November, 2009
Lunch Wrap
On FT Alphaville Friday morning,
- The new (ahem) transparent RBS.
- Taking out the trash at RBS.
- Gilty opportunism?
- Dollar rise *alert*.
- Why Asia may shake off an S&P correction.
- UBS,
Taking out the trash at RBS
The UK taxpayer is now the proud owner of £19.8bn worth of monoline exposure.
And £39.1bn worth of commercial real estate.
RBS’s just-released third-quarter results have a bit more detail on just what is going into the Asset Protection Scheme – the UK government’s plan to insure state-owned banks against credit losses.
Markets live transcript 6 Nov 2009
Markets live chat transcript for the chat ending at 12:10 on 6 Nov 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:good morning NH:and welcome to Markets Live
UBS, the bubble-talk bashers
Want some reassuring commentary that all is well and good in the world of equity valuations?
Well, here’s a pretty bullish bubble-bashing view from UBS, suggesting arguments for a big imminent correction are unwarranted.
The new transparent RBS (updated)
Here’s a curiosity.
In RBS’s interim statement, released on Friday, Stephen Hester, CEO of the bank shortly to be 84 per cent owned by the British taxpayer, makes a commitment to transparency. As he states in his third-quarter commentary (our emphasis):
Will BHP strike again?
It is almost a year since BHP Billiton abandoned its $62bn pursuit of Rio Tinto and…
people are starting to speculate.
Earlier this week, the Australian Financial Review asked whether BHP might bid again if the proposed iron ore joint venture (IOJV) between the two companies collapses.
Why Asia may shake off an S&P correction
The risk of the biggest US equities correction since the March low on the S&P500 has increased over the past week — but Asian economies, after a comparatively resilient year, are better placed than usual to resist an S&P-correlated correction,
Gilty opportunism?
Here’s a thought from Monument Securities’ Marc Ostwald.
The UK’s Office for National Statistics has just published a consultation on proposed changes to the measurement of mortgage interest payments within the Retail Prices Index — one of the main inflation rates in the UK;
Dollar rise *alert*
Yup that’s right.
Talk of the end of dollar hegemony may be premature. The latest contrarian ‘smart-money’ bet, partly fuelled by commentary from the likes of Nouriel Roubini and Martin Wolf on what might happen when the “mother all of carry trades”
British Airways defies financial gravity
Hidden away in British Airways’ half-year results is this tidbit:
That means British Airways NAPS pension liabilities now stand at a whopping £2.66bn — more than twice the £1.17bn reported at the end of last fiscal year.
Further reading
Elsewhere on Friday,
- The dollar as a funding currency.
- Thermodynamics and US executive pay.
- A dollar shortage in China?
- What’s up with the UUP Dollar ETF?
- Lessons for the foreign exchange market from the global financial crisis.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Mohamed El-Erian and Ramin Toloui: How to fill the gaps left by dollar decline
It has become fashionable to speculate on the future of the US dollar as the world’s reserve currency,
AV after dark
On FT Alphaville late Thursday,
- Fannie Mae lost how much?
- Goldman, the interest-rate hedging king.
- Sun shareholders left swinging.
The Galleon insider case multiplied in size,
- For the background to the case,
Snap news
Breaking pre-market news on Friday,
- RBS reports Q3 proforma net loss of £1.8bn – statement.
- Hannover Re swings to Q3 profit, boosts 2009 target – statement.
- Corporate: British Airways,
Galleon case triggers more arrests
US prosecutors on Thursday intensified their crackdown on Wall Street insider trading, revealing criminal charges against 14 people which are related to the case last month against Raj Rajaratnam, founder of the Galleon hedge fund,
Citi to relaunch troubled unit
Citigroup is poised to relaunch a unit containing its troubled hedge fund operations after nearly two years of poor performance and internal strife. Citi executives wanted to change the name of the unit ? which has $14bn under management and includes private equity operations ? from Citi Alternative Investments to Citi Capital Advisors,
Bank of England tries ‘last heave’
The Bank of England voted on Thursday to hold interest rates at 0.5% but extended its programme of quantitative easing, pumping another ￡25bn into the economy in what was described as “one last heave” to propel growth.
Fannie to draw further $15bn
Fannie Mae said on Thursday it would draw another $15bn of funds from the US Treasury after reporting a ninth consecutive quarterly loss, of $19.8bn in the third quarter, driving its net worth below zero.
Russia signals return to debt markets
Alexei Kudrin, the Russian finance minister, on Thursday visited London to woo investors ahead of Russia’s return to international debt markets for the first time in 10 years. Moscow is seeking up to $17.8bn in eurobond financing next year to cover deficit spending and fund a recovery from an economic contraction of nearly 11% in the first half of this year.
UBS fined in speculation scandal
UBS has been hit with the third-biggest fine levied by the UK’s FSA watchdog after senior employees were discovered using money taken from customer accounts to speculate in foreign currencies and commodities.
C&W outlines demerger plan
Shares of Cable & Wireless fell 6% on Thursday as the telecoms company said it aims to complete a demerger of its UK and international businesses by mid-2010. C&W confirmed plans to create separate stock market listings for the two businesses,
Banks face IASB loan loss rule
Banks outside the US would have to report expected losses on their lending much earlier, under proposals published on Thursday by the International Accounting Standards Board. The plans represent a virtual U-turn from the current system and would allow banks to provide for expected losses over the duration of a loan,
Man Group sees new investment
Redemptions from institutional investors have continued to drain capital from Man Group, the world’s largest listed hedge fund manager, over the past seven months. However, the group’s first-half results showed outflows from institutions were partially offset by surging investment from Asia and the Middle East.
Japan bond yields rise
Japanese government bond yields rose to their highest level in three months on Thursday, as poor demand at a 10-year bond auction underscored concerns over rising issuance in the world’s largest bond market.
Old Mutual still reviewing structure
Julian Roberts, chief executive of Old Mutual, said on Thursday that he hopes to reveal the future structure of the life assurance and banking group around its 2009 results next March. Analysts have long expected a break-up of the group’s diverse businesses and there has been renewed speculation that Nedbank,
Overnight markets: Up
Asian stocks rose on Friday, reports Bloomberg, paring a weekly loss after Australia’s central bank more than tripled its economic growth forecast and reports showed that US unemployment claims and worker productivity beat estimates.
Fannie Mae loses $19bn in one quarter of one year
Nineteen BILLION dollars – that’s how much government sponsored entity Fannie Mae lost in the third quarter of 2009, according to the mortgage lender’s 10-Q filing with the SEC on Thursday.
That marks a ninth consecutive quarterly loss for the lender – which it accompanied with a request for a fresh $15bn bailout from the US Treasury.
[Galleon] Zvi Goffer et al – new readers start here
Some 21 individuals and firms are now facing — or have faced — court action stemming out of the investigation into an alleged $20m insider trading ring.
Here’s the re-re-revised complaint from the SEC with details on the sprawling investigation. Get yourself a coffee or something – it’s 50 pages long.
Goldman, the interest-rate hedging king
We flagged up a few months ago the curious case of Goldman Sachs’ liabilities: the fact that the bank was generating an interest-income not only on its assets, but in some cases on its liabilities too .
[Galleon] More stoolies in the Rajaratnam-Goffer case
The complaint documents associated with the latest swoop on those allegedly dealing inside make it abundantly clear the FBI has made very extensive use of co-operating witnesses.
In particular, there is bound to be speculation on the identity of someone referred to as “CS-1,”