March, 2009
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Obama’s bank plan could rob the taxpayer
Jeffrey Sachs, director of The Earth Institute at Columbia University, writes: It is no surprise that stock market capitalisation of the banks has risen about 50 per cent from the lows of two weeks ago.
Snap news
The latest on Thursday,
- 3I says it expects further negative impact on portfolio valuations — statement.
- LSE says trading activity is up, value of trades down — statement.
- Man Group sees fiscal-year profit before tax and exceptional items of $1.2bn — statement.
Brown backs away from new stimulus
Gordon Brown signalled that Britain would not announce a big fiscal stimulus in next month’s budget, as the failure of a gilts auction on Wednesday underscored concerns about the impact of further borrowing on the deteriorating public finances.
Public finance fears hit gilts auction
A UK government bond auction failed for the first time in seven years on Wednesday as investors refused to buy the securities amid worries over deteriorating public finances. Alarm over rising UK debt levels and renewed fears over inflation saw investors shun the auction,
Dollar dips on Geithner’s ‘loose talk’
The dollar fell briefly by 1.3% against the euro on Wednesday after US Treasury secretary Tim Geithner suggested the US was open to exploring a Chinese proposal to reduce reliance on the dollar as the world’s reserve currency.
Geithner to seek more regulatory powers
US Treasury secretary Tim Geithner will ask Congress to bring large hedge funds, private-equity firms and derivatives markets under federal supervision for the first time as part of a revamp of US financial rules,
BofA plans to repay Tarp funds
Bank of America has joined the growing list of US banks that are seeking to repay funds borrowed under the government’s bank recapitalisation scheme as quickly as possible. Ken Lewis, BofA chief executive,
Citi plans fund to buy bank debt
A Citigroup investment management unit is to start fundraising for a new fund that will look to buy up the debt of banks. The new fund under the bank’s fixed income investment management unit – a new platform for its fixed income investment funds – will start marketing to investors next week with the aim of raising about $250m,
ICBC secures Goldman pledge
Industrial and Commercial Bank of China on Wednesday secured a promise from Goldman Sachs that it would hold the majority of its stake in the Chinese lender for at least another year. Goldman, which holds 4.9% of ICBC,
Lloyds offers bond swap
Lloyds Banking Group has taken further steps to bolster its capital strength with a £7.5bn bond swap offer as it also raised an extra $5bn (£3.4bn) in government guaranteed funding in the bond markets.
BPM seeks Italian state aid
Banca Popolare di Milano became the fourth Italian bank to announce that it would seek state-backed funding from Italy’s €12bn bank aid scheme with at least one more bank expected to follow suit in the next few days.
Regulator clears Chinalco’s Rio deal
Australia’s competition regulator has cleared Chinalco’s planned $19.5bn investment in Rio Tinto, ruling that the transaction was unlikely to “unilaterally decrease global iron ore prices below competitive levels”.
Pearl angers bond holders
Hugh Osmond’s Pearl Group has deferred making a £33m interest payment on some of its bonds, angering some holders of the debt. The deferred payment was on £500m of bonds issued by life assurance investor Resolution before it was taken over by Pearl in 2007.
GSK in talks over Aspen stake
GlaxoSmithKline is poised to take a significant minority stake in Aspen Pharmacare of South Africa. GSK is in talks over the likely acquisition of about 10% of the drug producer in a deal that could be completed in coming weeks.
Letter says AIG paid bonuses early
AIG paid more than $40m in controversial retention bonuses to staff at its troubled financial unit in December, three months ahead of schedule, according to the resignation letter of an AIG executive, Jake DeSantis.
IBM set to cut 5,000 jobs
IBM, which has the largest workforce in the US technology sector, is set to lay off about 5,000 staff in its North America operations. The company, which declined to comment, is expected to tell staff of the job losses on Thursday.
UK banks warned after attack
UK banks were warned on Wednesday to take security precautions for staff after vandals attacked the Edinburgh home of Sir Fred Goodwin, former chief executive of Royal Bank of Scotland. Three ground-floor windows of the detached house were smashed and a Mercedes car in the driveway was vandalised.
Overnight markets: Fresh heart
Asian stocks rose on Thursday, lifting the region’s benchmark index to a two-month high, as better-than- expected US economic data fuelled optimism that government stimulus measures are having an effect on global growth.
CDS update: Optimists get a boost from US economic data
This CDS report was written by Markit’s Gavan Nolan
After an uneasy morning session European CDS indices recovered their ground, with events overseas providing the catalyst. The Markit iTraxx Europe index was over 8bp wider earlier today as skepticism mounted over the US government plan for dealing with “toxic”
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Lombard: Time for a truth and reconciliation commission
The most shocking aspect of Wednesday’s attack on Sir Fred Goodwin’s car and home is that nobody seems that shocked by it. Worse, many people would endorse, if not the action itself, then the sentiment of the email claiming responsibility.
ILFC: The ‘F’ stands for…
ILFC, the plane-leasing unit of black-hole insurer AIG, may be seeking its own bailout soon.
March 25 (Bloomberg) — American International Group Inc.’s plane-leasing unit said it may not be able to survive without help from its parent company or new access to credit.
Swinging gilts
Wednesday’s price action in the UK 10-year gilt.
A stunning reversal, eh?
Although an entirely predictable one, according to Mark Ostwald of Monument Securities.
What a momentous day, and a roller coaster ride for Gilts.
Two very different SDR scenarios, says Rogoff
With the IMF’s special drawing rights firmly on the table as the means for some sort of world helicopter cash drop or the basis of new global reserve currency, it’s probably worth pointing out how they might feature in the IMF’s radical overhaul in lending procedures as announced on Tuesday.
The hedgie rich list
More from Alpha magazine…
The top ten hedge fund moneymakers for 2008:
1. James Simons (Renaissance Technologies Corp.) $2.5bn
2. John Paulson (Paulson & Co.) $2bn.
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Dear AIG…
The NY Times on Wednesday featured a strongly-worded and impassioned letter sent by Jake DeSantis, an executive vice president at AIG’s financial products unit to chief executive Edward Liddy.
Here’s the 1,500 word dispatch in full:
Exploding pensions – Smiths Group edition
A taste of things to come.
From the Smiths Group interim results presentation.
Shares in Smiths Group, an engineering conglomerate, were down 13.2 per cent at 713p in early afternoon trading in London on Wednesday.
‘No fire power left’
David Bloom, Global Head of FX Research, at HSBC thinks the world has run out of fire power. Consequently, as there won’t be much more policy reaction after the G20 meet and because markets won’t be patient and wait for action already taken to become effective,