April, 2009
Snap news
Breaking pre-market news on Thursday,
- Credit Suisse reports revenues at CHF9.5bn (Q1 08: CHF2.9bn) – statement, FT story.
- Northern Rock sees debt owed to the government increase to £9.8bn (Dec 08:
UK’s Darling gambles on growth
UK chancellor Alistair Darling on Wednesday gambled on a rapid economic recovery and deep spending cuts to regain control of public finances ravaged by the global financial crisis. In an austere Budget that raised taxes on the rich and nearly halved planned spending growth,
UK raises tax for top earners
Britain’s Labour government on Wednesday unveiled plans to increase taxes on the rich and curb public spending as UK chancellor Alistair Darling confirmed a huge increase in borrowing to restore the public finances.
VW eyes move on Porsche
Volkswagen is considering an audacious bid for Porsche’s automotive business, a move that would up-end Porsche’s takeover of VW, which started three and a half years ago. VW’s management is weighing the option of buying Porsche AG,
Morgan Stanley slashes dividend
Morgan Stanley on Wednesday broke a run of positive Q1 results from US banks by announcing a larger-than-expected loss and slashing its dividend by 80% in an effort to conserve capital. The bank’s $578m Q1 loss,
BofA’s Lewis: US urged silence on Merrill
Fed chairman Ben Bernanke and then-Treasury secretary Hank Paulson pressured Bank of America to stay silent about its increasingly troubled plan to buy Merrill Lynch – a deal that later triggered a government bailout of BofA – according to testimony by Ken Lewis,
Wells net jumps on Wachovia buy
Wells Fargo’s net income jumped 52% in the first quarter due mainly to its acquisition last year of regional lender Wachovia and a rise in mortgage refinancings, reports the WSJ. Wells’ latest results were slightly higher than preliminary results issued two weeks ago,
Kirin in buy-out bid for Lion Nathan
Japanese brewer Kirin offered on Thursday to buy out Australia’s second-biggest brewer, Lion Nathan, in a deal that could be worth more than A$2.4bn ($1.7bn), reports Reuters. Lion Nathan said Kirin had made an approach for the 53.9% of shares it doesn’t already own.
Freddie Mac’s finance chief found dead
David Kellermann, acting chief financial officer of troubled US mortgage financier Freddie Mac, was found dead early on Wednesday in his suburban Virginia home after his wife reported an apparent suicide.
HK blocks Li’s PCCW buy-out
PCCW chairman Richard Li on Thursday abandoned his $2.1bn bid to buy out Hong Kong’s biggest phone company after the territory’s Court of Appeal blocked the deal, prompting the stock’s biggest decline in more than eight years,
GM plans debt-for-equity launch
General Motors said on Wednesday it was “working aggressively” to launch a debt-for-equity exchange ahead of a government-imposed June 1 deadline and that it might miss a $1bn debt payment due then.
NY bans placement agents
Amid a widening probe into possible kickbacks involving New York’s pension fund, Thomas DiNapoli, the state’s comptroller, announced Wednesday he was banning placement agents from involvement in the fund’s investments,
IMF slashes global growth outlook
The global economy will contract sharply this year and recover only sluggishly in 2010, the IMF said on Wednesday as it urged governments to sustain or even increase fiscal stimulus next year. World output will shrink by 1.3% this year and grow by just 1.9% in 2010,
Madoff trading firm draws bids
A bidding war has erupted for the remnants of Bernard Madoff’s trading operation, once one of the largest market makers on the Nasdaq exchange, reports the NYT. Irving Picard, the trustee liquidating Madoff’s assets,
Overnight markets: Mixed
Asian stocks fluctuated on Thursday, as finance companies dropped after Morgan Stanley reported a wider-than- forecast loss and automakers advanced. Futures on the S&P 500 lost 0.4% after the gauge erased a rally to finish down 0.8% in New York on Wednesday.
Central counterparties and CDS risk, a contrarian argument
Central clearing houses have been hailed by regulators as a potential saviour of the much-maligned market for credit default swaps – but a new research paper suggests this optimism might be misplaced.
CDS report: Budget, what budget?
This CDS report was written by Markit’s Gavan Nolan
From the media reaction in the UK, one could be forgiven for thinking that the annual government budget is an event of global proportions. While its effect on UK businesses and consumers is indeed important – especially this year – its impact on the rest of the world is relatively insignificant.
Sorry sir, your credit-card has been rejected due to insufficent lender’s funds
Meredith Whitney’s call on credit-card exposure being the next big impairment factor on financial balance sheets appears to be gaining traction by the day. Certainly, what started as a trickle of disappointing news flow risks becoming a steady stream both in the UK and in the US.
UK, the economic iconoclast
No surprise this, but Britain looks set to be locked out of the Euro club by official Maastricht criteria. From the FT:
Alistair Darling on Wednesday unveiled plans to tax the rich and rein in public spending as he confirmed a huge increase in borrowing to restore the public finances,
Hurry, special offer for Sibir investors
It’s BP-TNK and they are prepared to offer 430p for each share. (And no, that’s not a typo).
But don’t hang about as this once in a lifetime offer, which values the scandal- hit Russian oil explorer at a cool £1.6bn, ends on Thursday.
The travails of the financial guarantors
There’s been a slew of (mostly negative) ratings actions on the financial guaranty sector – the bond insurers, mortgage insurers and the like – recently. Here’s a recap.
Subsequent to a warning from FGIC’s auditor that there is substantial doubt over the bond insurer’s ability to “continue as a going concern,”
Confessions of a Tarp bride
All the perfumes of Arabia will not sweeten this little hand.
Forget the opera. Cancel dinner at Bouley. How life has changed since my CEO husband went on the government dole. I am a Tarp wife.
If you can stomach the whole thing,
Budget: Gilt market reaction
A bit of a mixed reaction in the UK government bond market to the budget.
Midday, as the chancellor’s budget speech began, gilt prices rose seemingly in unison, but gains were swiftly reversed barely half an our later.
HMT wakes up to smell the coffee
Time to reprise RBC’s chart of 2009 GDP estimates as published on FT Alphaville last Friday — the original and as well as an amended version to account for Chancellor Alistair Darling’s stunning reversal on the matter of UK growth in 2009 following his presentation of the Budget.
Banking credit catch-22 in action?
On Monday we wrote about Citi’s Q1 gains on credit value adjustments of its CDS.
We’re still not sure whether this is an actual CDS position against itself. Citi’s Q1 statement has the following:
- A net $2.5 billion positive CVA on derivative positions,
Are you a member of the ‘World’s Safest Banks’?
It’s definitely a sign of the times when advertising execs feel the need to include the following accolade in their bank marketing material:
… part of one of the “World’s Safest Banks”
Economist Paul Krugman notes the esteemed title in the following advert from Santander’s Sovereign Bank:
Morgan Stanley not in Q1 happy bank club
Shares down in pre-market after the firm reports a net loss.
But has the market realised the loss is largely due to improvements in the company’s credit spreads? Oh, and the bank also had a Goldman-esque ‘orphan month’.
Freddie CFO commits suicide
From WCBS:
NEW YORK (WCBS 880) — Farifax, VA police tell CBS TV affiliate WUSA in Washington DC the acting head of Freddie Mac, David Kellerman, has committed suicide.
Police responded to the Kellerman home after receiving a call from his wife.
The world’s 50 ‘safest’ banks
UBS? Wells Fargo? Really? From Global Finance Magazine (HT Capital Chronicle).
Full methodology here.