May, 2009
Overnight markets: Stronger
Asian stocks rose on Tuesday as higher confidence among US homebuilders, a surge in oil prices and a drop in bank borrowing costs stoked optimism the global economy is recovering. Futures on the S&P500 Index were little changed after the gauge climbed 3% on Monday – the most in two weeks.
Annals of totally unsurprising defaults, RH Donnelly edition
RH Donnelley publishes telephone directories, which is possibly the only form of print media more distressed than newspapers (and this even despite the relative absence of echo-chamber commentary on the matter of its steady and inevitable demise).
Bible code, finance edition
A financial lesson brought to us from way, way, back many centuries ago courtesy of HSBC’s chief economist Stephen King:
In the Bible, you can find everything you need to know about government borrowing.
Another blow for the SEC
The SEC has not had a good year. This month alone, the regulator has had to contend with sharp criticisms of its operations under the chairmanship of Christopher Cox and a probe of two of employees accused of insider trading.
Blank verse
Lombard lit, from Andrew Hill…
Victor Blank, Victor Blank,
Lumbered Lloyds with a deal that stank.
Sold his soul for a mortgage bank.
Poor old Victor Blank.
Victor Blank, Victor Blank,
Thought other banks he could outflank,
The pain in Spain will be felt mostly by the banks
Lisa Hintz of Moody’s Capital Markets Research Group, who last month warned on German banks, is a touch concerned about the strength and stability of the Spanish banking system.
In her most recent note,
Hedgie-lit
Normally we don’t look twice at press releases that land in the FT Alphaville inbox when they begin thusly:
Dear {NAME}
But we couldn’t not be intrigued by this one.
Finbar Taggit, city blogger (Finbar.com),
Debts, defaults and UK commercial property
On Monday evening, De Montfort University will publish its annual, and influential, Commercial Property Lending Report. But thanks to the FT’s property correspondent, Dan Thomas, FT Alphaville has had a sneak preview of the survey,
Top Trumps
Somebody call the FASB. This man has a lot to teach them.
… the Donald, as he’s known to fans and detractors alike, has provided under oath the secrets to how he values his wealth and treasure. In one case,
CDS report: Porsche races wider
Having fallen steadily last week, the appetite for risk in Europe wobbled on Monday as a raft of investment-grade companies sought to raise money in the bond market.
Non-financial investment-grade companies have already raised €153bn this year,
Lunch Wrap
On FT Alphaville on Monday morning,
- Credit levelling, Japan edition.
- Iraq not happy about floating inventories.
- Drowning? No, just Elliot Waving.
- The sun never sets on the RAB Capital business empire…
- How not to do earnings guidance.
Markets live transcript 18 May 2009
Markets live chat transcript for the chat ending at 12:06 on 18 May 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH)
PM:
Welcome
NH:
to all new Markets Live
Gasoline in severe backwardation
Here’s the front end of the forward curve for both Nymex gasoline and heating oil futures.
As can be seen gasoline is now severely backwardated at the front-end of the curve, while heating oil futures (aka distillate) are still firmly holding on to contango.
How not do to do earnings guidance
It’s a tricky business forecasting profits and things like this don’t help.
A couple of months ago, New World Resources, one of those eastern European mining companies that floated in London over the past couple of years,
The sun never sets on the RAB Capital business empire…
One for the unusual, labyrinthine investment files.
Two years after they co-founded Land and Sea Development Ethiopia Ltd in Washington DC., the three partners – Michael Kassa Gebru, Jay Nijjer and Dr.
Drowning? No, just Elliott Waving
Curious timing for a man who’s been calling Armageddon for as long as anyone can remember.
Robert Prechter, chief executive of research house Elliott Wave International , chose this weekend to issue dire warnings to the wire agencies of pending financial catastrophe.
Quote du jour, Iraq on floating inventories edition
Via Bloomberg:
“We don’t think it’s a wise economic decision” to produce oil from secure underground fields then pay to store it in floating tankers, Iraqi Oil Minister Hussain al-Shahristani said yesterday in an interview at the Dead Sea in Jordan at the World Economic Forum.
Credit levelling, Japan edition
For some time now, Japan has been in something of an anomalous position with regard to its sovereign credit ratings.
Once upon a time Japan was a safe-as-houses triple A issuer: the bank of Japan had a deserved reputation for fiscal rectitude and of course,
Further reading
Elsewhere on Monday,
- Slovakia raises important questions about the rigid application of the Maastricht criteria.
- S&P 500 earnings are on a downward spiral.
- WolframAlpha just raised the bar.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Münchau: Germany needs more than an accounting trick
After the US, the country with the biggest banking problem is probably Germany.
Snap news
Breaking pre-market news on Monday,
- Moody’s unifies Japan’s government ratings at Aa2 – statement.
- Independent News and Media enters financial stanstill with principal banks, secures €15m working capital – statement.
Lloyds chairman Blank will step down
Sir Victor Blank will step down as chairman of Lloyds Banking Group by the bank’s annual meeting in 2010, in an effort to appease shareholder anger over the bank’s takeover of HBOS, the FT said. Lord Leitch,
Investors face halving of M&S dividend
Investors are bracing for Marks and Spencer to cut its dividend this week, with some analysts expecting the retailer to reduce its full-year pay-out by as much as half, the FT reported. Morgan Stanley,
VW suspends talks with Porsche amid feuding
Volkswagen suspended merger negotiations with Porsche on Sunday in another twist in the power struggle between Europe’s largest carmaker and the debt-ridden sports carmaker that is its biggest shareholder,
Smaller US banks need additional $24bn
Small and medium-sized US banks must raise some $24bn to meet the capital standards set by the government in its stress tests of large institutions, research conducted for the Financial Times by Sandler O’Neill shows.
ONS gets sums wrong on retail sales
One of Britain’s most closely watched economic indicators has heavily overstated the quantity of high street sales over the past two years, the Office for National Statistics admitted on Friday. Britain’s supplier of official statistics conceded that since the financial crisis began in August 2007,
Executives drop out after FSA scrutiny
Several executives lined up for senior positions at British financial institutions have withdrawn after the Financial Services Authority questioned their competence for the job, the FT said. The news is further evidence of the City regulator’s increasingly hands-on approach in vetting executives and directors of large banks following the near-collapse of several large lenders.
Insurance reform hurts UK banks
A crackdown on a controversial form of insurance is costing some banks and insurers hundreds of millions of pounds this year, adding to the pressure on the financial services industry. Lloyds Banking Group,
ECB move aims to revive market for asset backed securities
The European Central Bank is pushing for an increase in the amount of information that has to be disclosed about asset-backed securities as part of efforts to revive a market that has collapsed since the start of the credit crisis in August 2007,
Waste outshines gold as prices surge
It has become the latest – and perhaps most unlikely – sector to nourish the green shoots of economic recovery: the price of recyclable rubbish has doubled since November, outperforming traditional commodities,