Investors put billions into emerging market equity funds
Funds dedicated to emerging market equities reported their largest weekly inflows since May 2008 during the week ended March 25th, Merrill Lynch said in a report on Friday.
These funds attracted $2.3bn in a third consecutive week of inflows,
CDS report: UK financials fail to find support
Excitement over news that Barclays might not need government help and over the junior debt exchange offers from Lloyds and RBS failed to help UK banks and insurers in the European credit markets on Friday even as some of their continental counterparts saw muuchh more positive moves.
Lunch Wrap
On FT Alphaville this morning,
- Barclays de-stressed.
- Japan’s stock markets, doing just fine, thanks.
- Reasons to expect a global currency as a genuine possibility.
- Australia fires Minmetals warning shot at China.
Global currency, it COULD happen
Who would have thought, even a couple of months ago, that calls for a global currency might be taken seriously as a solution to the current financial crisis?
Yet, the concept is gaining incredible momentum.
Markets live transcript 27 Mar 2009
Markets live chat transcript for the chat ending at 12:03 on 27 Mar 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:AHAH!!! PM:CAPITALIST PIGS!
Japan’s stock markets are doing very well, thank you
Amid almost relentlessly gloomy data emerging from Japan, the country’s stock markets have been doing very nicely thank you. Only on Friday did Japanese stocks snap (by incremental amounts) their solid nine-day winning streak,
Australia fires warning shot at China
It is a good job Rio Tinto has a plan B in case its proposed $19.5bn investment with China Chinalco is blocked.
It may well need it.
Here’s why – a statement from Australia’s Treasurer Wayne Swan, explaining his decision to block a’ $1.7bn bid for miner Oz Minerals from a Chinese metals group called Minmetals.
Further reading
Elsewhere on Friday:
- Triumph of the US banking oligarchs
- What if no one came?
- Buyout deals of the year
- State of the (US) economy: a graphic view
- The intellectual crash of 2009
Pink picks
Comment, analysis and other offerings from Friday’s FT:
Alan Greenspan : We need a better cushion against risk
The former Fed chairman writes that new regulatory challenges arise because of the recently proven fact that some financial institutions have become “too big to fail”,
Snap news
Breaking pre-market news on Friday:
- Italy’s Monte Paschi seeks €1.9bn state aid as profit drops – statement
- Hochschild Mining resolves industrial action – statement
- Scottish & Southern
US reveals regulatory overhaul
The Obama administration plans to introduce more stringent rules on capital and liquidity as part of a sweeping regulatory overhaul outlined by Tim Geithner, US Treasury secretary, on Thursday. Geithner told Congress that the US needed a fresh approach to regulating risk that identified problems across the financial system as a whole.
AIG subpoenaed on CDS contracts
AIG was subpoenaed on Thursday by New York’s attorney general Andrew Cuomo for information on its credit default swaps contracts, which Cuomo said were “at the heart of AIG’s meltdown”, reports Reuters.
RBS launches debt swap deal
Royal Bank of Scotland offered to buy back or exchange up to £14.8bn worth of junior bonds on Thursday, joining a growing list of banks looking to boost capital and put a floor under the highly discounted market prices of such bonds.
Russian banks ‘in crisis’
Hundreds of Russian banks are likely to go under by the end of the year amid mounting bad loans, potentially hitting as much as 20% of credit portfolios, a top Russian banker warned Thursday. Pyotr Aven,
US economy falls 6.3% in Q4
The US economy shrank in the fourth quarter at its fastest rate since 1982, revised official figures showed on Thursday, as corporate profits fell at the sharpest pace in 55 years and jobless claims continued to climb.
WestLB owners plan sell-off
WestLB’s owners plan to put the bank up for sale through an auction that could herald a wider shake-up of Germany’s state-owned Landesbank sector. The bank expects the offer to satisfy a promise to the European Commission to seek a change in its ownership,
Rio shares rise on ‘Plan B’ talk
Rio Tinto shares jumped in Sydney trading on Friday after the miner said it had an alternative plan should its $19.5bn investment deal with Chinese aluminium group Chinalco fail, reports Bloomberg. Rio added 6% to A$58.21 after jumping 7.4% in London on Thursday after its CFO Guy Elliott said it may sell shares or bonds,
Canary Wharf owner risks debt breach
Songbird Estates, the controlling shareholder in Canary Wharf, the property development that came to symbolise London’s revival as a global financial centre, warned on Thursday it was in danger of breaching a key debt agreement on a $1.27bn loan with Citigroup in the next 12 months.
Mizuho to off-load equity holdings
Mizuho Financial Group, Japan’s second-largest bank, plans to sell as much as Y900bn ($9.2bn) of equity holdings, as the sinking value of its investments threatens to cause the bank’s first annual loss in six years,
Man Group chief warns regulators
Increased regulation of hedge funds will drive some out of business and lead to a shrinkage of the industry, Peter Clarke, chief executive of Man Group, the UK’s biggest listed hedge fund manager, warned Thursday.