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Monday, October 6 2008
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  • 8:28 AM The plunge in commodities prices has economists worried about deflation as a lack of credit strangles growth, pushing housing prices even lower, leading to more defaults, and even tighter credit etc. - a phenomenon one money manager calls a vicious deflationary cycle.
  • 8:20 AM Commodities markets are poised to post their biggest annual decline since 2001 as slowing economic growth erodes demand for raw materials, and investors bail out of leveraged positions.
  • 8:05 AM Scotiabank (BNS) to pay C$2.3B for a 37.6% stake in CI Financial, Canada's number-three mutual fund company.
  • 7:59 AM eBay (EBAY) buys Bill Me Later, the number two online-oriented payments brand, for $945M in cash ($820M) and options ($125M), opening up "deferred payments and promotional financing service to the tens of millions of customers who use eBay and PayPal."
  • 7:53 AM Bank losses could more than triple to $1.7T as they begin to tap the government's bailout plan, which will force them to write down some still overvalued assets, and may drive yields on more tame debt issues down.
  • 7:39 AM The cost of borrowing dollars overnight, Libor, jumped 37 BPs to 2.37%, while three-month Libor fell five BPs to 4.29%.
  • 7:30 AM Steven Spielberg's DreamWorks studio finalizes its split from Viacom's (VIA) Paramount Pictures. The parting seemed to be amicable, leaving open the possibility of future collaboration.
  • 7:22 AM How long before the Wall Street credit crisis clogs up Main Street?
  • 7:09 AM Following a similar move by U.S. counterparts, Europe's automakers plan to ask the European Commission for a $55B loan to speed the switch to environmentally- friendly cars.
  • 7:06 AM ING Groep (ING) wants to raise its stake in Bank of Beijing to 20%, and may apply for a retail banking license in China. ING wants 20-25% of its profits to come from the Asia-Pacific region within the next ten years, as compared to 6% today.
  • 7:06 AM A sworn affidavit by Wachovia (WB) CEO Robert Steel suggests the bank came close to failing at least twice in the last week, and that the FDIC pushed Steel to abandon a pact with Citigroup (C) in favor of Wells Fargo (WFC), thereby letting the government off the hook.
  • 6:56 AM UBS lowers its forecast for China's 2009 GDP growth to 8.0% from 8.8%, citing anemic global growth and forecasts of a severe U.S. recession. This is the second time in less than three months that UBS has lowered its outlook on China's growth.
  • 6:54 AM U.S. futures are shaky, but have climbed from overnight lows. Dow -2.06%. S&P -2.37%. Nasdaq -2.2%.
  • 6:53 AM Europe's limping into lunchtime: London -3.3%. Paris -5.9%. Frankfurt -5.5%.
  • 6:52 AM Asia markets saw deep shades of red on Monday. Nikkei -4.25% to 10,473. Shanghai -5.23% to 2,174. Hang Seng -4.97% to 16,804. BSE -5.61% to 11,824. Jakarta -10.03%.
  • 6:50 AM Makoto Utsumi, formerly a top official at Japan's Finance Ministry, says "there was and will be no chance for a coordinated rate cut" by the U.S., Europe and Japan to prop up the dollar.
  • 6:48 AM Asian money-market rates maintain their nine-month highs as the $700B fails to inspire confidence and European countries struggle to rescue faltering financial companies.
  • 6:30 AM The German government and banks craft a $68B rescue package for Hypo Real Estate after an earlier plan faltered. Germany's central bank warned Hypo's failure could have "triggered unpredictable consequences" like those of Lehman's failure.
  • 6:24 AM BoA (BAC) agrees to settle claims regarding some subprime loans or option adjustable-rate mortgages originated by Countrywide Financial. The deal will cover nearly 400K borrowers and could be worth up to $8.4B.
  • 6:23 AM The cost of borrowing in euros for three months, or Euribor, hit a record of 5.35% - its seventh straight record-breaking day. The TED spread - the difference between Treasurys and what banks pay to borrow in dollars - was at 3.89% today.
  • 6:12 AM BNP Paribas (BNPQY.PK) agrees to buy Fortis' Belgium and Luxembourg units for $19.8B after an earlier government rescue failed.
  • 5:22 AM A U.K. firm specializing in corporate insolvencies expects a wave of failures amongst U.K. retailers at the start of 2009. With the 'banking honeymoon' nearing its end, the firm warns there are few white knights around to rescue companies in distress.
  • 5:10 AM At the weekend's summit of EU leaders, Germany refused to back a pan-European bailout, and announced a full guarantee on bank deposits, pressuring other countries to follow suit. EU members not included in the talks expressed their disquiet.
  • 4:41 AM Fed officials and execs from Citi (C) and Wells Fargo (WFC) try to resolve their volatile battle for Wachovia (WB). The lead solution involves divvying up Wachovia's branches by geographic area, Wells taking its asset-management and brokerage units - and no FDIC help for either.
  • 4:38 AM Chinese Premier Wen Jiabao has full confidence China's financial system is safe, and says the economy may be able to sustain its rapid growth even in the midst of the global financial crisis.
  • 4:35 AM The ECB has been busy. Yesterday it lent €24.6B to banks through its above-market 5.25% marginal lending facility and took in €38.8B in its below-market 3.25% deposit facility. Today it plans to launch a quick liquidity absorbing tender up to €220B.
  • 4:20 AM European markets are down heavily in the early going. London -2.4%. Paris -4.7%. Frankfurt -4.4%.
  • 4:19 AM Flight-to-safety mindset is evident in Treasury futures. 30-year +1.01%. 10-year +0.73%. 5-year +0.53%. 2-year +0.23%.
  • 4:18 AM Crude has dipped below $90, currently -4.45% to $89.70. Gold +0.18% to $834.70.
  • 4:17 AM It's still the middle of the night, but U.S. futures look ugly. Dow -2.07%. S&P -2.39%. Nasdaq -2.66%.
  • 3:59 AM ImClone (IMCL) agrees to be acquired by Eli Lilly (LLY) for around $6.1B.
  • 3:48 AM Asian markets plunge on fears of financial crisis contagion: Nikkei -4.3%. Hang Seng -4.7%. Shanghai -5.2%. BSE -3.6%.
  • 12:00 AM Monday's economic calendar:
    9:00 Former Fed chief Volcker and vice-chief Ferguson speak on financial supervision
    11:30 Treasury's Ryan speaks at industry conference
    12:00 Fed's Evans speaks on economic outlook in Texas
    12:00 Fed's Fisher speaks on Fed, economy
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