Good morning New York,
FT ALPHAVILLE
Oh the sunny uplands of Italian banking turnarounds. That'll be €2.5bn please: Dan reports that Monte dei Paschi di Siena, Italy's third largest, oldest, most loved and, ahem, only moderately state supported lender revealed its big survival plan on Monday. More earnings, more capital, buy signals are bound to start flooding in this morning and… oh.
Walking dead update: The latest monthly performance figures for the hedge fund industry are out — and those funds still breathing had a good-ish month, says Dan. But performance ain't so hot as that put out by the industry's legions of undead predecessors. Those cautious equity hedge funds have put up less than half the return for the S&P 500 this year.
Help to market-clear?: We previously looked at ways the scheme could be pretty risky for financial stability, and where it might not be a risk. But we maybe didn't look so much at one basic question here: whether HTB will get houses built. The supply problem.
NEWS
White House rejects demands to negotiate on shutdown: Obama will not back away from his refusal to negotiate with Republicans over America's debt limit, his senior economic advisers said, but the administration has left open the door for a short-term increase in borrowings. (Financial Times) The partial shutdown of the federal government ended its first week on Monday without any bipartisan meetings held or planned. (NYT)
Alexander rejects MPs' criticism of Help to Buy: The UK government defended its flagship housing policy on Tuesday as the official launch of the second phase of its Help to Buy mortgage scheme was overshadowed by a warning that it risked kindling a destabilising housing boom. (Financial Times)
CME takes on LME with aluminium contract: CME Group, the world's largest futures exchange, will launch an aluminium contract to challenge the London Metal Exchange's dominance of the largest base metals market as it suffers a storm of public criticism. (Financial Times)
China and Japan warn US on default: China and Japan ratcheted up pressure on the US to avoid an unprecedented US default on its debt as Democrats and Republicans continued their stand-off over the budget in the second week of a US government shutdown. (Financial Times)
National Grid warns on UK winter power supply: National Grid has insisted the UK will keep the lights on this winter, despite forecasting that electricity supply will be at its tightest in six years. It said the electricity margin during peak demand in cold weather will be 5 per cent, a sharp drop from previous years. The margin, which represents the safety cushion of spare power generating capacity, was more than 15 per cent in the winter of 2011-12. (Financial Times)
Alcatel-Lucent cuts 10,000 jobs worldwide: Alcatel-Lucent will cut 10,000 jobs across the world, including 900 in its domestic French market, as part of a strategy to slash €1bn in costs from the lossmaking telecoms equipment maker, it confirmed on Tuesday. (Financial Times)
Argentina suffers setback in battle with 'holdout' creditors after the US Supreme Court declined to consider an appeal to reverse a ruling by an appeals court that had ordered the country to pay the "holdouts" in full. Argentina would continue fighting its case against Elliott Associates, a New York-based hedge fund, "with all the legal resources available", finance secretary Adrián Cosentino said. (Financial Times) (FTAV)
Markets: Markets were cautious and mixed as news of steady growth in China's service sector was counteracted by lingering fretting over the US government shutdown and lack of progress in averting a technical default by Washington. The FTSE All-World equity index was up less than 0.1 per cent as Europe's Stoxx 600 eased 0.1 per cent and index futures suggested the S&P 500 would dip 1 point to 1,675. Shanghai returned from a week-long holiday to rise 1.1 per cent – helping push Hong Kong's Hang Seng up 0.7 per cent – after a key gauge of the services industry showed the sector continuing to expand in September. The HSBC/Markit survey came in at 52.4 last month. A reading above 50 indicates growth, though September's figure was a slight deceleration from August's 52.8. Industrial commodities, which tend to be highly sensitive to perceptions of Chinese economic activity, are generally firmer. Copper was up 0.4 per cent to $3.30 a pound and Brent crude was adding 6 cents to $109.74 a barrel. (Financial Times)
