October, 2009
Securitisation datapoint du jour, Nationwide edition
You have to love this headline from the Guardian on Sunday, even if you disagree with the premise: “Nationwide revives bond market that caused crunch”.
Beyond specious headlines, the Guardian reported that UK mortgage lender Nationwide intends to issue a £3.3bn prime residential mortgage backed security – Silverstone 2009-1 - in what would be only the second such deal this year.
Great Depression-esque bad debt at US banks
This is a rather arresting chart:
That’s from Moody’s, showing how the pace of charge-offs (write-offs on bad debt) for rated US banks now exceeds the early years of the Great Depression.
The banks incurred $45bn of loan charge-offs in the third quarter,
Lunch Wrap
On FT Alphaville Monday morning,
- The US recovery – jobless, job losses or job-full?
- Break-ING up is so hard to do.
- Hamp-ered loan modifications.
- China SAFE unlocked and unleashed.
- Derivatives dated 1692 in Further reading.
More homespun wisdom from the Sage
It’s nice to see the world’s most successful investor kicking himself — even if it is only for not reining in the bankers.
The BBC is making the most of a recent interview with Warren Buffett, running articles,
Break-ING up is so hard to do
Nips and tucks can only hide so much. News that ING will undergo major reconstructive surgery — amputating its banking arm from its insurance operations — may have been expected, but nonetheless is a major blow to bancassurance as a business model.
Markets live transcript 26 Oct 2009
Markets live chat transcript for the chat ending at 12:10 on 26 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) Paul Murphy (PM) NH:hello there NH:It’s 11.02
Jobs and recovery. Discuss.
Here are three distinct points of view to ponder when it comes to the outlook for the US recovery.
First, the prospect of a jobless recovery — that is, one which doesn’t produce growth in employment.
Hamp-ered
Fannie Mae chief credit officer Edward Pinto has some strong words on the US government’s Home Affordable Modification Plan — Hamp.
From Clusterstock:
Based on comments being made by industry participants and program results to date,
China SAFE unleashes outbound securities investments
Like so many official decisions in China, there are various reasons — some obvious and some less so — behind the discreet move by China’s foreign exchange regulator, the State Administration of Foreign Exchange,
Further reading
Elsewhere on Monday,
- “The business of capital is bust.”
- Why do bankers make so much money?
- “The payroll hidden in plain sight is stock compensation.”
- How was Hong Kong corruption killed?
- The smartest boys in the alley,
Pink picks
Comment, analysis and other offerings from Monday’s FT,
George Soros: Do not ignore the need for financial reform
The philosophy that has helped me both in making money as a hedge fund manager and in spending it as a policy oriented philanthropist is not about money but about the complicated relationship between thinking and reality,
Snap news
Breaking pre-market news on Monday,
- ING says it will split in half as part of European Commission restructuring deal and launch a €7.5bn rights issue – statement, statement.
- Ladbrokes says it has received 95 per cent take up for rights issue – statement.
Lloyds in talks to buy CPA Global
Lloyds Banking Group is negotiating a £400m acquisition of CPA Global, the patent and legal services group, underlining how the bank’s private equity arm now dominates the UK’s shrinking buy-out market.
Deutsche set for Sal Oppenheim deal
Deutsche Bank is set to clinch a deal to buy Sal Oppenheim, the private bank, in a transaction that could be announced this week. The deal is expected to give Deutsche about 75% of Sal Oppenheim, which could provide the owners of Sal Oppenheim with a blocking minority in the combined entity.
Merlin Entertainments eyes listing
Merlin Entertainments, the UK theme park group owned by buy-out group Blackstone, is preparing a stock market flotation, setting the stage for a flurry of UK listings in the new year. The planned offer would be the first big listing on the LSE since the onset of the financial crisis and would value Merlin at about £2bn.
Capmark files for bankruptcy
Commercial real estate company Capmark Financial filed for bankruptcy protection on Sunday, wiping out the investment of several private equity firms including KKR, reports Reuters. Capmark, which was created in March of 2006 through a leveraged buyout of the commercial real estate assets of General Motors’ finance arm GMAC,
Matalan weighs £1.5bn sale
Matalan, the privately owned UK discount retailer, is weighing a £1.5bn sale after a number of expressions of interest. Buy-out group CVC is among parties to have approached Matalan, which was taken private by its founder and controlling shareholder John Hargreaves amid acrimony with institutional investors and non-executive directors three years ago.
Peltz grabs stake in Legg Mason
US activist investor Nelson Peltz is set to grab a seat on the board of Legg Mason after accumulating a significant stake in one of the biggest US mutual fund companies, reports the WSJ. Legg Mason is expected to name Peltz a director on Monday,
Dubai ponders $6.5bn debt issuance
Dubai is gauging investor appetite for debt issuance of $6.5bn as the emirate seeks to seeks refinance its pile of short-term loans and bonds and replace them with longer-term debt. The emirate’s finance department,
China resumes investment approvals
China has resumed approvals for institutions to buy overseas securities under its tightly managed offshore investment regime after a 17-month hiatus, suggesting Beijing believes the worst of the financial crisis is over.
UK group targets underwriting costs
An influential group of UK investors is working on plans to cut out the investment banks that advise companies on raising fresh funds by issuing new shares. The investors involved in the embryonic scheme include M&G,
FTSE chiefs gain robust pay rises
FTSE 100 chief executives have received inflation-busting pay rises averaging 7.4% over the past year, almost making up for a 29% drop in their bonuses, according to a report published Monday. Incomes Data Services,
Tokyo to oversee JAL turnaround
The Japanese government plans to put a state-backed turnaround body in charge of the overhaul of Japan Airlines, underlining the government’s deeper involvement in the process, according to the Nikkei business daily,
Fund to focus on role of women
One of the world’s first funds to focus on investing in companies with a relatively large number of women in senior roles will launch in coming weeks, backed by Cherie Blair, wife of the former UK prime minister Tony Blair,
Japanese earnings look up
Japan’s short but intense first-half results season will this week confirm that a broad recovery in corporate profits remains intact. But analysts are anxious for guidance on whether the strong yen will hurt exporters in the run-up to Christmas.
East Asia warned on currency threat
China, Japan and other east Asian countries must have “serious” talks on currency co-operation to prevent a recurrence of the extreme fluctuations that have raised trade tensions in the region, the president of the Asian Development Bank warned on Sunday.
Madoff friend Picower found dead
Palm Beach billionaire and philanthropist Jeffry Picower, described as the biggest beneficiary of Bernard Madoff’s massive fraud scheme, died on Sunday after he was found lying at the bottom of the pool at his home,
Overnight markets: Up
Gains in Asian stocks on Monday reduced demand for the safety of the dollar, weaking the US currency. The Hong Kong market was closed for a holiday. Futures on the S&P500 rose 1.3% after the gauge fell 1.22% on Friday.
The Weekender
This week on FT Alphaville,
- That carpe-diem (property) rally.
- Brazil scores an own goal with capital controls.
- Rapping Raj: the Rajaratnam rap sheet.
- The tech analysis party poopers.
ICOPPED?
Rule No1 in crisis management PR: get ALL your bad news out at the FIRST available opportunity.
So we must assume the good investor relations people at moneybroker ICAP were terribly frustrated on Friday,