MOVE TO SYNTHETIC US JUNK BONDS
Demand is growing for “synthetic” financial instruments that enable investors to take positions in the US junk bond market without owning the underlying securities. The instruments, created by using credit derivatives on junk bond or high-yield indices, resemble transactions linked to US mortgages that proliferated before the financial crisis. The collapse of these synthetic mortgage-backed collateralised debt obligations when mortgages turned sour was a big feature of the crisis.
BUILD NOW, PAY LATER PLAN TO SPUR HOUSING
Housebuilders will be given government land to build homes – with no need to pay until the properties are built and sold – under radical plans being considered by ministers. The plan, “build now, pay later”, would provide incentives for housebuilders by easing their cash flow problems with projects on state-owned land. It is exp?ected to be among an array of “growth” measures to be made public in the run-up to the Budget on March 23.
LIBYAN CENTRAL BANK CHIEF SURFACES
The whereabouts of the governor of Libya’s central bank, the man who holds the key to the Gaddafi regime’s finances, have confounded officials, diplomats and bankers who have been desperate to find him over the past two weeks. Farhat Omar Bengdara has spent much of the time since the outbreak of the uprising against Muammer Gaddafi outside Libya. Late on Tuesday night the governor finally surfaced: in an e-mail sent to the Financial Times, he said he had been informed that the secretary of planning and finance had been appointed as acting governor and confirmed that he had been in Istanbul.
FORGET THE BAD TIMES – THE GLORY DAYS ARE ON THE WAY BACK FOR HEDGE FUNDS
Investors are expected to pour record sums into hedge funds this year, with estimates suggesting that the figure could be as high as $210bn. That would be almost four times higher than in 2010. Deutsche Bank said that such investment would increase the total size of the hedge fund market by more than 10 per cent, valuing it at $2.25 trillion (£1.4 trillion).
DECLINE IN FINAL-SALARY PENSION SCHEMES GATHERS PACE
Final-salary pension schemes are being closed to existing employees at the fastest rate on record, according to new research. Seventeen per cent of defined-benefit schemes were closed to new accrual by 2010, up from 7 per cent in 2009 and only 3 per cent in 2008.
The Daily Telegraph
ICELAND'S ECONOMY CONTRACTED IN FOURTH QUARTER
Iceland’s economy shrank again in the final part of last year after growing in the third quarter, data showed, but it closed 2010 with its first year-on-year growth since the country was hit by a brutal recession. Gross domestic product (GDP) shrank 1.5 per cent in the fourth quarter from the previous three months, the statistics office said yesterday. Year-on-year the economy grew for the first time since before the financial crisis, rising 0.1 per cent.
FORD CHIEF EXECUTIVE MULALLY GIVEN $56.5M OF SHARES
Ford, which made its biggest profit in more than a decade last year, has rewarded chief executive Alan Mulally with shares worth $56.5m (£35m). The man who hired Mulally, executive chairman Bill Ford Jr., also got stock worth $42.4m.
THE WALL STREET JOURNAL
US, EU AIR-SAFETY PACT NEARS FINAL APPROVAL
After a delay of almost two years, the US and the European Union appear ready to cement an air-safety pact that both sides say should improve aviation oversight and save millions of dollars annually by eliminating duplicate efforts. The agreement was reached in 2008 but languished amid opposition in the U.S. Congress. That fight now appears resolved. As a result, the EU on Monday gave its final approval of the pact, which could come into force as soon as May.
WARNER BROS. TO OFFER MOVIES THROUGH FACEBOOK
Warner Bros. Entertainment said it will start renting movies via Facebook, the latest effort by movie studios to find new revenue sources as consumers buy fewer DVDs and spend more time online.