May, 2009
Snap news
Breaking pre-market news on Thursday,
- Ahold Q1 net profit down 25 per cent on higher taxes and provisions – statement.
- Corporate: Wolseley, United Utilities, Man Group, Brewin Dolphin, Paypoint,
Samberg to close fund amid probe
Arthur Samberg, one of the world’s best known hedge fund managers, is closing down his hedge fund, Pequot Capital Management, saying public disclosures of the reopening of a government probe into allegations of insider trading made its continued operation “untenable”.
Citi, SEC, in talks to settle probe
Citigroup is in the early stages of negotiating with the SEC to settle an investigation into whether it misled investors by not properly disclosing the amount of troubled mortgage assets it held as the market began to implode in 2007,
JPMorgan warns on credit card woes
Jamie Dimon, JPMorgan Chase chief executive, warned on Wednesday that loss rates on the credit card loans of Washington Mutual, the troubled bank it acquired last year, could climb to 24% by the year end.
BofA nears capital-raising target
Bank of America has struck agreements with several non-government owners of its preferred stock and raised approximately $5.9bn by converting their holdings into common shares, the bank announced on Wednesday.
Rising Treasury yields threaten recovery
US Treasury yields rose to their highest level in six months and stocks fell on Wednesday, fuelling concern that rising mortgage rates could damp a nascent US economic recovery. The yield on the benchmark 10-year Treasury note rose 24bp to 3.74%,
Sale of RBS Asian assets to ‘drag on’
The sale of Royal Bank of Scotland’s Asian assets is likely to drag on through the summer after failing to attract enough bids amid uncertainty surrounding the divestment. Potential bidders had until last weekend to table non-binding offers,
GM fails to agree $27bn debt deal
General Motors moved closer to bankruptcy on Wednesday as bondholders failed to agree to a debt-for-equity swap and European governments sparred over the fate of its international operations ahead of the US-imposed June 1 deadline for submitting a restructuring plan.
Time Warner close to AOL deal
Time Warner is close to a decision to spin off all of its AOL internet business. Although not yet final, executives are known to favour spinning off the whole division rather than a part of it. Over the past year,
Permira sells stake in Britvic
Permira on Wednesday sold its 14% stake in Britvic for about £81m, ending almost three years of frustration for the UK private equity group in its attempts to agree a buy-out deal with the soft-drinks maker.
US blocks CSL’s $3bn Talecris bid
The US Federal Trade Commission authorised a lawsuit on Wednesday to block the proposed $3.1bn acquisition of Talecris, a US plasma provider, by Australia’s CSL, citing concerns over US antitrust laws.
UK’s B&B set to miss coupon payments
Bradford & Bingley, the UK mortgage lender nationalised last year, said it will miss coupon payments on some of its perpetual subordinated bonds and subordinated notes on their next date of payment – all due in June or July.
Saudis back oil price increase
The world economy has strengthened enough to weather oil prices at $75-$80 a barrel, the Saudi oil minister, Ali Naimi, said on Wednesday, suggesting that Opec, which meets Thursday in Vienna, no longer sees a need to support the global recovery with low oil prices.
Brussels to speed up bank reform
The European Commission on Wednesday stepped up the pace for overhauling Europe’s patchy system for supervising banks and insurers despite UK concern about ceding binding authority to non-national bodies.
NYSE Euronext opposes LCH.Clearnet bid
NYSE Euronext on Wednesday said it opposed a plan by a consortium of 11 banks and Icap, the inter-dealer broker, to buy LCH.Clearnet, Europe’s largest independent clearing house. The exchange group is the second largest shareholder in the clearer with 5%.
Six arrested over UK insider dealing
Five men and one woman were arrested in the UK on Wednesday in connection with an investigation by the London City watchdog into suspected organised insider dealing. The FSA, working with police, arrested the six,
Overnight Markets: Mixed
Asian stocks fell on Thursday, led by banks and mining companies, after ANZ sold shares and metal prices declined. Futures on the S&P500 Index were little changed after the gauge dropped 1.9% on Wednesday in the biggest slide in two weeks,
Arthur Samberg’s Pequot Capital to close
This is big. From the WSJ:
Arthur Samberg, among the best-known hedge-fund managers, is closing down his firm amid an ongoing investigation into possible insider trading.
“Public disclosures about the continuing investigation have cast a cloud over the firm and have become a source of personal distraction,”
Bond market closing levels
Via John Jansen at Across the Curve:
The yield on the 2 year note increased 2 basis points to 0.97 percent. The yield on the 3 year note climbed 3 basis points to 1,49 percent. The yield on the 5 year note soared 11 basis points to 2.41 percent.
US Treasuries selling off, benchmark yield curve hits record wide
That sound you hear is not the roar of competing Manchester United and Barcelona supporters; rather, it is the sound of current bloodbath in Treasuries.
The 10-year hit 3.709 per cent – a level not seen since November 2008 – while the benchmark yield curve steepened to a record 275bp compared with 263bp on Tuesday.
Six arrested in FSA insider dealing investigation
This just out from the FSA’s press office:
Five men and one woman, aged between 27 and 34, were today arrested in connection with an ongoing investigation by the Financial Services Authority (FSA) into suspected organised insider dealing.
VW investors forget the pain of burnt fingers
Short-sellers appear to have forgotten what happened the last time they dallied with Volkswagen – nothing less than biggest short squeeze in history.
Because on Wednesday, DataExplorers – which tracks short interest – noted that the short base for Volkswagen had crept up to 3 per cent,
Handy bankruptcy fees calculator
Never know, might come in useful.
Courtesy of LoPucki-Doherty.
Alternatively, check out the model for estimating Chapter 11 fees constructed by Stephen Lubben of Seton Hall University.
H/T Credit Slips
Related links:
Equity fund managers see bottom in equities
Talk about talking one’s book. This is the latest press release from Standard & Poor’s Fund Services unit:
London, 27 May, 2009 – The US equity market has bottomed out, according to a number of fund managers interviewed by Standard & Poor’s Fund Services for its latest sector update,
Overheard
In the Long Room on Wednesday,
- №3459-1 ”On Protection of Property Rights of Citizen during the Period of Crisis Overcoming in Ukraine”.
- Teun “Combo” Draaisma.
- Is Bradford & Bingley’s coupon strike a CDS event?
- A 57-page presentation on financial derivatives and their role in the subprime crisis.
Eight-month high for the Baltic Dry
The Baltic Dry index – a benchmark measure of dry shipping rates and thus global trade – rose 7.55 per cent today, bringing it to an eight month high after its disastrous collapse at the end of 2008.
Over May alone,
Fed to cut funds rate to -5% by year end?
From an economic letter by Glenn Rudebusch, senior vice president and associate director of research at the Federal Reserve bank of San Francisco dated May 22 (H/T Greg Mankiw’s blog), emphasis FT Alphaville’s:
“Austerity vs currency debasement” (Bob’s with Marc)
Mr Faber may have stolen the pixel-bite on Wednesday with his prediction of hyperinflation in the US (he even used the Z-word), but there is a manic tone to the commentary coming out of a number of avowed bears.
Recession hits rappers’ bling, grills
Oh no you didn’t.
The recession is hitting rappers where it hurts — their bling.
From the Wall Street Journal:
After years of starring in rap-music lyrics and videos, “bling” is losing its ring.