July, 2009
California declares fiscal emergency
California, which is teetering on the brink of fiscal collapse, has printed the first batch of about 30,000 IOUs to be issued to people awaiting income tax rebates on Thursday unless Arnold Schwarzenegger,
SEC scraps brokers’ board votes
In a move hailed as a victory by activist investors, the SEC on Wednesday scrapped a controversial 72-year-old rule that allowed broker-dealers to vote in corporate director elections on behalf of their clients without specific instructions.
Royal Mail sell-off put on hold
The part-privatisation of Royal Mail was formally put on hold on Wednesday by Peter Mandelson, UK business secretary, who said there was “no prospect” of the contentious sale going ahead at present.
UK ends National Express hopes
The UK transport secretary Lord Adonis on Wednesday signalled the end of National Express’s hopes of running a big rail business after the government announced it would nationalise the struggling operator’s East Coast rail franchise.
UK corporate fraud losses soar
UK corporations lost £960m to publicly reported fraud in the half year to June 30, the highest six-month total since at least 2003, when BDO Stoy Hayward began tracking corporate fraud. There were 182 cases with combined losses of £960m reported to authorities by end-June,
Overnight Markets: Up
Asian stocks climbed on Thursday as commodity prices rose and on speculation stimulus measures are helping to bolster consumer demand. Overnight futures on the S&P 500 Index were little changed after the gauge advanced 0.4% on Wednesday,
Arnold Schwarzenegger declares “fiscal emergency” in California
California’s governer declared a state of “fiscal emergency” after lawmakers failed to agree on a budget plan by the deadline on Wednesday, Reuters reported.
From Reuters:
California’s lawmakers failed to agree on a balanced budget by the start of its new fiscal year on Wednesday,
More dollar deliberations
Wednesday’s dollar dive (as illustrated below by the movements of the dollar index) is, according to some reports, being put down to yet more rather non-dollar friendly signals from China.
Specifically,
[The Stanford Series] Stanford CFO James Davis “intends to plead guilty”, laywer says
James Davis, the former chief financial officer of Stanford Financial Group and who is facing charges related to an alleged $7bn fraud at the group, intends to plead guilty to the three charges against him,
Smarter than your average undergrad?
Dealbreaker points to an Institutional Investor story on a 23-year-old financial wunderkind Merritt Graves – who is managing a $4.7m equity long-short fund while nominally attending college in California.
US credit card losses hit record, Fitch says
Losses on US credit card debt reached a record of high of 10.4 per cent of outstanding loans in June, rating agency Fitch said in a statement released on Wednesday.
The report follows a similar assessment from Moody’s,
SEC proposes shareholder ‘say on pay’ for Tarp beneficiaries
As widely expected (read: leaked), the US Securities and Exchange Commission on Wednesday voted in favour of seeking feedback from investors and bankers on whether companies who benefited from government aid should be obliged to give shareholders a direct vote on executive compensation.
The retrospective Buiter
Willem Buiter, former member of the Bank of England monetary policy committee, economist and FT ‘Maverecon’ blogger on Wednesday looked back through his voluminous works and commented thus (our emphasis):
Thames River to wind down Hillside Apex
“Hedge fund returns up, redemptions down” says Reuters. Not, though, for everyone.
Proof that the redemptions nightmare is still not over for some funds: Thames River Capital, the multi-billion fund of funds is winding up a long/short emerging markets credit fund it operates,
Northern Rock covered
What’s this? Northern Rock has fallen below its minimum regulatory requirements?
Northern Rock’s capital base has now reduced to a level below its minimum regulatory capital requirement.
Lex: Lloyds Banking Group
Whoever becomes the new chairman of Lloyds, the first thing he should do is get rid of the chief executive, Eric Daniels.
The current arrangement , which allows Mr Daniels to escape his share of responsibility,
US private sector shed 473,000 jobs in June, ADP says
US companies cut more jobs than forecast in June, according to data released by ADP Employer Services on Wednesday.
The ADP jobs report showed a drop of 473,000 private sector jobs on a seasonally adjusted basis from May to June,
Distressed exchange in Austria
There was something of a flurry this week in the world of European debt exchanges, when Austria’s Raiffeisen Bank – the second biggest lender to emerging Europe – pulled without explanation a €500m perpetual exchange offer it had put to market on June 18th.
Lunch Wrap
On FT Alphaville on Wednesday morning,
- Other comprehensive income cleverness.
- Goldman again.
- Japanese equity raisings: So much money, so much dilution.
- Prudent decisions in central banking,
Goldman again
Matt Taibbi’s Rolling Stone article on Goldman Sachs has been making tidal-sized waves in the blogosphere for the past week.
That’s unsurprising given that it begins with the following unnerving paragraph:
Other comprehensive income cleverness
Here’s a rather funny thing via UBS’s US banking team, which re-initiated coverage of a number of American IBs yesterday.
It relates specifically to Citi, but will certainly extend to other banks. Here’s UBS analyst Glenn Schorr:
Markets live transcript 1 Jul 2009
Markets live chat transcript for the chat ending at 12:08 on 1 Jul 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Okay PM:lets start early
Japanese equity raisings: So much money, so much dilution
Rights issues, all the rage in many key markets, have never been popular in Japan.
In fact, just like in the US, they are non-existent. That is partly due to a broad preference among Japanese companies
Prudent decisions in central banking, revisited
We were yesterday reminded of the true Golden Era in central banking, circa 2006. A time when, freed from the dull chore that was setting interest rates, the main pressures on a Bank of England employee’s schedule were questions such as:
Bifurcated Britain
The question is, which is the leading indicator?
9:30 RTRS – UK Q1 OUTPUT PER WORKER -2.0 PCT QQ, -4.2 PCT VS YR AGO, BIGGEST YY FALL SINCE RECORDS BEGAN IN 1960.
9:30 RTRS – UK SERVICE SECTOR OUTPUT -0.1 PCT MM IN APRIL VS -0.2 PCT IN MARCH,
Clubbable miners
And so to the Melbourne Mining Club on Monday evening, where Xstrata’s Mick Davis was telling us how he was once the youngest cricketing umpire in South Africa, explaining along the way the “intellectual purity”
Amor fati, Greg Hutchings
Greg Hutchings was, they still say, the “epitome” of the 80s entrepreneur.
He joined engineering co Tomkins in 1984 to lead the firm — in classic-corporate raider style — to a 350 per cent outperformance of its sector over the next seven years.
Further reading
Elsewhere on Wednesday,
- “Do correlations matter when the world is on fire?”
- Madoff victims, get over it.
- UK funds prepare anti-EU directive war chest.
- Ivy league endowments underperform smaller peers.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: The cautious approach to fixing banks will not work
The financial system had to be rescued from its own mismanagement of risk,