Good morning New York,
FT ALPHAVILLE
The reserve requirement confusion: Izzy presents a response from Peter Stella, former chief of monetary and foreign exchange operations at the IMF, to something written by Jeremy Siegel at the Wharton School on the subject of reserve requirements and whether or not they pose an inflationary or credit expansion threat. In short, Stella feels Siegel is a little bit confused.
The BoJ massive: Gloves off from Kuroda at the Bank of Japan and everyone is very excited… David notes that this monetarist experiment faces some very serious problems.
NEWS
Obama budget to offer program cuts, seek deficit deal: "President Barack Obama will offer cuts to Social Security and other entitlement programs in a budget proposal aimed at swaying Republicans to compromise on a deficit-reduction deal, a senior administration official said on Friday." (Reuters)
UBS saved Ping An deal with $5.5bn loan: UBS provided a secret loan of about $5.5bn to enable a Thai company to purchase HSBC's stake in a Chinese insurer earlier this year, according to people familiar with the deal. Thailand's agribusiness giant Charoen Pokphand Group bought HSBC's 15.6 per cent stake in Ping An, China's biggest private insurer, for a total of $9.4bn, closing the deal in February. There was no disclosure at the time of UBS's role in financing the transaction. (Financial Times) "For the help it provided, UBS is set to earn another milestone. People familiar with the matter say the bank is expected to reap, over time, about $100 million in arranging fees alone, a massive amount for one bank on a single deal." (Reuters)
US non-farm payrolls due out today are expected to show a March gain of 200,000 jobs according to Dow Jones' survey of economists, or 190,000, according to Bloomberg's. Both figures would see the unemployment rate hold steady at 7.7%. In February, NFPs posted a 236,000 gain. (Wall Street Journal) (Bloomberg)
Cyprus crisis to hit European banks hard: The Cyprus banking debacle will strip €15bn annually from the profits of Europe's biggest banks, according to a report from analysts at Barclays. (Financial Times)
Autonomy deal takes toll at HP: "Hewlett-Packard's chairman and its longest-serving directors resigned from their positions on Thursday in a delayed reaction to last year's disastrous $8.8bn writedown relating to the company's $11bn acquisition of Autonomy. Ray Lane will be succeeded as chairman temporarily by Ralph Whitworth until a permanent replacement is identified." (Financial Times)
Former MF Global CEO Jon Corzine helped to bring down the brokerage, according to a report by the company's court-appointed trustee. "Unusually for a chief executive, Mr Corzine executed some of the trades personally, "even placing trades in the middle of meetings"." The document said Corzine and his management team engaged in "negligent conduct". (Financial Times)
"Samsung Electronics on Friday said that first-quarter operating profit would be stronger than expected, as the world's largest electronics company by sales stepped up sales of lower-end smartphones in emerging markets despite growing price competition and slowing demand in developed markets." (Financial Times)
Enron's Skilling may get to leave jail early: About 6.25 years into a 24-year sentence, Jeffrey Skilling may be able to leave jail early if prosecutors reach and agreement with the former Enron CEO that would result in a resentencing. Victims of Enron's fraud and bankruptcy were notified by the Department of Justice of the possibility, but it's not clear whether an agreement will be reached or by how much his sentence could be reduced. (Reuters)
U.S. FTC said to probe Macquarie's operation of advantage: "U.S. antitrust regulators are investigating whether Macquarie 's private-equity arm violated a consent decree allowing it to buy the Advantage rental car brand from Hertz Global Holdings Inc., two people familiar with the matter said. Macquarie, in a joint venture with Franchise Services of North America Inc., bought Advantage from Hertz under a Nov. 15 agreement with the U.S. Federal Trade Commission that let Hertz buy Dollar Thrifty Automotive Group Inc." (Bloomberg)
The scathing HBOS report is out and in it, the Parliamentary Committee on Banking Standards accuses HBOS's former chairman, Lord Stevenson, and former chief executives Sir James Crosby and Andy Hornby, of presiding over a "colossal failure". The commission said the HBOS "catastrophe" should be seen as a case study of how not to run a bank and called on regulators to consider barring the three directors from any future role in the sector. However the comission's chairman, Andrew Tyrie, stopped short of saying Sir James or Lord Stevenson should be stripped of their titles. (Financial Times)
Markets: Japanese stocks rallied to fresh multiyear highs on Friday, a day after the Bank of Japan announced dramatic new monetary stimulus but European and other Asian markets were under pressure ahead of US jobs data amid growing concern over the US economy. The FTSE Eurofirst 300 edged down 0.3 per cent in early trading to a one-month low, but the Nikkei 225 Stock Average surged 3.5 per cent to its highest level since August 2008 after the BoJ announced open-ended asset purchases that would double the monetary base over two years, an unprecedented move aimed at ending decades of deflation. The Japanese currency hit a fresh three-and-a-half year low of Y97.21 against the dollar early on Friday, before making back some of the losses writes the FT's Global Markets oarsman Robin Wigglesworth.
