April, 2009
New car prices undercut used models
In one of the most striking signs yet of the conflicting pressures buffeting the automotive industry, some new cars are now selling more cheaply than used vehicles, the FT said. A shortage of good-quality
Steep fall in number of new mobile subscribers
The number of net new mobile phone subscribers in the world fell sharply in the fourth quarter of 2008 and the growth of mobile data revenues stalled for the first time, providing further evidence of the impact of the global economic downturn on the mobile telecoms sector,
Fleet-owners face bankruptcy threat from plunging shipping rates
Global shipping rates are set to fall by 74 per cent this year as commodity demand continues to fall in Asia and the massive glut of vessels ordered during the boom years finally takes to the seas, the Telegraph reported.
S&P rally goes unexploited by hedge funds
Hedge funds failed to take advantage of the sharp rally in equities in March as their generally defensive stance meant the average fund across all investment strategies gained less than 2 per cent even as the benchmark S&P 500 index rallied by more than 8 per cent.
Moody’s downgrades Berkshire Hathaway
Warren Buffett’s Berkshire Hathaway lost its triple-A grade from Moody’s Investors Service, the very ratings firm in which the billionaire holds a 20 per cent stake. The two-notch downgrade to Aa2, which follows Fitch Ratings’ one-notch cut last month,
Overnight markets: Mostly higher
Asian shares were mostly higher on Thursday, helped by strong gains in Tokyo and the positive close on Wall Street overnight. Japanese markets rallied during morning trading, on track to snap a two-day losing streak,
Berkshire Hathaway loses triple-A rating at Moody’s
Speaking of downgrade Friday,
Moody’s Investors Service has downgraded the insurance financial strength (IFS) rating of National Indemnity Company (National Indemnity) to Aa1 from Aaa and the long-term issuer rating of its ultimate parent,
S&P downgrades the whole US mortgage insurance sector
Downgrade Friday continues.
In yet another sign of the continued distress in the US housing market, Standard & Poor’s downgraded its rated universe of private mortgage insurers, and mostly by multiple notches.
FOMC says financial markets still ‘fragile and unsettled’, risk of deflation invoked
The minutes of the last meeting by the US Federal Open Market Committee are out, and they make for interesting reading. Here are some extracts, emphasis ours:
The information reviewed at the March 17-18 meeting indicated that economic activity had fallen sharply in recent months.
CDS update: Pernod shines in Europe, while Centex outperforms in US
This CDS report was written by Markit’s Gavan Nolan
Credit markets on both sides of the Atlantic endured a relatively flat session today, though the stagnation in indices obscured significant events among single names.
S&P’s CMBS stress test
Standard & Poor’s this week completed a significant re-analysis of its rated universe of US commercial mortgage backed-securities (CMBS). The results are either alarming or wholly unsurprising, depending on how closely you’ve been following the saga of US commercial real estate.
Bank of America divides analyst opinions
Richard Bove (of Rochdale Research, formerly of Ladeburg Thalmann), in the Wall Street Journal on Monday:
In restarting his coverage of Bank of America Corp. (BAC), he called the economy’s bottom.
Splitting up RBS and Lloyds?
This extract from a speech just given by George Osborne, shadow chancellor, at the RSA think tank in London:
By dint of its substantial shareholdings, the government has a powerful influence over the future structure of the UK banking industry,
London bankers v New York bankers
Reports CNBC:
London bankers’ mighty pay has fallen from the highest level among global financial centers to the lowest, with Wall Street financiers grabbing the top spot, a poll showed on Sunday.
Specifically,
Financial feud: Cramer vs Roubini
Doom-mongering economist Nouriel Roubini and outspoken CNBC host Jim Cramer are big crowd pleasers on FT Alphaville – for varying reasons.
So we thought we’d reprint the following, from the New York Post:
Lunch Wrap
On FT Alphaville this morning,
- FDIC and the magical accountant: a financial fairytale.
- Getting bearish on banks again: the return of the IB capital call?
- Green shoots; severe frosts.
Green shoots; severe frosts
Talk of green shoots is most definitely premature. The recession has barely begun. The two below graphs from SocGen’s Andrew Lapthorne:
Corporate earnings have barely yet begun to suffer. Not that they won’t of course.
CDS report: European credit derivatives narrow
European credit derivatives narrowed on Wednesday amid light flows.
Markit’s iTraxx Crossover index, which is mainly made up of high-yield names, narrowed to 920 basis points from a Tuesday close of 929bp.
Markets live transcript 8 Apr 2009
Markets live chat transcript for the chat ending at 12:06 on 8 Apr 2009. Participants in this chat were: Paul Murphy, FT (PM) Bryce Elder (BE)
PM:
Okay
PM:
It’s 11.03
FDIC and the magical accountant: a financial fairytale
Once upon a time there was a princess called Sheila.
Sheila was in charge of a small but important slice of the Kingdom, known as FDIC.
All was well in Sheila’s fiefdom. Since the Glass-Steagal Revolution she had ruled over FDIC,
The good car-maker/bad car-maker plan
Well, if it works for Irish banks, why not US auto manufacturers?
Reuters was using words like “intense” and “earnest” on Wednesday as it reported on General Motors’ preparations for a possible bankruptcy filing. Bloomberg was reporting similar activity as GM responds to Obama’s rejection of the company’s s plea to hang on to $13.4bn in federal loans.
Madoff behaviour, internet bubble edition
In the last days of the Dot-Com bubble, when wild share price swings and high leverage levels were becoming synonymous with the internet sector, there were a few financial players who exhibited prudence.
Distress delays Devonshire’s distressed debt debut
There’s been a lot of irony in the credit crunch, from Gordon Brown’s efforts to borrow our way out of a debt problem to the attempts to force banks to lend while increasing their capital requirements.
Further reading
Elsewhere on Wednesday,
- “Don’t fire ken Lewis!”
- On being Bernied.
- “Many of you may think of me as a devil-may-care, gimlet-eyed, barbéd-tongued man-about-town1 and raconteur, but I am not everything that I seem”.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
What the G2 must discuss now the G20 is over
The FT’s Martin Wolf writes: Did the meeting of the Group of 20 in London last week put the world economy on the path of sustainable recovery? The answer is no.
Snap news
Breaking pre-market news on Wednesday,
- Evolution Group adjusted PBT down 91 per cent to £1.9m in 2008, AUM up 21 per cent — statement.
- Pearl Group Ltd. plans to raise £500m in new equity and list on the LSE — statement.