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November 2009

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  • "I thought I was a conservative. I think I could have been more conservative"
  • As many of the world’s leading banks were posting ever more impressive figures for the third quarter, criticism from areas of the non-financial media began in earnest again.
  • Refi-rock, spearheaded by JPMorgan MBS trader Russell Middleton, is more than just a party to raise money for a good cause. The event, which took place for the sixth time on October 29, attracted more than 1,500 people from the world of mortgage and rates trading.
  • Bankers are often caricatured as greedy, bonus-grabbing individuals. But an intriguing tale from Michigan questions this stereotype.
  • Mongolia’s frontier image fits perfectly with Louis Vuitton’s image of "chic nomadism", said the French label’s chairman, Yves Carcelle, at the opening of his firm’s first store in Ulaanbaatar on October 23. Dale Choi, market commentator for local investment bank Frontier Securities, blogged that in response to his questions as to whether his country of 2.7 million merited an LV presence, Carcelle replied: "Since we really sell emotions, not goods, we never do market research. Our approach is based on our feeling for the market of how it is developing, observing its progress and changes in behaviour, until we are convinced that it is ready for us." If the move pays off for Louis Vuitton, Euromoney can see the technique catching on in financial markets. The attractions are obvious: why pay inflated salaries to teams of suitcase bankers and itinerant analysts to research a market and gauge its potential, when a Gallic sniff of the air and a wave of a thermometer can achieve the same result? Will "chic nomadism" (with its shades of the satirical hobo-chic "Derelicte" brand from the Ben Stiller comedy Zoolander) catch on in Mongolia? Choi notes wryly that the Mongolian revolutionary hero Sukhbaatar would never have imagined the erection of a Louis Vuitton tent to host the opening party on the square at the heart of Ulaanbaatar that bears his name. Meanwhile there’s a danger of frontier market envy developing in Asia. A Khmer fund manager with interests in Mongolia as well as his own country reacts with dismay on hearing the news. "Phnom Penh should have been first," he says. It will have to settle for perhaps being next, if Carcelle decides the time is right to sell some emotions there.
  • It looks as if RBC may be losing its staff to Hollywood.
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  • They have raised private capital in abundance as their stock prices soared. Investors may be overlooking how dependent the banks have been on government subsidy, especially now it is being phased out. Looking ahead, their credit losses are more likely to rise than to fall. Peter Lee reports.
  • The limited effects of a system breakdown at EBS suggest the two interdealer brokers no longer dominate FX price discovery. They had better watch out, there’s a new market paradigm on the block and it is hungry for their lunch. Lee Oliver reports.
  • The credit crisis almost razed the entire edifice of modern finance to the ground. Governments had to act quickly to help rebuild it. In doing so, have they created a monster that distorts the reality of the banking system’s health? Hamish Risk reports.
  • The country’s investment banks are encouraging firms to take a longer-term view of risk management and funding. Change is happening, but from the top down. Nick Kochan reports.
  • Global investment banks under domestic pressure to curb salaries and bonuses face a dilemma in booming Brazil: how to compete for skilled staff in a market where local competitors face no such constraints. Chloe Hayward reports.
  • The end of the civil war has boosted economic confidence. But there is much to be done in improving infrastructure and reviving activity stunted by the conflict, such as agriculture and fisheries. Chris Wright reports.
  • The post-summer jump in covered bond new issuance has sharply reduced spreads, surprising many analysts. ECB purchases helped recovery but liquidity is bound to tighten and yields correct. Philip Moore reports.
  • Capital markets are booming once again and competition is heating up among the investment banks. Is the upturn too good to be true? And how will the competitors fare in the new order? Helen Avery reports.
  • Mexico’s private equity market has long been near dormant. Now it is waking up and is set to give the capital markets and economy a boost. But there will be more battles with regulators, investors and entrepreneurs before a private equity boom can develop. Chloe Hayward reports from Mexico City.
  • The liquidation of a prominent equity fund capped a tough year as the country’s stock index slid from one of the decade’s top performers in Asia to one of its worst. Lawrence White examines the market’s lack of depth and breadth, and how to fix it.
  • Proving that higher spreads, the annihilation of half of the investor base and a global recession can’t keep a good product down, securitization has returned to Europe. Louise Bowman investigates.
  • The emirate is beginning to recover from the financial shocks of the past year. But several challenges remain, not least servicing its large debt pile. Sudip Roy reports.
  • The country has had its tribulations, but it is prospering from international demand for minerals and energy and from the benefits of liberalization. The only shadow is the danger that discontent among the poor will grow faster than the redistribution of wealth. Dominic O’Neill reports from Lima.
  • The Middle East’s best-known international investor says his faith in capitalism remains unshaken. Only time will tell if and to what extent his belief in Citi, so severely tested over the past year, will endure. Taimur Ahmad interviewed him in Riyadh.
  • The number of commercial banks has increased from 17 to 27 in the past two years. New government measures aim to force consolidation. Meanwhile, though, many are reluctant to lend, and local businesses are suffering. Lawrence White reports from Phnom Penh.
  • The New York FX Committee will appoint Jeff Feig, global head of G10 FX at Citi, as its chairman when Richie Mahoney steps down in early 2010. Mahoney, head of BoNY Mellon’s global markets and capital markets group, has served on the committee since 1994, so Feig has a lot to live up to.
  • In another clear signal that it intends to build on its huge FX business, UBS has hired market veteran Dave Tait as its global head of proprietary trading. Tait had a long and successful career on the sell side, including stints at Goldman Sachs and CSFB, before moving into the then fledgling hedge fund industry several years ago. He initially worked at Bluecrest, before joining the ill-fated Peloton Partners. Until he was lured back to the sell side by UBS, he was trading at Citadel.
  • A way to cope with forward premia risk; Increased reluctance to take on counterparty risk
  • The State of California is suing State Street Corporation, alleging that the Boston-based bank overcharged two of its high-profile pension funds on securities-related FX transactions. While some are claiming that the allegations involving pension funds Calpers and Calsters are the biggest story in FX for some time, the really big issue is why it has taken what are supposedly professionally run funds so long – up to eight years, according to CNBC – to realize that they might not have been filled at a realistic FX rate.
  • Talks under way about payment arrears; Agreement with holdouts also under consideration
  • Ivanhoe claims GDP could get 30% lift; Deal expected to be worth $4 billion
  • Banks under scrutiny over lending growth; Central bank praised for its supervision
  • Mubadala, the Abu Dhabi state-owned company established to diversify the emirate’s economy, plans to become a frequent borrower in the international capital markets, says a senior official.
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