October, 2009
Bloomberg to buy Business Week
Bloomberg, the financial information company, on Tuesday won the auction for Business Week with an offer between $2m and $5m for the US financial magazine. The deal to buy the journal from McGraw-Hill came as Thomson Reuters,
Hedge funds ‘misrepresent facts’
One in five hedge fund managers misrepresents their fund or its performance to investors during formal due diligence, according to New York University’s Stern School of Business. Using confidential data taken from 444 due diligence reports commissioned by investors between 2003 and 2008,
AIG staff resist bonus payback
Some executives at AIG have yet to give up part of their controversial retention bonuses amid uncertainty about future compensation at the US insurance group. A report due on Wednesday from Neil Barofsky,
Australia’s Packer raises casino stake
James Packer, Australia’s richest man, has raised the stakes in a bet that has so far lost at least $1bn, reports Bloomberg. Packer paid A$205m ($186m) to increase his stake in Crown, Australia’s largest casino owner,
Court to hear Skilling appeal
The US Supreme Court has agreed to hear an appeal by Jeffrey -Skilling over his criminal conviction in the Enron case. The decision raises the prospect that yet another verdict in the government’s five-year investigation into criminal activity at the Houston energy company could be overturned.
Peek to quit CIT
Jeffrey Peek submitted his resignation on Tuesday as chief executive of CIT Group as the troubled US commercial lender struggled to gain support from bondholders for its debt exchange plan. If CIT fails to win support for the plan – aimed at eliminating at least $5.7bn of its $30bn debt – it will automatically switch to a prepackaged chapter 11 bankruptcy filing.
Overnight markets: Mostly up
Asian stocks mostly rose on Wednesday, after a better- than-estimated sales forecast at Intel boosted technology shares, offsetting a decline among financial companies. Futures on the S&P500 Index climbed 0.9% after the gauge slipped 0.3% on Tuesday.
Baby Boomers working longer, for less
The deep recession in the US has accelerated a trend toward late retirement, according to BNP Paribas analyst Julia Coronado.
In the second installment of her series on how the financial crisis has changed the retirement landscape for the Baby Boomers,
US commercial real estate datapoint du jour, Hawaiian hotels edition
On Tuesday, the Wall Street Journal published a story on the downturn facing the Hawaiian resort industry. It began with this sobering stat:
For the hotel industry in the continental U.S., this downturn is the worst since the Great Depression.
Public versus private FX forces
We’ve noted the level of state intervention currently impacting FX markets. But Barcap’s Steven Englander puts it all rather succinctly in his latest note.
For the BarCap man, it is down to a battle between public and private interests (our emphasis):
Moody’s still negative on Spanish banks
It’s pretty much the done thing these days to question the fundamentals of the Spanish banking system, but — and it surprises us to say this — Moody’s has been ahead of many (though not the FT) in warning about the pain in Spain.
Mystery Meredith Whitney Goldman downgrade – update
Okay – if you want to know what Meredith said about Goldman Sachs on Tuesday, you no longer have to try to mind-meld with the bankslayer.
Here’s why she downgraded the mighty Goldman:
And as a special bonus,
Moving targets, QE edition
Here’s a significant development in the Bank of England’s quantitative easing, we think.
Charlie Bean, the Bank’s deputy governor for monetary policy, has just made a speech called “Quantitative easing:
Non-slacker at the Fed
Reuters columnist Rolfe Winkler points us to a recent speech and presentation by Fed governor James Bullard.
The speech, Winkler says, is a direct refutation of economist Paul Krugman’s ideas that inflation,
Special FX moves
Here’s some chart porn to commemorate Tuesday’s special FX moves:
All of which is having the following effect on commodities:
Nice.
Of course, there’s one G7 currency you can trust to perform even more badly than the US dollar — the GBK:
Lunch Wrap
On FT Alphaville Tuesday morning,
- Meredith Whitney’s mystery Goldman downgrade.
- We are all liquid now.
- The UK farmland grab.
- Mortgage convexity crops up.
- Ostrom Nobel reflections in Further reading.
Markets live transcript 13 Oct 2009
Markets live chat transcript for the chat ending at 12:19 on 13 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) Paul Murphy (PM) NH:heloooooooooooo NH:it’s 11.03
Mystery Meredith Whitney Goldman downgrade
This is how analyst Meredith Whitney treats the media — the industry that helped turn her into the renowned bankslayer she is today:
While clients get the full Goldman note, journalists are left to psychically read Whitney’s thoughts.
Convexity crops up
Uh oh. There’s that word again — convexity.
Here it is in the Wall Street Journal:
[FTN Financial's Walt] Schmidt said mortgages are performing well, considering 10-year Treasury notes are yielding close to 3.2%.
The UK farmland grab
Forget gold. The ultimate defensive investment strategy in the UK appears to be farmland.
Consider the following chart, included in a press release from property consultants Knight Frank, which compares the performance of UK farmland with that of the FTSE.
We are all liquid now
The most (popularly) insensitive quote of the year award goes to the FSA’s liquidity manager, David Morgan.
In a Friday speech on the FSA’s new liquidity rules for banks, which will see them buying more government bonds,
Further reading
Elsewhere on Tuesday,
- The Epicurean Dealmaker vs James Kwak, or a defense of would-be investment bankers.
- What’s the difference between QE and debt monetization?
- Reflections on the Ostrom Nobel.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
A seven-point banking plan
Anthony Bolton, president, investments, of Fidelity International, writes: The past 12 months has been a near-death experience for the global financial system.
AV after dark
On FT Alphaville late Monday,
- The perils of corporate email, Bear Stearns edition.
- The media ♥ Jim Rogers.
- Cash-crunched, scandal-hit Dubai.
Overheard in the Long Room,
- Why one buyside guy thinks US equities are a buy.
Snap news
Breaking pre-market news on Tuesday,
- Old Mutual prices a £500m fixed rate senior bond – statement.
- ITV announces convertible offering – statement.
- Corporate: Carillion, Connaught, Whitbread,
Overnight markets: Up
Asian stocks rose, led by Japanese automakers as the yen weakened, while a strongly positive Goldman note boosted steelmakers and banks, Bloomberg reported on Tuesday. “We are turning maximum bullish on Asian Steel and on Japan in particular,”
Bishop drops out of race for ITV chair
ITV lurched deeper into crisis on Monday after its latest candidate for chairman pulled out of talks to take the post following consultations with major investors including its largest shareholder and business rival,
BofA to hand over Merrill documents
Bank of America agreed to hand over documents detailing the legal advice it received during its purchase of Merrill Lynch, the WSJ said, citing people familiar with the situation. The reversal, which comes after months of resistance,
Britain faces £26bn tax rise to repair economy
Britain must raise taxes by £26bn per year – including “significant” rises in income tax, national insurance and VAT – or cut public spending by 17 per cent in the three years to 2013-14, over and above the measures proposed in this year’s Budget,
Sterling hits five-month lows
The outlook for global monetary policy shaped action on the foreign exchange markets on Monday, with sterling the main casualty, the FT reported. A report from the Centre for Economics and Business Research predicted that UK interest rates would remain at their historic low of 0.5 per cent through 2010.