August, 2009
SEC chief in call for funding shake-up
America’s SEC should fund itself directly from industry fees, a system that would allow it to tackle more complex investigations and invest more in technology and skilled people, Mary Schapiro, its chairman,
Murdoch to charge for all online content
Rupert Murdoch has vowed to charge for all the online content of his newspapers and TV news channels, going well beyond his plan announced in May to test pay models on one of News Corp’s stronger papers.
ITV to sell Friends Reunited to DC Thomson
ITV is set to sell Friends Reunited to DC Thomson, the Dundee-based publisher, for £25m – less than four years after the broadcaster bought the social network for £170m – in a deal that could be announced as soon as Thursday.
Trump faces bondholder battle
Trump Entertainment Resorts bondholders plan to reject Donald Trump’s attempt to take control of the bankrupt casino company saying it would leave their securities worthless, reports Bloomberg. The bondholders are owed $1.25bn.
Former Amex chief tipped for AIG chair
Harvey Golub, a respected former head of American Express, has emerged as the frontrunner to become chairman of AIG, in a move that would provide the stricken insurer with a robust defender against congressional critics.
Overnight markets: Mixed
Asian stocks were mixed on Thursday as Nikon Corp forecast a record loss, some investors speculated China’s central bank may rein in lending and mining companies gained on higher metal prices. Futures
SEC gets aggressive on “abusive” short selling
The SEC is having a very busy week. On Monday, it fined Bank of America $33m; on Tuesday, it hit GE with a $50m penalty for alleged accounting fraud. And on Wednesday, the US regulator charged two options traders and their broker-dealers with violating the requirements of Reg SHO.
Fannie and Freddie’s uncertain future
The future of those historic linchpins of the US housing market, Fannie Mae and Freddie Mac, is looking increasingly uncertain.
Consider these two separate – though perhaps not unrelated – pieces of news.
CDS report: Markets widen after US data disappoint
This CDS report was written by Markit’s Gavan Nolan
European credit lost ground today after disappointing data from the US. The Markit iTraxx Europe index closed around 91.5bp, just under 1bp wider on the day.
In defence of energy speculators
The FT reports on Wednesday that:
An unsigned paper opposing trading limits circulating in Houston’s natural gas hedge fund community warns that “domestic liquidity will suffer terribly” as CFTC rules grow more onerous.
Goldman faces increasing scrutiny on pay and derivatives
Goldman’s 10-Q is always an interesting read, but the former investment bank’s update for the second quarter of 2009, filed on Wednesday, was particularly revelatory.
Take these “other matters”, emphasis FT Alphaville’s:
The point of cutting costs is to have lower costs…
… Someone should tell UBS.
UBS reported dismal 2Q results on Tuesday — but don’t feel too sorry for its bankers.
Despite cutting 1,140 jobs in the last quarter, the investment banking division,
Lehman’s $627m tax bill
The NY Times’ DealBook reported on Wednesday that Lehman Brothers stands accused – by none other than the administration of New York mayor Michael Bloomberg – of shortchanging the city to the tune of $627m in corporate and other taxes.
Finance’s best-dressed
Ooh la la.
Vanity Fair has released its 2009 international best-dressed list, its annual compendium of the most style-tastic people on the globe, and it looks like quite a few financial players have made the cut.
Lunch Wrap
On FT Alphaville Wednesday morning,
- Laughing Lloyds.
-The Church of England’s search for yield.
- Who’s benefiting from China’s recovery?
- The dollar shortage problem, evaluated.
- Lloyds in a ‘period of maximum stress’.
The dollar shortage problem, evaluated
When central banks around the world initiated unlimited and multiple swap lines at the peak of the financial crisis last year, the mainstream press gave the event little, if any, coverage.
The jargon,
Markets live transcript 5 Aug 2009
Markets live chat transcript for the chat ending at 11:51 on 5 Aug 2009. Participants in this chat were: Tracy Alloway, FT (TA) Paul Murphy (PM)
TA:
Hello there
TA:
It’s 11.00
Who’s benefiting the most from China’s recovery?
Standard Chartered points out that LatAm and Africa have done well from China’s recent commodity stockpiling:
Related link:
China’s growth figures simply don’t add up – FT
Laughing Lloyds
Lloyds shares were up 5.5 per cent in early trade on Wednesday, even after the bank posted higher than expected impairments on bad debt.
From the statement:
Impairments in the first half were £13.4 billion,
Joy meets God in the Church of England’s search for yield
After what it must have deemed a decent interval since triggering a furore over its attack on traders and bankers as “robbers and assassins” last year, the Church of England is shamelessly seeking more yield.
Lloyds in a ‘period of maximum stress’
Lloyds Banking Group’s bad debts have managed to exceed analysts’ estimates, even as the bank’s £4bn proforma loss was better than the worst expectations.
The lender set aside £13.4bn for bad debts,
Further reading
Elsewhere on Tuesday,
- What would crack this rally?
- Goldman: we do not frontrun our clients.
- Brad Setser goes to Washington.
- “When I was 14, Warren Buffett wrote me a letter.”
- How the 2008 shorting ban damaged market quality.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
The price is not always right
The ‘efficient market hypothesis’ has been a fact of life for economists, writes Richard Thaler, professor of economics and behavioural science at the University of Chicago Booth School of Business and the co-author of ‘Nudge’.
Snap news
Breaking pre-market news on Wednesday,
- Lloyds interim proforma loss widens to £4bn — statement.
- Allied Irish Banks posts interim loss of €786m — statement.
- Halifax UK house prices rise 1.1 per cent in July — statement.
SEC eyes flash-trading ban
America’s SEC is preparing to clamp down on lightning-fast “flash” trades made on electronic trading systems amid complaints that the practice puts some investors at a disadvantage. Mary Schapiro, SEC chairman,
GE settles claims of fraud in accounts
General Electric agreed on Tuesday to pay $50m to settle civil accounting fraud charges, calling into question its famed ability to deliver consistent earnings growth. The settlement with the SEC – which accused GE of bending accounting rules “beyond breaking point” – involves a relatively small payment.
BNY Mellon in talks over manager Insight
Bank of New York Mellon is in advanced talks to buy the bulk of Insight Investment Management, one of the UK’s biggest fund managers, in a deal that could be worth up to £235m. BNY Mellon beat several rivals including Schroders and Hellman & Friedman in the auction for Insight,
BNP to take over Italy’s Findomestic
BNP Paribas on Tuesday agreed to take full ownership of Italy’s second-largest consumer finance house in a deal with Intesa Sanpaolo worth up to €1.15bn ($1.66bn). The French group, which took over Fortis of Belgium earlier this year,
S&P downgrades UK bank debt
UK banks with government stakes saw a sharp downgrading of chunks of their debt on Tuesday after S&P concluded the government’s sweeping powers could harm bondholders. The downgrades followed the government’s decision earlier this year to suspend interest payments due on some so-called “tier two”