- IMF Cuts Global Forecast on Worst Crisis Since 1930s
- Lehman raises $4bn in new capital
- UBS says it is over the worst of losses
- Morgan buys minority stake in Hawker
- HSBC chief bullish on likely growth in 2008
- Thornburg Mortgage To Resume Lending
- Jana Says It Rejects CNET Offer
- Google exec to head EMI digital music
- French stock market regulator starts action against EADS managers
- Aloha Airlines' last flight brings cheers, tears
IMF Cuts Global Forecast on Worst Crisis Since 1930s - Bloomberg
The International Monetary Fund cut its forecast for global growth this year and said there's a 25 percent chance of a world recession, citing the worst financial crisis in the U.S. since the Great Depression.
The world economy will expand 3.7 percent in 2008, the slowest pace since 2002, according to a document obtained by Bloomberg News at a meeting of Southeast Asian deputy finance ministers and central bankers in Da Nang, Vietnam. In January the fund projected growth of 4.1 percent.
The reduction is the third by the Washington-based lender since last July, when it predicted the world economy would cope with the U.S. credit squeeze and grow 5.2 percent this year. Central banks will need to conduct policy ``as flexibly'' as the circumstances warrant, the statement said, adding that the European Central Bank has room to lower borrowing costs.
``The financial shock that originated in the U.S. subprime mortgage market in August 2007 has spread quickly, and in unanticipated ways, to inflict extensive damage on markets and institutions at the core of the financial system,'' the statement said. ``The global expansion is losing momentum in the face of what has become the largest financial crisis in the United States since the Great Depression.''....
Lehman raises $4bn in new capital - Financial Times
Lehman Brothers’ shares leapt almost 18 per cent following its increased $4bn capital raising plan, a jump that reflects the volatility in financial stocks that has become commonplace and the huge influence of short traders.
Many speculators who profited from placing such trades on the demise of Bear Stearns in mid-March believed Lehman was the next logical target, but they will now be nursing some painful losses.
It is likely that those investors being forced to bail out of their positions, now that Lehman appears to have fended off any chance of Bear-like problems, contributed to the investment bank’s outperformance versus its peers. Lehman’s rally on Tuesday eclipsed the S&P investment bank index, which was up 9 per cent.
Lehman’s share price rise followed the news that it would raise $4bn in new capital instead of the originally planned $3bn due to strong demand. The move is part of the brokerage’s efforts to complete its capital raising plans as early as possible....
UBS says it is over the worst of losses - Daily Telegraph
UBS led a rally in banking stocks around the world after the Swiss banking giant's $19bn (£9.6bn) sub-prime writedown was taken as a sign that the worst of the credit crunch may over.
The Dow Jones soared 375 points in late trading, after European bourses climbed on the positive sentiment with London's FTSE 100 rising 2.6pc, Germany's DAX rising 2.8pc and France's CAC 3.7pc.
Investors were relieved that UBS was able to recapitalise so swiftly with a SFr15bn (£7.5bn) rights issue to restore its battered balance sheet to health.
Sentiment was further helped by Lehman Brothers which raised $4bn from a convertible share sale to quell speculation that it is short of capital....
Morgan buys minority stake in Hawker - FInancial Times
Morgan Stanley has bought a minority stake in London-based commodity fund Hawker Capital to bolster the range of hedge funds the Wall Street bank can offer to clients.
Hawker, which manages about $300m (£152m), started trading last October after founders Tim Sanger and Oliver Hawkins left Rubicon Fund Management, the London macro fund that ran into trouble last year.Morgan Stanley will sell Hawker’s fund through its investment management platform, which already features several funds in which the bank has bought minority stakes, as well as FrontPoint, which it bought outright.
The deal plugs a hole in Morgan Stanley’s hedge fund range amid booming demand for commodity funds. Managers in the sector say big institutional investors are expressing strong interest in commodity hedge funds, even as money flows in record amounts into commodity exchange-traded funds and trackers.....
HSBC chief bullish on likely growth in 2008 - Financial Times
Mike Geoghegan, chief executive of HSBC, said the UK’s biggest bank was well positioned for growth in 2008 given its strong capital base and liquidity.
Speaking at a Morgan Stanley-hosted financial services conference in London on Tuesday, Mr Geoghegan said HSBC was seeing inflows of business because of its capital position and strong retail deposit base. The bank has a tier 1 capital position of 9.3 per cent.
His relatively bullish comments come as banks face greater scrutiny of their capital positions given worries about further writedowns on US subprime losses.
“You wouldn’t be surprised to see the amount of business is coming to HSBC because of its capital.”.....
Thornburg Mortgage To Resume Lending - Wall Street Journal
Thornburg Mortgage Inc., the home-mortgage finance company that narrowly escaped seeking bankruptcy-court protection, expects to resume making loans "within weeks, if not days," Chief Executive Larry Goldstone said Tuesday.
The Santa Fe, N.M., company, which has focused on making big loans to wealthy people, had to suspend funding new mortgages recently after a sharp drop in the value of its mortgage securities triggered margin calls from its lenders and left it short of cash. In recent weeks, the situation got worse because the company wasn't able to meet $610 million in margin calls.
Last week, MatlinPatterson Global Advisers LLC, a hedge fund specializing in distressed debt, made a $500 million investment in Thornburg, gaining a stake of about 40% in the company.
Thornburg announced late Monday that it had raised $1.35 billion through selling bonds, warrants to purchase its common shares and interests in certain mortgage assets....
Jana Says It Rejects CNET Offer - Wall Street Journal
Jana Partners LLC added more heat to its proxy battle with CNET Networks Inc. as it argued "fundamental strategic and operational change" is needed at the interactive media company.
The hedge fund, which is seeking to elect seven new members to CNET's eight-person board, also disclosed it rejected a CNET offer of one board seat. The fund said agreeing to that "would not bring about the necessary level of change at CNET."
Jana had teamed up with Sandell Asset Management Corp. to shake up the company, which provides online technology news. Jana has a 10% stake in CNET, according to filings in February, while Sandell has a 2.3% stake.
The group has nominated a slate of seven directors who would replace two directors and fill five new seats, putting the board's membership at 13 and giving the dissidents a majority. CNET is appealing a March court decision that is allowing the board-takeover effort, which the company has said violates its corporate bylaws.....
Google exec to head EMI digital music - Reuters
Google has lost another member of its executive team as Chief Information Officer Douglas Merrill is leaving to join music company EMI.
EMI said in a statement on Wednesday that as president of its digital music business, Merrill will head a new global function including digital strategy, technology and business development.
"I have two passions. One is creating platforms and tools that make it easier for consumers to achieve their goals. The other is music," Merrill said.....
French stock market regulator starts action against EADS managers - The Times of London
EADS, the European aerospace and defence giant, faces the threat of management upheaval after the French stock market regulator began proceedings on insider trading allegations.
Analysts gave warning that a string of resignations may be inevitable after 17 past and present executives were alleged to have traded unlawfully in the company’s shares.
Two leading shareholders in EADS – Lagardère, the French media group, and Daimler, the German car-maker – were also targeted by the Autorité des Marchés Financiers (AMF), which said that it had evidence of insider dealing in connection with the failure of Airbus, the aircraft manufacturing division, to deliver the new A380 airline on time.
The AMF also alleged that EADS, which is struggling to overcome Fran-co-German squabbling, production delays and the falling dollar, had misled financial markets.....
Aloha Airlines' last flight brings cheers, tears - AP via USA Today
Aloha Airlines has landed its last flight in Honolulu.
About 100 out-of-work employees cheered and wept as they jammed the Aloha side of Honolulu's interisland terminal late Monday to greet the final landing. Flight 251 from Maui touched down at 10:32 p.m., eight minutes ahead of schedule.
More than half the 80 people aboard were Aloha employees taking their last ride on the airline that had been around for 61 years.
Is it just me or do these banks have no idea how much deadweight they carry on their balance sheet?
Posted by: azuman | April 02, 2008 at 10:41 AM