August, 2009
Further reading
Elsewhere on Wednesday,
- Madoff CFO DiPascali: I may have helped, just a little.
- China rising, rent-seeking version.
- Atticus pinched.
- Ferguson and Felix, a defence.
- It’s time to remove Russia from the BRICs.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
The Fed must time a good exit
Randall Kroszner, Norman R. Bobins professor of economics at the University of Chicago’s Booth School of Business and a former governor of the US Federal Reserve,
Snap news
Breaking pre-market news on Wednesday,
- ING posts Q2 net profit of €229m - statement.
- Corporate: BHP Billiton, Anglo American, Balfour Beatty, Smurfit Kappa, SAS, Tui, E.on, Nestle.
Madoff aide’s guilty plea: ‘It was all fake’
Frank DiPascali, a top aide to Bernard Madoff, pleaded guilty on Tuesday to 10 criminal charges and gave extensive new details about the $65bn Ponzi scheme orchestrated by his boss, saying: “It was all fake.
Financials fall on toxic assets warning
Financial stocks led US equities to their worst day in more than a month on Tuesday after the Congressional Oversight Panel, which runs the US government’s TARP scheme, warned that the Treasury had not done enough to relieve banks of toxic assets.
BofE suppresses bond yields: IMF
Long-term UK government bond yields appear to have been suppressed by about 40bp to 100bp by the Bank of England as a result of its unorthodox monetary policies, an IMF study has found. These policies have left the Bank holding a large chunk of the total UK government bond market,
Atticus to close flagship $3.5bn fund
Atticus Capital, the activist hedge fund group co-chaired by banking dynasty scion Nathaniel Rothschild, is closing its flagship $3.5bn fund and group founder Timothy Barakett is stepping down as manager of the fund.
Deutsche Bank backs Sal Oppenheim
Deutsche Bank has backed a €300m ($423m) injection of capital by shareholders for Sal Oppenheim as the two banks continue talks over a possible equity shareholding. The step appears to strengthen Deutsche’s role at Luxembourg- based Sal Oppenheim,
CIT misses quarterly results deadline
CIT, the troubled US small-business lender, on Tuesday delayed filing its Q2 results with the SEC, saying its restructuring efforts meant it was unable to meet the deadline without “unreasonable effort or expense”.
Wachovia agrees ARS buy-back
Pennsylvania reached an agreement with Wells Fargo’s Wachovia unit to offer to buy back $324.6m of auction rate securities from residents in the wake of the collapse of the ARS market in early 2008, reports the WSJ.
FSA steps back from bank pay rules
The UK’s Financial Services Authority has backed away from specific recommendations on how bankers’ bonuses should be structured for fear they could undermine the UK’s competitiveness. The City regulator’s final remuneration code,
China’s economy cools as lending slows
China’s surging economy slowed slightly in July after Beijing instructed state-controlled banks to curb excessive lending, with the volume of new lending dropping 77% from a month earlier. Most economic indicators however suggested a continuing strong recovery,
China formally arrests Rio staff
Chinese prosecutors have formally arrested four employees of mining giant Rio Tinto on suspicion of violating commercial secrets and bribery, reports Reuters, citing the official Xinhua news agency. Australian national Stern Hu and three Chinese employees of the Anglo-Australian company are suspected of ”using improper means to obtain commercial secrets about our country’s steel businesses”,
Resolution finally seals Friends deal
Resolution finally captured Friends Provident on Tuesday after the life assurer’s board recommended the latest £1.86bn offer from Clive Cowdery’s Guernsey-based acquisition vehicle. The deal was announced as Friends reported disappointing first-half results,
UK companies to cut dividends
Britain’s bigger listed companies are forecast to pay out £8bn less in dividends this year as many seek to repair balance sheets that became overstretched before the credit crunch, according to the share registration arm of outsourcing specialist Capita.
Collins Stewart signals optimism
Collins Stewart struck a cautiously optimistic note about market conditions after announcing a first-half profit and a round of appointments in corporate broking and securities businesses. Revenues across the stockbroker’s four divisions totalled £95.3m,
US economy has bottomed: Soros
The US economy has hit bottom and the current quarter will see positive growth due to the government’s stimulus spending, billionaire financier George Soros told Reuters Television on Tuesday. Soros said government stimulus efforts had “made a difference” and that the US economy faces a positive quarter,
Overnight markets: Down
Asian stocks fell on Wednesday for the first time in three days, as commodity prices declined and a weaker dollar reduced Japanese automakers’ overseas earnings prospects. Futures on the S&P500 Index added 0.2% after the gauge slid 1.3% on Tuesday,
Madoff deputy DiPascali will “tell all” (updated)
So much for Bernard Madoff’s claim that he acted alone. ABC News reported on Tuesday that Frank DiPascali, Madoff’s finance chief, will “tell all and name names” under the terms of his plea deal with prosecutors:
Emerging market consumers not persuaded by plastic
Plastic in the form of credit cards, that is.
The Business Standard reported on Tuesday that in India, “the annual growth in credit card balances has fallen to an all-time low”:
According to the Reserve bank of India (RBI) data,
Madoff’s deputy facing 10 criminal charges
Bloomberg reports:
Frank DiPascali, the finance chief at Bernard Madoff’s investment advisory business, is being charged with 10 crimes related to his boss’s $65 billion Ponzi scheme.
U.S. prosecutors said the charges against DiPascali,
CDS report: Markets widen as traders take profits
This CDS report was written by Markit’s Gavan Nolan
European credit markets widened today as investors continued to take profits following the recent rally. The Markit iTraxx Europe was over 5bp wider at 90.25bp,
Hedge funds still not quite earning those 2-and-20s
Hedge fund returns are on the up, Reuters reported on Tuesday, citing the latest data from Hedge Fund Research:
Hedge funds posted more gains last month, providing fresh evidence that the $1.4 trillion (840 billion pounds) industry is recovering after last year’s heavy losses and record redemptions.The average hedge fund gained 2.42 percent in July after having inched up 0.13 percent in June,
The CIT deathwatch continues
Increasingly, the question seems to be when – rather than if – troubled commercial lender CIT will file for bankruptcy.
The lender has faced a series of end-of-the-world deadlines and won an equal number of eleventh hour reprieves,
Who’s afraid of the US federal budget?
Never one to shy away from a good fiscal debate, Niall Ferguson, financial history professor at Harvard, sounds the alarm on the Obama administration’s looming federal deficit problem in a Tuesday FT comment piece.
Lunch Wrap
On FT Alphaville on Tuesday morning,
- A friendly resolution, at last.
- Introducing the BoE Macro Plus Fund.
- The mystery of China’s disappearing mega oil-bid.
- Another day, another Chinese resources deal Down Under.
Introducing the BoE Macro Plus Fund
Here’s an interesting view on the Bank of England’s recent foray into the world of outright asset purchases from Evolution Securities on Tuesday:
1. As of Thursday the 6th August, the bank owned £918m corporate bonds.
Markets live transcript 11 Aug 2009
Markets live chat transcript for the chat ending at 11:58 on 11 Aug 2009. Participants in this chat were: Bryce Elder (BE) Miles Johnson, FT (MJ)
BE:
It’s 11.04am …
BE:
Welcome to understudy Tuesday on Markets Live.