October, 2009
The Weekender
This week on FT Alphaville,
- Home Affordable Modification Plan.
- A discussion about jobs.
- Black Swan for dummies.
- The opposite of a rate-slasher movie?
- Posen prose.
- A prime baby and other news from David Einhorn.
How to ruin a business journalist’s weekend, Bernard Madoff edition (UPDATED)
It might be bank failure Friday, but it’s also “closer look at how the SEC utterly embarrassed itself r.e. Bernard Madoff” day.
The SEC has released a detailed archive of exhibits compiled in support of the recently published report on the regulator’s failure to uncover Bernard Madoff’s epic Ponzi scheme.
Ross, Icahn expect a commercial real estate crash
Carl Icahn is a busy man. On the same day he agreed a restructuring plan with constantly-on-the-verge-of-bankruptcy CIT, he told Bloomberg’s Tom Keene he quite concurred with Wilbur Ross’ earlier assessment of the outlook for commercial real estate in the US,
CDS wrap: Is decoupling back?
Markit’s Gavan Nolan wrote this CDS report
Decoupling theory was thought to have suffered a fatal blow over the past 18 months. Its advocates were dismayed to find that emerging economies did not hold firm while developed countries collapsed in a financial-induced mess.
The SEC’s latest haul includes two kids, aged 9 and 11…
The regulator has gone all 2.5D. This is an illustration of the Tang clan, associated friends and their investment vehicles. Click to enlarge.
Chen Tang, from Fremont, California, along with six friends and relatives and two children,
Skittish, or what? Friday’s bath on Wall St
When major, liquid, deeply-researched equity indices start going up or down by 2 per cent or more on a daily basis, it’s time to don our favourite piece of headgear.
What a puzzle. US investors celebrated a marginally higher-than-expected GDP figure on Thursday,
CNBC = NSFW
What is CNBC playing at? The business network seems to be getting into Fox Business territory with its latest online feature, or “Highlights From Frederick’s 2009 Fall Collection”.
A sample of the goods on display (click to enlarge,
Those money-losing FHLBs
FT Alphaville has maintained a somewhat skeptical stance as far as the 12 Federal Home Loan Banks (FHLBs) are concerned. The FHLBs are major sources of funding for a slew of US financial companies, as Bloomberg pointed out on Friday:
US consumers increasingly worried about their finances
On the heels of a report showing US consumer spending declined in September comes fresh data showing that Americans are increasingly worried about their personal finances.
The Reuters/University of Michigan Survey of Consumers final index of sentiment for October slipped to 70.6,
CIT, or the world’s least unexpected bankruptcy filing (UPDATED)
Alright, there are more than a few contenders to the title of the world’s least unexpected bankruptcy filing (not least Woolworths, or Thornburg Mortgage), but CIT has to be up there.
On Friday, CNBC reported the deeply troubled consumer lender would file for Chapter 11 bankruptcy protection on Sunday night.
The CME’s sour
Just two days after Saudi Aramco decided to change the way it prices its oil – by abandoning the Platts WTI benchmark in favour of Argus Petroleum’s Sour Crude Index – the CME, owner of the Nymex exchange,
US consumer spending falls sharply in September
Spending by US consumers fell for the first time in five months in September, and by the largest amount in percentage terms since December 2008, data released by the Commerce Department on Friday show.
RIP oil fundamentals?
Remember the days when hurricanes and geo-political events made oil fly?
Well, according to Olivier Jakob at Petromatrix, those days — for the time being at least — should be forgotten. The correlations between the Dow,
Lunch Wrap
On FT Alphaville on Friday morning,
- UK economy like an episode of Eastenders, says Morgan Stanley.
- This year’s Halloween favourites.
- I LUV u – Sir Martin Sorrell gets creative.
- No discount for you,
Fitch slashes UK building societies
Oh dear, oh dear.
Nationwide may have reported the first annual gain in UK house prices since March 2008, but that won’t offer much respite to UK building societies, seven of which on Friday had their lower tier 2 subordinated notes (LT2) and permanent interest bearing shares (PIBS) downgraded between one and two notches by ratings agency Fitch.
Greenwich: Equity derivatives are looking good
US institutions are increasing their use of highly liquid “flow” equity derivatives, but declines in asset values and a sharp fall in hedge fund trading activity have driven down both notional amounts of equity derivative trades and the amount of commissions paid by institutions on trades of these products,
Markets live transcript 30 Oct 2009
Markets live chat transcript for the chat ending at 12:09 on 30 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:hello NH:Good morning
This year’s Halloween favourites
This Saturday is Halloween. If you’re in finance and fancy making an ironic statement — or just want to deflect from being part of ye most hated of trade guilds — then perhaps you might consider some of the following outfits we at FT Alphaville have cherry-picked as favourites for this year’s festivities.
Smithers: ‘We will muddle through’
Economist and uber-pundit Andrew Smithers is on a roll, having drawn attention in the financial media this week with his latest report contending that the US stock market is 40 per cent overvalued.
Smithers – who regularly opines on everything from Japan to the US stock markets and UK monetary policy – also has central bankers firmly in his sights with his new book,
UK economy like an episode of Eastenders, says Morgan Stanley
And that’s not because an ageing, vituperative boss is on their way out.
The UK economy is in a sorry state compared to its global peers, says Morgan Stanley strategist Graham Secker.
Macro watchers in the UK have lots to keep their attention just now;
No discount for you, says Erste Bank
Austrian lender Erste Bank — heavily invested in the emerging European banking systems of countries like Romania and the Czech Republic – said late Thursday it was launching a €1.6bn no-discount rights issue to bring its capital base in line with raised expectations on mounting loan losses in emerging Europe.
London’s nightmare is New York’s dream
Oh no! London city regulators’ and politicians’ worst nightmares have come true – not only has London failed to gain a much hoped for lead over New York, but it has fallen behind Singapore in the contest to be the world’s top financial centre.
I LUV u – Sir Martin Sorrell gets creative
Sir Martin Sorrell, he of the famous “bath shaped recession” quip, appears to have a growing addiction to shape-based economic prognosis.
Having already offered his prediction for an “L-shaped” recession,
Further reading
Elsewhere on Friday,
- Bernanke’s modern encapsulation of Friedman’s bold revelation.
- The story behind WaMu’s demise.
- ‘David Rosenberg makes Nouriel Roubini look like Mary Poppins’.
- If you want to rein in bankers’ pay,
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Philip Stephens: The future or the museum? Europe’s moment of choice
The other day a visitor from China asked whether I thought Britain was falling into inexorable decline.
AV after dark
On FT Alphaville late Thursday,
- The clairvoyant news on Oracle-Sun – is the deal about to unravel?
- Barclays lost $220m in scandal-hit German hedge fund K1.
- Ratings agencies change their mind about everything,
Snap news
Breaking pre-market news on Friday,
- Nationwide UK house price index shows annual house price inflation was positive for first time since March 2008 – statement.
- Cosmen family voices concern about “absence of a well defined strategy”
Lloyds seeks to raise £21bn
Shares in Lloyds Banking Group surged 7.5% on Thursday as the bank began consultations with investors about a £21bn capital raising and played down the impact of concessions demanded by Brussels for state aid.
US, Asia, show new growth
The US economy returned to growth in the third quarter after the longest economic contraction since the Great Depression. Official data on Thursday showed that Q3 US GDP grew at an annual 3.5% – slightly above analysts’ predictions – after shrinking in each of the past four quarters.
K1 founder arrested as probe expands
The trans-Atlantic investigation into the K1 hedge fund group escalated on Thursday when its founder was arrested in Germany and US authorities revealed a money-laundering probe that is reportedly connected with the European inquiry.