Good morning New York,
FT ALPHAVILLE
When you can't beat them, spend it: Gary Jenkins notes that when there's nothing better to do with your money you should just spend it. Izzy wonders if this isn't what the central bankers were after all along?
Meanwhile in Greece...: Joseph notes that it's probably significant that Dromeus Capital, a fund which did its homework on underpriced Greek assets last year, and made a killing, is going cautious on Greece.
Is the FSA (still) a leaky ship? It may seem fanciful that Tidjane Thiam and other directors at Prudential believed that a leak of their planned $35bn takeover of AIA three years ago might come from the FSA. But they did, notes Paul. SEe the final notice censuring Mr Thiam and fining the Pru $30m here.
NEWS
Cyprus imposed severe capital controls: "Cyprus is to become the first eurozone country ever to apply capital controls – with limits on credit card transactions, daily withdrawals, money transfers abroad and the cashing of cheques – intended to prevent a vast outflow of euros when its banks open on Thursday. Under drastic measures that some analysts say are incompatible with monetary union, depositors would be able to withdraw no more than €300 in cash each day, said people familiar with the move. Transfers over €5,000 would require permission of the central bank." (Financial Times)
Kurodo warns Japan debt 'not sustainable': Japan's central bank governor has told parliament that the government's vast and growing debt is "not sustainable," and that a loss of confidence in state finances could "have a very negative impact" on the entire economy. The warning comes as Shinzo Abe's administration attempts to drag Japan out of more than a decade of deflation by means of aggressive monetary and fiscal stimulus. (Financial Times)
Chevron cuts senior executives' pay: "Chevron, the US oil group, is cutting the pay of its chief executive and other senior executives after high-profile safety failures. The board has decided to cut stock awards and cash bonuses for 2012 by about 10 per cent, according to a person familiar with the decision." (Financial Times)
RBS and Lloyds must raise extra £9bn: "Britain's two part-nationalised banks account for as much as £20bn of a £25bn capital shortfall across the sector identified by the UK's new financial stability regulator, people close to the process said. The Financial Policy Committee announced yesterday that UK banks were overstating their capital by £52bn, after it scrutinised their balance sheets with tougher measures of risk and factored in looming fines and expected losses." (Financial Times)
France's towns demand rescue from 'Time bomb' of Dexia loans: French towns such as Sainte-Etienne are calling on President Francois Hollande's government to save them from about €10bn in Dexia loans whose risks they say weren't made clear. Sitting on debt pegged to foreign interest rates or currencies, many troubled municipalities are struggling to service their loans and clamoring for help from the state. (Bloomberg)
Google eyewear to be 'made in USA': "Google will manufacture Project Glass, its futuristic digital eyewear, in Silicon Valley, in a high-profile example of the return of electronics manufacturing to the US. Google is working with Hon Hai Precision Industry, the Taiwanese contract manufacturer better known as Foxconn, to assemble the sci-fi headset at a facility in Santa Clara, California, according to people familiar with the company's plans." (Financial Times)
Blacktone is open to keeping Michael Dell on as CEO if it gains control of Dell. Mr Dell began the current bidding war for the company with an offer to take it private alongside Silver Lake Partners, but his fate as founder and largest shareholder is likely to be key to any rival deal. Blackstone sees Mr Dell as a "potential ally" for securing control of the company if its bid succeeds. (Wall Street Journal)
German unemployment unexpectedly rises amid euro crisis: The number of people out of work in Germany increased a seasonally adjusted 13,000 to 2.94m, according to the Nuremberg-based Federal Labor Agency. Economists had predicted a decline of 2,000. The adjusted jobless rate held at 6.9 per cent, slightly above a two-decade low of 6.8 per cent. The fall is being blamed on renewed tensions in financial markets. (Bloomberg)
American Airlines' $11bn merger with US Airways received a bankruptcy judge's approval. However, Judge Sean Lane objected to a clause giving a $20m severance package to AMR's outgoing chief executive, Tom Horton (Reuters). The two airlines announced the merger plan in February, with the backing of creditors (Bloomberg).
Markets: Worries about the eurozone unsettled global equities and the euro and pushed up prices for "core" government bonds and gold, as political uncertainty in Italy compounded lingering concerns about Cyprus's banking crisis. However, the S&P 500 US equity index managed to pare an early decline to end less than 0.1 per cent lower – once again within a whisker of its 2007 record closing high. The FTSE Eurofirst 300 fell 0.4 per cent to a three-week low, and there were bigger falls for Italian and Spanish shares. The FTSE MIB in Milan shed 0.9 per cent and Madrid's Ibex 35 index fell 1.1 per cent. (Financial Times)
