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90 seconds at 9am: New bid for Hanover?; Standard and Poor’s global bank warning
November 25th, 2009Bernard Hickey details the key news overnight in 90 seconds at 9am in association with ASB, including news a source has told the NZHerald that a ‘well known and trusted company’ is preparing a rival bid for Hanover Finance’s loans that will be ‘competitive’ to the one on the table from Allied Farmers’ shareholders.
Meanwhile, Standard and Poor’s has warned overnight that most of the world’s banks require capital injections to remain above Standard and Poor’s tougher revised measure of Tier 1 capital, The Telegraph reported. Standard and Poor’s has downgraded the status of hybrid capital. This means ANZ on 7.1%, CBA on 6.3% and NAB on 6.9% would need to raise capital to meet the tougher measures, the Sydney Morning Herald reported.
Meanwhile in the United States, quarterly GDP growth in annual terms was revised down to 2.8% from 3.5% and US unemployment is expected to remain above 10%. This data dragged on the US stock market and reduced appetites for risky currencies such as the New Zealand dollar, which nudged down to 72.3 USc overnight.
Tags: 90 at 9, Bernard Hickey, Hanover Finance, Standard and Poors, US GDP
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November 25th, 2009 at 9:00 am
Must see some signs of higher deposit rates on offer now, both here and across the Tas. There is no other pathway. Mort rates MUST rise and that’s before the RBNZ has decided Fisher at the Israeli RB has once again taken the lead. Bollard is again late to the party.
November 25th, 2009 at 9:47 am
“A well know and trusted company…”. It will be interesting to see who that entity is, as the two adjectives don’t always go together.
November 25th, 2009 at 10:03 am
A sad last-gasp attempt at relevance by S&P. Where was this ‘improved’ methodology back when it would have actually been useful? Are we meant to believe that the art of credit ratings has made a sudden breakthrough since the financial crisis began?
November 25th, 2009 at 10:12 am
Marac?
November 25th, 2009 at 10:21 am
S&P are also hypocrites – the prevalence of hybrid securities as ‘equity’ came about because the ratings agencies themselves (Moody’s first, S&P followed) decided to start treating them that way back in 2005.
November 25th, 2009 at 10:27 am
Well Marac and its parent has the funds, and is also listed on NZX and has a plan to benefit from the consolidation of the finance sector. But I’d think Marac and its parent have better opportunities to choose from, e.g. being patient and waiting until there is more distress to take advantage of, such as when the other finance companies are getting credit ratings that are below BB, and have nowhere else to turn to. Also, Marac and its parent and its associated entities have a known interest in South Canterbury Finance, with the $75m prior charge secured funding line provided by an entity managed by a PGC owned entity.
November 25th, 2009 at 10:40 am
Ive just finished reading a book on the demise of Lehman Bros. If what is in it is even half right then the big 3 ratings agencies are as much to blame for the GFC as anybody on Wall St.
They have no credibility left.
November 25th, 2009 at 10:41 am
Something to warm up the day!….. http://www.dailymail.co.uk/news/article-1230635/Scientist-climate-change-cover-storm-told-quit.html
November 25th, 2009 at 10:49 am
WOW…looks like some in the Maori Party really do have a conscience…>
http://www.stuff.co.nz/national/politics/3095679/Maori-Party-revolt-threatens-Emissions-Trading-Scheme
November 25th, 2009 at 11:02 am
At last, someone has an eye for the FUTURE…of New Zealand…albeit from a MAORI perspective.
Unfortunately HONE will still be a thorn in the side of any real sharing of MINDS for the WHOLE of New Zealand benefit.
Why the RUSH…
When do the rest of us GET a SAY. …MR Key.
November 25th, 2009 at 11:17 am
My step children are 1/64 Ngai Tahu. I might see if that close relationship allows me to become a member! At least the leadership appears to be taking a bit of notice of their constituency.
November 25th, 2009 at 11:21 am
Perhaps if we all inter MARRY, we may ALL get a SAY.
November 25th, 2009 at 12:32 pm
@Wally Mortgage rates may well rise, but the OCR does not have to.
regards
November 25th, 2009 at 12:34 pm
@Miguel S: but the American banks are 2%…if that doesn’t open a few eyes I don’t know what will…though I would think anyone with a functioning brain would not be surprised….
regards
November 25th, 2009 at 12:36 pm
@Andrew: Yes, the ratings agencies sold the AAA ratings for about $100k? each to anybody and everybody. I think its good they are being sued…I just hope it does not get thrown out as “free speech” that would be a travesty….but not un-surprising.
November 25th, 2009 at 1:26 pm
@Steven: Citi is the only US bank in the 2’s, and the crappiness of their capital has been well documented already… the next lowest US bank is BoA at 5.8%. My beef is that S&P told banks that they would give hybrid capital a favourable treatment, and now they’re saying “guys, we’ve had it wrong for the last four years, so we’re going to punish you for it.”
@andrew: if you haven’t already, you should read Michael Lewis’ article “The End”, especially the bit where a guy from S&P explains how they model house prices.
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom/
November 25th, 2009 at 11:37 pm
Regarding the comment :
Meanwhile in the United States, quarterly GDP growth in annual terms was revised down to 2.8% from 3.5% and US unemployment is expected to remain above 10%. This data dragged on the US stock market and reduced appetites for risky currencies such as the New Zealand dollar, which nudged down to 72.3 USc overnight.
Don’t know if it is a good idea to state these sorts of opinions as facts. I think they can be made but heavily qualified. eg. This data dragged on the US stock market, ‘which someone who actually knows no more than anyone else about the reasons for NZD/USD movements but who has to make a comment to make a living has attributed to’ reduced appetites for risky currencies such as the New Zealand dollar, which nudged down to 72.3 USc overnight.
I think this would help readers understand these issues a little better. It is pointless perpetuating the idea that an expert can tell you why this sort of thing happenes – especially on a daily basis. This topic has been covered far better than I can By Nassim Nicholas Taleb
December 6th, 2009 at 8:29 pm
It’s summer . Get sandals !
March 11th, 2010 at 6:56 am
Helloo among me and my siter in-law we’ve bought more women’s shoes over the years than I can add up, including Shoes, pumps, sandals. Even if, the last few days I’ve settled down to on line of style. Why? Because I was glad to determine how well-designed and cool to carry they are!