October, 2009
Bernanke does bank regulation and supervision
Has Ben Bernanke been taking a leaf out of Lord Turner’s banking regulation book?
The Federal Reserve chairman has been speaking on the dual subjects of financial regulation and supervision post-crisis.
The perils of instant analysis
It seems Dick Bove has landed himself in a bit of trouble.
Having appeared on CNBC immediately after Wells Fargo’s third-quarter results on Wednesday, saying the bank was a “standout” among financial institutions,
Interest rate swap existentialism du jour
Those of you who enjoy a good interest rate swap debacle (Traders, Guns and Money-style) are in for a treat.
And Goldman Sachs conspiracy theorists especially.
From Bloomberg:
Oct. 23 (Bloomberg) — New Jersey taxpayers are sending almost $1 million a month to a partnership run by Goldman Sachs Group Inc.
Lunch Wrap
On FT Alphaville Friday morning,
- A shock flop in UK GDP.
- And market reaction.
- Managing expectations, central bank edition.
- “US stocks are 40% overvalued”.
- A closer look at Galleon’s returns.
Markets live transcript 23 Oct 2009
Markets live chat transcript for the chat ending at 12:09 on 23 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:hey NH:It’s 11.03am
[Galleon] A closer look at Galleon’s returns
With Galleon-gate now one week old, bloggers have been poring over the fund’s annual returns.
The Pragmatic Capitalist for one, who has posted the Galleon numbers on his blog, smells a rat.”Gauging from the returns,”
The US stock market is overvalued by 40%
Andrew Smithers, of London-based research house Smithers & Co, is not a man who has any truck with nonsense. Particularly when it comes from the mouths of stockbrokers.
In his latest report, The US Stock Market:
Managing expectations, central bank edition
Adding to the central bank confusion this week, is this FT story by US economics editor Krishna Guha:
When the Federal Reserve cut interest rates to virtually zero in December last year, it told the market it expected to keep them there for quite a while.
GDP reaction: Sterling tumbles, Gilts rally, but FTSE fine
Oh dear, oh dear.
The market reaction after Friday’s UK GDP data:
Sterling gets hammered against the dollar:
… and against the euro:
The 10-year gilt yield falls sharply:
…
GDP shock flop
The recession in the UK continues. In fact it is now the longest on record.
From Reuters:
…
To put those figures into perspective, Reuters says economists were expecting growth of 0.2 per cent over the quarter after a 0.6 per cent fall between April and June.
Ballooning CMBS payments
Via HousingWire, an RBS chart which aptly demonstrates the upcoming refinancing need for (US) commercial mortgage-backed securities:
Further reading
Elsewhere on Friday,
- So how long was Galleon trading on insider trading?
- And more on the Galleon informant.
- The earnings season racket.
- “Some Wall Street banks would love to tell their employees that their bonus is being capped for their own good.”
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Martin Wolf: Why curbing finance is hard to do
About a month ago, I visited the aero engine factory of Rolls-Royce, in Derby. I was hugely impressed.
AV after dark
On FT Alphaville late Thursday,
- The SEC’s on a roll.
- Regulatory Nonsense Service.
- Short dollar leverage?
Over in the Long Room,
- Just commentary…
- Limited edition vampire squid pen holder.
Snap news
Breaking pre-market news on Friday,
- China tells banks to conduct quarterly stress tests — Reuters.
- Top Cadbury investor would consider 820p bid — Reuters.
- Balfour Beatty receives acceptances for 97 per cent of shares in rights issue — statement.
Fed sets pay limits for banks
The Federal Reserve on Thursday unveiled sweeping draft rules for bankers’ pay but, unlike the proposal adopted by many European nations, did not support a standard benchmark for the proportion of bonuses to be deferred – raising fears over an uneven playing field between US and European banks.
ECB warns on hedge fund rules
The ECB has dealt an unexpected blow to contentious plans by the European Commission to regulate hedge funds and private equity groups, warning on Thursday that the proposals would put the industry at a significant competitive disadvantage.
BP eyes bid for Jubilee field
BP, Europe’s second-biggest oil company, may bid for Kosmos Energy’s stake in the Jubilee field off Ghana’s coast and has hired Goldman Sachs to advise it, reports Bloomberg. BP has held talks with Ghana National Petroleum Corp about a potential joint offer for Kosmos’s Ghanaian assets,
Peltz adds twist to Cadbury battle
A wild card is set to be thrown into the battle by Kraft to acquire UK confectionery group Cadbury with the expiry on Friday of an agreement by activist shareholder Nelson Peltz to refrain from publicly criticising the US food group.
Credit Suisse sees bumper profit
Credit Suisse on Thursday unveiled bumper Q3 results as the Swiss banking group reported a surge in its investment banking activities and solid results in private banking. Group net profit reached SFr2.35bn ($2.33bn),
CIT, Goldman in loan pact
CIT, the troubled US commercial lender, reached a tentative agreement with Goldman Sachs over a disputed payment on a $3bn loan, reports Dow Jones. An agreement over the $1bn “make whole” payment could be made final within Friday.
Brussels set to pass Northern Rock plan
The European Commission is next week expected to approve a radical restructuring of UK lender Northern Rock, paving the way for the break-up and sale of the nationalised bank. Northern Rock’s proposal to split itself into two,
Blackstone to back Asian fund
Nick Taylor, a former executive of Citadel Investment Group, is preparing to open the largest Asia-focused hedge-fund startup since May 2007 after receiving the backing of Blackstone Group, reports Bloomberg.
China GDP underlines rebound
China’s recovery accelerated in the third quarter as a result of the government’s massive lending and investment programme, with the economy growing at an annual 8.9%. The rapid rebound is already raising concerns about asset price bubbles and inflation.
Russia drops BNY Mellon suit
Russia dropped a $22.5bn lawsuit against Bank of New York Mellon on Thursday after agreeing an out-of-court settlement in a case related to a decade-old money laundering scandal. A judge in Moscow’s arbitration court said Russia’s federal customs service,
Gartmore on brink of £500m IPO
Gartmore, the fund management group equally owned by management and buy-out group Hellman & Friedman, aims to register flotation plans with the UK’s FSA as early as next week. The group has appointed Morgan Stanley and Citi to advise it on completing an IPO by year-end.
FSA calls on banks to hold more capital
Top international banks should be required to hold additional capital and perhaps extra liquidity in recognition of their “too big to fail” status within the financial system, according to the UK’s FSA.
Former Vivendi executives face trial
Jean-Marie Messier and Edgar Bronfman Jr, former executives at Vivendi, the French media group, have been ordered to stand trial by a Paris judge over allegations that include share price manipulation dating back eight years.
Overnight markets: Up
Asian stocks advanced on Friday as earnings reports in the region fuelled optimism about global economic recovery. The dollar meanwhile appreciated against the yen to as much as 91.71, its strongest in
The SEC’s on a roll, it would seem
While not on a par with the alleged Raj Rajaratnam affair, there was fresh evidence on Thursday of the SEC’s newly-proactive approach to stock price manipulation and the like.
One Lambros Ballas, working for a New York brokerage called Global Arena Capital Corporation,