June, 2009
Lunch Wrap
On FT Alphaville Thursday morning,
- UK 10-year gilt yields hit 4%.
- The Women (& Co.) of Citi.
- On the issue of oil demand, not supply problems.
- Football hyperinflation.
- Emerging markets:
UK 10-year yields hit 4%
10 year gilt at 11:06 BST…
and at 11:07…
This year:
The Women (& Co.) of Citi
Citi has had it with women.
WomenCo. that is.
The investment bank has filed a complaint against the networking website for career-minded women. Citi’s lawyers argue that the site “is using names and marks and operating a business that infringes and misappropriates”
Markets live transcript 11 Jun 2009
Markets live chat transcript for the chat ending at 12:12 on 11 Jun 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) NH:hola NH:and welcome to Markets Live
On the issue of oil demand, not supply problems
So BP, one of the world’s most prominent oil majors, is not worried about global oil supplies. In fact, CEO Tony Hayward summed up his view on future supply constraints in the group’s latest annual statistical review released on Wednesday as follows (our emphasis):
Football hyperinflation
Is this for Real?
2003
Ronaldo became Manchester United’s first-ever Portuguese player when he signed for £12.24 million after the 2002–03 season.
2009
Manchester United said on Thursday they have received a world record 80 million pound ($131.2 million) bid for forward Cristiano Ronaldo from Real Madrid.
Emerging markets: A golden era or booster-overhype?
As proven time and time again in the world of investing, if you stick with a position long enough, you’ll eventually be proven right and usually, rewarded — although whether you’re rewarded soon enough to stay solvent is another question.
Inflation expectations, Google datapoint du jour
Obviously not a scientific process — but then populist inflation expectations can become a self-fulfilling prophecy.
Those are the results from Google’s predictive search function. You can see the results for inflation outstrip those for deflation by a cool nine to one.
Russia’s win win
We questioned on Wednesday just how wise it was of Russia to be talking down the dollar ahead of switching US Treasuries into alternative non-dollar denominated investments, as it indeed was claiming it would – surely the process would depreciate its assets?
Well,
Bernanke conundrum calculator
What fun.
Political Calculations has built a calculator, using a formula inspired by some Calculated Risk data, that generates predicted mortgage rates based on current Treasury yields — and vice versa.
Oil bulls
Crude continued its ascent overnight: US light crude prices (July delivery) rose around 80 cents to just over $72 a barrel.
…the current rally in oil is nearly twice the average bull market gain in nearly half of the average duration.From Bespoke Investment.
Further reading
Elsewhere on Thursday,
- “There are no bad bonds, just bad prices. Treasuries at 2 per cent were a toxic asset.”
- Russia sells US Treasuries to buy IMF bonds.
- “…hype and hyperinflation have killed the art market,
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Turf warriors head for Washington
We are about to observe the next phase in the US government’s attempt to stabilise the country’s financial system,
Snap news
Breaking pre-market news on Thursday,
- Charles Stanley funds under management fall from £11bn to £9bn in fiscal 2009 — statement.
- Wogen says it’s received a possible offer from executive directors and co-founder — statement,
Fed emails bash BofA chief
Federal Reserve officials harshly criticised Bank of America and its chief executive in emails after the bank tried to pull out of its deal to buy Merrill Lynch, according to documents obtained by congressional investigators,
Fiat seals deal with Chrysler
Fiat and Chrysler on Wednesday finalised a global strategic partnership that they said would start operations “immediately”. The alliance focuses on a “new Chrysler” comprising most of the bankrupt carmaker’s assets;
Citi on defensive with ‘poison pill’
Citigroup on Wednesday introduced a form of “poison pill” that discourages investors from buying more than 5% of its shares and deters large shareholders from raising their stakes, in an attempt to protect a $43bn tax benefit.
US long-term rates hit high
US long-term interest rates rose to their highest point this year on Wednesday, after the sale of 10-year government debt met with a tepid response from inflation-wary investors. Amid concerns about rising government borrowing,
Oil prices threaten recovery
Oil prices rose to almost $72 a barrel on Wednesday on optimism that the global economy has reached its bottom, but the move prompted concerns that the doubling in crude prices since February could stem a recovery.
UK eyes rescue for building societies
Britain’s troubled building societies could be handed a lifeline by the Treasury, as Alistair Darling, chancellor, considers ways to allow them to raise capital without losing their mutual status. A Treasury white paper,
US ‘pay tsar’ to vet executive pay
The salaries of the top 100 employees at seven US companies that received government bail-out funds will be vetted by a “special master” appointed on Wednesday as part of the Obama administration’s executive compensation reforms.
Saad sees credit lines shut off
Western banks have begun to close down credit lines to Maan Abdul Sahed Al-Sanea – a major shareholder in HSBC – and his investment entity, Saad Group. Sanea’s investment business said that some of the several dozen international banks that had lending relationships with the Kuwaiti-born former fighter pilot had started liquidating shareholdings.
Arcandor holds on to Thomas Cook
Arcandor on Wednesday insisted it had no immediate plans to hand over its controlling stake in Thomas Cook to creditor banks, following the German retailer’s insolvency, setting the stage for a potentially drawn-out battle over the fate of its shareholding in the UK-listed tour operator.
Future divided for Northern Rock
UK lender Northern Rock should be split into two businesses, with retail deposits in one unit and mortgages in the other, according to bankers examining the feasibility of a sale of the bank, reports The Times.
Laxey reconsiders Shaftesbury stake
Laxey Partners, the UK activist investor, is considering the future of its £130m shareholding in Shaftesbury, the London property company, after Shaftesbury asked investors for more cash to fund acquisitions last month.
Ukraine in $1.3bn bank bailout
The Ukrainian government will take controlling stakes in three banks and inject a total of $1.26bn of capital, Yulia Tymoshenko, prime minister, said on Wednesday, reports Reuters. Five Ukrainian banks have been identified as being in financial trouble.
Japan GDP plunge revised up
Japan’s economy shrank less than the government initially estimated in the quarter to March 31, as business investment and inventories fell at a slower than expected pace, reports Bloomberg. GDP shrank at a record 14.2% annual pace in the quarter,
Overnight markets: Mostly down
Asian stocks mostly fell on Thursday, led down by technology shares. Futures on the S&P500 added 0.3% after the gauge lost 0.4% on Wednesday, led by financial companies, as yields on 10-year Treasury notes climbed to the highest level in eight months.
Beige book: Few signs of economic recovery
Wednesday’s Fed Beige book is more of a deflation alert than anything else:
With few exceptions, Districts reported that prices at all stages of production were generally flat or falling. The notable exception to the downward pressure on prices was the widely-reported increase in oil prices.
For the most part,