UK to end shorting ban but extend disclosure The UK's ban on short selling of 32 financial stocks will be lifted on Jan 16 but investors will continue to be required to disclose their short positions until at least June 30, the FSA watchdog body said Monday. Current rules call for notification if a net short position exceeds 0.25% of a company's issued shared capital, and further disclosures if there are any changes in the position. From Jan 16, further disclosures will only be required at 0.1% bands. "Welcome to the year of disclosing dangerously", says Lombard. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50793/uk-to-end-shorting-b
| GE launches $10bn FDIC-backed debt General Electric's finance arm on Monday launched a $10bn sale of FDIC-backed debt, the largest sale under the US government's Temporary Liquidity Guarantee Program since its inception last November, reports Reuters. The GE Capital sale will push total issuance under the programme to over $115bn. Before GE Capital's deal, the largest sale under TLGP was $9bn on Dec 1 from Bank of America. The scheme was created in November to fill a financing gap for banks shut out of the corporate bond market by skyrocketing yields. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50792/ge-launches-10bn-fdi
| Waterford Wedgwood eyes asset sale Talks to salvage Waterford Wedgwood were underway with at least three US parties on Monday night after the owner of the historic crystal and porcelain brands was forced into receivership. The company's lenders, led by Bank of America, called in their loans after talks with a US private equity investor collapsed at the weekend. Sir Tony O'Reilly, chairman and one of Ireland's top businessmen, owns 52% of the company with his brother-in-law Peter Goulandris. As of last month, Wateford could secure only half the €154m (£142m) in equity it set out to raise in August. Now, warns Lex, "dissident investors in Sir Tony's media empire will scent blood". See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50791/waterford-wedgwood-i
| Hedge funds face more pain Hedge funds are suffering a New Year hangover of record proportions after a year-end rush to suspend or restrict withdrawals of money and the first of a looming wave of closures. Funds from London managers GLG, RWC and Oceanwood Capital all introduced last-minute restrictions as the year ended, while Finnish fund Ilmatar on Monday said it would close. Hedge funds are facing a meagre year after their worst 12 months on record left most needing to make back hefty losses before they begin earning performance fees. More than 150 – including funds from top industry names such as Tudor, Citadel, Cerberus Capital and Highbridge Capital – have limited redemptions. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50790/hedge-funds-face-mor
| Asset managers turn to corporate bonds High-grade corporate bonds are set to outperform other asset classes in 2009, fund managers and market strategists surveyed by the FT have forecast. More than half the 30 top asset managers and strategists surveyed said high-quality corporate credit was trading at cheap levels and was most likely to see a rally in 2009. In contrast, government bonds were the least-favoured asset class, with many respondents arguing that yields had fallen too far in 2008 and could lead to a price bubble. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50789/asset-managers-turn-
| LyondellBasell fights for survival LyondellBasell's bondholders were Monday braced for large losses after it emerged the world's third largest petrochemicals company was on the brink of bankruptcy. The price at which the company's bonds on Monday traded indicated that LyondellBasell's bonds are worth not much more than 10% of face value. The Dutch-US company, formed through a merger in 2007, has been struggling with $26bn of debt and falling demand for its products. It is now working with its banks including Merrill Lynch, Goldman Sachs, Citigroup, RBS and UBS, to restructure. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50788/lyondellbasell-strug
| Share fall could see Fortress delist Shares in Fortress Investment Group, the US first private equity and hedge fund firm to list nearly two years ago, rose Monday amid speculation that the group may opt to go private once more. Shares in Fortress, which fell below $1 on Friday, closed at $1.90 on heavy volume Monday. With Fortress's market cap at about $770m, it is possible that Wes Edens and other Fortress founders may take their company private once more - but with banks reluctant to lend, they would most likely have to use their own money. Other alternative firms listed in New York, meanwhile, may be forced to delist if they violate rules such as the requirement they do not trade below $1 for 30 consecutive trading days. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50787/share-fall-could-see
| Fed buys MBS in latest 'unorthodoxy' The Federal Reserve on Monday kick-started its latest unconventional programme to boost the US economy, this time targeting mortgage-backed securities to help the slumping housing market, reports Reuters. The Fed plans to buy back as much as a ninth of outstanding, mortgage-backed bonds sold by mortgage giants Fannie Mae, Freddie Mac and Ginnie Mae. The aim is to encourage buyers to return to the housing market or cut payments on existing home loans. The New York Fed began buying MBS guaranteed by Fannie, Freddie and Ginnie on Monday, part of a programme of as much as $500bn. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50786/fed-buys-mbs-in-late
| Judge urged to jail Madoff US prosecutors on Monday asked a federal judge to jail Bernard Madoff pending his trial, saying he violated a court order by transferring more than $1m of valuables from his Manhattan apartment to third parties including his brother and son. Madoff, accused of masterminding a $50bn "Ponzi" scheme, is charged with securities fraud and faces separate civil charges brought by the SEC. As part of his $10m bail, Madoff is under house arrest and his assets have been frozen. Separately, David Kotz, SEC inspector-general, on Monday promised a "hard-hitting" investigation into the SEC's failure to detect the fraud. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50785/judge-urged-to-jail-
| UK's Large calls for finance watchdog Britain risks a repeat of the current financial crisis unless it establishes a body that is independent enough to stand up to powerful vested interests, a prominent former regulator has warned. Sir Andrew Large, a former deputy governor of the Bank of England, says in an article in Tuesday's FT that the UK needs an independent body to provide early warnings of systemic financial problems and would have the tools to discourage excessive borrowing. The government should act quickly to set up such a body before the political will to do so dissipates. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50784/uks-large-calls-for-
| Japan's companies on M&A trail Japan's cash-rich trading companies, such as Marubeni and Itochu, are on the hunt for bargain acquisitions outside Japan, seizing the opportunity to expand abroad while the stronger yen makes purchases cheaper and potential competitors are sidelined by the credit crisis, reports the WSJ. The conglomerates have been among the most active in M&A as Japanese companies spent a total of nearly $78bn last year on acquisitions outside Japan, more than triple the amount spent in 2007 and exceeding the annual record of $52bn set in 2006, according to data provider Dealogic. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50783/japans-companies-on-
| Veteran McCann quits Merrill Lynch In Categories: People Posted at 05:30 by Gwen Robinson Robert McCann, head of Merrill Lynch's "thundering herd" of 16,000 financial advisers, is leaving the firm he has worked for, with one interruption, since 1982. His departure, described by a Merrill source as voluntary, was announced to the company late Monday by John Thain, who was chief executive of Merrill but following the firm's acquisition by Bank of America last week, is now BofA's president of global banking, securities and wealth management. McCann led the successful effort to keep the vast majority of brokers in the fold after the BofA deal was announced. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50782/veteran-mccann-quits
| Apple chief reveals hormone imbalance Apple on Monday sought to allay speculation about the health of Steve Jobs, with an open letter from its chief executive explaining that he was suffering from a hormonal imbalance. Jobs, who has revived Apple's fortunes over the past decade and is seen as critical to its future, alarmed investors when he appeared significantly thinner in recent news conferences and when Apple failed to say why he would not deliver his annual speech to the Macworld conference, scheduled for Tuesday in San Francisco. In his letter, Jobs said that a relatively simple remedy had been found for his condition and he would stay on as chief executive during his recovery. See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50781/apple-chief-reveals-
| Overnight markets: Limited optimism Asian stocks edged up for a seventh day on Tuesday, boosted by hopes for a global economic recovery later in 2009 and hopes for US tax cuts and other stimulus measurs, though the rising yen and falling high-yielding currencies suggested such optimism was limited. However, investors continued to move money from government bonds into equities as their willingness to take risks recovered. Asian markets (Tues)
05:25am GMT
Nikkei up 48.50 (+0.54%) to 9,091.62
Topix up 0.89 (+0.10%) to 876.80
Hang Seng down 175.90 (-1.13%) at 15,387.41 US markets (Mon)
DJIA down 81.80 (-0.91%) at 8,952.89
Nasdaq down 4.18 (-0.26%) at 1,628.03
S&P500 down 4.35 (-0.47%) at 927.45 European markets (Mon)
FTSE100 up 17.85 (+0.39%) at 4,579.64
Eurofirst 300 up 16.22 (+1.89%) at 873.01 Currencies
05:17GMT
€/$ 1.3546 (1.3878)
$/¥ 93.07 (91.96)
£/$ 1.4611 (1.4467) Commodities
05:15 GMT
Brent Crude (Feb09) down $0.37 at $49.25
Light Crude (Feb09) down $0.70 at $48.11
100 Oz Gold (Feb09) down $2.80 at $855.00
3M 24HR Copper up $118.00 at $3,330 10-year government bond yields (%)
US 2.49 (2.41)
UK 3.15 (3.03)
Germany 3.01 (2.98)
Japan 1.25 (1.21) Sources: FT, Reuters See this article online.
http://ftalphaville.ft.com/blog/2009/01/06/50776/overnight-markets-li
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