April, 2009
What can $250bn SDRs get you?
So the G20 has decided to pump an extra $250bn into the Special Drawing Rights (SDR) system of the IMF. The actual methodology of how this will be done is yet to be revealed (will quotas be reallocated? Will everyone simply get a fresh top-up equal to 10x their original? etc).
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Old world news values in the ‘New World Order’
It’s official, forget the world as we knew it. We are now living in a New World Order (NWO), according to Gordon Brown and his G20 pals.
But just to reassure you that the “old” world still exists,
Further reading
Elsewhere on Friday:
- The lessons of Weimar 1923
- The reverse Black Swan
- The financial crisis: An inside view
- Fund management? You’re — literally – better off tossing a coin
- Mark-to-messy
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: Summit success reflects a different global landscape
The US president has grasped that if America is to hold on to its pre-eminent role in the world it will be within a system in which others have a stake.
Snap news
Breaking pre-market news on Friday,
- RBS says more job cuts expected in UK and internationally – statement.
- Anglo American prices $2bn bond offering – statement.
- British Land sells Abbey headquarters – statement.
G20 hails ‘new world order’
G20 leaders on Thursday declared their summit a “fight back” against recession as global markets surged after they agreed to toughen financial regulation and channel more funds to the IMF. UK leader Gordon Brown,
Steps agreed by G20
The G20 summit on Thursday agreed to tighten limits on hedge funds and other financial companies, triple the IMF’s resources and give China and other developing economies more say in managing the global economy.
ECB rate-cut strengthens euro
The ECB cut interest rates on Thursday by a smaller than expected 25bp, triggering a 1.7% rise in the euro against the dollar. The cut, from 1.5% to 1.25%, took official eurozone borrowing costs to their lowest in decades.
Non-US banks miss US rule changes
Banks following international accounting rules will not get the break awarded to their US rivals, the International Accounting Standards Board said Thursday, after its US counterpart agreed to relax “fair value” accounting.
Bailed-out banks eye toxic assets
US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan, are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn public-private partnership plan to revive the financial system.
IBM, Sun, near deal at lower price
IBM and Sun Microsystems are in final stages of talks to combine the two computer giants but at a lower price than initially discussed, reports the WSJ. Under the proposal, IBM would pay $9.55 a share – or about $750m – for Sun,
TCI bows out of D Börse struggle
A key chapter in shareholder activism ended at Deutsche Börse when The Children’s Investment Fund sold most of its stake, ending its efforts to influence strategy at the German exchange group. The hedge fund followed Atticus Capital,
Wood Mackenzie seeks buyer
Wood Mackenzie has hired Goldman Sachs to sell the fast-growing energy research and consultancy group for at least £650m to gain a badly needed cash injection for Candover, its ailing private equity owner.
American Airlines in talks for Citi cash
American Airlines is in early talks to raise cash from Citigroup, its credit card partner, after recently securing a $100m loan from Germany’s DVB Bank. The talks, which centre on their co-branded credit card,
BoC’s French bank deal fails
Bank of China’s plan to buy a stake in a French private bank has collapsed after it tried to renegotiate the purchase price on Beijing’s orders. La Compagnie Financière Edmond de Rothschild refused to sell a 20% stake to the Chinese lender at a lower price than the €236m ($317m) agreed in September,
FSA wins key Winterflood case
The UK City watchdog has won a key case in its drive against market malpractice after an independent tribunal backed its belief that market abuse does not have to involve deliberate intent. Winterflood,
Canary Wharf offers debt buy-back
Canary Wharf Group, the London Docklands property developer, has offered to buy back £185m of its securitised debt from bond holders at discounts of up to 85% of face value to take advantage of prices being offered on illiquid corporate debt.
US charges UBS client
US federal prosecutors on Thursday brought the first criminal case against a wealthy US client of UBS after the Swiss bank’s recent admission it helped customers evade taxes. Steven Michael Rubinstein,
Overnight markets: Summit happy
Asian stocks jumped on Friday, sending the regional benchmark index toward its fourth-straight weekly advance, after G20 leaders agreed steps to fight the global recession and China said production expanded for the first time ini six months.
DJIA back over 8,000
For the first time since Feb. 10. If this is a suckers’ rally it has legs like a racehorse.
Related link:
FTSE back over 4,000 – FT Alphaville
M2M mystery at Morgan Stanley
Morgan Stanley is sitting out of this particular US bank rally. Why?
There’s no real specific MS news. However, if the banks really are rallying based on changes to mark-to-market accounting in the States (despite the fact that these have been widely expected for weeks — whatever happened to buy the rumour sell the fact?) then perhaps this has something to do with it.
Soros gets his way with the G20
The G20 communiqué is officially out.
Among the collective promises to persecute stamp-out tax havens, is this interesting little decision on IMF special drawing rights (SDRs):
19. We have agreed to support a general SDR allocation which will inject $250 billion into the world economy and increase global liquidity,
Don’t forget, inflation is our friend
Moderate inflation is and always has been our friend (hence the reason why government targets are 2%etc).
Accordingly, and perhaps unsurprisingly given current deflation fears, a little bit of inflation would be welcomed by any Western economy.
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Toxic Pub Co and the short sqeeze of death
Well, that’s what some brokers are calling it.
Of course, that chart does not do justice to the recent spike in Punch Taverns Toxic Pub Co.
But this one does.
Anyone who shorted Punch in the past couple of months will be nursing burnt fingers.
Welcome to the Museum of Natural Credit Crunch
Presenting a new display at New York’s Museum of American Finance.
Related links:
The credit crisis is already fodder for a museum – FoxBusiness
M2M (or FAS 157-e) change confirmed
From Reuters.
FASB AGREES OBJECTIVE OF MARK-TO-MARKET ACCOUNTING IS STILL WHAT WOULD BE RECEIVED IN AN ORDERLY TRANSACTION IN THE CURRENT INACTIVE MARKET.
FASB SAYS AN ‘ORDERLY’ TRANSACTION DOES NOT INCLUDE FORCED LIQUIDATION OR DISTRESSED SALE.