April, 2009
CDS wrap: A postive end for a volatile week
This CDS report was written by Markit’s Gavan Nolan
A typically volatile week in the credit markets ended positively, though UK investors could be forgiven if they struggled to share in the optimism.
Reserves “substantially reduced” at largest US banks, Fed says
Extracts from the Fed white paper on “The Supervisory Capital Assessment Program” regarding the largest 19 banks in the US (hereafter, the stress test):
Losses associated with the deepening recession
Statement: Fed Releases More Stress Test Methodology Details
Any emphasis ours.
Washington, Apr 24 2009 April 24 – The Federal Reserve today released more details about the methodology financial regulators used to run “stress tests” on 19 major bank holding companies to see how they would hold up under varying economic circumstances over the next two years.
Maiden losses for Fed
The Federal Reserve released its 2008 annual financial statements on Thursday. As broadly noted, and highlighted by the Fed itself, the statements revealed new information about the balance sheets and P&Ls of the consolidated special vehicles created to take on the distressed assets of Bear Stearns and AIG – known as the Maiden Lane LLCs.
Lessons in personal finance, Citi style
Dealscape beat us to the punch on this announcement from Citi that some of its bankers “took a break” on Friday to teach students in New York about personal finance and saving money, all in honour of Teach Children to Save Day.
Britain’s shrinking private sector
Quite shocking really – or a cause for celebration, depending on your political bent. But pretty soon now, maybe in a year or so on current trajectories, the public sector will overtake the private sector in terms of economic output in Britain.
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DIY stress test
While the actual results of the US bank stress tests won’t be released until May 4, today we are getting something almost as interesting – the methodology.
The 30-page report will reportedly be released at 2pm New York time/7pm in London.
“Extraordinary” flows into emerging market funds
Funds dedicated to emerging markets posted $2.2bn in inflows during the week ending April 22, the strongest streak for the asset class since May 2008, Merrill Lynch’s Michael Hartnett said in a note released on Friday.
Alors! Je voudrais un Sterling
Here’s an intraday graph for cable, which earlier today was looking a little bit err, wan, to say the least:
Something clearly happened at around noon.We’re thinking… French tourists?
14:06 RTRS- STERLING REBOUND SAID TO BE ON CENTRAL BANK BUYING – TRADERS
So anyway,
FDIC, the ‘F’ stands for…
Well, it’s not ‘funding’, anyway.
While the financial problems facing the Federal Deposit Insurance Corporation (FDIC) have been apparent for some time, this chart is still striking.
That’s the Deposit Insurance Fund Reserve ratio released on Wednesday in FDIC’s Q4 2008 banking profile.
Total production nightmare, or is it?
Yes, we know. The UK Q1 GDP figures are horrible. But for a truly frighteningly experience we thought we would direct you specifically to the two following components: annual change in total production output,
CDS report: European credit derivatives tighten
European credit derivatives prices tightened on Friday as they took their cue from firm equity markets.
Markit’s iTraxx Europe index, which is comprised of 125 European investment grade names, tightened to 152 basis points – 1bp tighter than the Thursday close.
Lunch Wrap
On FT Alphaville Friday morning,
- A short guide to the UK’s triple A rating.
- Equities still “a bubble waiting to be pricked”.
- Sayonara HSBC.
- Unrealistic GDP forecasts, UK edition.
- At least you’re not Spanish.
Markets live transcript 24 Apr 2009
Markets live chat transcript for the chat ending at 12:08 on 24 Apr 2009. Participants in this chat were: Paul Murphy, FT (PM) Bryce Elder (BE) PM:Hi there PM:Apols — little late this morning
Daily Mail – junk
Not our opinion, naturally.
LONDON (Standard & Poor’s) April 23, 2009–Standard & Poor’s Ratings Services said today that it lowered to ‘BB+’ from ‘BBB-’ its long-term corporate credit rating on U.K.-based newspaper and media group Daily Mail & General Trust PLC (DMGT).
Russian rally rumbled
Russian stocks have been staging a recovery of late alongside other global equity markets. But on Friday, the Russian rouble-denominated Micex index fell 1.1 per cent, sending the index towards its first weekly decline in two months.
At least you’re not Spanish
A brave headline, admittedly, in light of Lex/PIGS-gate.
Justified we feel though:
MADRID, April 24 (Reuters) – Spanish unemployment soared to 4 million in the first quarter, almost doubling in a year as the recession destroys jobs more quickly than anywhere else in Europe,
Annals of unrealistic GDP forecasts, UK edition
UK Q1 GDP is out, and as feared has come in much worse than consensus expectations. Here’s the table from Reuters:
Here’s the joyfully long-list of records that reading achieves:
* Biggest quarterly
Sayonara HSBC: Tokyo’s latest ‘hollowing-out’ story
Bloomberg has the latest “hollowing-out” headline out of Tokyo: HSBC will close equity research, trading in Japan.
Europe’s biggest bank will shut its stock-research and trading businesses in Japan,
Equities still a bubble and equity guys out of this world, BNP Paribas says
Yes, really. In a note issued late on Thursday, the credit analysts at BNP Paribas argued that “despite a close to 5o per cent drop in equity valuations, equities look not only rich but are significantly mispriced and are a bubble waiting to be pricked.”
Further reading
Elsewhere on Friday,
- Washington’s irreversible errors.
- Five dumbest things on Wall Street.
- How old is your fund manager? (HT Abnormal Returns.)
- Playing smoke’n'mirrors with warrants.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Martin Wolf: Is the UK once again the economic sick man?
Is the UK once again the economic sick man? Or is it, as Alistair Darling, chancellor of the exchequer,
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Snap news
Breaking pre-market news on Friday,
- ACEA: European March new commercial vehicle registrations down 32.9 per cent – statement.
- Nomura holdings posts Y217.1bn Q4 loss – statement.
- Corporate:
Storm erupts over BofA’s Merrill deal
The circumstances surrounding Bank of America’s controversial takeover of Merrill Lynch on Thursday sparked an unprecedented public dispute involving the bank’s embattled CEO, Ken Lewis, and top officials past and present.
First test for US toxic asset plan
The Obama administration will on Friday get the first indication of investor interest in its $1,000bn toxic assets plan amid fears that the threat of government intervention and banks’ reluctance to sell will deter fund managers from participating.
Fiat pursues GM Europe stake
Fiat on Thursday signalled its interest in taking a stake in GM’s European business as it rushes to agree an alliance with GM’s rival, Chrysler. The Italian carmaker is among up to seven contenders for a stake in GM Europe,
Microsoft sees first fall in revenue
Microsoft’s revenues fell for the first time in its 34-year history in the first quarter of this year, bringing an end to one of the most dramatic uninterrupted growth stories in modern business, according to figures issued Thursday.