October, 2009
Slow US recovery blamed on low demand
Weak demand from battered consumers will be a “major constraint” on the US economy for the foreseeable future, key White House adviser Lawrence Summers said on Monday. Mr Summers, the director of the National Economic Council,
JPMorgan tries to calm fears over UK
JPMorgan’s top executives have embarked on a charm offensive to allay fears by staff and regulators that the ousting of Bill Winters as co-head of the investment bank will mean a diminished role for its London operations,
CIT debt swap struggles, bankruptcy looms
CIT, the troubled lender to small and medium-sized businesses, is seeing little interest from bondholders in a debt exchange offer aimed at repairing its fragile balance sheet, Reuters said, citing sources familiar with the matter.
Apple director quits Google amid probe into board links
The close boardroom ties between Google and Apple were loosened further yesterday as Art Levinson, a director of both companies for five years, quit the board of the internet group with immediate effect,
Lehman Brothers bankers claim £70m in lost pay
Six European bankers at Lehman Brothers are claiming £70m for lost pay and bonuses from the administrators of the collapsed bank, the Telegraph reported, citing court documents. Italian banker Riccardo Banchetti,
Companies choose bonds over banks for cheap funds
Companies have borrowed more from bond investors than from banks and other loan providers for the first time this year in a bid to lock in cheap, long-term funding, the FT reported. Low interest rates and rising inflows into fixed-income funds have triggered record bond issuance as banks cut back lending.Global bond issuance from non-financial companies has reached $1,310bn in the year to date,
Third of staff at RBS Coutts Singapore quit
RBS Coutts, the international arm of the UK private bank, is scrambling to rebuild its flagship Singapore office after the mass resignation of one-third of its staff in the city-state, the FT reported.
Reliance accounts are questioned by Indian audit
The accounts of Reliance Communications, one of India’s biggest companies, have been questioned by a government-commissioned audit that alleges the group under-reported its revenue to the government and paid too little in licence and spectrum fees.
Citi marks a first for US retail banking as it opens in Vietnam
Citigroup today becomes the first US financial institution to open a retail operation in Vietnam in the latest sign of western companies targeting consumers in the fast-growing Asian economy. The US bank will open a branch in Ho Chi Minh City to provide deposit services to individuals and remittance services for the Vietnamese diaspora,
Dubai, cash-crunched and scandal-hit
What exactly is going on in Dubai?
Comments by an analyst at Standard & Poor’s – which has warned before about Dubai’s finances – suggest the emirate is running out of cash, and fast. As Dow Jones reported on Sunday:
Machine-readable Rogers
How’s this for a public service: a blog aggregating Jim Roger’s various media appearances around the world – which must be something pretty close to a full time job.
The 15th entry so far in October at the Jim Rogers Blog has to do with Jim’s view there is going to be a stock market correction. As he told Reuters:
CDS report: Philips tighter after reporting better-than-expected earnings
Gavan Nolan of Markit wrote this CDS report
European credit spreads tightened today, extending the rally seen last week. The Markit iTraxx Europe index closed at 87bp, over 3bp tighter than Friday’s close.
The perils of corporate email, Bear Stearns edition
On Tuesday, former Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin will appear in a Brooklyn court on charges they misled investors about the financial prospects of two investment vehicles they ran.
Sterling and the UK stock market
Sterling at six month low, FTSE 100 at year high. Explain.
One answer to that teaser could be that bouts of sterling weakness are often good news for the UK stock market.
Here’s Morgan Stanley strategist Graham Secker on the subject:
Debt and the dollar’s demise, a compendium of concerns
Here’s a stark reminder of the ticking time bomb that is the US’s federal debt — now at an $11,900bn, or $38,000 per citizen.
Ratings agency Standard & Poor’s is now warning that the US will have to officially — and imminently — raise its federal debt limit:
For America’s small banks, the problems are just beginning
America’s large banks have already warned about the threat to their balance sheets posed by their commercial real estate exposure, but it may well be the smaller regional banks that are most at risk.
In an interview with the FT in 2008,
And the Nobel Memorial Prize in Economics goes to…
Elinor Ostrom, Arthur F. Bentley professor of political science and co-director of the workshop in political theory and policy analysis at Indiana University Bloomington “for her analysis of economic governance,
Lunch Wrap
On FT Alphaville Monday morning,
- Sterling is slammed.
- Presenting the € FTSE.
- New ‘socialism’ made Citi sell Phibro.
- I’m an executive get me out of here!
- More on bank bondage (and the end of QE).
Pumping down the gas
It appears there’s nothing like a a financial crisis to change a nation’s attitude towards driving and gasoline expenditure.
Note, for example, the following chart from Harry Tchilinguirian at BNP Paribas on Monday:
Markets live transcript 12 Oct 2009
Markets live chat transcript for the chat ending at 12:16 on 12 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Bryce Elder (BE) Paul Murphy (PM) NH:Hello there NH:it’s 11.03am
The € FTSE
Here’s a two-year comparison of the FTSE 100 versus the Dax, showing the FTSE quite clearly outperforming the Dax in the period (via Bloomberg):
Now here’s the DAX in sterling terms versus the FTSE — can you spot the difference in performance?
And just to be sure there’s no mistake,
That Opec effect on fuel cracks
When Opec first started cutting crude production back in October, one of the immediate effects on the market was a pullback in the supply of heavy sour crudes.
As we noted before, this is because Saudi Arabia, Opec’s largest and most proficient swing producer,
CIC — the multi-purpose SWF
Oh, for an investment bank client like China Investment Corp, as Lex observed recently, noting: “While other sovereign wealth funds talk a good deal, CIC does them”.
Many governments may also wish they had an SWF like CIC.
Sterling slammed
News of Gordon’s great autumn clearout (what am I bid for this bridge, bookmaker and uranium enrichment company?) does not seem to have impressed the FX market.
Monday’s price action and headlines:
RTRS-STERLING EXTENDS LOSSES,
Bove hates new ‘socialism’ for making Citi sell Phibro
Rochdale Securities analyst Richard Bove says a lot of things we don’t agree with, but his angry diatribe on Citi’s decision to sell Phibro — its energy trading arm — to Occidental Petroleum for a rather lacklustre price of $450-500m,
I’m an executive get me out of here!
The latest from the soap opera that is ITV:
ITV plc announces that John Cresswell, currently Chief Operating Officer, has agreed to assume the role of Interim Chief Executive to lead the company through to the appointment and arrival of the next Chief Executive.
More on bank bondage (and the end of QE)
If quantitative easing was a stage play and the protagonist was played by the Bank of England, next year would most likely see a change to an all-new cast.
With that in mind, meet your new star of QE — British banks.
Soros shows how to make (more) money and look like a nice guy
So George Soros, billionaire investor, philanthropist and political activist is now “Mr Green”, with an initiative announced at the weekend to invest $1bn in clean technology and donate $10m a year to a new climate policy forum over the next decade.
Further reading
Elsewhere on Monday — and at the weekend,
- A Nobel for Taleb?
- Mourning rally.
- The semiotics of Larry Summers’ neckwear.
- Chew over this one, Cadbury.
- New gas rescues the world.
- Is Wasserstein’s health about to become a job-sized problem?
- Americans are still delusional about house prices.