May, 2009
JPMorgan: SEC to act on Jefferson County
JPMorgan Chase said US SEC officials approved filing an enforcement action against it for securities law violations involving bond and swap sales for Jefferson County, Alabama, reports Bloomberg. Jefferson County faces bankruptcy on $3bn of floating-rate ‘sewer debt’ after interest rates surged when the credit ratings of insurers backing the bonds were cut.
Nasdaq profits plunge 22%
Nasdaq OMX Group on Thursday reported a 22% decline in Q1 profit as rivals continued to cut into its market share in US equity trading. The exchange group reported Q1 earnings of $94m, down from $121m in the same quarter last year.
Commodity prices fuel hedging
The sharp rise in commodity prices in recent weeks is prompting corporate consumers to hedge their exposure to raw materials and rebuild depleted inventories. As prices on Thursday rose to their highest in six months,
Overnight markets: Down
Asian stocks fell for the first time in five days on Friday, led by automakers and mining shares, on concern a two-month rally had made stocks expensive relative to earnings prospects. Futures on the S&P500 Index climbed 0.6% after the gauge fell 1.3% on Thursday from a four-month high,
“We face no problems that cannot be overcome with insight, patience, and persistence”
That’s Mr G.
Phew.
SCAP – the design and implementation.
SCAP – the outright liar bit.
The SCAP was a deliberately stringent test. It was designed to account for the highly uncertain
US stress test results
Yes, the results of the Supervisory Capital Assessment Program (SCAP) are finally out and you can find them here.
In the meantime here’s a quick summary:
10 of the 19 firms tested need to add $185bn to their capital buffers.
Napier: Higher yields do not mean normalisation
If you’re unconvinced by the current market rallies but don’t quite know why, the following John Authers interview with Russell Napier, bear market historian and author of ‘Anatomy of the Bear’ is definitely worth some of your time.
US net foreign debt headed towards 100% of GDP
Moving back into the realm of scary figures, a new report by Peterson Institute director Fred Bergsten predicts US net foreign debt could be headed towards $50,000bn or beyond and as much as 100 per cent of GDP as soon as 2030.
Inventory correction has further to go, say Standard Chartered
If you remember, US Q1 GDP figures released late last month revealed some unexpectedly large inventory reductions in the quarter. These were taken by some to suggest the bulk of destocking in the US was over and done with.
RTRS-THOMSON REUTERS PLC SAYS EPS $0.40
Get this. A solid set of Q1 figures from Thomson Reuters, released on Thursday early afternoon London time, pushed the shares convincingly above £19.
The stock is now higher than Reuters (pre-merger) traded at the height of the greatest financial markets boom in history – a couple of years back,
Bill Miller says buy banks
Fallen star Bill Miller, of Legg Mason, is back — with stock tips. Via Bloomberg:
“Financials have the biggest potential to outperform” other stocks because of how far they’ve fallen in the worst bear market since the Great Depression,
Unconventional conventions at the ECB
While the ECB’s rate-cut announcement at 12:45 BST didn’t contain any surprises (a 25bp cut to the core refi rate), comments being made at a 1:30 BST press conference by Jean-Claude Trichet do:
13:39:51 DI !! *DJ Trichet:
Erstwhile Samfundets Støtter
CMA reports on Thursday that Norway has been overtaken by Germany as the safest country in terms of sovereign CDS. Here’s the data, as it stands now:
The ‘QE’ stockmarket effect
On paper, the Fed and Bank of England initiated quantitative easing policies to try and keep long-term yields down and to boost the level of aggregate banking sector reserves so as to encourage bank lending.
CDS report: “Mr Geithner has said the world will be fine”
The cost of insuring against the possibility of default on Japanese bonds fell dramatically on Thursday, as the market reopened after a three-day holiday to greet a wave of positive sentiment. Tightening in the CDS market was accompanied by sharp gains amongst Japanese equities amid optimism that the country’s economy was beginning to shake off the worst of the global recession.
Lunch Wrap
On FT Alphaville on Thursday morning,
- BoE expands QE.
- An impaired Lloyds.
- The ongoing structured finance mess at Barclays.
- The really sinister pandemic: Mad Manager Disease.
- Financial figures through Google goggles.
BoE expands QE
Bank of England Maintains Bank Rate at 0.5% and Increases Size of Asset Purchase Programme by £50 Billion to £125 Billion
Statement in full here.
The Committee also agreed to continue with its programme of purchases of government and corporate debt financed by the issuance of central bank reserves and to increase its size by £50 billion to a total of £125 billion.
Market awash with oil, but prices still going up
WTI crude futures continue to pound higher on Thursday despite all fundamental logic. At the last look the contract was trading at $57.91 per barrel compared with a close of $56.34 on Wednesday.
JBC Energy sums up the odd state of affairs well (our emphasis):
Quote du jour: fears of competitive devaluation
A policy mistake made by some major central bank may bring inflation risks to the whole world. As more and more economies are adopting unconventional monetary policies, such as quantitative easing, major currencies’ devaluation risks may rise.
Markets live transcript 7 May 2009
Markets live chat transcript for the chat ending at 12:13 on 7 May 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hi there PM:Welcome to Bull Market Live
After KKR and Kirin, deals hot up in Asia-Pacific
Private equity may be at least staggering – if not roaring – back to life in the Asia-Pacific region after Thursday’s news that KKR is buying AB InBev’s South Korean Oriental Brewery for $1.8bn.
The deal,
No asset protection for Lloyds
Surely this can’t be right, the share price of a UK bank going down?
Well it is and the reason is not hard to find – in Thursday’s surprise first quarter trading statement Lloyds reveals that corporate impairments in 2009 are going 50 per cent higher than in 2008.
Rash of optimism breaks out in eurozone
What’s this? Two major investment banks changing their economic forecasts for the eurozone hours away from the ECB’s landmark interest rate meeting?
JP Morgan and Merrill Lynch have both revised their expectations for eurozone GDP this year,
It’s SCAP Day
Save the time: Thursday May 7, 2009 at 5pm EDT.
Treasury secretary Tim Geithner, Fed chairman Ben Bernanke, FDIC chair Sheila Bair and Comptroller of the Currency John Dugan have all come together to provide us with a handy little explainer for the SCAP – the Supervisory Capital Assessment Program,
Financial figures through Google goggles
Guido Fawkes has alerted us to the fun to be had with the new predictive function on Google searches.
While most of them reveal a worrying anti-semitic streak (even in the case of Allen Stanford, who by all accounts is a rather fervent Christian) and an obsession with public figures’ wives,
The really sinister pandemic: Mad Manager Disease
More contagious than swine flu, more deadly than Ebola – the Slow Leadership blog draws our attention to a sinister virus that has been circling the world for a number of years and has brought various economies to their knees:
An impaired Lloyds
Well, Lloyds’ first-quarter trading update was never going to be spectacular. The bank, unlike its competitors, is widely expected to report negative earnings this year. In a surprise statement issued today,
Further reading
Elsewhere on Thursday,
- Of fingers and dykes.
- So is everyone confused, yet?
- Bank shareholders: It ain’t over til it’s over.
- Banks and Orwell.
- Did the recession just end?
- A modest proposal:
Further reading
Elsewhere on Thursday,
- Of fingers and dykes.
- Is everyone confused (and stressed) yet?
- Bank shareholders: It ain’t over til it’s over.
- Banks and Orwell.
- Did the recession just end?
- A modest proposal: