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Citi’s bad image in Hong Kong 2:15
Citibank in Hong Kong is reportedly charging around 45 percent interest to some borrowers. CNN’s Eunice Yoon reports.
Added On February 23, 2009
And, Citigroup aside from overcharging obscene interest rates in Hong Kong and probably everywhere else they can get away with it, they are busy shopping arm-in-arm with other companies that we’ve given bailouts, because apparently they want to be the ones in control of the credit default swaps clearing facility rather than have regulators do it. – That’s probably why they are asking us for money again – note this article from cnn about it.
– cricketdiane, 02-24-09
SPECIAL REPORT Issue #1: America’s Money Crisis
Citi in talks over bigger U.S. stake – report
Bank and regulators said to discuss plan for government to convert preferred shares to common stock.
By CNNMoney.com staff
Last Updated: February 23, 2009: 1:09 PM ET
Government officials are reportedly weighing converting preferred shares in Citigroup into common stock, which ultimately bolster the embattled bank’s capital structure.
NEW YORK (CNNMoney.com) — Citigroup Inc. is in discussions with regulators about a plan for the federal government to take a larger ownership stake in the bank, according to published reports.
The Wall Street Journal, citing sources familiar with the matter, reported that the government would convert a large portion of its preferred Citigroup shares to common shares.
The government received the preferred shares in return for investing $45 billion in Citi as part of the $700 billion bailout of the financial system.
The Treasury Department, which has spearheaded recovery efforts for the financial system, declined to comment on the report, noting it has a policy of not discussing conversations with specific banks.
Yet the department noted that it was open to allowing financial institutions to covert government’s existing preferred shares into new convertible preferred stock – a move that would ultimately allow Citigroup to strengthen its capital levels.
In many ways, that is exactly what government officials are reportedly considering, according to the Journal.
[ . . . ]
-CNN’s Alona Rivord contributed to this report. To top of page
First Published: February 22, 2009: 9:43 PM ET
MY NOTE – “like I said in my earlier post, this one is CNN’s repeat of the WSJ report which used sources which were near someone who actually might have known something that might have happened and that could happen maybe.” Why does that happen with business stuff? Would someone please get them to remove their heads from the present location and give themselves some sunshine for a change – it is obviously needed in a bad way. It will never be possible to see reality from the position of ass first, eyes closed – it just doesn’t work.
– cricketdiane, 02-24-09
From Times Online
February 2, 2009
Icap consortium mulls £800m LCH.Clearnet bid
Icap, the world’s largest interdealer broker, has joined forces with about a dozen investment banks and other rivals to consider a bid of about £800 million for LCH.Clearnet, the London-based clearer of share and derivatives trades.
A successful deal, which could be two or three months away, would mean that the Icap consortium wrestling LCH.Clearnet out of talks with The Depository Trust & Clearing Corporation, the US clearer.
It would also pave the way for LCH.Clearnet to expand into the over-the-counter derivatives market, an independently negotiated and highly profitable market for structured trades.
Icap is run by Michael Spencer, who is the treasurer to the Conservative Party. Interdealer brokers stand between counterparties in bond and derivatives trades.
* Charity begins on dealing floor for Icap boss
* Icap boosts profits by 8% in turbulent markets
* Icap seeks to reassure its investors
In a statement to the stock market this morning, Icap confirmed that it was an equal member of the consortium.
“Discussions are at a very preliminary stage, and there can be no certainty that such an offer will be made,” the broker said.
Other members of the consortium are thought to include Société Générale and Morgan Stanley. Most of its members, which are big uses of LCH.Clearnet, are existing shareholders in the UK clearer.
According to sources, the banks and brokers are worried that a sale to DTCC, which began talks with LCH.Clearnet in October, would create a monopoly clearer and hit competition in the sector.
DTCC is a not-for-profit organisation and envisages turning LCH.Clearnet into a similar operator within three years. It has yet to table a firm bid but has signalled that shareholders would receive about €10 a share, which would value the company at about €739 million (£650 million).
The Icap consortium has not discussed firm terms yet but is understood to be comfortable paying a premium for LCH.Clearnet. It is understood that an offer of about £800 million is being mooted.
Icap has profited from the volatility in credit markets during the past 18 months of financial turbulence. However, it is also keen to diversify its revenue sources. Mr Spencer is a substantial shareholder in Icap and also runs his own private investment vehicle.
JPMorgan, Deutsche Bank Join ICAP in LCH.Clearnet Bid (Update1)
By Matthew Leising
Feb. 23 (Bloomberg) — JPMorgan Chase & Co., Deutsche Bank AG and six more banks are backing ICAP Plc’s potential bid for LCH.Clearnet Ltd., the firm that guarantees about half Wall Street’s interest-rate swap trades, said people familiar with the situation.
Some of the banks also have stakes in New York-based Depository Trust & Clearing Corp., which offered 739 million euros ($945 million) for London-based LCH.Clearnet, and wants to become a clearinghouse for trades involving credit-default swaps, or contracts used to hedge against losses and speculate on a company’s ability to repay its debt.
The banks are lining up to keep control of $458 trillion of outstanding interest-rate swaps in the world’s largest over-the- counter derivatives market. At the same time, U.S. and European regulators are pushing for more transparency in credit-default swaps, which were blamed for accelerating the collapse of Lehman Brothers Holdings Inc. and American International Group Inc. in September.
“If there’s going to be clearing they want to control it,” Craig Pirrong, a finance professor at the University of Houston, said of the banks. “The banks are basically positioning themselves to have the most influence possible about how a legislatively mandated clearing system evolves.”
London-based ICAP, the world’s largest broker between banks, said Feb. 2 it was part of a group of financial companies that may bid for London-based LCH.Clearnet, without naming the banks. LCH.Clearnet said Feb. 13 it would offer clearing services for credit-default swaps, a $28 trillion market, by December.
Citigroup Inc. and UBS AG are also part of the ICAP group, with BNP Paribas SA, HSBC Holdings Plc, Royal Bank of Scotland Group Plc and Societe General SA, according to the people familiar with the plan, who asked not to be identified because the details are private. Spokespeople at the banks declined to comment.
“This is a group of major market participants who came together to explore the possibility of an offer,” said ICAP spokesman Neil Bennett, declining to name the banks.
London Stock Exchange Group Plc said last week it was interested in backing the bid, without committing itself to join the offer.
ICAP shares fell 0.25 pence to 211 pence as of 11:25 a.m. New York time in London trading.
Depository Trust is owned by banks and brokers including Goldman Sachs Group Inc., UBS, JPMorgan, Citigroup and Barclays Capital. Clearinghouses are capitalized by their members, and pool traders’ collateral to share the risk of default and give regulators access to prices and positions. Lack of central clearing left banks with losses after Lehman’s Sept. 15 bankruptcy.
U.S., U.K. and European regulators are in talks to regulate credit-default swaps, the Federal Reserve said last week.
Regulators including the Fed, the U.K.’s Financial Services Authority, the German Federal Financial Services Authority and the European Central Bank met Feb. 19 to discuss a possible information sharing agreement, according to a Fed statement on its Web site. The goal would be to apply consistent standards to the market and provide support across multiple jurisdictions, the Fed said.
Credit-default swaps rise as investor confidence deteriorates. They pay the buyer face value if a company defaults in exchange for the underlying securities or the cash equivalent.
Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or weather.
To contact the reporter on this story: Matthew Leising in New York at firstname.lastname@example.org.
Last Updated: February 23, 2009 11:34 EST
Top banks agree central clearing for EU credit-default swaps
London/Brussels – Some of the world’s top banks have pledged to deal through central clearing houses when trading credit default swaps (CDS) in the European Union, EU officials said Thursday. But bankers and EU staff alike sidestepped a reported Fren…
Posted : Thu, 19 Feb 2009 14:35:58 GMT
Author : DPA
Category : Business
Business News | Home
London/Brussels – Some of the world’s top banks have pledged to deal through central clearing houses when trading credit default swaps (CDS) in the European Union, EU officials said Thursday. But bankers and EU staff alike sidestepped a reported French call for the countries which use the euro to set up a clearing house in Paris to counter the weight of London and New York, saying that they did not care where the business was carried out.
The Brussels-based European Banking Federation (EBF) “has no preference as to the location of the (one or more) central counterparties, but above all it wishes for (them) to be safe, sound, efficient and reliable,” the group wrote.
The members of the EBF and the International Swaps and Derivatives Association (ISDA) pledged to use central clearing services in simultaneous letters sent to the EU’s executive, the European Commission, on Wednesday, commission spokesman Oliver Drewes said.
The two organizations later on Thursday confirmed his comments on their respective websites.
Drewes said that the Brussels-based body welcomed the move, which comes as world governments are looking to crack down on off-exchange financial deals in the wake of the global banking meltdown.
He refused to comment on a report published in Thursday’s Financial Times that France’s national bank had called for the 16 states which use the euro to set up a clearing house in Paris in a bid to wrest control of the 28-trillion-dollar market from London.
“Who will do it? That’s up to them,” he said.
The banks signing the letters include Barclays Capital, Citigroup Global Markets, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J P Morgan, Morgan Stanley and UBS.
* Reuters, Thursday February 19 2009
* EU says top dealers agree to clear credit default swaps
* Says more measures may be needed to supervise sector
* Central clearing to be used by end of July
* ICE says ready to launch in Q1 2009 in Europe
* Eurex Clearing says its service ready in Q1 (Adds ICE announcement, Eurex comment)
By Huw Jones
BRUSSELS, Feb 19 (Reuters) – Brokers and banks that trade credit default swaps (CDS) off an exchange have agreed to clear their contracts centrally by the end of July to make the market less risky, the EU’s top market regulator said on Thursday.
The financial crisis and credit crunch has spurred policymakers to improve transparency across several markets.
Regulators on both sides of the Atlantic say the global $27 trillion credit derivatives sector — most of which is in the form of CDS — is too opaque, making it hard to quickly assess the extent of risk when things go wrong.
EU Internal Market Commissioner Charlie McCreevy said the International Swaps and Derivatives Association (ISDA) and the European Banking Federation had committed to using a central counterparty for eligible EU contracts.
“Given the size of the derivatives markets I am looking (at) whether other measures might be necessary to make sure they are adequately supervised and do not pose unnecessary risks to financial markets,” McCreevy said in a statement.
A clearing house ensures trades are completed and backed by collateral even if one side of the deal later defaults.
McCreevy had asked the industry to commit by the end of 2008 to central clearing of CDS but a tentative deal collapsed and he then said legislation would be needed to make clearing compulsory.
ISDA said nine leading dealer firms have committed to using a central counterparty clearing for CDS in the EU.
“This commitment provides the basis for constructive dialogue with the European Commission, both on arrangements for central clearing and on related regulatory matters,” said Eraj Shirvani, ISDA chairman and head of fixed-income in Europe for Credit Suisse.
ISDA said the dealers who have signed up are Barclays Capital, Citigroup Global Markets, Credit Suisse, Deutsche Bank , Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and UBS .
McCreevy will meet with industry every three to four weeks to ensure the commitments are carried out but no particular operator is favoured, his spokesman said.
Legislation is still an option if there is no progress.
“Who is going to do this, who wants to offer this service? That is a decision for those who want to offer this kind of service,” McCreevy’s spokesman told a news briefing.
The push for clearing has highlighted divides across the Atlantic, between Britain and the euro zone and between banks and exchanges.
The global market is roughly divided into dollar and euro denominated credit derivatives which are contracts bilaterally agreed among banks and dealers.
Some banks would like to clear all their global trades in one place but the EU fears this will be a U.S.-based operator.
France called on the European Central Bank (ECB) to lend its weight to McCreevy’s efforts to ensure an EU-based clearer is set up and the ECB is holding regular meetings with industry.
The British Bankers Association warned in a letter to McCreevy on Thursday that forcing industry to clear on a euro zone platform “could be both construed as anti-competitive and drive business away from the EU. It would also impact on firms’ ability to manage their global risk book.”
Deutsche Boerse’s Eurex Clearing and Anglo-French clearing house LCH.Clearnet have both announced they will launch a CDS clearing service. Eurex said it will be technically ready this quarter.
The IntercontinentalExchange, which is setting up a CDS clearer in the United States, announced on Thursday it would offer the same service in Europe during the first quarter.
Some banks are reportedly backing a bid by broker-dealer ICAP to acquire LCH.Clearnet so they can keep fees low and avoid using an exchange-owned clearer.
ISDA said it was working on the introduction of a standard coupon or interest payment for CDS and “hard wiring” of the auction settlement process in order to clear trades. (Reporting by Huw Jones; Editing by Sharon Lindores and Erica Billingham)
My note –
“Take this mess out the hands of the same old, same old banking system inanities and put it under the rigors of actual accrual purview by the anti-trust division – and things will get different. Then, real solutions can make a difference that include sensible and prudent conversions from what we have now to what we need for the future of a stable and prosperous national future.” – cricketdiane, 02-23-09
[ ON A Different Note – ]
*** These jackasses are getting ready for a field war with the real people that are the citizens of their nation – and probably so are ours.
This is really a sad testament to the inability of our governments and police to utilize the public resources in a positive and productive way.
A bit it looks like, getting to use all their toys and tactics on a public crowd in order to consummate their authority is the sum total of their ability to perceive of positive and productive public good.
Obviously – that is not good, not positive, not productive and in fact, is tragic. As if the citizens of the UK, the US and about everywhere else haven’t lost enough and been subjected to enough already –
now we’ve got the police and national guard and who all else, militarily getting themselves stirred up to shoot us, taze us, beat us, pepper spray us, arrest us, spray us with whatever nasty or hurtful whatever.
And, then all that public energy – on the part of police and on the part of the regular citizens will be completely wasted to absolutely no good, no solutions and no improvement of anyone’s lives whatsoever.
– cricketdiane, 02-24-09
Britain faces summer of rage – police
Middle-class anger at economic crisis could erupt into violence on streets
* Paul Lewis
* The Guardian, Monday 23 February 2009
* Article history
Protestors clash with mounted riot police outside the Israeli embassy in London
Protesters clash with police in London in January over Israel’s action in Gaza. Such scenes could become more common sights in the UK. Photograph: Peter Macdiarmid/Getty Images
Police are preparing for a “summer of rage” as victims of the economic downturn take to the streets to demonstrate against financial institutions, the Guardian has learned.
Britain’s most senior police officer with responsibility for public order raised the spectre of a return of the riots of the 1980s, with people who have lost their jobs, homes or savings becoming “footsoldiers” in a wave of potentially violent mass protests.
Superintendent David Hartshorn, who heads the Metropolitan police’s public order branch, told the Guardian that middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.
He said that banks, particularly those that still pay large bonuses despite receiving billions in taxpayer money, had become “viable targets”. So too had the headquarters of multinational companies and other financial institutions in the City which are being blamed for the financial crisis.
Hartshorn, who receives regular intelligence briefings on potential causes of civil unrest, said the mood at some demonstrations had changed recently, with activists increasingly “intent on coming on to the streets to create public disorder”.
The warning comes in the wake of often violent protests against the handling of the economy across Europe. In recent weeks Greek farmers have blocked roads over falling agricultural prices, a million workers in France joined demonstrations to demand greater protection for jobs and wages and Icelandic demonstrators have clashed with police in Reykjavik.
In the UK hundreds of oil refinery workers mounted wildcat strikes last month over the use of foreign workers.
Intelligence reports suggest that “known activists” are also returning to the streets, and police claim they will foment unrest. “Those people would be good at motivating people, but they haven’t had the ‘footsoldiers’ to actually carry out [protests],” Hartshorn said. “Obviously the downturn in the economy, unemployment, repossessions, changes that. Suddenly there is the opportunity for people to mass protest.
“It means that where we would possibly look at certain events and say, ‘yes there’ll be a lot of people there, there’ll be a lot of banner waving, but generally it will be peaceful’, [now] we have to make sure these elements don’t come out and hijack that event and turn that into disorder.”
Hartshorn identified April’s G20 meeting of the group of leading and developing nations in London as an event that could kick-start a challenging summer. “We’ve got G20 coming and I think that is being advertised on some of the sites as the highlight of what they see as a ‘summer of rage’,” he said.
His comments are likely to be met with disappointment by protest groups, who in recent weeks have complained that police are adopting a more confrontational approach at demonstrations. Officers have been accused of exaggerating the threat posed by activists to justify the use of resources spent on them.
Police were said to have been heavy-handed at Greek solidarity marches in London in December and, last month, at protests against Israel’s invasion of Gaza. In August 1,000 officers, helicopters and riot horses were drafted to Kent from 26 UK police forces to oversee the climate camp demonstration against the Kingsnorth power station. The massive operation to monitor the protesters cost £5.9m and resulted in 100 arrests. But in December the government was forced to apologise to parliament after the Guardian revealed that its claims that 70 officers had been hurt in violent clashes were wrong.
However, Hartshorn insisted: “Potentially there will be more industrial actions … History shows that some of those disputes – Wapping, the miners’ strike – have caused great tensions in the community and the police have had difficult times policing and maintaining law and order.”
Both “extreme rightwing and extreme leftwing” elements are looking to “use the fact that people are out of jobs” to galvanise support, he said.
A particularly worrying development was the re-emergence of individuals involved in the violent fascist organisation Combat 18, he said. “They are using the fact that there’s been lots of talk about eastern European people coming in and taking jobs on the Olympic sites,” he said. “They’re using those type of arguments to look at getting support.”
Hartshorn said he also expected large-scale demonstrations this year on environmental issues, with hardcore green activists “joining forces” with middle-class campaigners over issues such as airport expansion at Heathrow and Stansted. With the prospect of angry demonstrations against the economy, that could open the door to powerful coalitions.
“All you’ve got to do then is link in with the environmentalists, and look at the oil companies. They’re seen to be turning over billions of pounds profit in issues that are seen to be against the environment.”
Stop, armed police! Put down your MP3 player
* Rosalind Ryan
* guardian.co.uk, Wednesday 13 February 2008 16.20 GMT
* Article history
Armed police UK
Photograph: Dan Chung
Armed police arrested a man listening to his MP3 player and took a sample of his DNA after a fellow commuter mistook the music player for a gun.
Darren Nixon had been waiting at a bus stop in Stoke-on-Trent on his way home from work when a woman saw him reach into his pocket and take out a black Phillips MP3 player. The woman thought it was a pistol and called 999.
Police tracked 28-year-old Nixon using CCTV, sending three cars to follow him. When he got off the bus, armed officers surrounded him. He was driven to a police station, kept in a cell and had his fingerprints, photograph and DNA taken.
He was freed when Staffordshire police realised it was a false alarm – but will now have his DNA stored on a national database for life with a record that he was arrested on suspicion of a firearms offence.
“It was unreal,” he told the Metro newspaper. “I had a completely clean record before this, and have always been a law-abiding citizen.”
Nixon, a mechanic, said that as he got off the bus and started to walk home on January 26, he saw a policeman gesture but could not hear what he said.
“I turned the music off and they were telling me to put my hands up in the air,” he added.
“My heart was racing a mile a minute. One of them was hiding behind a car door, looking down his sights at me, and the other was shouting orders and pointing a gun at me.
“It was a pretty scary experience. I had no idea what was going on.”
Nixon has received an apology from Staffordshire police.
“‘We received a report from a member of the public who had seen a man appear to pull a hand gun from a jacket pocket, grip it with both hands and aim it,” a Staffordshire police spokesman said.
“An operation was put in place and a man matching the description was detained.”
He said the description was “extremely good”, enabling officers to act quickly.
The Liberal Democrats, who are campaigning to have the DNA records of innocent people destroyed, said the national DNA database now held more than 3m records kept for life, an estimated 125,000 of which belong to people who were neither cautioned or charged.
“There is no reason that [Nixon] is on the government’s database other than he was in the wrong place in the wrong time, and that could happen to all of us,” Lynne Featherstone, the party’s spokesperson for youth and equalities, said.
“The use of DNA is vital to modern policing, but not letting people remove their DNA when it is has been proved they have done absolutely nothing wrong would seem more at home in a fascist state than a free and fair society.”
Armed police in gang warning to five year olds
* Helen Carter
* The Guardian, Tuesday 6 March 2007
* Article history
Armed officers in full bullet-proof armour have been speaking to school children aged between five and seven in special assemblies to warn them against becoming involved in gangs and gun crime.
Officers in Merseyside have routinely gone into secondary schools, but now they fear that most gang members have already been recruited by their early to mid teens. By going into primary schools, backed by headteachers and the local education authority, they hope to prevent very young children from joining gangs.
PC Neil Thomas, of the force’s Matrix team which is running the sessions, said: “By the time children get to secondary school, we are probably a bit late to start teaching them about gangs and gun crime. So we decided to speak to five to seven-year-olds and teach them that picking up a gun or becoming involved in gangs is a slippery slope that could end them up being killed. We put on role play in the language they understand and get our message across.”