Thread: Bank failure(s)

Toyota announced it's first fiscal year loss in 59 years.

The first in 71 years of operating profit, according to my sources. Net profit is expected to be just 9% of earlier forecasts. Tata and the UK government in discussions on injecting money into Jaguar Land Rover.

Asian and European markets are down modestly today, Monday, with raw material companies weak on the economic outlook.

Singapore's largest bank asks its shareholders for $2.75bn of new capital. The Irish government subscribes to Euros 5.5bn of capital in the Irish banks. Japan's second-largest bank seeks $3.9bn of preference capital. The Russian government is rumoured to be ready to lend $78bn to its oligarchs from the reserves in return for increased government influence in their businesses.

Latvia's economic package was approved late Friday, Euros 3.7bn from the EU, 1.8bn from Nordic countries and 1.7bn from the IMF.

Originally Posted by oldfogey

The first in 71 years of operating profit, according to my sources. Net profit is expected to be just 9% of earlier forecasts.

They had a term for the 59 years but it wasn't "operating profit"...I can't remember what it was.

They did say with Daihatsu and Hino included they'd be black.

The source was a couple different Japanese newspapers, maybe they messed up the translation.

They can still finance in the yen bond market at 1%, despite a downgrading, so I don't think anyone thinks they won't survive.

Relatively quiet day, markets up or down modest amounts after Wall Street down 2%.

China drops interest rates another 0.27% and reduces reserve requirements. Russia raises its seasonal debate with Ukraine over gas payment debts, hoping the EU will pay up in return for uninterrupted gas supplies over winter. Japanese and Taiwanese exports each drop 29% year-on-year in November. Taiwan-China direct flights have resumed, increasing trade but in some interesting ways:
Drug smuggling takes off with flights | Oddly Enough | Reuters

Japanese industrial confidence ratings hit -45, down from -10 last month ( proportion of respondents who think things will get worse v better), reflecting the world economic downturn and the yen strength. Japanese equity market down 2%, others down around 1%. This kind of export knock-on from the currency has yet to be seen in the Euro zone, but will certainly follow in early 2009. Two more retail chains in UK go into default, talk with private equity firms.

Sterling, dollar and Aussie dollar weaker again.

Bush signs pensions relief bill:
Bush signs pension relief bill into law | Politics | Reuters

Have yourselves a Merry little Christmas, Let your heart be light, From now on our troubles will be out of sight...

Markets seem to have gently improved while I was away, must go away more often .

In the UK there seems to be a new high street retailer going bankrupt every day as the pound slides down to parity with the Euro. Low prices in high street sales seem to have boosted the end year sales volumes. Italy takes its turn to have business confidence fall to an all-time low. The new Thai prime minister talks of a 3% of gdp stimulus package. Russian rouble falls to a new low against the Euro and dollar.

Only modest changes again, Wall Street ended down a bit, Asia mixed and Europe up modestly so far. Japan rose 1.3% in its final trading session of the year.

GMAC gets $5bn from the TARP, GM $1bn in addition to subscribe to GMAC's rights issue. Taiwan announced a $6bn package to support long-term growth industries, including memory chips, medical equipment, pharmaceuticals and energy-saving technology. China and Taiwan aim to liberalise trade in the financial sector, allowing Taiwan's banks to open on the mainland. Stocks there rose 6%.

Sheikh Hasina's Awami League party gained 229 of 300 seats in the election in Bangladesh to replace the military government there. The turnout was 70% of the 81m registered voters. Sheikh Hasina is the daughter of Sheikh Mujibur Rahman who led the secession battle from Pakistan in 1971 and was assassinated in 1975 during a military coup.

Last one of these for 2008! Wall Street closed around 2.5% higher and Asia and Europe modestly higher today, too.

In 2008 Sterling hit 2.04 to the dollar but declined to the current 1.44, saw a high of 223 to the yen but is now 133 and against the Euro went from 1.36 to 1.02. The dollar fell 19% against the strongest currency, the yen, and 4% against the Euro.

Brent Crude hit a high of $144 in July but now trades at $37. Stock markets declined from the start of the year, typically the first day was the highest level of the year, to mid November before a volatile recovery to date. Most fell 50% from their 2007 peaks, and the more volatile 75%, with the S&P falling a net 39% on the year, the worst since 1931. Bond yields declined around the world, giving investors in 10-year US Treasuries a positive return of 15%. The median US house price fell 13%.

The government of Ukraine ordered its banks to lend $2bn to its gas company to pay arrears to the Russian gas supplier Gazprom yesterday: the Ukraine's prime minister flies to Russia today for talks to avoid Russia cutting off the gas supply which runs through Ukraine to Europe. Ukraine receives $2.5bn per annum in transit fees, which Gazprom may pay partly in advance for 2009. Slovakia becomes the 16th member of the Euro block at midnight tonight.

Thanks for the updates OF. It is nice hearing from a pro at this.

Markets are modestly up on the first day of the year: Hong Kong was up 4.5% and raw material stocks were strong.

Russia cuts volume of gas supplies to Ukraine as they argue over gas prices and onward transmission fees for 2009. Belarus gets $2.5bn IMF package.

Further stock market gains on this first full working day of the year. Asia and Europe up 2%.

Japanese vehicle sales for 2009 were down 5% on 2008 and the lowest since 1980. Toyota was down 7.4% while Honda sales rose 0.4% with its small car (Fit) and minivan (Freed) selling well. India cuts interest rates 1% to 4%. Germany's coalition governmnet works its way towards a Euro40bn stimulus package. Russia and the Ukraine each appeals to the EU over their gas price dispute. Luxemburg raises the issue of a pan-EU Treasury to issue bonds as Italy and Greece find difficulties.

Richardson withdraws from the Commerce Secretary nomination and speculation on the size and shape of the fiscal stimulus package from the Obama Presidency continues.

A mixed day after Wall Street ended marginally down. December economic statistics around the world are uniformly bad, showing sharp downturns everywhere. US car sales stats were out, no surprises: Chrysler suffering worst, the Japanese down in line with Ford. The dollar and sterling are having a good day against the Euro and yen.

The gas saga in Europe continues. Russia clearly reduced its supply through the Ukraine pipeline. Russia stopped gas supplies going over the Rumanian / Ukraine border, cutting supplies to Bulgaria, Greece, Turkey and Macedonia. Cynics think this is Russia ensuring the pro-Western president of the Ukraine hands over to his prime minister, Ms Timochenko, who is pro-Russian and significantly more popular in order to bring the Ukraine "back into the fold". It certainly reminds EU leaders of their dependence on Russian gas.

Asian markets generally better as Obama's reflation package becomes front page news and GM says it doesn't need any more money from the government for now. Dollar stronger as well.

Europe opens weaker, after Russia turns off the supply of gas via Ukraine completely and several countries face real problems. The list of countries reporting a total halt of Russian supplies via Ukraine now includes Romania, the Czech Republic, Slovakia, Bosnia-Hercegovina, Bulgaria, Croatia, Greece, Hungary, Macedonia and Serbia. Italy and Austria say they have received only 10% of their expected supply. Russia supplies around 20% of all European gas via Ukraine.

US down on poor economic news, mainly the poor employment survey (official stats on Friday) which show services reducing employment faster than expected, and a profit downgrade from Intel.

Elsewhere India was down 7.5% after one of its large IT companies finds accounting irregularities and its Chairman and founder resigns. Shades of Enron at this stage of the last market downturn! Asia otherwise down around 3% and Europe 2%. Taiwan's exports in December fall 42%, a token of the sudden economic decline. Lenovo forecasts a loss and cuts 11% of its employees.

EU says it will raise the gas supply issue to a high political issue if supply does not resume soon, sends observers to Ukraine to check out reality of the situation. The Bank of England is expected to cut interest rates today.

Edit: UK rates were reduced 0.5% to 1.5%, the lowest in the Bank of England's history (created 1692). EU sponsored talks between Ukraine and Russia today ended in failure.

Originally Posted by oldfogey

... and a profit downgrade from Intel.

... Taiwan's exports in December fall 42%, a token of the sudden economic decline. Lenovo forecasts a loss and cuts 11% of its employees.

This is my industry, my division's biggest customers are computing related, and pretty much everyone, including us, has cut at least 10% of employees, cut benefits, no raises, bonuses etc etc. (so much for our bail-out) Just another downturn in the real world. Companies will die off, be aquired, and the harsh Darwinian action of capitalism will make the survivors in our industry yet again stronger. If only the government would allow it in all industries...

Quiet day with markets +/-1%, currencies stable. Unemployment official numbers might change that, but the survey earlier in the week probably broke that news.

Bank of Korea cut rates 0.5% to 2.5%. Japan considers removing its 40% capital gains tax on foreign investors. Mexican inflation in December rises to 6.5% year-on-year after the 20% decline of the Peso against the dollar. Venezuela's finance minister concedes devaluation is possible given the state of finances after the oil price decline.

Russia and the EU, led by Putin and Czech Prime Minister Topolanek, agreed to put joint monitors in place for the gas pipeline through the Ukraine. Russia's dispute with the Ukraine over transit fees and gas prices for the domestic Ukrainian supply are being set aside from the throughput of contracted EU gas.

Renault total sales were down 29% in December, of which 41% in emerging markets, and 4% for the full year 2008.

Friday's confirmation of 524k increase in unemployed and the new high jobless rate of 7.2% produced a decline in Wall Street on Friday, and Asia and Europe are modestly down on Monday. Both HBOS and Lloyds TSB share issues are 99.5% taken up by the British Treasury which accordingly owns 43% of the newly-merged Lloyds Banking Group.

The gas pipeline saga rolls on, with Russia refusing to turn the valves on after the Ukrainain Prime Minister reportedly added some clauses by hand to the final agreement before signing it. The EU continues to negotiate with both parties.

The ECB is expected to cut interest rates this week. Economic forecasters begin to talk about a Q3 recovery in the US.

Weak Wall Street, but China's trade figures were the shock, taking Japan down 4% and the yen sharply upwards. Europe is down 1-2% again. Raw material prices fell on recent bad economic indicators, taking that sector of global stockmarkets down relatively.

Russia has turned the gas supply to Europe via Ukraine back on, with monitors checking that volume flow out of Ukraine equals volume flow into Ukraine until the specific Ukraine / Russia dispute is settled. Edit: that didn't last long, the Russians have complained that the Ukrainians are cheating and turned the valves off. The German government coalition has finally agreed a second stimulus package of Euros 50bn, 1% of gdp, to cover tax breaks for the lowest paid, infrastructure and loan guarantees to non-financial corporations.

China's exports fell 3% year-on-year in December, in contrast to the 17.5% full year-on-year growth. Imports fell 21% in December.

Agricultural futures (specifically hard red spring flour) are no longer driven by supply and demand fundamentals so much as market manipulation through rumors and outright lies by huge investors and, uh.... Canada.

US trade deficit narrowed in November thanks to a sharp reduction in imports, -12% month-on-month, oil price falls playing a large part. Bernanke calls for more efforts to boost banks' balance sheets, though the gradual freeing up of the money markets continues.

UK government proposes to guarantee £21bn of mid- and small-company loans to banks for a fee. Thailand cut its interest rates 0.75% to 2%. The Kazakhstan government is to invest $1bn into its four big banks as part of an IMF-sponsored package. A Latvian demonstration wanting a change in government in response to the weak economy ended in violence.

Deutsche Bank reported a Euro 4.8bn loss in Q4. European equity markets were weaker on poor sentiment in banks and materials, down 2%. Asian markets were little-changed.

Chrysler is rumoured to be in talks with Renault-Nissan and Magna over the sale of Jeep.

Originally Posted by CBRVFR

Agricultural futures (specifically hard red spring flour) are no longer driven by supply and demand fundamentals so much as market manipulation through rumors and outright lies by huge investors and, uh.... Canada.

I was just reading this year is going to be rough on foodstuffs as third world countries don't have the money for gas, tractors and fertilizers so grain yields are getting hammered.

You heard the same?

Most of the export wheat is raised by the US, Aus, Canada and Argentina. If the weather is good in China and the Ukraine, the demand won't be unusually high -

Year by year the third world importers get slightly better yields, and the population hasn't exactly been exploding in many parts of the world. Ending stocks may be low, but we just had a good harvest for the stuff I'm interested in. Unfortunately, the cost is tied to Corn and Soybeans, so when those markets go crazy it affects the price.

Markets in Asia sharply weaker after the 4% drop on Wall Street yesterday. US Retail sales ex cars were down 3% month-on-month.

Europe awaits a rate cut (or not) from the ECB as stress on the weaker governments continues. Greece was downgraded yesterday, Ireland and Portugal are expected to follow; Hungary gets a visit from the head of the IMF over its proposed budget; Italian industrial production is down 10% year-on-year. Kazakhstan considers devaluation. Edit: ECB cuts rates 0.5% to 2%.

Financials are generally weak, with Citi's position under review and other individual banks being downgraded.

Originally Posted by luvtolean

I was just reading this year is going to be rough on foodstuffs as third world countries don't have the money for gas, tractors and fertilizers so grain yields are getting hammered.

Hrmmm....maybe if we devised a scheme where we magically turned one of those grains into fuel...then it would be a perfect system. Think about it, more gas equals more grain, more grain equals more gas...a perfect loop....





Or something....