April, 2009
FSA steps up scrutiny in ‘get scary’ drive
Finance companies and executives face tougher regulatory vetting in one of the first signs of the City watchdog’s efforts to become more intimidating, lawyers say. The Financial Services Authority is delving deeper into the pasts of those it supervises in what solicitors see as a crackdown that could lead to more companies and individuals being excluded from the market,
Employers introduce pay freezes, headcount culls to cut costs
Between a fifth and a quarter of wage settlements in the first few months of this year have involved pay freezes as hard-pressed employers have sought to curb costs during the recession. Pay surveys by the Labour Research Department and Incomes Data Services reveal a widening gap between businesses that can afford to pay more and those that are struggling,
Stronger banks poach senior staff from rivals
One of the biggest banker poaching exercises seen in Europe for years is under way as those banks that have survived the credit crisis better than their rivals hire senior talent., the FT reported. Since the September collapse of Lehman Brothers,
Tchenguiz pub group defaults on loan
Globe Pub Company, the struggling operator owned by Robert Tchenguiz, is facing an uncertain future after the company defaulted on a £257m asset-backed loan. The default comes after the company, which owns more than 400 pubs,
Investors braced for new wave of rights issues after HSBC success
Investors are braced for a wave of new capital raisings, following the completion of HSBC’s giant £12.5bn rights issue, the FT reported. The success of the offering, the biggest ever seen in the UK, frees underwriting capacity among banks and institutional investors,
SEC to consider proposals to restrict short selling
US securities regulators will consider about four proposals to restrict short selling, including the restoration of the “uptick rule,” SEC chief Mary Schapiro said on Monday. Other proposals on the table include a so-called “bid test”
Art prices fall 35% as collectors cash in
Art prices plunged during the first quarter of the year as cash-strapped collectors looked to unload works by postwar masters that had earlier boomed in price along with the stock market. The Mei Moses index,
Merkin ‘duped’ his investors, Cuomo claims
Andrew Cuomo, the New York attorney-general, on Monday filed civil fraud charges against the hedge fund manager Ezra Merkin, alleging he secretly channelled more than $2.4bn to Bernard Madoff’s Ponzi scheme in exchange for lucrative fees,
Overnight markets: Mostly negative
Asian equity markets were mixed Tuesday, largely in line with downward trend set by the US and Europe. Japan’s Nikkei nudged 0.3 per cent higher in late morning trading , but both financial and technology stocks in the index were under pressure.
Fixing the gilt market
The results of the Bank of England’s latest £2.5bn gilt asset purchase buyback on Monday confused us a bit at first. Here are the Reuters snaps:
- BANK OF ENGLAND SAYS GETS 3.65 COVER RATIO IN PURCHASE OF 2.5 BLN STG OF LONGER-DATED GILTS
- BOE SAYS BUYS 0 MLN STG OF 2020 4.75 PCT GILT
- BOE SAYS BUYS 2,050 MLN STG OF 2021 8.00 PCT GILT,
SEC accuses “Chinese Warren Buffet” of operating a Ponzi scheme
Another day, another alleged Ponzi scheme. This just out from the SEC:
Washington, D.C., April 6, 2009 – The Securities and Exchange Commission has obtained an asset freeze to halt a multi-million dollar Ponzi scheme and affinity fraud targeting members of the Chinese-American community,
A commodity anchor, or oil as money
Former director at London’s International Petroleum Exchange (and frequent contributor to FT Alphaville’s Long Room) Chris Cook has long been campaigning for a new monetary system that would link monetary units to energy.
Move over Meredith
…there’s another bank slayer in town, and his name is Mike Mayo.
The former Deutsche Bank analyst has re-launched his coverage of the sector at his new employer, CLSA, with a note titled the ‘Seven deadly sins of banking’.
Revealed: hedge fund and PE leverage, amongst other strictures
Managers of hedge funds and private equity will need to be registered, hold a minimum level of capital and provide regulators with information on both the size and source of their borrowings, according to a draft EU proposal obtained by Reuters.
Bear market not over – sell today
Perhaps Morgan Stanley have been listening to FT Alphaville’s Paul Murphy, because the bank has moved “underweight” of European equities. (Their new asset allocation is +5 per cent cash, neutral bonds and -5 per cent equities).
Meredith Whitney speaks on bank profitability
Does she even recognise the concept?
Bank-slayer Meredith Whitney has been speaking with Steve Forbes on the subject of the financial industry. Most of it is a recap but she does give her (fresh) opinion on the mysterious early 2009 profitability of US investment banks like Citigroup,
Tick, tick, tick…Switzerland
The Telegraph’s Ambrose Evans Pritchard is a little worried about Switzerland. Specifically about the prospect of imminent deflation. As he writes on Monday:
Watch Switzerland closely. It is tipping into deflation,
FDIC insurance, inspected
Remember the story that FDIC, which insures bank deposits in the US, could go bankrupt?
While it’s highly improbable that the agency, with its explicit support from the US government, would be allowed to go bust,
CDS report: Debt buybacks, FASB and viAIGra stimulate the banks
The cost of insuring European corporate debt against default eased again on Monday as sentiment towards banks improved after last week’s loosening of US mark-to-market accountancy rules. In morning trade the Markit iTraxx Europe index of investment grade companies fell 9 basis points to 157bp,
Lunch Wrap
On FT Alphaville Monday morning,
- The Fed’s asset-liability mismatch.
- IASB under pressure on M2M.
- Wall Street ‘fraud’ and pixelated rage.
- AffAer Lingus.
- Insider trading goes mainstream.
CEO compensation in America, datapoints du jour
From The Baseline Scenario, using data from an NYT article. Click to enlarge.
And before you start, here is the logged version. Ha!
Markets live transcript 6 Apr 2009
Markets live chat transcript for the chat ending at 12:14 on 6 Apr 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello there NH:Welcome!
Insider trading goes mainstream
… and has made it on to the front page of the Independent along with picture of a dealing desk from 1980s, which is presumably some sort of nod to Oliver Stone’s film Wall Street.
The reason for the Indy’s sudden interest in insider dealing is an interview with the FSA’s head of enforcement Margaret Cole,
AffAer Lingus
Aer Lingus CEO Dermot Mannion’s abrupt departure from the Irish airline on Monday morning has left many bewildered.
So far, all we have by way of explantion is this tidbit from the official statement:
Wall Street “fraud” and pixelated rage
PLEASE INVESTIGATE THE MASSIVE ENDLESS EXPLOITATION OF THE STOCK MARKET BY THOSE WHO SHOULD BE HONEST AND TRANSPARENT BANK OF AMERICA ARE EVIL CHEATING THE TAX PAYER AND ORDINARY INVESTORS AND OUR MAINSTREAM MEDIA ARE DOING NOTHING TO MAKE FINANCE HONEST THE GAMES WILL CONTINUE UNTIL THE MASSES REFUSE TO PLAY AND THE MESSAGE OF TRUTH TRIUMPHS…
IASB under pressure on M2M
In case you missed it on Saturday.
PRAGUE, April 3 (Reuters) – European Union finance ministers called on a global accounting standards setter on Friday to change one of its rules in line with a reform of its U.S.
The Fed’s asset-liability mismatch
Ben Bernanke’s Friday speech, on the Federal Reserve’s balance sheet, has got us thinking.
According to the latest Fed data, the central bank now has $2,080bn in assets. That’s more than double what it had in July last year.
Further reading
Elsewhere on Monday,
- Wiki credit ratings.
- My DNA made me invest.
- “Currently, 75% of the stocks in the S&P 500 are trading above their 50-day moving averages”.
- Make the bank creditors suffer.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
The fiscal hole that must be filled
The FT’s Clive Crook writes: Even before Mr Obama unveiled his ambitions for healthcare reform, wage subsidies to help the working poor,
Snap news
Breaking pre-market news on Monday,
- HSBC receives acceptances for 96.6 per cent of rights issue — statement.
- AstraZeneca gets Swedish approval to sell its OTC portfolio to GlaxoSmithKline — statement.