UK's Darling gambles on growth UK chancellor Alistair Darling on Wednesday gambled on a rapid economic recovery and deep spending cuts to regain control of public finances ravaged by the global financial crisis. In an austere Budget that raised taxes on the rich and nearly halved planned spending growth, Darling told parliament that the public finances would not recover to comfortable levels until 2017-18 after borrowing surges to £175bn this year. The UK economy would contract by 3.5% in 2009 but rebound quickly thereafter, he said. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55026/uks-darling-gambles-
| UK raises tax for top earners Britain's Labour government on Wednesday unveiled plans to increase taxes on the rich and curb public spending as UK chancellor Alistair Darling confirmed a huge increase in borrowing to restore the public finances. The move to raise the top rate of income tax from 40% to 50% next year for those earning more than £150,000 is a big blow to the UK's keenly guarded image as a lower-tax economy that can attract the best foreign workers, particularly to its City financial hub. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55025/uk-raises-tax-for-to
| VW eyes move on Porsche Volkswagen is considering an audacious bid for Porsche's automotive business, a move that would up-end Porsche's takeover of VW, which started three and a half years ago. VW's management is weighing the option of buying Porsche AG, in a move that would bring relief to the highly indebted parent Porsche SE holding company. VW, Europe's largest car company, has a turnover about 15 times greater than Porsche's. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55024/vw-eyes-move-on-pors
| Morgan Stanley slashes dividend Morgan Stanley on Wednesday broke a run of positive Q1 results from US banks by announcing a larger-than-expected loss and slashing its dividend by 80% in an effort to conserve capital. The bank's $578m Q1 loss, compared with a $1.3bn profit a year ago, contrasted with Wells Fargo, which announced record quarterly earnings of $3bn. Morgan Stanley's CEO John Mack said the bank would have been profitable without a $1.5bn accounting charge caused by a rise in the price of its debt. In the same period last year, it recorded a $1bn gain on the value of its debt. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55023/morgan-stanley-slash
| BofA's Lewis: US urged silence on Merrill In Categories: M&A, People Posted at 04:57 by Gwen Robinson Fed chairman Ben Bernanke and then-Treasury secretary Hank Paulson pressured Bank of America to stay silent about its increasingly troubled plan to buy Merrill Lynch - a deal that later triggered a government bailout of BofA - according to testimony by Ken Lewis, BofA's chief executive, reports the WSJ. Lewis told prosecutors in February that he believed Paulson and Bernanke were instructing him to keep silent while the two sides negotiated government funding to help BofA absorb Merrill and its huge losses, according to the transcript. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55027/bofas-lewis-us-urged
| Wells net jumps on Wachovia buy Wells Fargo's net income jumped 52% in the first quarter due mainly to its acquisition last year of regional lender Wachovia and a rise in mortgage refinancings, reports the WSJ. Wells' latest results were slightly higher than preliminary results issued two weeks ago, which were well above Wall Street estimates. The San Francisco bank reported Q1 net income of $3.05bn, up from of $1.99bn a year earlier. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55022/wells-net-jumps-on-w
| Kirin in buy-out bid for Lion Nathan Japanese brewer Kirin offered on Thursday to buy out Australia's second-biggest brewer, Lion Nathan, in a deal that could be worth more than A$2.4bn ($1.7bn), reports Reuters. Lion Nathan said Kirin had made an approach for the 53.9% of shares it doesn't already own. No price was given but analysts pointed to the A$11.50 a share Kirin offered for Lion Nathan shares in Lion's failed A$7.6bn bid for Australian bottler Coca-Cola Amatil last year. Lion Nathan shares, on a trading halt, last traded at A$8.31. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55021/kirin-in-buy-out-bid
| Freddie Mac's finance chief found dead In Categories: People Posted at 04:44 by Gwen Robinson David Kellermann, acting chief financial officer of troubled US mortgage financier Freddie Mac, was found dead early on Wednesday in his suburban Virginia home after his wife reported an apparent suicide. His death adds to turmoil after David Moffett, Freddie Mac's government-appointed chief executive, quit last month amid apparent frustration with Freddie's regulator. Kellermann, 41, became acting CFO last September after Freddie was placed under conservatorship. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55020/freddie-macs-finance
| HK blocks Li's PCCW buy-out PCCW chairman Richard Li on Thursday abandoned his $2.1bn bid to buy out Hong Kong's biggest phone company after the territory's Court of Appeal blocked the deal, prompting the stock's biggest decline in more than eight years, reports Bloomberg. The FT adds that after a six-day hearing, the court overturned the results of a February shareholders' meeting, which had approved the buy-out by Li in partnership with China Unicom, PCCW's second largest shareholder. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55019/hk-blocks-lis-pccw-b
| GM plans debt-for-equity launch General Motors said on Wednesday it was "working aggressively" to launch a debt-for-equity exchange ahead of a government-imposed June 1 deadline and that it might miss a $1bn debt payment due then. The development comes as the government's autos task force – which has been focused on Chrysler's end-April deadline to restructure - prepares to meet GM's bondholders after a hiatus of more than six weeks. A debt exchange at GM would enable bondholders to swap their $27.5bn in unsecured debt for equity in the carmaker. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55018/gm-plans-debt-for-eq
| NY bans placement agents Amid a widening probe into possible kickbacks involving New York's pension fund, Thomas DiNapoli, the state's comptroller, announced Wednesday he was banning placement agents from involvement in the fund's investments, reports DealBook. DiNapoli also said he was reviewing the fund's investments with firms under investigation by the New York attorney general and the SEC. Two associates of the former state comptroller have been indicted as part of attorney general Andrew Cuomo's probe into deals involving private equity groups including Quadrangle and Carlyle. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55016/ny-bans-placement-ag
| IMF slashes global growth outlook The global economy will contract sharply this year and recover only sluggishly in 2010, the IMF said on Wednesday as it urged governments to sustain or even increase fiscal stimulus next year. World output will shrink by 1.3% this year and grow by just 1.9% in 2010, the IMF said in what it called a "substantial downward revision" of its January forecasts, when it predicted global growth of 0.5% this year and 3% in 2010. As Lex notes, the revised forecasts "will have even bears running scared". See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55015/imf-slashes-global-g
| Madoff trading firm draws bids A bidding war has erupted for the remnants of Bernard Madoff's trading operation, once one of the largest market makers on the Nasdaq exchange, reports the NYT. Irving Picard, the trustee liquidating Madoff's assets, said Wednesday he had received three additional offers for the business. Last month, Picard struck a tentative deal to sell the business to Castor Pollux Securities for $15m. Madoff himself had valued the trading operation at about $700m before he was arrested in December for running a multibillion-dollar Ponzi scheme. See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55017/madoff-trading-firm-
| Overnight markets: Mixed Asian stocks fluctuated on Thursday, as finance companies dropped after Morgan Stanley reported a wider-than- forecast loss and automakers advanced. Futures on the S&P 500 lost 0.4% after the gauge erased a rally to finish down 0.8% in New York on Wednesday. Asian markets (Thurs)
03:00 BST
Nikkei down 40.66 (-0.47%) at 8,686.64
Topix down 2.36 (-0.28%) at 827.60
Hang Seng up 99.87 (0.67%) at 14,978.32 US markets (Wed)
S&P500 down 6.53 (-0.77%) at 843.55
DJIA down 82.99 (-1.04%) at 7,886.57
Nasdaq up 2.27 (0.14%) at 1,646.12 European markets (Wed)
FTSE100 up 43.20 (1.08%) at 4,030.66
Eurofirst 300 up 7.72 (0.98%) at 795.24 Currencies
04:10 BST
€/$ 1.2985 ( 1.2929)
$/¥ 97.75 (98.31)
£/$ 1.4456 (1.4643) Commodities
04:05 BST
Brent Crude (ICE) down $0.18 at $49.63
Light Crude (Nymex) down $0.35 at $48.50
100 Oz Gold (Comex) up $0.80 at $893.30
Copper (Comex) down $2.50 at $203.45 10-year government bond yields (%)
03:50 BST
US 2.93 (2.88)
UK 3.45 ( 3.30)
Germany 3.20 ( 3.16)
Japan 1.42 (1.46) Sources: FT, Bloomberg See this article online.
http://ftalphaville.ft.com/blog/2009/04/23/55013/overnight-markets-mi
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