May, 2009
US unveils OTC derivatives rules
The Obama administration on Wednesday unveiled a sweeping plan to regulate OTC derivatives in a move to increase transparency and reduce risk in a largely unregulated market worth more than $680,000bn.
Brussels fines Intel record $1.4bn
Intel, the world’s largest chipmaker, has been fined a record €1.06bn ($1.44bn) by Europe’s competition authorities for abusing its dominant market position and using illegal sales practices to encourage computer manufacturers to carry its micro-processor chips.
MUFG may ‘back out’ of Citi unit buy
Mitsubishi UFJ Group may back out of an agreement to buy a Citigroup banking unit after failing to purchase other Japanese assets from the US bank, reports Bloomberg. MUFJ Trust & Banking Corp, a unit of Japan’s biggest lender,
Clearer wants a deal with bidders
LCH.Clearnet, Europe’s biggest independent clearing house, plans to respond to a €830m (£748m) bid from a consortium of 11 banks and Icap, the inter-broker dealer, by proposing joint discussions aimed at combining elements of the bid with the clearer’s own proposal for a new structure.
Freddie Mac to draw further $6.1bn
Freddie Mac said on Tuesday it would draw $6.1bn of capital from the US Treasury after a $9.9bn Q1 loss drove its net worth below zero. The government-run mortgage lender said it expected further losses in coming quarters,
Belgium considers KBC bail-out
The Belgian cabinet on Wednesday met to consider extending further guarantees to KBC amid talk of more writedowns on the bank’s CDO portfolio. By contrast, the bail-out of Dexia, the Franco-Belgian bank,
CCB share deals soar after BofA stake sale
The volume of share dealing in China Construction Bank soared on Wednesday, fuelling speculation that some buyers of Bank of America’s $7.3bn sell-down had flipped their holdings to pocket huge gains.
Amex sells $3bn of debt
American Express sold $3bn of debt on Wednesday without a federal guarantee to help the credit card issuer repay government bailout funds. AmEx joins a string of banks, including JPMorgan and Goldman Sachs,
US banks swamped by ‘refi’ fever
The rush of US homeowners to refinance mortgages at lower rates is creating a boom in the home lending business, prompting banks including Bank of America and Wells Fargo to hire thousands of new employees for extra shifts to process mountains of paper.
LandSecs: No UK property rebound
Land Securities, the UK’s largest property company, has warned that hopes for a recovery in the battered real estate sector are premature after it revealed a record £4.7bn fall in the value of its estate.
AIB shareholders vent anger
The chief executive of Allied Irish Banks narrowly missed being hit by eggs thrown by an angry investor at Wednesday’s shareholders’ meeting to approve a €3.5bn (£3.2bn) recapitalisation by the Dublin government.
Candover chief says sorry for decline
Gerry Grimstone, chairman of Candover, admitted that the UK private equity group’s structure was “unsatisfactory” as he faced shareholder criticism for mistakes that forced it to be put up for sale after suffering a liquidity crisis.
ING posts third consecutive loss
ING, the Dutch banking and insurance group, reported its third consecutive quarterly loss on Wednesday, hit by unexpected insurance losses and rising loan loss provisions in banking. The €793m ($1.1bn) quarterly net loss,
Icap launches iron ore derivatives service
Icap, the UK-based inter-dealer broker, on Wednesday announced the launch of a new brokerage service for iron ore derivatives, a further sign of the shift from traditional annual price negotiations to spot pricing.
Overnight markets: Down
Asian stocks fell on Thursday as an unexpected drop in US retail sales and a decline in commodity prices dimmed the earnings outlook for electronics and metals producers. In New York the S&P500 Index slid 2.7% as figures showed a 0.4% decline in retail sales in April against estimates the number would be unchanged.
US Treasury proposes new regulatory framework for derivatives
The US Treasury on Wednesday proposed a sweeping new framework within which to regulate over-the-counter derivatives, including those notorious credit default swaps.
Reuters reports (emphasis FT Alphaville’s):
Annals of historical credit crunch comparisons, medieval edition
The current crisis has been compared to many a historical slump, including the 80s housing crash, the 90s Savings & Loan crisis, the panic of 1907 and of course, the Great Depression.
But this is the first time we’ve seen the crisis compared with ‘ye olde credit crunch of 1294′.
CDS update: Sovereign CDS hurt by weak data
This CDS report was written by Markit’s Gavan Nolan
Credit and equity were back in tandem today, with both markets reacting negatively to weak economic data. In Europe, the Bank of England’s quarterly inflation report weighed on the market.
Obamanomics: bailout conservatism v fiscal splurge
Fox Business reports:
The municipal bond market is in trouble, and Congress wants to grant it a federal guarantee.
Yes, yet another contingent liability foisted upon the US taxpayer.
The House Financial Services Committee is scheduled to consider a series of bills that would provide massive government backing and intervention to the municipal bond market.
Estonia, nul points
Sovereign European states have always been and always will be notoriously competitive. Unsurprisingly, this can in some cases lead to some pretty silly things, among them the yearly embarrass-athon that is the Eurovision song contest.
Is the dash for trash over?
One could certainly be forgiven for thinking so, given Wednesday’s price action and comments from leading strategists. Both Credit Suisse and UBS have been advising clients to be more “defensive”, while Goldman Sachs reckons the short squeeze is over.
How news happens – Rio edition
We haven’t seen too many examples of this of late – the faceless (probably British, definitely long-only) institutional fund manager applying very public pressure on a major listed company board. Consider this report regarding Rio Tinto from Reuters:
[The Stanford Series] The DEA connection
On Monday, the BBC’s Panorama claimed that it had strong evidence to back up the long-speculated-about notion that Sir Allen Stanford was a US government informer:
Panorama is aware of strong evidence that Sir Allen was a confidential agent of the DEA as far back as 1999 – the year he made out the $3.1m cheque to the DEA.
Annals of improbable research, babyfaced black CEOs edition
Presented without comment (via AP):
Black Fortune 500 CEOs with a “babyface” appearance are more likely to lead companies with higher revenues and prestige than black CEOs who look more mature, an upcoming study says.
CDS report: Mixed blessings
The appetite for risk in Japan rose sharply on Wednesday, as the market responded positively to a growing optimism on Tokyo stocks. The cost of protecting against default on Japanese corporate bonds fell to a six-month low.
Stressed out by the recession? Have a curry
Okay, we’re not quite sure if curry is a Giffen good — we certainly can’t find any historical price data to support the theory (despite “ethnic takeaways” being included in the Office of National Statistics’ CPI basket).
US housing market remains under stress, data show
Recent data releases present a mixed picture of the US housing market, with RealtyTrac reporting foreclosures crept back up to record levels nationwide in April, although they declined in hard-hit states like California and Nevada.
That mysterious BofA/CCB stake sale
The market rumour-mill was working overtime in Asia late on Wednesday about big business in shares in China Construction Bank. The chatter followed Tuesday’s news of Bank of America’s $7.3bn disposal of more than a third of its stake in CCB to a small group of investors led by buyout firm Hopu Investment Management,