September, 2009
Overnight markets: Mostly down
Asian stocks mostly fell on Monday, dragging the MSCI Asia Pacific Index from a one-year high, as the dollar weakened and New Zealand retail sales unexpectedly fell. Futures on the S& 500 Index dropped 1% after the gauge dipped 0.1% on Friday despite a report showing better than expected consumer sentiment.
The Weekender
On FT Alphaville this week,
- Dear Cadbury’s…love, Kraft.
- Emergency, securitised CPR.
- British Airways suffered pension tension.
- Santander subordinates took a siesta.
- Cay-man down.
The end of Corus bank, enabler of the condo boom
On Wednesday, the New York Times published a colourful feature on the aftermath of the condo boom in Florida. At the center of the piece, described as the “now tottering king of American finance”: Corus Bancshares of Chicago.
CDS report: Summer’s over. Is the recession ending too?
This CDS report – a review of the week that was – was written by Markit’s Gavan Nolan
Summer is drawing to a close amid a growing consensus that the global recession has also reached its denouement.
[The Lehman Anniversary] A data retrospective
Justin Walters, co-founder of Bespoke Investment Group, provided the following series of charts and tables.
Table one: the performance of major sectors and indices in the aftermath of Lehman
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Table two:
[The Lehman Anniversary] ‘It felt like someone had just died a tragic and untimely death’
The following piece is an FT Alphaville dramatisation of an account by a junior Lehman M&A banker who watched the collapse unfold in 2008. All rights reserved.
You can also listen to this account, as voiced by a member of the FT Editorial team.
[The Lehman Anniversary] Academia
Lehm-educate yourself this weekend with our selection of academic papers and speeches examining the fall of the investment bank.
Financial crisis, global conditions, and regime changes
In this VoxEU paper,
[The Lehman Anniversary] Quotes du crise
FT Alphaville presents a selection of visionary — and not so visionary — quotes from the Lehman crisis.
To start, Dick Fuld, CEO of Lehman, on October 6, 2008:
I’m not sure I would say it was a house of cards .
[The Lehman Anniversary] One year ago: what the blogosphere and media said
FT Alphaville goes back to the morning (and afternoon) of September 15. Here’s what the blogs and media were saying as the day’s events unfolded.
The media:
Wilbur Ross: Possibly a Thousand Banks Will Close – CNBC
In an exclusive interview with CNBC.com,
[The Lehman Anniversary] One year on: the media commemorate the fall
September 15 2009 will mark the one-year anniversary of Lehman Brothers’ momentous collapse.
The mainstream media are churning out retrospectives, interactive features and video specials in commemoration of the event.
Lunch Wrap
On FT Alphaville Friday morning,
- The unloved dollar and other currencies.
- Leverage ratios are the new VaR?
- The new carry currency.
- Cave, vomiturus sum.
- Investors ♥ US govies.
Markets live transcript 11 Sep 2009
Markets live chat transcript for the chat ending at 12:08 on 11 Sep 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:Hello again NH:its 11.03am
Investors ♥ US govies
The result of Thursday’s 30-year bond auction:
So, what can we discern from the above?
Reuters says bidding was the second highest on record since the 30-year bond was reintroduced in February 2006,
Cave, vomiturus sum
Caveat emptor. Etc.
Earlier this week a Connecticut judge ordered UBS to set aside $35.5m to cover a potential judgement on a case brought by Pursuit Partners, a hedge fund based in the same state. Pursuit claims that UBS sold it CDOs without revealing that it believed Moody’s was about to downgrade the securities.
The new carry currency?
The question’s being asked after the 3-month US dollar LIBOR rate fell to a record low of 0.299 per cent, leaving it some way below the Yen and the Swiss franc.
Leverage ratios are the new VaR?
What happens when you get Rick Bookstaber and Nassim Nicholas Taleb in the same room, to talk about one of the most controversial risk measures of the financial crisis?
They (almost) agree.
The two were speaking in front of the US House of Representatives Committee on Science & Technology,
The unloved dollar and other currencies
There was a time, writes Irwin Stelzer in Thursday’s New York Post,when the US Treasury secretary would stand on the steps of the Treasury building and pronounce America’s policy of maintaining a strong dollar.
Further reading
Elsewhere on Friday,
- The man who fuelled Lord Turner’s attack on the City.
- Measuring GDP from outer space (really).
- “OK still have this vomit?” one UBS employee asked.
- What finance stories aren’t being told?
- “Did Morgan Stanley’s CEO John Mack Just Get ‘Shot?”
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Lehman collapse: a catastrophe unfolds
See FT.com’s in-depth report combining comment, analysis and interviews with key figures surrounding the collapse of Lehman Brothers and its aftermath.
Snap news
Breaking pre-market news on Friday,
- Vedanta Resources announces revised $2.565bn cash offer for operating assets of Asarco – statement.
- Tesco and Fortis conclude discussions to form a new motor and household insurance partnership – statement.
Morgan Stanley’s Mac steps aside
John Mack will step down as chief executive of Morgan Stanley, ending a four-year tenure marked by controversy over his strategic decisions and a near-death experience during last year’s financial crisis.
GM opts for Magna in Opel deal
General Motors is to sell Opel, its lossmaking European subsidiary, to Canada’s Magna International and Russia’s Sberbank, ending months of uncertainty over the carmaker’s fate that had threatened to overshadow this month’s German elections.
Bank of England holds rates
The Bank of England signalled that the economy is stabilising on Thursday when it left monetary policy unchanged and felt no need to explain its decision. The Bank’s monetary policy committee held rates at 0.5% and decided against expanding its £175bn programme of quantitative easing.
US starts to unwind bank support
The US is starting to pare back its emergency support for banks and financial markets, Treasury secretary Tim Geithner said on Thursday, announcing that the state guarantee for the $2,500bn money market mutual fund industry will expire on schedule this month.
UK hedge funds to launch onshore vehicles
Some of London’s largest hedge funds are poised to launch onshore funds in order to trump strict new regulations expected from the EU. Cheyne Capital, the $6bn hedge fund manager, is set to become the latest big UK name to launch a so-called Ucits III fund – the term under the EU’s framework for an investment vehicle that can be marketed across the Union.
Pru looks to Asia for capital
UK insurance giant Prudential will look to Asia as a source of capital and could even seek to raise equity there after seeing strong demand for a $750m hybrid capital raising in the region this year. Tidjane Thiam,
UK’s JJB, Sports Direct, raided in probe
The offices of JJB and Sports Direct were raided on Thursday as part of an investigation over possible price fixing and fraud. The Office of Fair Trading is in the early stages of a probe of the sportswear retailers,
China’s industrial production rises 12%
China’s industrial production grew at a faster pace in August, reports Bloomberg. Output gained 12.3% from a year earlier, after climbing 10.8% in July, compared with an 11.8% median estimate of economists surveyed by Bloomberg.