April, 2009
CDS report: Pigs might fly
Credit derivatives markets were slightly wider Monday morning, with the potential spread of swine flu dominating headlines. But the flu is one of many potential pieces of negative news this week, including the results of the bank stress tests and GM’s restructuring,
Lunch Wrap
On FT Alphaville Monday morning,
- Swine flu in market pictures.
- An FT Alphaville swine flu briefing.
- Swine flu does not affect livestock.
- Effects of QE so far, in pictures, from the BoE.
Nothing is as dangerous as a Thain scorned
My, my, it’s like kiddies pinching and punching each other in a sandbox, only – yes folks, we’re talking about some of America’s current and former top bankers and finance officials.
First we had Bank of America’s Ken Lewis revealing that he was bullied and threatened by the then-US Treasury secretary into proceeding with the troubled deal for BofA to acquire Merrill Lynch.
Evil short-selling monsters revealed
… in this video, from Locatestock, which helps people find shares to short.
Watch as the evil short-sellers, part of Locatestock’s “High Five” programme, clap with glee, shrieking “I love a good profit”
Markets live transcript 27 Apr 2009
Markets live chat transcript for the chat ending at 12:07 on 27 Apr 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) Sir Richard Branson (RB) PM:Welcome
QE in pics
We are long-standing fans of the Bank of England’s graphics department, so we should welcome the first of a new quarterly publication: the Asset Purchase Facility, Q1 2009. Thankfully, the illustrations are up to the usual high standard,
Accounting stress
It’s worth noting, as the FT has done this Monday morning, this bit from the Fed’s Friday release of its banking stress test methodology:New FASB guidance on fair value measurements and impairments was issued on April 9,
Calm down, people – swine flu does not affect livestock
Dennis Gartman of the Gartman Letter notes on Monday morning the degree to which swine flu ‘news-telling’ itself has become something of a pandemic.
Unsurprisingly, he notes, commodity prices have been affected.
Gambling on Monte Carlo simulations
A mathematical model developed by physicists working on the atomic bomb in the 1940s and named after a gambling hub, is probably a fitting one for the US government to adopt in its banking stress tests.
The 6am Cut — a free news-by-email service from FT Alphaville
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Swine fever panic – in pictures
The airline stocks.
A tour operator – Thomas Cook.
An animal breeding company – Genus.
A sausage maker – Cranswick.
But there are some winners, such as Roche and GlaxosmithKline.
Swine flu — more than you ever wanted to know
If you went home on Friday thinking swine flu was the piggie equivalent of a bad cold, you may be as surprised as we were at the speed with which the next big pandemic scare rolled out at the weekend.
As the FT reports on Monday,
Further reading
Elsewhere on Monday,
- The battle between fear and fear.
- How necessities become luxuries.
- Oil shocks and recessions.
- The upside of swine flu, for one Aussie biotech company.
- Too-big-to-fail and three other narratives.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Münchau: Eurozone banking needs a co-ordinated strategy
The most shocking news from last week’s excellent Global Financial Stability Report from the International Monetary Fund was not the headline estimate of total bad assets,
Snap news
Breaking pre-market news on Monday,
- Aviva worldwide sales up 5 per cent in quarter — statement.
- UBS names Alex Wilmot-Sitwell and Carsten Kengeter as co-CEOs for investment bank — statement.
Chrysler, UAW agree deal
The United Automobile Workers union said Sunday it had reached an agreement with Chrysler that meets the US government’s criteria for the automaker to receive more financing, reports the NYT. The deal also brings Chrysler closer to prospects of an alliance with Italy’s Fiat ahead of Friday’s deadline.
Kirin acquires Lion Nathan for $2.4bn
Kirin, the Japanese brewer, will pay A$3.3bn ($2.4bn) to buy the 53.9% of Lion Nathan it does not already own in a deal valuing Australia’s second largest brewing group at A$6.5bn. The Japanese group said Monday it will pay A$11.50 a share plus interim and full-year distributions worth A$0.72 lifting the total pay-out to A$12.22.
AIG’s aircraft unit draws bids
International Lease Finance Corp has drawn closer to separating from AIG, its troubled parent, with three groups submitting bids to acquire the aircraft lessor for less than $5bn. The groups include a consortium led by Thomas H.
3i in plans for rights issue
The board of 3i will meet on Monday to discuss plans for the UK’s oldest private equity group to raise £500m-£700m from a rights issue as Michael Queen, its new chief executive, steps up his debt-reduction efforts.
Allianz, Amex to cash in ICBC stakes
Two more foreign investors in Chinese banks are expected to cash in lucrative stakes and raise in excess of $2bn this week as lock-in periods end for their holdings in Industrial and Commercial Bank of China.
Dissidents move against Fortis sale
Dissident Fortis shareholders are continuing their efforts to derail the sale of Belgium’s Fortis Bank to BNP Paribas, ahead of Tuesday’s general assembly that is expected to approve the deal after months of uncertainty.
Branson eyes Northern Rock
Sir Richard Branson’s Virgin Money has revived its interest in possibly buying parts of Northern Rock, the mortgage lender it tried to buy last year before the government nationalised it. Alistair Darling,
Warning on UK derivatives backlash
London’s status as a financial centre risks damage if policymakers regulate OTC – or privately negotiated – derivatives without distinguishing between products that contributed to the financial crisis and those that did not,
Bloomberg plans expansion
Bloomberg is planning a sustained investment in its technology and news operations, arguing it can gain market share even as financial turmoil poses the biggest threat to its data terminal business in its 27-year history.
IMF warns on national deficits
Budget deficits across the industrialised world will remain sky-high next year despite reduced spending on fiscal stimulus packages, the IMF warned on Sunday. It said the G20 economies taken together would run a budget deficit of 6.5% next year compared with 6.6% in 2009 – due more to weakness in their economies than to discretionary spending on stimulus packages,
Johansonn set to leave UBS
UBS, the troubled Swiss bank, is on Monday expected to announce the departure of Jerker Johansson, global head of its investment bank. Johansson, who joined UBS just over a year ago after 22 years at Morgan Stanley,
Swine flu triggers global alerts
Governments and health authorities worldwide are on alert for a possible influenza pandemic as the death toll from a new strain of swine flu in Mexico reached 81, reports the FT. Bloomberg adds that new illnesses also were confirmed in Canada on Sunday,
Weekend catch-up
In case you missed these stories:
- Swiss ask US to drop UBS case
Swiss President Hans-Rudolf Merz asked US Treasury Secretary Tim Geithner on Saturday to drop a legal case involving clients of UBS bank in return for a new tax accord between the two countries.
Overnight markets: (Mostly) up
Asian stocks reached their highest level in more than three months on Monday, led by finance companies and drugmakers. Futures on the S&P500 Index dropped 1.4% after the gauge gained 1.7% on Friday,
The Weekender
On FT Alphaville this week,
- A shameless appeal to readers
- Equities still in a bubble.
- The UK’s triple A rating.
- Sayonara HSBC.
- Strange action in Sterling.
- UK Budget review.