October, 2009
Regulator opposes traders’ limits
The US must not unilaterally impose limits on the trading positions that traders may take in oil and commodity futures and should enlist the support of the G20 to crack down on speculation, a top regulator warned on Thursday.
Top China banker warns on bubbles
China needs an “urgent” tightening of monetary policy to prevent its recent huge stimulus measures from inflating stock and property bubbles, one of the country’s top bankers has warned. Writing in Thursday’s FT,
Overnight markets: Down
Asian stocks fell again on Thursday, as concern about rising loan losses at banks fuelled speculation that an equity rally since March had outpaced earnings prospects. Futures on the S&P500 fell 0.1% after the gauge lost 0.9% on Wednesday, even after Wells Fargo posted a record quarterly profit.
Joined up regulation shock
Click to read
Dark pools and HFT finally catch Schapiro’s eye
Blink and you’ll have missed it:
Finally, we are also reviewing the rise of high-frequency electronic trading strategies, broker arrangements that can give their customers direct access to the markets,
SFO goes after Nick “Beano” Levene
From the Serious Fraud Office, Wednesday afternoon:
The Serious Fraud Office, having received complaints about the business activities of Mr Nicholas Levene, has now opened a formal criminal investigation.
Lynch mobbed
Now here’s something to send the blood pressure of Autonomy’s Mike Lynch soaring.
It’s a clinical – and very critical – analysis of Tuesday’s third quarter results from Canaccord Adams analysts Bob Liao and Kevin Ashton.
Peeking into Wells Fargo’s pandora’s box of commercial real estate
This is our last recorded call. Wells Fargo has always been committed to providing clear, complete, and transparent communication about the company’s results to all of its stakeholders. As we enter the second year of the merger with Wachovia,
[Galleon] Galleon liquidating itself
Galleon co-founder Raj Rajaratnam sent this letter to clients on Wednesday:
Dear Galleon Employees, Clients and Friends,
I have decided that it is now in the best interest of our investors and employees to conduct an orderly wind down of Galleon’s funds while we explore various alternatives for our business.
Dark clouds over the Isle of Man
Hard times for the Isle of Man.
First Alistair Darling lops 24 per cent off its budget, then Moody’s rubs it in by threatening to downgrade the island’s credit rating:
London, 21 October 2009 — Moody’s Investors Service has today placed the issuer and debt ratings of the Government of the Isle of Man (IOM) under review for possible downgrade.
Morgan Stanley reports EPS of $0.38, net income of $757m
Here’s the fifth major US bank to report earnings this third-quarter season — Morgan Stanley with attributable net income of $757m.
The bank managed to eke out the profit, along with applicable diluted earnings per share 38 cents,
Lunch Wrap
On FT Alphaville Wednesday morning,
- Urban (commentary) combat in China.
- Autonomy and the City.
- More mixed messages from the MPC.
- Gulf Keystone and that Kurdish oil.
- Evolution of an airport price.
Urban (commentary) combat in China
Is China urbanised or not?
It’s a question of more economic importance than you might think, given that it’s still widely believed that China will lead the world economy into recovery. A low urbanisation ratio — the proportion of people living in urban areas — would suggest that it still has lots of growth to get through.
Markets live transcript 21 Oct 2009
Markets live chat transcript for the chat ending at 12:12 on 21 Oct 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:it’s 11.03am NH:or thereabouts
Autonomy and the City
When it comes to City analysts, Dr Mike Lynch, the founder and chief executive of Autonomy, has previous.
Over the years, the Bayesian probability expert has had numerous run-ins with the scribblers who follow his software company.
More mixed messages from the MPC minutes
The minutes of the Bank of England’s Monetary Policy Committee meeting for its October interest rate decision are now out.
Anyone disappointed by the lack of guidance on the Bank’s £175bn quantitative easing programme in Mervyn King’s speech on Tuesday will not be assuaged by the details in the minutes.
Gulf Keystone and that Kurdish oil discovery – update
Presented without comment.
From Hungarian newspaper Napi Gazdasag via Dow Jones:
BUDAPEST (Dow Jones)–Hungarian oil and gas company MOL Nyrt. (MOL.BU) is cautious concerning its joint oil project in Iraq after its partner Gulf Keystone Petroleum Ltd.
Samurai dramas at Japan Post
The Japan Post story looks increasingly like one of those Byzantine plots in an arcane samurai drama — although with its cast of mainly grey men in mainly grey suits, it’s not quite so vivid.
But the
Evolution of an airport price
Watch that asset price drop!
BAA has (finally) agreed the sale of London Gatwick. The airport goes to Global Infrastructure Partners, the owners of London City, for £1.51bn.
It’s a decent price for GIP considering that Gatwick’s regulatory asset base (RAB),
Brazil – more taxing issues
Brazil may well be, as Lex puts it, a “victim of its own economic success”.
But its surprise move to impose a 2 per cent flat one-way tax on all new capital inflows this week has also drawn howls from portfolio investors – and some more warnings about the broader implications.
Further reading
Elsewhere on Wednesday,
- So now we know why Lehman went under.
- Five great lies of the modern financial system.
- Safety nets for the rich.
- Oil past $100 a barrel — believe it.
- SmartMoney’s 2009 Power 30:
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: How to manage the gigantic financial cuckoo in our nest
A year ago, at the height of the financial panic, the world yearned for a profitable and confident financial sector.
AV after dark
On FT Alphaville late Tuesday,
- King gets Churchillian and declares: ‘Break up the banks’.
- The price of cash.
- Bubble management, Brazilian style.
Over in the Long Room,
- Very sound work on Sound Oil.
Snap news
Breaking pre-market news on Wednesday,
- Cadbury reports “excellent” third quarter results ahead of Kraft put up or shut up deadline – statement.
- BAA announces sale of Gatwick airport to an entity controlled by Global Infrastructure Partners for £1.51bn – statement.
King urges bank break-ups
Mervyn King, governor of the Bank of England, called on Tuesday for banks to be split into separate utility companies and risky ventures, saying it was “a delusion” to think tougher regulation would prevent future crises.
Upbeat start to US earnings season
Corporate America issued a string of quarterly earnings results on Tuesday that exceeded Wall Street’s expectations and showed how big US companies have cut costs faster than revenues have fallen. But stocks fell back as investors focused on the lack of top-line improvement.
Brazil taxes foreign portfolio flows
Brazil’s currency and stocks fell sharply on Tuesday after the government imposed a 2% tax on foreign portfolio investments to stem the rapid rise of its currency. The move, announced shortly before local markets closed on Monday,
BlackRock sees bumper earnings
BlackRock, the US asset management firm, reported Q3 earnings of $317m on Tuesday, a 46% gain over a year ago, reflecting improving conditions in global financial markets. The results were also boosted by a $45m one-time gain from a change in local income tax laws,
Galleon moves assets into cash
Galleon Group, the hedge fund whose founder and president, Raj Rajaratnam is at the centre of insider trading charges, is rapidly liquidating its investments in expectation of a wave of investor redemptions,