Opening Bell: 02.05.09

Posted by William Richards, Feb 05, 2009, 7:49am

Picture 677.pngMadoff List Made Available Via Court Documents (CBS)
Presented without comment.

Bank Of America US Governments Bitch (Reuters)
It was bound to happen, and while we all figured it would be Citi (sorry, Citi) that first fell to its knees and felt the great warmth of acceptance, it turns out we were wrong; BAC has apparently almost officially made the move from "girlfriend" to "live-in hobo." And no, we're not talking the good kind, we're talking the kind that you rescue from the homeless shelter and can threaten to send back at any moment - though you have to admit there's a certain popcorn'ish quality to watching CEO's have their testicles handed to them.

Fun with selective hearing:

"Paulson and Bernanke on December 17 "forcefully urged Mr. Lewis not to walk away,"

[...]

Days later, Bernanke told Lewis Bank of America had no grounds to walk away

[...]

They warned Lewis that if the deal collapsed ... their confidence in Bank of America would be "undercut."

[...]

The government agreed to provide $20 billion in additional capital for the bank and to insure against losses on $118 billion in troubled assets"

Bank Of England Taking Its Sweet Time (Bloomberg)
In all likelihood the Bank of England is shooting for an effective 0%, but it looks like it's going to take a holiday at 1% and get back to us in a few.

"The Bank of England will probably lower the benchmark interest rate closer to zero today as officials resort to buying securities to revive the economy.

The nine-member Monetary Policy Committee will cut the bank rate by a half-point to 1 percent, the lowest since the institution was founded in 1694, according to the median of 61 economists' forecasts"

Swiss Government To UBS: Did Not (Reuters)
UBS pulled a brilliant move in announcing prematurely that the Swiss Government had asked them to break up, thus forcing the Swiss into a defensive position and (possibly, depending on previous moves/what comes next) setting them up to say something like "We're committed to the success of UBS".

Somewhat related, Bloomberg has it that Swiss Re has stepped outside the hospitality of the Swiss Government to look for funds, turning to O3 for about $2.6B in funds:

"The investment may give Berkshire a stake of more than 20 percent as Swiss Re struggles to keep its AA credit rating. The reinsurer fell as much as 18 percent after posting a 2008 loss of about 1 billion francs and announcing plans to cut the dividend. The Zurich-based company also will disband its financial-markets unit and may seek more capital."

A Look At Wall St. Pay (NYT)
Skip the first five'ish paragraphs and jump to the bit about the pay study: it's not a bad (if sobering) read.

Deficit Fears Weigh On Debt Issuance (FT)
"The Treasury Borrowing Advisory Committee expressed concern on Wednesday over the sharp jump in net borrowing needs - which market analysts estimate could reach $1,500bn to $2,500bn for the 2009 financial year.

Traders are particularly concerned about the appetite for Treasuries among foreign investors, who hold more than half the outstanding $5,500bn in Treasury debt."

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