March, 2010
It lives…
… the UK IPO market that is.
On Friday, two companies have announced offer prices for their flotations on Friday morning and one of them, shock horror, even has a private equity backer which is using the IPO to exit.
Friday rumourtrage (updated)
How’s this for a bit of RAW market information?
Rupert Murdoch’s News Corp to buy out the 60 per cent of a satellite broadcaster it does not already own.
A price of 735p-750p a share is being mentioned by traders.
Renminbi rumours
The Chinese-currency rumour mill is “churning overtime” traders noted on Friday, as forward renminbi contracts headed towards their biggest weekly gain in two months.
Citi traders said on Friday morning that much speculation about a weekend (upwards) revaluation of the reniminbi brought more heavy selling interest.
The genesis of Repo 105
Continued from ‘Repo 105,’ in which FT Alphaville began dissecting the official 2,200-page Examiner’s report into the Lehman Brothers bankruptcy.
In 2001 Lehman Brothers held a meeting with its lawyers and auditors.
What’s in Repo 105
While Repo 105 was created in 2001, it proved very useful for Lehman Brothers in terms of publicly reducing leverage as the financial crisis intensified in 2007 and 2008.
Lehman had lots of assets — CMBS,
Repo 105
Think window-dressing on a massive, and possibly misleading, scale.
Much of the 2,200-page Examiner’s report into the Lehman Brothers bankruptcy centres around an “accounting gimmick” used by the bank,
Further reading
Elsewhere on Friday,
- The Lehman Files: ‘catch-22 valuation’…
- … and asking questions of the New York Fed.
- Sovereign investment-grade status: life isn’t fair.
- The Germano-Iberian case for a double-dip.
Pink picks
Comment, analysis and other offerings from Friday’s FT,
Wolfgang Schäuble: European monetary union in crisis
Greece has reached a crossroads, writes Schäuble, German finance minister. For the first time,
Snap news
Breaking pre-market news on Friday,
- SuperGroup prices IPO at 500p a share, values company at £395m – statement.
- Promethean prices IPO at 200p a share, for a market capitalisation of £400m. (Price range was 180p-225p) – statement.
Sovereign CDS: Do we see the dust — clearing?
And the war over credit default swaps rages on.
On Thursday, Europe wheeled out out the big guns, with four of the region’s leaders demanding an inquiry into the CDS market.
The leaders of Germany,
Europe borrowed under – state of things to come?
Up, up and away: European commercial mid to long-term government borrowing is likely to hit a historic €1,446bn in 2010, rating agency Standard & Poor’s said in a note on Thursday.
That’s a €52bn jump from 2009′s peak,
Greece faces a Herculean adjustment task
The task the Greek government has set itself — sorting its finances, quelling increasing civic unrest — appears to rank somewhere between cleaning the Augean stables and killing the Lernean Hydra.
Well,
CDS report: A volaltility reversal
European credit markets continued to oscillate around the same point, a lack of direction all too obvious. The Markit iTraxx Europe index was trading around 75.25bp, nearly 2bp wider than yesterday’s close.
Streaky’s guilty, and he is going down (updated)
Via Bloomberg:
EX-CAZENOVE PARTNER GETS 21 MONTHS IN JAIL FOR INSIDER TRADING.
No details yet on disgorgement, or whether Malcolm Calvert has leave to appeal.
Updates (and the inevitable FSA press release) when available.
Are AIG’s Asian sell-offs just cursed?
Given the unfortunate execution so far of the Pru’s bid for American International Assurance, it’s hard not to wonder whether AIG’s attempts to sell its Asian operations are, well, cursed.
And as the following report from NY Times illustrates,
Not even your AAA-ABX is safe anymore…
An implied writedown is a type of monthly floating payment that is unique to CDS on ABS. These payments are intended to standardize writedown payments across CDS of ABS by creating a mechanism for the swap to writedown,
Sterling: vampire squid really quite confident
…in the long term.
Amidst an analyst note on the difficulties of measuring fiscal policy impacts on exchange rates, Goldman has weighed in on the Great British Krona. Good news, sterling: the beatings will stop.
Markets Live transcript 11 Mar 2010
Markets Live chat transcript for the chat ending at 12:18 on 11 Mar 2010. Participants in this chat were: Neil Hume, FT Bryce Elder NHgood morning NHand welcome to Markets Live
Overheating China – reaction
A bit more on the stronger than expected Chinese inflation data. Economists now expect further policy tightening measures and sooner rather than later.
Barclays Capital:
In view of the higher-than-expected inflation in February,
Reining in the Chinese inflation dragon
Remember that 17 per cent growth target for Chinese money supply this year?
It looks, err, increasingly untenable given the inflation numbers just out of the PRC.
Consumer prices rose by 2.7 per cent in February from a year ago,
Goldman’s Chinese rainmakers: Hu’s out and who’s in
To borrow from Oscar Wilde, to lose one top investment banker may be regarded as a misfortune; to lose two, carelessness. So what does it look like after losing a string of influential dealmakers?
As the FT reports on Thursday,
Do you feel €295bn less-liquid this week?
Whoooooosh.
Is that the sound of the ECB draining €295bn worth of liquidity from the eurozone system?
Some people certainly thought so.
This for instance is from GCI Financial on Wednesday:
The ECB withdrew a huge €295 billion today in a one-time fine-tuning operation.
Arbitrage (and accounting) in the time of crisis
Here they are — two examples of theoretically risk-free and profitable trades (really) courtesy of the Bank of England’s financial stability guru, Andrew Haldane.
It’s just a shame no one bothered to exploit them:
The Lehman potboiler
Sit yourself down for a good read.
Jenner & Block’s Anton Valukas, the court-appointed examiner who spent a year and $38m investigating the collapse of Lehman Brothers, has just been cleared by the bankruptcy court to publish his report.
Further reading
Elsewhere on Thursday,
- Inside Greenspan’s bad dreams.
- Central bank exit strategies: fight club!
- Fiscal sustainability down on the farm.
- Sovereign debt: this time is different? Not quite.
Pink picks
Comment, analysis and other offerings from Thursday’s FT,
Mohamed El-Erian: How to handle the sovereign debt explosion
We should all be paying attention to a new theme: the simultaneous and significant deterioration in the public finances of many advanced economies.
Snap news
Breaking pre-market news on Thursday,
BP to pay Devon Energy $7bn for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico – statement.
Old Mutual to IPO US asset management business – statement.
[The Stanford Series] Ponzi victims, unite!
Fraud – it brings people together. As Bloomberg reported on Wednesday:
Victims of Bernard Madoff and accused Ponzi schemer R. Allen Stanford are banding together to lobby Congress for a law that could require Wall Street firms to pay billions of dollars to cover some of the losses they suffered.