July, 2009
Terra Firma considers bond issue to pay down EMI debt
Blackstone, the private equity group, is advising its rival Terra Firma on a plan to issue high-yield bonds to repay Citigroup’s £2.6bn of loans to music group EMI, one of the US bank’s biggest single exposures.
Accusations fly over Saad Group
One of Saudi Arabia’s most powerful family-owned companies has filed a lawsuit in which it accuses Maan Al-Sanea, the Saudi billionaire and owner of the Saad Group, of “massive fraud” and alleges that he “misappropriated approximately $10bn as a result of his frauds”.
Paulson grilled over BofA-Merrill deal
Hank Paulson, the former US Treasury secretary, faced hours of Congressional questioning about his decisions at the height of the financial crisis on Thursday, with lawmakers highlighting the collapse of Lehman Brothers and his relationship with Goldman Sachs.
CIT on the brink as rescue talks fail
Shares in CIT, the US small-business lender, fell 75 per cent on Thursday after the failure of government bail-out talks prompted fears of a bankruptcy filing. The company was scrambling on Thursday to obtain last-minute financing commitments from lenders that could help CIT persuade the Federal Deposit Insurance Corporation to allow it to transfer assets to its banking subsidiary.
UK government ‘underspend’ at £20bn
Government departments iin Britain have amassed more than £20bn in underspends, the Treasury revealed on Thursday, adding to the problem of public expenditure control over the next decade. The announcement
Iceland looks towards EU membership
Iceland is preparing to make a formal bid for European Union membership within days as it turns to Brussels for help in stabilising its shattered economy. Its parliament on Thursday narrowly voted in favour of accession talks,
Porsche CEO says VW power struggle almost over
Porsche SE is likely to reach an agreement on a stake sale in a few days, chief executive Wendelin Wiedeking told Bloomberg, when asked whether Porsche will be sold to Volkswagen. “It’s already on the table,” he said in Ingolstadt,
Deaths reported in Jakarta hotel bombings
At least eight people were killed on Friday in two separate explosions at the JW Marriott and Ritz-Carlton hotels in central Jakarta, just over a week after the world’s most populous Muslim majority nation completed a peaceful presidential election.
Big oil’s dividend conundrum
According to Cazenove’s Darren Winder and Robert Griffiths, UK companies are expected to pay £55bn in dividends this year with the biggest contribution (£14.6bn, or 26 per cent) coming from the oil & gas sector.
CIT death plunge
CIT stock is trading again after being suspended over the course of what now appear to be failed government bailout talks.
Here’s how shares in the beleaguered corporate-lender have opened:
That’s a drop of some 70 per cent to 40 cents — a market cap slide which increasingly ups the odds of the lender failing to meet its minimum capital ratios and therefore the probability of bankruptcy.
Silver Lake swooping for Tandberg?
Norway’s Tandberg has been quite a-stir of late, with rumours swirling around the market that someone might be lining up an offer for the world’s biggest video-conferencing equipment producer.
Now, with Tandberg reporting second quarter earnings later on Thursday,
No green shoots in structured finance
That’s according to ratings agency Fitch, who have just revised their outlook for European structured finance – ABS, CMBS, CDOs and the like.
Here’s the press release:
Fitch Ratings-London-15 July 2009:
Broking, trading, by royal approval
News in our inbox on Thursday that the Queen has approved a Royal Charter for the Securities & Investment Institute. That, if you don’t know, is the body that sets the exams for FSA registration.
So,
Lunch Wrap
On FT Alphaville Thursday morning,
- JP Morgan reports Q2 net income of $2.7bn.
- Guess the bust?
- Calamari Barclays style.
- China: Too much of a good thing?
- Calpers vs Credit Ratings.
JP Morgan reports Q2 net income of $2.7bn, EPS $.28
Analysts had expected net income of $1.59bn or 5 cents a share, according to Bloomberg estimates.
And yes, like Goldman Sachs record-breaking second quarter, JP Morgan also had record revenue — $27.7bn to be exact.
Vampire squid, illustrated edition
Matt Taibbi’s description of Goldman Sachs being ” a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” seems to have really captured the world’s attention (at least if this Google news search is anything to go by).
Markets live transcript 16 Jul 2009
Markets live chat transcript for the chat ending at 12:09 on 16 Jul 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) NH:Good morning and welcome to Markets Live
Guess the bust
No, not that kind of bust. The financial kind.
Goldman Sachs have issued a note examining previous financial busts and what they had in common. We’ve taken some of their charts and redacted them below.
China: Too much of a good thing?
Official data on Thursday showed China’s economy accelerated by 7.9 per cent in the second quarter, far ahead of analysts’ consensus estimates. But just how solid an indicator is that for the global economy,
Bolton says ♥ short selling monsters
That’s Anthony Bolton, of course.
Writing in Thursday’s FT, the nearest thing the UK has to a Warren Buffett-style investment guru, says we should learn to appreciate the activities of those fine upstanding citizens of W1:
Things do not always go Goldman Sachs’ way
The anti-Goldman website www.goldmansachs666.com will be allowed to live.
The bank and www.goldmansachs666.com proprietor, Mike Morgan, had been engaged in a legal scuffle, centring around copyright issues,
Further reading
Elsewhere on Thursday,
- Another market crash in the making?
-$23,148,855,308,184,500 for cigarettes?
- A Dykstra disaster for Jim Cramer.
- Why does Goldman need a Fed exemption for VaR calculations?
- How long can Dated Brent still live up to its name?
- Is it all over for CIT?
- The glories of a little bit of inflation.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Bernie McSherry: Investors have to be sure statistics do not lie
The senior vice-president of strategic initiatives at Cuttone & Company writes:
Plan to unveil City high-flyers’ pay
The pay and bonuses of hundreds of traders and financiers will have to be publicly declared under a UK Treasury-backed plan to curb excessive and risky remuneration. Alistair Darling, chancellor, wants banks to be more transparent about what they pay their top earners to expose them to more scrutiny from the media,
CIT faces bankruptcy filing
The US mid-market lender CIT faced the prospect of a bankruptcy filing as hopes of a government-led rescue plan were dashed. “There is no appreciable likelihood of additional government support being provided over the near term,” CIT said in a statement late on Wednesday.
Citi close to FDIC deal
Citigroup is close to an agreement with the Federal Deposit Insurance Corporation, one of its main regulators, that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues.
China’s forex reserves pass $2,000bn
Beijing’s foreign reserve holdings have surged through the $2,000 billion mark, as money pours back into China to take advantage of faster economic growth and rapidly inflating asset prices. The flow of funds threatens to renew pressure for a revaluation of the renminbi at a time when the government and domestic business are focused on financial stability.