May, 2009
Marc Faber: Hyperinflation coming to the USA
Wa-oah. Marc Faber has a reputation as a bit of a doom-monger, but he has really surpassed himself with this one. From Bloomberg (emphasis ours):
May 27 (Bloomberg) — The U.S. economy will enter “hyperinflation”
Energy crunch time
The International Energy Agency has posted its recent report on the impact of the financial crisis on global energy investment on its website. The analysis was first submitted to the G8 Energy Ministerial meeting in Rome last weekend,
CDS report: Tokyo trend continues
The appetite for risk in Japan continued to grow on Wednesday, with the benchmark index for the country’s credit default swaps tightening for a seventh consecutive session.
The iTraxx Japan Series 11,
Lunch Wrap
On FT Alphaville Wednesday morning,
- Anti-market banking.
- Variable vibrations at Nationwide.
- Europe’s hedge fund fifty.
- Bradford & Bingley, the delinquent bank.
- A ‘brain crush’ on David Rosenberg.
‘Brain crush’ on David Rosenberg
The move by erstwhile Merrill Lynch economist David Rosenberg to Gluskin Sheff seems to be paying off in early days.
The economist has been hitting headlines with prominent interviews on Bloomberg TV and Fox Business.
Markets live transcript 27 May 2009
Markets live chat transcript for the chat ending at 12:08 on 27 May 2009. Participants in this chat were: Paul Murphy, FT (PM) Bryce Elder (BE) PM:Okay PM:It’s 11.04
The race for RBS’s Asian assets: ANZ plays in the big league
ANZ, Australia’s fourth largest bank, is going up against the big boys in the race for some of RBS’s Asian assets, and on Wednesday signalled it means business by launching an A$2.5bn ($2.3bn) rights issue to fund a prospective bid.
Bradford & Bingley, the delinquent bank
How sneaky is this?
Bradford & Bingley, the nationalised mortgage bank, quietly issued three statements after the market had closed on Tuesday, informing holders of three classes of notes that they would not now be getting their next due interest payment.
Variable vibrations at Nationwide
“Profitability has been adversely affected by the low interest rate environment and increased provisions as a result of the current recession. Our reported profit is 53% lower than it would otherwise have been because there is an exceptional charge of £241 million relating to the levies payable to the FSCS.
Anti-market banking
People might have assumed that with the US stress tests out of the way and the banking sector on both sides of the Atlantic seemingly on the mend, sector lobbyists might have relaxed in their attempts to paper over problems with accounting rule changes.
Further reading
Elsewhere on Wednesday,
- What good is the financial sector, anyway?
- Hedge fund tide is rocket fuel for stocks.
- Board stiff.
- Trojan horse becomes Trojan rabbit.
- Farewell Connecticut,
Pink picks
Comment, analysis and other offerings from the FT on Wednesday,
Martin Wolf: Feeble domestic demand is a chronic European ailment
Why has the European Union suffered so badly in a crisis that began in the US? The answer is to be found in four weaknesses:
Snap news
Breaking pre-market news on Wednesday,
- Nationwide earnings fall 69 per cent as mortgage market deteriorates – statement.
- Moody’s lowers Sony credit rating, outlook negative – statement.
- European April new commercial vehicle registrations down 42 per cent – statement.
Citi to hold fast in China, India
Citigroup will not sell its stakes in Chinese and Indian banks, said Ajay Banga, chief executive of Citi Asia-Pacific. Banga told the FT that Citi, which received a US government bail-out last year, also planned to expand lending across the region despite the “challenging” economic environment.
ANZ to raise $2bn in bid for RBS assets
ANZ, Australia’s fourth-largest lender, plans to raise A$2.5bn ($2bn) by selling shares to bolster capital as it bids for Royal Bank of Scotland’s Asian assets, reports Bloomberg. ANZ will sell the shares to institutional investors at A$14.40 each,
Bain leads race for Gome stake
Gome Electrical Appliances, China’s second-largest electronics retailer, may sell as much as 20% of itself to Bain Capital for about $500m, reports Bloomberg. Bain is competing for Beijing-based Gome with KKR and Warburg Pincus,
Bondholders shun GM’s tender offer
General Motors has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever US industrial bankruptcy within days, reports Reuters. The event marks a critical disappointment for GM,
UK seeks to secure Vauxhall’s fate
Britain has intervened in the political manoeuvring over the future of Opel/Vauxhall, explicitly linking its financial support for the spin-off of GM’s European operations to the future of two UK car plants in Luton and Ellesmere Port.
Miners set for showdown on ore prices
Chinese steelmakers and global miners are heading for a showdown over ore prices after Rio Tinto agreed to cut prices by a third for Japanese steel mills, much less than the reduction Beijing is demanding.
Freddie launches $1bn bond
Freddie Mac on Tuesday began marketing to investors the first commercial mortgage bond guaranteed by a government-sponsored mortgage agency. The new financing tool will help Freddie preserve capital while providing greater liquidity to the mortgage market.
Deutsche Bank sees ‘robust’ business
Deutsche Bank saw “robust” development of business in April and May, Josef Ackermann, chief executive, said on Tuesday, continuing the optimistic tone struck by Germany’s largest bank since it returned to profit this year.
Money market rates rise again
Key money market rates rose for the first time in more than two months amid worries that the economic revival could stall as the financial health of banks remains fragile. The cost of borrowing dollars between banks over three months,
Santander to pay Madoff trustee $235m
Spain’s Santander, one of Europe’s biggest banks, has reached a settlement with the trustee seeking to recover money for Bernard Madoff’s victims, agreeing to pay $235m to resolve claims against two of the bank’s hedge funds managed by its Optimal investment arm.
IG hit by Japan leverage cap fears
Shares in IG Group, Britain’s biggest spread-betting company, fell on Tuesday after reports that Japanese regulators may seek to limit the amount of leverage that can be used by retail forex speculators in Japan.
Russian group invests $200m in Facebook
Facebook said on Tuesday it had accepted a $200m investment from Digital Sky Technologies, a private Russian internet investment group, valuing the fast growing social network’s preferred stock at $10bn.
Vodafone threatens to join UK exodus
Vodafone has raised the prospect of joining the tax exodus from Britain after demanding a “dialogue with the government” on the subject of tax on foreign earnings, reports The Times. Andy Halford, Vodafone’s finance director,
PwC: ‘Bad banks’ should have key role
Removing toxic assets from US and British banks’ balance sheets could be speeded up if the billions of dollars of government guarantees on these assets can be sold to private investors, according to a report by PwC.
Third ex-Morgan Stanley trader punished
A former Morgan Stanley trader has been fined £140,000 and banned by the FSA, the UK financial watchdog, after he traded ahead of clients to profit from their orders, known as “pre-hedging”. It was the third trading-related punishment linked to the bank in the past month. The FSA said Tuesday that Shroff,
NYSE Liffe to launch stock index futures
NYSE Liffe on Tuesday said it would launch a suite of US and European stock index futures products based on MSCI Equity Indices, in the first expansion of its product base since the US futures arm of NYSE Euronext launched eight months ago.