May, 2009
Fed spur to buy bubble-era securities
The Federal Reserve will provide loans to finance the purchase by investors of bubble-era commercial mortgage-backed securities from July onwards in a move officials hope will stem a financing crisis in the commercial property industry.
Fresh bail-out hopes lift GMAC
GMAC bonds rallied on Wednesday ahead of an expected announcement from the US government that it will invest another $7bn in the company, through which it could take a majority stake, in an effort to shore up the automotive industry.
Singapore client sues Citi
One of Singapore’s richest businessmen has filed a lawsuit against Citigroup’s private banking arm in the latest legal action involving private banks and their clients in Asia after last year’s market turmoil.
Chinalco set to restructure Rio deal: SMH
Aluminium Corp of China, or Chinalco, China’s biggest aluminum producer, may take a smaller stake in Rio Tinto to win approval for its $19.5bn investment, reports Bloomberg, citing the Sydney Morning Herald .
IMF urges UK to control public finances
The IMF urged the UK government on Wednesday to act faster once economic recovery was underway to rein in public finances by cutting public spending plans or raising taxes. Warning that the UK’s current policy package hinged on “continued trust in the sustainability of the fiscal position”,
US investors win on board nominations
US shareholders scored one of their biggest victories in many years on Wednesday when regulators proposed new rules allowing them to nominate company directors. The SEC has considered the controversial rule three times in the past five years,
Downgrades loom for Spanish banks
Bad debt problems at Spanish banks and cajas, the regional S&L institutions, have triggered at least one skipped interest payment on a mortgage-backed bond this week and prompted warnings of imminent downgrades by credit rating agencies.
Moody’s cuts Korean bank ratings
Moody’s on Wednesday lowered its ratings for four South Korean lenders, including Kookmin Bank, citing rising bad loans and weak financial positions. The downgrade was part of the agency’s wider reassessment of banks globally.
M&A turns to Depression-style barter
It is the oldest form of commerce: trading what you have for what you want without exchanging money. Businesses turned to bartering during the 1930s Great Depression. Now, some companies are again swapping assets instead of shopping for them.
Oil trader regrets boozy lunch
A former Morgan Stanley trader who hid from his bosses a potential $10m loss on trades made under the influence of alcohol after a long lunch has been handed a two-year ban by the London City watchdog.
Overnight markets: Mostly down
Asian stocks retreated on Thursday, dragging the MSCI Asia Pacific Index from a seven-month high, as the stronger yen diminished earnings prospects in Japan and the US Federal Reserve projected a deeper recession.
UBS confirms wider loss for 2008
UBS on Wednesday confirmed the restatement of its 2008 accounts, which raised its net loss by $405m Swiss francs (or about $369m).
The restatement, which the bank said earlier this month it would do,
Forget those green shoots – Fed seeing mostly weeds in 2009
The “green shoots of economic revival” meme started when Ben Bernanke used the phrase in an interview with CBS back in March.* Since then, it’s been picked up and deployed with abandon.
But the latest minutes of the Federal Open Market Committe,
CDS update: Autos and banks outperform
This CDS report was written by Markit’s Gavan Nolan
Credit investors with an appetite for risk are firmly in the ascendancy. Major credit indices continue to outpace their equity counterparts,
A dollar dive, and finally a gold-bug reaction
We know the dollar has been losing value over the last few weeks. However on Wednesday the intra-day plunge in the dollar index was slightly more severe than usual, as can be seen in the following chart:
Stress-testing, a retrospective view
While the recent stress-testing of banks by the US government garnered a lot of attention, there has been much less focus on the stress-testing procedures of banks in the run-up to the crisis. Or rather,
Spanish banking pain, Caja Madrid RMBS edition
It’s not often that ratings agencies are ahead of the curve, but Moody’s recent warnings on systemic risk in the Spanish banking system and its move to review for downgrade the ratings on 34 of the country’s banks are looking positively prescient.
Beverley hills hedgie
From AP (via Fintag) – over the weekend:
Bradley L. Ruderman, 46, surrendered to FBI agents after being named in a wire fraud complaint. He was later released on $500,000 bond.
Ruderman had already had a complaint lodged against him in a civil case by the SEC. But the interesting part came with the FBI involvement:
Negative interest in cash, or goodbye banknotes
[Cash] is a redundant, indeed dominated medium of exchange and means of payment for legitimate transactions.
Or at least so says Willem Buiter, former BoE MPC member, and Maverick economist blogger in one of his recent negative-interest rate postings.
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Moody’s warns on Asian banks
Ratings agencies continue to aggressively review their ratings on global banks, as exemplified by a slew of announcements coming out of Moody’s on Wednesday.
Here are some of the headlines, with extracts from the accompanying statements (emphasis ours):
CDS report: Rally loses steam
The appetite for risk in Europe waned on Wednesday morning, as the effects of the previous day’s rally began to peter out amid poor economic data from Japan.
The Markit iTraxx Crossover index, which tracks the cost of insuring against the possibility of default by the 45 most traded names in the junk-rated sphere,
[The Bidens, Paradigm and Ponta] Placing for Paradigm
As Felix Salmon notes (from Mark Gimein’s story on Paradigm over at the Big Money) when James and Hunter Biden, the brother and son of the US vice president first got into the hedge fund industry in 2006,
The undervalued pound, redux
Add Merrill Lynch – and a host of fund managers – to the list of those calling a significant overshoot in the sterling sell0ff. The following from their fund manager survey, out today.European currencies continue to get cheaper in the view of our panellists.
Dutch courage, commodities trading edition
On 6 February 2008, Mr Redmond took an extended lunch break between 13.14 and 16.41. He drank alcohol over lunch and it appears that this affected his behaviour on his return to the office, although he was not visibly drunk,
Rosenberg’s back, and as bearish as ever
David Rosenberg appears to be settling into his new post at Gluskin Sheff in Canada just fine, if his inaugural note as chief economist and strategist is any indication.
Here are some highlights from his first report,
Major blow to Gulf common currency plans
Progress on the formation of the Gulf Cooperation Council (GCC), a project that aims to create a Gulf Arab monetary union, had been going swimmingly of late.
Most importantly, earlier this month, the GCC got over what was assumed to be one of its most thorny issues – the choosing of a headquarters.
Lunch Wrap
On FT Alphaville on Wednesday morning,
- QE and expectation management from the BoE.
- Is Japan set for two lost decades?
- YELLow Director.
- Chateau Dick – For Sale!
- Lloyds’ risk factor 1.3.
Markets live transcript 20 May 2009
Markets live chat transcript for the chat ending at 12:07 on 20 May 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Okay PM:It’s 11.02
A delinquent spike
From John Kemp at Reuters – a chart showing the percentage of US residential mortgages where payments are 30 days or more overdue.
So, by the end of Q1 this year, almost 8 per cent of all US single family mortgages were classified as delinquent.