Good morning

The headlines:

  1. And in the Greek Bailout News, the politicians seem to be throwing around insults. But that said, I see that the Netherlands has suggested something which sounds quite sensible on first read. Why not give Greece a bridging loan until after their elections? My response to that is: what’s to stop a new government defaulting on that loan? And if I were Greece, I’d far rather default on a bridging loan. Still, it’s interesting. Link: Europe and the Greek aid saga.
  2. The current head of the World Bank is leaving in June. There is word out that Hilary Clinton may be his replacement. Another US candidate for the World Bank, while we have another European heading up the IMF. I mean – I know it’s a bit nationalistic – but do we really think that Europe and the US should still be heading up the World Bank and the IMF? I vote that we find someone from the BRIC nations. Or Australia. Contention for World Bank Presidency.
  3. Moody’s is reviewing 17 banks and securities firms, and has warned of potential rating downgrades. UBS, Credit Suisse and Morgan Stanley could by cut by three levels; Goldman Sachs, Deutsche, Citigroup, Barclays, BNP Paribas, Credit Agricole, HSBC, Macquarie, Royal Bank of Canada  and J. P. Morgan Chase by two levels; and Bank of America, Nomura, RBS and Societe Generale by one level. So all the big boys then. And some of the small ones. Forgive me for sounding snarky, but I feel like Moody’s is about to paid significantly less for its ratings in future. Link: Bank ratings may be cut by Moody’s.
  4. There are still murmurings from Xstrata shareholders that the premium being offered in the Glencore takeover is too low. 16.43% of the Xstrata shareholders can block the deal when the shareholders vote on the deal. What is interesting is that the majority of M&A deals fail to create the value they promise. In fact, most deals subtract value. But gracious, it makes it good to be an Investment Banker. You get to charge the fees for the acquisition/takeover, and then charge them again when you advise on the spin-off after the takeover fails. Lovely. Link: Xstrata Deal.
  5. According to a Deutsche Bank report, the world’s oil market is exhibiting warning signs at the same level as those of the 1970s, when we had the last set of oil shocks. On average, an oil shock increases the world crude price by 38%. This is being triggered by the on-going Iran VS the US (and the EU) saga around nuclear programs and trade embargoes. Nothing like a global recession coupled with an oil shock. Maybe the Mayan calendar is predicting the end of the world in a financial sense? Link: Risks to Global Oil Supply.
  6. And what is fast becoming my favourite part of these posts: African News in Brief. The key points:
    • Ghana has upped its prime interest rate in response to slight increases in inflation.
    • Zimbabwe’s tobacco industry is set to continue its recovery this year.
    • A new natural gas well has been discovered off the coast of Mozambique, which increases the natural gas volume discovered in the region by around a third.
That’s all folks. Happy Thursday.