FT markets round-up: "A calmer mood prevailed in the markets after the volatility of the previous session, as participants took a positive view of some mixed US economic data and attempted to put lingering concerns about the eurozone to one side. Indeed, the S&P 500 US equity index rose 0.8 per cent to finish within two points of the record closing high of 1,565.15 it set in October 2007. The FTSE Eurofirst 300 closed 0.2 per cent higher, although there were further losses for peripheral eurozone equity markets, with the Ibex 35 in Madrid shedding 1.8 per cent and Milan's FTSE MIB down 1 per cent." (Financial Times)
Warren Buffett will become one of Goldman's largest shareholders, after a deal to convert billions of dollars of warrants into common stock. Berkshire Hathaway was originally issued the warrants as part of investing $5bn in the bank during the crisis, giving it the right to purchase about 9 per cent of the bank for $115 per share before October 1 this year. Tuesday's revised deal will see Goldman issue Berkshire stock equivalent to the company's paper profit on the position (Financial Times, Goldman statement). Buffett's gain of a 2 per cent stake from the deal will making him a top 10 Goldman shareholder (Wall Street Journal, Bloomberg).
The world's pool of Aaa-rated government debt has fallen 60 per cent since the start of the financial crisis. The loss of top ratings by the US, UK, and France have helped shrink the stock of debt deemed Aaa by Fitch, Moody's and Standard & Poor's from almost $11tn at the start of 2007 to $4tn in 2013 (Financial Times).
US crackdown on Citi laundering laws: "The US Federal Reserve has ordered Citigroup to improve its compliance with anti-money laundering rules, citing deficiencies at an affiliate of Banamex, its prized Mexican banking arm. Citi is required to develop plans to strengthen its anti-money laundering procedures and adequately fund its risk-management programmes. There were no fines as part of the Fed order." (Financial Times)
Argentina loses bid for rehearing on bonds: "Argentina's request that the full federal appeals court in New York reconsider a ruling by a three-judge panel was denied in a case involving $1.3 billion in defaulted bonds. The U.S. Court of Appeals in Manhattan today said the full court won't rehear the appeal, leaving in place an Oct. 26 ruling that bars Argentina from treating restructured-debt holders more favorably than holders of the repudiated debt." (Bloomberg, see also FT Alphaville)
Home prices in US post their biggest rise since 2006: "U.S. home prices rose in January from a year earlier, registering the biggest increase since the summer of 2006, according to Standard & Poor's Case-Shiller home-price indexes. On a year-on-year basis, the 20-city index improved 8.1%, above recent expectations of economists polled by Thomson Reuters for a rise of 7.9%." (Wall Street Journal)
FURTHER FURTHER READING
- Paul Krugman tells Cyprus to leave the euro.
- Quis custodiet ipsos custodes? Calpers edition.
- Chairman Xi and the China Dream.
- The financial crisis has not been good for geopolitical revisionism.
- Zhengzhou is not a ghost city.
- Further (book) reading: an Albert Hirschmann biography.
