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October 2001

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  • The Caspian region has begun to boom because of its oil potential. Now the aftermath of the terrorist attacks on the US will transform the politics of the region. Bad news for the Afghans could in the long-run be good news for the countries around the Caspian if it gives them more bargaining power.
  • Author: Julie Dalla-Costa
  • Jersey City used to be good for three things: it was a good place to park the car before getting on the ferry to New York, it served as the butt of many a poor joke by Manhattanites, and offered a fantastic view of the skyline across the Hudson. The terrorist attacks on the World Trade Centre destroyed the latter, at least for the time being. Though not the prettiest buildings to many, for 25 years the twin towers dominated and defined Manhattan. They were usually the first buildings you would see as you neared the island, and also served as a useful reference point if you got lost when walking downtown.
  • The 31 states of Mexico are bonding again. But unlike independence in 1821 this time it is purely financial.
  • "For every complicated problem," the American journalist HL Mencken wrote, "there is a solution that is short, simple - and wrong." The foreign exchange market's view of the much-mocked, formerly dismissed but now resurrected Tobin tax follows the Mencken line. The idea of a tax on foreign exchange transactions is misconceived, most commentators and market participants agree.
  • Author: Kala Rao
  • In times of financial uncertainty, it is always tempting for banks to retreat to the business they know best. In the Netherlands, this means pulling back from international expansion and focusing on the domestic retail market. But there is always going to be one bank looking abroad for new opportunities.
  • The response of private-sector financial institutions, central banks, regulators and governments to the murderous attacks on New York and Washington has been one of remarkable resilience and impressive solidarity. Governments have forged their diplomatic coalition against terrorists, central banks have coordinated injections of liquidity and interest rate cuts to prevent systemic crisis, regulators have been flexible enough to relax - temporarily - certain capital standards, banks have lent each other space and carefully rebooted the financial markets.
  • Lehman Brothers escaped across the river, its emergency relocation plan kicking in within minutes of the tragedy. Merrill did not fare quite as well.
  • The smoke clears around BSCH, and Emilio Botin emerges in front after his swift and successful coup de grace.
  • Global finance is in the front line of the campaign against terrorism. The markets have so far proved resilient, thanks to a massive injection of liquidity by central banks and a brief interlude when a spirit of cooperation broke out among Wall Street rivals. Shoring up global confidence and leaning on international banks to line up for an economic war to starve terrorists of funds are now Washington's financial priorities. Broker-dealers made hay in the flurry of securities selling. But nothing can disguise the fact that the world economy and investment banking were in a parlous state even before September 11. The fog that surrounds the political and military outcome has added new uncertainty to recovery prospects.
  • Whether it’s labelled programme trading or portfolio trading, the provision of cut-rate execution for liquid securities is a cash cow for banks and brokers. Despite low margins and dismal prevailing market conditions, institutions are still piling into the business. Just how high can an essentially commoditized service rise?
  • In times of crisis, maintaining stability is crucial. Not at Merrill Lynch, it seems. Two weeks after the attacks on the World Trade Centre which forced Merrill to evacuate its headquarters for the foreseeable future, the new regime has seen fit to dispose of Jeff Peek, president of Merrill Lynch Investment Managers.
  • With Pakistan once again becoming a frontline state, the financial community is preparing for the worst. Despite this, Pakistan's move to support the US has brought comfort to the market.
  • Alrosa is by far the biggest gem diamond producer in Russia and supplies about 20% of world production. Now it is seeking new funding to develop its existing mines, open up new prospects in Russia and Africa, and expand the production of cut diamonds.
  • Although deeper and more liquid than anyone had dared predict, the nascent euro-denominated bond market in 1999 had one weakness: it was failing to secure may US issuers. However, during the first eight months of this year the costs of issuing in euros narrowed for a great many US borrowers, and increasing numbers of them began to recognize the attraction of the euro market.
  • I am convinced that the outcome of the human tragedy of September 11 will be a gutsy renewal of solidarity and confidence, recently lacking in the US, on the part of Americans and foreigners.
  • Salomon Smith Barney moves back to lower Manhattan. Will other investment banking firms follow?
  • The new era of a diminishing treasury debt has been shattered with the events of September 11. Now, the US government appears to be preparing for a vast expansion of public spending, heavily affecting dollar-denominated debt markets.
  • In the August edition of Euromoney the Emerging Markets table of banks ranked by shareholders equity gave incorrect figures for total assets and asset growth for the Shanghai Pudong Development bank. The correct figures are $15,569 million and 28.67% respectively.
  • Despite huge uncertainty about the political and economic future of the Middle East, bankers there say they are still busy and that life is carrying on as normal.
  • Two weeks after September 11, the sell-off in the Asian equity markets was unabated. Hong Kong’s Hang Seng was down 10.9%, Korea had dropped 10.8%, and Singapore had plunged 18.1%. And Japan’s Nikkei fell through the psychological 10,000 barrier. Chris Cockerill reports on what comes next
  • In the Netherlands, bankers anticipate that the final stage of the introduction of the euro will pass into history without a hitch.
  • Russia has been trying to climb out of economic isolation for the last two years. Now that economic isolation will act as a shield from recession caused by America's war in Russia's own backyard.
  • Belarus's small banking system has remained a sideshow during the tumult of recent years, while some of the most advanced of Europe's transitional economies suffer.
  • At the IMF meeting in Prague last year, the car carrying JP Morgan chairman Sandy Warner and the bank's president and CEO, Bill Harrison, got caught in the crossfire of anti-globalization protesters. The driver managed to get out of trouble and both men escaped unscathed. But JP Morgan employees joked that, had Warner and Harrison really been in a tight spot, security would have been briefed about who to cover first. Just 10 months after Chase's merger with JPMorgan it was clear that Harrison was firmly in the driving seat.
  • Rising competition in the programme trading arena has begun to change the balance between agency trading and risk trading. Agency business still controls a higher percentage, but risk trading has begun to rise.
  • The markets were already jittery before September 11 but the terrorist attacks sent volatility soaring. The central banks poured money in to provide liquidity and cut interest rates, politicians made rallying calls to investors to help keep markets up and some hedge funds promised not to short stocks, while some lenders refused to make them available for shorting. Yet market forces prevailed: indices plummeted and then started to bounce all over the place. But some investors feel the worst is over and buying opportunities will abound.
  • As the dollar continued to weaken in the days after the attacks on the World Trade Centre, the euro inched up to 91 US cents, with some analysts predicting 98 cents or even parity. It has been a painful crawl back for a currency that required concerted central bank support a year ago.
  • The days of professional footballers retiring from the sport to run a pub are well and truly gone. The riches bestowed on the game's top stars have done more than just bump up their bank balances. If the latest move by Alan Shearer is anything to go by, their new-found wealth is encouraging them to take an interest in investment strategy.