December, 2009
Goldman’s collateral damage
Cast your mind back to that SigTarp report, published last month.
Readers will recall there’s been a persistent stink over whether the efforts of the Federal Reserve and the US Treasury to prop up AIG had the effect of bailing out Goldman Sachs — its largest trading partner.
Lunch Wrap
On FT Alphaville Monday morning,
- British Airways pension fireworks.
- Dubai’s Nakheel sticking plaster.
- How much are you worth?
- Oil breaks.
- China: The heat is on.
- A heap of Hypo for Austria.
Oil breaks
WTI crude was trading sub $70 per barrel on Monday, a move which solidifies its breakout from a recent $70-80 trading range.
The big question facing the market now is whether prices will continue to trend lower ahead of the holidays,
Markets live transcript 14 Dec 2009
Markets live chat transcript for the chat ending at 12:13 on 14 Dec 2009. Participants in this chat were: Neil Hume, FT Miles Johnson, FT NHhey there NHgood morning NHwelcome
China: The heat is on
The latest Chinese economic data and the policy announcements emanating from Beijing make it very clear: inflation is back in China, as the FT notes, and almost every economic commentator worth their notes is venturing an opinion as to what the mandarins should do about it.
Dubai’s Nakheel sticking plaster
One inevitable consequence of Abu Dhabi swooping to rescue its indebted neighbour is that some people will have made several large sacks of money.
Anyone who made bets on Nakheel 2011 bonds for example,
How much are you worth?
Is it the £500,000 your bank, or otherwise reviled-financial institution, pays you each year?
Or the negative £3.5m you contribute to society?
That’s right — negative £3.5m. A study by left-ish think tank,
Fund management flop
Oh dear. Shares in Gartmore are trading below their revised flotation price on Monday morning.
Recall, that Gartmore was forced to cut the price of its £676m IPO on Friday to 220p per share, down almost 16% from the mid-point of its target price range.
A heap of Hypo for Austria
There’s been something of a major bailout in Austria on Monday morning. Hypo Group Alpe Adria, the struggling Austrian lender part-owned by Germany’s Bavarian state, has been nationalised.
For those unfamiliar with the story,
Dear HM Revenue & Customs
A draft version of a letter 11 independent UK stockbrokers are set to send to the HMRC:
Dear Sirs
Arden Partners plc, Oriel Securities Limited, The Evolution Group plc, Numis Corporation plc, Altium Capital Limited,
British Airways pension fireworks
We knew British Airways statement on its pensions deficit would be interesting.
We didn’t know it would be this interesting.
The UK airline revealed on Monday morning that following an actuarial review by its pension trustees,
Further reading
Elsewhere on Monday,
- Active trader: retracing Fibonacci’s steps.
- Paul Samuelson, RIP.
- 10 lessons for investors from a dismal decade.
- Should the Fed be forever fighting bubbles?
- Volcker speaks.
Pink picks
Comment, analysis and other offerings from Monday’s FT,
Wolfgang Münchau: European farce descends into Greek tragedy
The Greek crisis, which has brutally exposed the weaknesses of Europe stability and growth pact,
Snap news
Breaking pre-market news on Monday,
- Cadbury unanimously rejects Kraft’s offer – statement.
- British Airways agrees pensions deficit with trustees – statement.
- Royal KPN completes share buyback programme of €1bn – statement.
Statement From Sheikh Ahmad Bin Saeed Al Maktoum
14 December 2009
The Government of Dubai, acting through the Supreme Fiscal Committee (“SFC”), today announces a set of actions in relation to Dubai World:
Sheikh Ahmad Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee said:
Nakheel says it will pay/ Abu Dhabi rides to rescue
From Nasdaq Dubai on Monday morning:
14 Dec 2009 – 09:05:07 Nakheel Development Limited – Announcement Nakheel confirms that it will honour all obligations related to the 2009 Nakheel Development Limited Sukuk using funds that will be provided by the Dubai Financial Support Fund.
Bonus backlash
A copy of the letter sent by Joanthan Keeling, chief executive of Arden Partners, to the FT:
Dear Sir,
Bank Payroll Tax
As CEO of a quoted stockbroker I am angry to find that the draft BPT legislation appears to capture our firm,
Hands v Wormsley (or Terra Infirma)
Oh dear. Guy Hands, the self-respecting veteran of British private equity, is clearly closer to the edge than we realised.
If you start accusing a leading bank of getting one of its analysts to write knocking copy on one of your businesses just so as to undermine you,
AV site maintenance
Here on FT Alphaville we are about to get our back-end upgraded — a refresh of our blogging software is scheduled for later on Friday.
Readers should be unaffected, but if you are, or you notice something strange,
Fair value foresight and equity destruction
A Friday accounting curio courtesy of Fitch Ratings.
The agency’s done a report on the US banks and fair value, looking at a sample of 20 of ‘em to estimate the impact of potential new accounting rules.
The sovereign ‘Northern Rock’ funding model
Remember how Northern Rock proved that being too dependent on immediate short-financing was not necessarily a good idea? Remember this chart from the funding model, so noticeably reliant on sub-3-month money?
Now,
Baillie Gifford slays ENOC’s Dragon Oil offer
The Dragon Oil votes are in, and there will be some rather peeved folk over in Dubai.
RTRS-DRAGON OIL PLC SHAREHOLDERS VOTE NOT TO ACCEPT OFFER FROM EMIRATES NATIONAL OIL CO
RTRS-DRAGON OIL -RESOLUTION WAS PASSED BY IN EXCESS OF 50% OF SHAREHOLDERS,
Guest post: Prof Craig Pirrong on moves to overhaul to the derivatives market
Lawmakers in DC are due to resume debate on major financial reform legislation currently working its way through the US House of Representatives. One closely-watched aspect of that debate is sweeping overhaul of over-the-counter derivatives markets.
Very Hamp-ered
They are here!
Official figures for the number of permanent modifications undertaken as part of the US Treasury’s Home Affordable Modification Plan (Hamp) were published on Thursday.
As a reminder,
Lunch Wrap
On FT Alphaville Friday morning,
- Pre-Budget report + 2.
- Counting the costs of more bank capital.
- Moody’s UK AAA is safe for now.
- A steeper path to follow.
- ECB liquidity cliff risk.
Markets live transcript 11 Dec 2009
Markets live chat transcript for the chat ending at 12:08 on 11 Dec 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:hello NH:good morning
A steeper path to follow
Sovereign debt yield curves are steepening.
On Thursday, US 30-year yields hit four-month highs after a government long-dated auction received poor demand and revived worries over the federal budget deficit.
ECB liquidity cliff risk
From Deutsche Bank’s Brice Vandamme — a chart to starkly illustrate the upcoming end of the ECB’s liquidity operations:
Despite the size of the ECB’s Long Term Refinancing Operation, Deutsche Bank thinks the actual impact of its end (the last one-year operation takes place this month,
PBR + 2
After Thursday’s wobble, the UK gilt market has sort of regained its composure.
Click to enlarge (Snapshot taken at 10.10am London time):
And we guess this is helping:
HONG KONG (Reuters) – The top sovereign credit ratings of Britain and the United States are not under threat of a downgrade right now,