July, 2009
HSBC’s hedge fund hope
Here, courtesy of the FT’s new hedge fund correspondent, is the internal memo on HSBC’s new prime brokerage services.
Intriguingly enough, we’re told there will be no rehypothecation in this one — which in theory should mean that hedgies’ assets are kept in segregated accounts,
US car company makes profit
Well sort of.
From Ford Motor Company:
Ford posted net income of $2.3 billion, or $0.69 per share. These results compare with a net loss of $8.7 billion, or $3.89 per share, in the second quarter of 2008.† The results for the second quarter 2009 include a special items net gain totaling $2.8 billion,
Lunch Wrap
On FT Alphaville Thursday morning,
- Re-remic-ing the Talf.
- Islamic finance to the rescue?
- Morgan Stanley and VaRiations.
- Latvia jitters creeping back.
- Now that’s a pay-off at Porsche.
Re-Remic-ing the Talf
Commercial real estate has, rather suddenly, become the new doom-spot for the US economy.
Fed chairman Ben Bernanke is worried about it, Morgan Stanley and Wells Fargo posted losses because of it, and S&P is confusing everyone about it.
Markets live transcript 23 Jul 2009
Markets live chat transcript for the chat ending at 12:16 on 23 Jul 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Good morning. PM:Welcome
Islamic finance to the rescue?
From Wikipedia:
Usury (pronounced /ˈjuːʒəri/, comes from the Medieval Latin usuria, “interest” or “excessive interest”, from the Latin usura “interest”) originally meant the charging of interest on loans.
Morgan Stanley and VaRiations
Comment columns are awash today with talk of Morgan Stanley’s trading prudence, as evidenced by its lower Q2 Value at Risk number.
For instance, here’s Graham Bowley at the New York Times:
. . . After years of chasing Goldman,
Latvia jitters creeping back
Latvia is back in the headlines as talks between the government and the IMF over its second loan instalment continue to flounder over differing budgetary views.
The analyst community is now interpreting the deadlock as yet another possible chink in the armour of Latvia’s euro-peg defence.
Now that’s a payoff
From FT.com on Thursday.
Porsche on Thursday dismissed chief executive Wendelin Wiedeking, as the debt-ridden German sports carmaker prepared for an increase of its capital base by at least €5bn ($7.1bn) ahead of a merger with rival Volkswagen.
Further reading
Elsewhere on Thursday,
- The rise and rise of the efficient markets hypothesis.
- Shut down CDS! No, shut down hedge funds!
- The railings of Charlie Gasparino, part I, part II.
- On Morgan Stanley’s risk-taking.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
John Gapper: Squeeze the leviathans of finance
If you have not been concentrating for the past few months, you may think that nothing much has changed in the world of finance. Banks such as JPMorgan Chase and Goldman Sachs have reported large profits for the second quarter,
Snap news
Breaking pre-market news on Thursday,
- Credit Suisse posts Q2 net income of CHF 1.6bn — statement.
- ING seeking buyers for private banking unit — Wall Street Journal.
- Berkshire Hathaway reduces stake in Moody’s by 17 per cent — Bloomberg.
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National Express receives second bid
National Express on Wednesday night revealed that it had received a second takeover approach after FirstGroup, the initial bidder, walked away from the company, citing uncertainties surrounding its rival’s business.
Porsche plans to add €5bn to capital base
Porsche plans to increase its capital base by at least €5bn in a move to bolster its sagging balance sheet ahead of a planned, though controversial, integration of carmaking operations with its German rival Volkswagen,
Iron ore spot prices forge path to $100
Spot iron ore prices are fast approaching $100 a tonne, well above the levels at which miners and steelmakers in Japan, South Korea and Europe have struck supply deals, as demand outside China recovers,
Executive pension costs revealed
Britain’s biggest companies are paying an average 70 per cent of executives’ pay to fund the final salary pensions of their top officials, making them hugely more expensive than the pensions of ordinary employees,
GSK’s swine flu arsenal grows
GlaxoSmithKline moved on Wednesday to become the pharmaceuticals company with the broadest range of products to tackle swine flu. The UK group unveiled plans to add masks and diagnostics to its vaccines and antiviral medicines business.
Deutsche Bank finds four cases of surveillance
Deutsche Bank on Wednesday admitted it had been involved in four cases of surveillance activities, some of which are being investigated for breaches of privacy laws, but said none of its top executives had any role.
Advisers to CIT’s bondholders said to push for bankruptcy
Advisers to the bondholders that gave troubled commercial lender CIT a $3bn lifeline are recommending the company be restructured through a bankruptcy after a debt tender next month, Bloomberg said, citing a person familiar with the matter.
Goldman sheds bail-out legacy
Goldman Sachs became the first major bank to buy back warrants held by the US Treasury on Wednesday, allowing the group to shake off the last vestige of its participation in the government bail-out programme after just nine months.
US banks warn on commercial property
Two of America’s biggest banks, Morgan Stanley and Wells Fargo, on Wednesday threw into sharp relief the mounting woes of the US commercial property market when they reported large losses and surging bad loans.
Boeing warns on Dreamliner losses
Airbus rival Boeing’s troubled 787 Dreamliner looks unlikely to make a profit for at least two years after its first delivery, as the aircraft-maker warned on Wednesday that the programme could make a loss in its initial stages.
Overnight markets: Mostly higher
Most Asian stocks rose on Thursday, led by manufacturers that rely on US demand as American housing prices unexpectedly gained, Bloomberg said. The MSCI Asia Pacific index was marginally higher at 106.86 by noon in Tokyo.
CDS report: Markets mixed as traders digest earnings
This CDS report was written by Markit’s Gavan Nolan
European credit indices gave back some of their recent gains, prompted by profit-taking and mixed signals from the US. The Markit iTraxx Europe index was back above 100bp,
Death to CDS, Maxine Waters edition
One week ago, Congresswoman Maxine Waters (D-CA), introduced H.R. 3145, or the Credit Default Swap Prohibition Act of 2009.
We’ve tried to refrain from commenting, but since we keep being reminded of its existence…
A forward curve proposition
Commodity curves used to be relatively dependable. Gold, for instance, was pretty much always in a state of perfect contango irrespective of price due its money-like status. This currency-esque characteristic therefore made its curve a reflection of the time value of money.
Lex: Apple
Sales of Macs may have dipped, but the iPhone has more than made up for it.
There are two lessons here for investors. First, despite a confidence-sapping lack of communication about the health of co-founder and chief executive Steve Jobs during his recent mediacal leave,
A gap in the output gap
The output gap, a way of measuring how far an economy is from its full capacity, has gained some ubiquity of late.
Central bankers from Bernanke to Bean are using it as evidence of the risk of deflation,