August, 2009
Lunch Wrap
On FT Alphaville Friday morning,
- Regarding RBS’s mark-to-make-believe.
- Twitter, the first casualty of war?
- RBS and Her Her Majesty’s APS.
- Weighing talent and executive pay.
- Cash-for-’fill-in-the-blank’.
The problem with non-farm payroll numbers
Yes, everything is wonderful, stocks have been rallying, and the pitter patter of people going back to work is supposedly to be demonstrated in Friday’s US non-farm payroll figures.
Reuters puts the consensus figure at a loss of 320,000 jobs in July,
Yesterday it was banks, now it’s cash-for-’fill-in-the-blank’
If the term “cash for clunkers” festooning just about every news website, TV programme and newspaper is starting to drive you mad, think again.
Not since before the financial crisis has a chunk of US government spending been ushered through with so little opposition,
Markets live transcript 7 Aug 2009
Markets live chat transcript for the chat ending at 11:44 on 7 Aug 2009. Participants in this chat were: Paul Murphy (PM) Bryce Elder (BE) PM:Hi 11:02AM PM:Welcome to Market Live
Hands off, in tax haven
The New York Times on Friday puts an undoubtedly unwelcome spotlight on the Guernsey haven of one of Britain’s most high-profile taxpatriates, financier and private equity player Guy Hands.
As the
Attendant QE rallies, exits and the Japanese experience
Here, just for you dear readers, is a selection of analyst reaction to the Bank of England’s surprise Thursday decision to extend quantitative easing by £50bn.
The highlights are our own, throughout,
Weighing talent and executive pay
Here’s an annual talent/performance ranking for S&P 1500 chief executives compiled by two academics, Jaeyoung Sung from Korea’s Ajou University and Peter Swan from the Australian School of Business, NSW.
Loss in Translation
Wednesday’s edition of City A.M. saw columnist Victoria Bates direct readers’ attention to Andrew Davidson’s new book ’1,000 CEOs’.
As she points out Lloyds CEO Eric Daniels’ entry stands out — for all the wrong reasons.
Regarding RBS’s mark-to-make-believe
Alongside RBS’s £1bn first-half loss published on Friday, comes an update on its Level 3 assets.
Level 3 assets, you might remember, are those whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
Twitter, the first casualty of war?
Twitter’s nearly day-long outage on Thursday has been put down to a “denial of service” attack by its operators.
However, that hasn’t stopped people from speculating who was behind it. The FT, for one,
RBS and Her Majesty’s APS
Check out these impairments, from RBS’s just-released interim results:
Impairments, however, rose sharply to £7,521 million, compared with £1,479 million in the first half of 2008. Over 70% of the impairment costs arose in the Non-Core division,
Further reading
Elsewhere on Friday,
- Larry Summers, economic recovery and Ben Bernanke.
- Dear Mr Banker, did you consider a (bonus) haircut?
- What mainstream press can learn from a Goldman takedown.
- The true costs of cheaper calories and commissions.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Samuel Brittan: Economists shuffle the deckchairs
The popular view of economists is that they exist to make forecasts and do so badly. One of the more basic rules of the subject is that where a demand exists some people will come forward to supply it
Exchanges should unite to end flash orders
Bob Greifeld,
Snap news
Breaking pre-market news on Friday,
- RBS posts H1 proforma net attributable loss of £1bn, appoints new CFO — statement, statement.
- Allianz posts Q2 net profit of €1.87bn — Reuters.
- OFT refers Sports Direct’s acquisition of 31 JJB stores to the Competition Commission — statement.
BofE boosts QE scheme to £175bn
Doubts about the strength of the UK’s economic recovery re-emerged on Thursday after the Bank of England’s rate-setting MPC surprised markets by voting to pump an extra £50bn into the economy. The Bank’s MPC voted to extend its so-called quantitative easing programme of buying government and corporate bonds from £125bn to an unexpectedly large £175bn,
ECB holds rates, Germany optimistic
The ECB left its main interest rate unchanged at 1% on Thursday, as expected, just hours after another surge in Germany industrial orders lifted hopes of an early end to the severe recession in Europe’s largest economy.
Nasdaq OMX, BATS, to stop flash orders
Two of the three US equity exchanges that allow traders to use flash orders said on Thursday they would voluntarily end the practice from September. The announcements by Nasdaq OMX and BATS Trading came just days after Mary Schapiro,
Investor demand fuels ETF rebound
Assets invested globally in exchange traded funds have reached a record high of $862bn amid partial recovery in equities and continuing strong demand for passive investment. The value of global ETFs plunged from $805bn in April 2008 to $711bn at the end of 2008 as recession hit stock,
Aviva plans Delta Lloyd IPO
Aviva, the UK’s biggest insurer, will explore a partial sale next year of Delta Lloyd, its Dutch subsidiary, which could raise about £855m. Andrew Moss, Aviva’s CEO, said the stake should be at least 25-30% to create a meaningful free float and boost Aviva’s financial flexibility.
Morgan Stanley to buy back Tarp warrants
Morgan Stanley is to pay $950m to sever yet another link to the US government’s bail-out plan, buying back warrants it gave the authorities as part of a $10bn capital injection last year. The bank said the redemption of the warrants,
High yield debt lifts Blackstone
Blackstone reported improved Q2 profits on Thursday after the US buyout group benefited from stock market rallies and a stronger market for high yield debt. But executives said they do not plan to list their companies any time soon.
Ex-SocGen investment bank head quits
The former head of investment banking at Société Générale resigned from the bank on Thursday after France’s markets regulator opened sanction proceedings against him over allegations of insider dealing.
KBC sets aside €300m for CDO claims
KBC, the Belgian bank that received three state bail-outs, has set aside €300m ($430m) to compensate private banking clients who lost out when their risky investments soured in the financial crisis. Claims for compensation from private investors,
Rising risk provisions hit Commerzbank
Commerzbank on Thursday raised its risk provisions as Germany’s second largest bank was hit in the second quarter by problems in property markets and turmoil in eastern Europe. But Commerzbank, which continues to struggle after its takeover of Dresdner Bank,
NYT hires Goldman for Boston Globe sale
The New York Times Co has enlisted Goldman Sachs to explore a sale of its New England Media Group, which owns the 137-year-old Boston Globe and other media assets, reports Reuters. The move confirmed longstanding
Publicis nears Razorfish acquisition
Publicis Groupe is closing in on an acquisition of Razorfish, Microsoft’s digital advertising agency, and could agree final terms by early next week. The situation remains fluid, but the French communications company has taken the lead in a contest with Dentsu,
Greenberg pays $15m in SEC settlement
Hank Greenberg, former chairman of US insurer AIG, on Thursday agreed to pay $15m to settle the SEC’s investigation into his role in accounting fraud at the troubled insurer from 2000 to 2005. The settlement focuses on Greenberg’s alleged involvement in “numerous improper accounting transactions” that inflated AIG’s results.
Twitter hit by cyber-attack
What might have been no more than a teenage prank knocked Twitter, the fast-growing internet communications service, offline for more than two hours on Thursdady. The micro-blogging firm, whose service allows text and web posting of messages of 140 characters or less,
Study finds women directors hurt profits
Having more women in the boardroom can hurt the financial performance of well-governed companies, according to research that is likely to be seized on by critics of diversity initiatives. The study, published this week in the Journal of Financial Economics,