Good morning, New York
It's the second business day that London and NYC are only four hours apart thanks to Daylight Savings Time. Just think of how much easier transatlantic communications would be if it was always like this. Sigh...
FT ALPHAVILLE
One hundred and one pains in the SNS for the CDS market. The nationalisation of the fourth largest bank in the Netherlands is proving to be a pain for the credit derivatives market, writes Lisa. It's only by virtue of the small number of contracts outstanding that referenced SNS Bank that this hasn't been making more headlines and causing more consternation. Next milestone: if credit event auctions are held, and that may also prove challenging.
Deputy prime minister Nick Clegg has hits soundbite pay dirt on the FLS. In Tuesday's FT he is quoted as saying that the Funding for Lending Scheme, whereby financial institutions get cheap loans from the Bank of England to boost credit to the wider economy, should be "put on steroids". Click through for the full post.
Belize has closed its restructuring with 86 per cent approval by its creditors, writes Joseph in the latest addition to his Pari Passu series. When he last wrote about Belize, he noted the government's understanding (for "clarity") that it didn't believe it was required to pay its debt on a ratable basis — but also a theory that its bondholders hadn't necessarily agreed with this disclosure, because the disavowal of ratable payment isn't in the direct bond contract. This may affect any future litigation, either in Belize itself or wherever Belize's example gets cited for or against ratable payment as something you can 'naturally' infer from a sovereign promise of equal payment.
NEWS
Republicans to unveil $4.6tn of cuts. The staunchly conservative fiscal package, to be unveiled in the US House of Representatives, would slash government spending by $4.6tn over a decade and balance the budget within 10 years, with spending and revenues each worth 19.1 per cent of the economy. (Financial Times)
The founder of Intrade received $2.6m in insufficiently documented payments from the popular prediction markets company in 2010 and 2011, an audit revealed weeks before trading on the site was halted. (Financial Times)
Paulson eyes Puerto Rico tax haven move. Billionaire John Paulson has explored abandoning his native New York for the tropics of Puerto Rico as he tries to shield his fortune from US tax collectors. The Queens-born hedge fund manager considered the option, according to people familiar with the situation, after Puerto Rico passed a law designed to encourage the rich to relocate to a Caribbean island that is not traditionally considered a tax haven. (Financial Times)
US urges China to crack down on hacking. The White House has called on China to take "serious steps" to stop extensive hacking of US companies and to start negotiating international rules for behaviour in cyberspace. (Financial Times)
Mexico eyes telecoms revolution. The Mexican government on Monday announced a sweeping proposal to limit the reach of telecoms tycoon Carlos Slim and broadcasting giant Televisa as part of efforts to boost competition in Latin America's second-biggest economy. The bill, which forms part of the most ambitious economic reform agenda in a generation, seeks to establish a powerful industry regulator armed with an array of tools to curb companies' control of markets, while opening up space for new investors. (Financial Times)
New York City's proposed ban on "supersized" sugary drinks has been struck down by a judge the day before the anti-obesity measure was set to start blocking soda taps. Mayor Michael Bloomberg quickly vowed to appeal against the ruling. His initiative had won praise from public health experts but attracted fierce criticism from the US beverage industry. (Financial Times)
Sales of risky pools of securities backed by car loans have jumped this year as investors' search for yield takes them to corners of the market that boomed in the build-up to the financial crisis. Sales of subprime auto asset-backed securities in the US have increased year-to-date to nearly $4bn, almost double the volume during the same period of 2012, according to Deutsche Bank data. Subprime auto sales now account for 34 per cent of all auto ABS issuance, surpassing levels last seen in 2007. (Financial Times)
Cut in fuel use reignites ethanol debate. The price of a critical US biofuel credit has breached $1 for the first time, after soaring 1,900 per cent this year. The market is in "Renewable Identification Numbers", or RINs. These 38-digit codes are at the heart America's experiment with "green" fuels. The sharp rise in RIN prices this year shows what happens when policy clashes with the realities of supply and demand. (Financial Times)
Markets: Stocks and commodities are weaker while perceived havens such as the dollar are in demand, as the bull run that has taken many equity barometers to multiyear or in some cases record highs endures one of its periodic pauses. The FTSE All-World index is retreating 0.2 per cent from its latest four-year peak as the FTSE Eurofirst 300 opens with a loss of 0.2 per cent and after the Asia-Pacific region shed 0.5 per cent. (FT's Global Market Overview)
