TI-Brent Spreads Stable Despite Destruction in Brent

The Eurozone crisis had its part to play in the fall in energy prices in May 2012 (over 4% drop) which are, to some extent, reflective of the global macro-economy.

Nevertheless, the spread of TI-Brent, around 12.55 has not changed as visibly, although it was wide at 20.8 on April 4, 2012, but this extremity was short-lived, and the spread narrowed fairly rapidly after that. The previous major widening was Oct 2011, when the spread was 26.

Facebook - America's Biggest (but not Best) Tech IPO

Facebook has become the biggest technology IPO in US history. The flotation was done on Nasdaq - with 80 million shares being traded in 30 seconds. It's opening price at $38 a share resulted in a valuation of $100bn. On Monday, it's first day of trading, the stock closed almost $4 below the IPO price, and fell again Tuesday.

Pre-IPO Facebook paid over $1bn for photo-sharing program Instagram.

Facebook was a loss-making business until 2009, when revenues reached $229m mainly from advertising.

Project "GX" - The Glencore-Xstrata Mega-Merger

Glencore and Xstrata, commodities giants extra-ordinaire, desire to merge in a $90bn merger. Glencore would own 55% of the new entity which would be headed by Xstrata CEO, Mick Davis. Xstrata is 1.5% owned by Fidelity Investments, who believe (amongst others in the market e.g. Standard Life, Schroders) that Glencore should offer more than it has for its share in the new concern. Glencore already own 34% of Xstrata.

One of Xstrata's goals is cost-reduction initiatives in an inflationary environment.

Chancellor lets Branson buy NorthernRock - Good or Bad for Taxpayers?

Branson attempts to make a "silk purse out of a sow's ear", by paying £747m cash for the bank, a third of which will be funded by the state. Branson's Virgin Money is investing together with Stanhope Investments, a unit of the Abu Dhabi national fund. The deal comes 5 months after UK finance minister George Osborne (aka Chancellor of the Exchequer), who studied Modern History at Oxford, put N-rock up for sale.

A word on the role of the Chancellor..it is one of the FOUR Great offices of State, which comprise, the Prime Minister, the COTE, the Foreign Secretary and the Home Secretary.

James Callaghan (PM: 1976-1979) is the only person to have served in all four offices. Prior to PM he was Chancellor (1964-1967) wrestling with BoP deficit and speculative attacks on GBP. He was ousted by Maggie Thatcher's Conservatives in 1979 following the "winter of discontent".

UKFI (UK Financial Investments) manages government stakes in bailed-out banks, established shortly after the collapse of Lehman Brothers. Sir David Cooksey (creator of Advent) joined as Chairman the following year, his background is both engineering and financial entrepreneurship.

"Super Mario" Monti steps up to Italian plate

Mario Monti, a former EU commisioner (who earned a reputation as an attacker of monopolistic visions and vested interests, e.g. blocked the merger between GE and Honeywell in 2001), is stepping into the space left by Silvio Berlusconi (owner of A.C. Milan), and forming the next Italian cabinet. Mario studied at Bocconi in Milan and Yale (a very old college founded in 1701), under James Tobin (Nobel Prize, 1981).

3Q 2011 Profits are "Turning Point" for BP

3Q profits came in at $5.14bn - near tripling of the replacement cost profit in same period 1 yr ago."Replacement cost profit" is an accounting practice for reporting profits in the oil industry. BP is still paying for the cleanup in the Gulf of Mexico and compensating victims.

MS Debt More Risky than Bank of America, says CDS

495 basis points is the highest level it's been in 2.5 years, implying a cost of $495,000 a year to insure $10m of Morgan Stanley bonds for 5 years (more expensive than Bank of America). At 500bps premium, bonds are regarded to have junk status, say Markit. Shares in MS fell 10% to $13.51. The main driver for the concerns is MS' exposure to European bank debt, in particular France.