Commodity hedge fund loses $400m in oil slide (FT)
Clive Capital, the world’s largest commodity hedge fund, has been left nursing losses of more than $400m as a result of the collapse in the price of oil last week…Others, including Astenbeck Capital, the Phibro-owned fund run by Andrew Hall, are thought to have taken double-digit percentage point losses to their portfolios, according to investors…In a letter sent to investors on Friday and seen by the Financial Times, Clive said it was down 8.9 per cent on the week after what it called “extraordinary” price movements on Thursday. Clive’s management said it was at a loss to explain what had caused crude oil markets to be “annihilated”.
Silver-Mad Small Investors Fueled an Epic Rise and Fall (WSJ)
Behind silver's historic collapse is a market that came loose of its moorings, fueled by speculative traders, many of them small investors who may have jumped in at just the wrong moment. "If gold is a Monte Carlo casino, silver is a slot machine in Las Vegas," says Andy Smith, a senior metals strategist at Bache Commodities.
Euro Nations Divided Over Greek Debt (WSJ)
Finance chiefs from the most important euro nations discussed Greece's problems—and other issues, including Portugal's imminent aid package—at informal talks in Luxembourg on Friday. The gathering, one of many informal meetings of select European officials since the financial crisis began, turned into a media circus after Germany's Spiegel Online reported its existence Friday—and claimed it had been called because Greece was thinking of leaving the euro zone. The report sent the euro tumbling…"We are not discussing the exit of Greece from the euro area. This is a stupid idea and an avenue we would never take," said the host of Friday's meeting, Luxembourg Premier Jean-Claude Juncker.
EU eyes lower rates for Greece, Ireland amid chaos (Reuters)
The European Union is looking to lower interest rates on bailout loans to Greece and Ireland and is working on a second rescue for Athens in a chaotic effort to prevent a disorderly debt restructuring. The executive European Commission said on Monday it hoped to see a decision within weeks on reducing the rate charged to Ireland to make Dublin's debt more sustainable.
Irish to Avoid ‘Doomsday,’ Honohan Says as Rescheduling Mooted (Bloomberg)
Irish central bank Governor Patrick Honohan said the country will avoid economic “doomsday,” as a government minister and prominent professor suggested the nation should reschedule debts from its as much as 85 billion-euro ($121 billion) bailout. Honohan was responding to Morgan Kelly, an economics professor dubbed Ireland’s Doctor Doom, who wrote in the Irish Times newspaper that Ireland faces a “prolonged and chaotic national bankruptcy.”
U.S. Will Urge China to Boost Interest Rates in Washington Talks (Bloomberg)
Treasury Secretary Timothy F. Geithner will urge China to allow higher interest rates when he meets with Chinese leaders this week, as the U.S. extends its push for a stronger yuan.
Private Equity Has A Horse In This Race (Dealbook)
Carl Pascarella, an executive at TPG, the private equity firm, owns a piece of the the colt that shocked the horse racing world on Saturday with a come-from-behind victory. Animal Kingdom, who had never run on dirt and only had four races under his belt, covered the mile and a quarter in 2:02.04.
AIG Fall Blunts Talk Of Taxpayer Gain (WSJ)
What Treasury chooses to do with its AIG shares "is essentially a political decision," says Jay Ritter, a finance professor at the University of Florida. "Government officials and politicians would like to say we broke even and didn't lose any taxpayer money" in the AIG bailout, he says. "But as a taxpayer, I would be happy if we got out close to whole, and losing a little would ultimately be a good outcome" given the amount that was committed to the AIG bailout, Mr. Ritter says.
Fee Pitched for Fast Firms (WSJ)
Sen. Charles Schumer told regulators that sophisticated electronic traders should bear the cost of monitoring their dealings, with special fees assessed to firms that issue and then rapidly cancel securities orders.
UBS fears missing ambitious targets (FT)
Oswald Grübel, chief executive, surprised analysts last month by maintaining his medium-term goals of SFr20bn (€16bn) in annual revenues and SFr6bn in pre-tax profits for the group’s recovering investment bank. UBS’s performance targets were set in late 2009, before the new Basel III framework was finalised and before regulators in Switzerland proposed their own additional capital requirements for the group…However, according to senior UBS bankers, there is a growing acceptance that the targets are aspirational and will be extremely difficult to achieve over the next two years.
Moody's: Expiring of US muni backstops going well (Reuters)
An expected flood of expirations of liquidity facilities on U.S. municipal debt this year is so far going well, Moody's Investors Service reported on Monday.
SEC reform proposal threatens ‘dark pools’ (FT)
The US Securities and Exchange Commission is considering a proposal to move more trading back on to exchanges from alternative venues such as “dark pools”, which has drawn sharp criticism from banks and many trading firms. David Shillman, associate director of the SEC’s division of trading and markets, told the Financial Times that a so-called “trade at” rule is “very much in play. There’s interest in it”. The “trade at” rule, which would require non-exchange venues to improve on the displayed market price, is a response to concerns among some academics and market participants that a rising share of trading happening outside of exchanges is making trading more expensive and difficult.
US Q1 home values see biggest drop since 2008–Zillow (Reuters)
Zillow said its home value index fell 3 percent in the first three months of the year from the previous quarter, and was down 8.2 percent year-over-year.
Seeking Business, States Loosen Insurance Rules (NYT)
Vermont, and a handful of other states including Utah, South Carolina, Delaware and Hawaii, are aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. Roughly 30 states have passed some type of law to allow companies to set up special insurance subsidiaries called captives, which can conduct Bermuda-style financial wizardry right in a policyholder’s own backyard.
Berkshire Hathaway profit falls on Japan (Reuters)
Berkshire reported a net profit of $1.51 billion, or $917 per Class A share, compared with a profit of $3.63 billion, or $2,272 per Class A share, a year earlier. The company took a provision of $1.7 billion in the first quarter for catastrophe losses, primarily for the Japan earthquake but also from a quake in New Zealand and flooding in Australia…Berkshire also recorded losses of $506 million in the first quarter for stocks where the company's investment was in a loss position and that loss was not considered temporary. The biggest share of the loss was an impairment on part of Berkshire's stake in Wells Fargo, and the rest came from an impairment on the stake in Kraft Foods.
HSBC Costs Rise on New Hires and Customer Compensation (Bloomberg)
Costs as a proportion of income rose to 60.9 percent from 49.6 percent, the London-based bank said today in a statement. Net income rose 58 percent to $4.15 billion compared with $2.63 billion in the year-earlier period, the bank said in its first detailed quarterly earnings report. The shares fell.
U.S. gas prices hit $4 a gallon, but may retreat (Reuters)
The national average for self-serve, regular unleaded gas was $4 per gallon on May 6, up 11.98 cents from April 22, according to the nationwide Lundberg Survey. This was still below the all-time high of $4.11 on July, 11, 2008, and last week's fall in crude oil prices may lead to a 8- to 12-cent drop in prices at the pump over the next few weeks, according to Trilby Lundberg, the survey's editor.
Sweep is an ugly ending for Lakers and a bittersweet one for Phil Jackson (LA Times)
The Mavericks' 122-86 blowout victory in Game 4, which completed their 4-0 sweep of the Western Conference semifinal series, perhaps came at the right time for the Lakers. They appeared to be teetering, perhaps because this was the 77th postseason game they had played since 2008, nearly an extra 82-game regular season in a four-year span. "I was talking to Kobe [after the game] and we both agreed it was better to lose now than to get to the [NBA] Finals and lose," Jackson said. "Going all the way and losing in the Finals, now that's really tough."
What was in medicine chests at bin Laden compound? (MSNBC)
Either Osama bin Laden or those who lived with him at the Pakistan compound where he was killed apparently suffered from stomach ulcers, high blood pressure and nerve pain — plus the normal ailments that affect a family with children, according to a pharmacist’s analysis of medications reportedly found at the site. In addition, the medicine cache was said to contain Avena syrup, a botanical product that has at least two uses: as an artificial sweetener often used for a sour stomach and as “natural Viagra” that could be used to increase sexual desire and potency.