Good morning, New York...
FT ALPHAVILLE
Gold producers in the southern hemisphere were not having a good time on Tuesday morning, with significant falls in their equity prices. To spell out why this is such an issue for the gold miners, Neil presents thoughts from analysts at Citigroup. It looks at planned changes to the way gold miners report their production costs per ounce of gold produced — changes intended to address big shortcomings of the traditional "cash cost" measure. Back story and more on the click through.
Cristina and the Supremes.The Supreme Court is asking the US government's opinion on a petition by Argentina against holdouts being granted "discovery" of information about the Republic's assets abroad, as a means of getting paid in a separate case on other debt spinning out of the 2001 default. But the request is a sign of the Supreme Court's interest in taking the case further, and it has landed about the time when people are thinking of Argentina's chances of taking the pari passu saga through to a cert petition. (This is the petition needed for the Supreme Court to take up the case.) Joseph compares the legal backgrounds of this case versus the pari passu saga.
Don't look down. What goes up, must come down, but most particularly the shiny yellow stuff lately. And Bitcoins. Can't forget Bitcoins. The team at Bank of America Merrill Lynch, meanwhile, took at look at the present state of the S&P 500, comparing the recent peak to previous peaks in 2000 and 2007. Go to the full post for charts. Lots of them.
NEWS
Crude fall. Brent crude oil fell below $100 for the first time since July as weak economic data from China and the US add to concerns about demand for oil, with ICE June futures dropping more than $2 to a low of $98 on Tuesday morning in London. The global benchmark oil price has now fallen more than 10 per cent so far this month, and almost 5 per cent this week alone, as a sell-off in gold has spread to other commodities. (Financial Times)
Transparency in commodities. Cargill has warned the commodities industry that trading houses must embrace ethical and transparent business practices or risk being vilified by the public and regulators as banks have been. The remarks by Greg Page, chairman and chief executive of the trading house, come as companies trading cargoes of basic materials face new scrutiny from lawmakers and non-governmental organisations over their influence on food and fuel prices and transactions with sometimes unsavoury regimes. (Financial Times)
Creditors of Energy Future Holdings have rejected a pre-packaged bankruptcy for one of its main units and a restructuring of $32bn in debt. In 2007, the Texas power producer was the subject of the largest ever leveraged buyout. Lenders who control the senior debt turned down the complicated proposal, which would have required them to cancel debt in exchange for an undetermined amount of equity in the parent company and $5bn in cash or new debt at other units, and broke off talks. (Financial Times)
Ergen trumps SoftBank with $25bn Sprint bid. Charlie Ergen, chairman of Dish Network, launched his boldest bid to date on Monday with a $25.5bn offer for Sprint Nextel that trumped an agreed deal for the US wireless carrier by Japan's SoftBank. The enigmatic billionaire is jockeying for position as the US wireless industry undergoes a tumultuous round of consolidation that will position a new batch of winners and losers in the world's most valuable telecoms market. (Financial Times)
ENRC has suspended one of its managers in Africa due to whistleblower allegations of impropriety in the latest blow to the FTSE 100 miner left reeling by investor concerns over corporate governance. The manager in Mozambique, where the company has coal assets in the resource-rich northern Tete province, has been suspended pending the outcome of an internal investigation, the company said. (Financial Times)
A former trader at Rochdale Securities pleaded guilty to conspiracy and wire fraud months after he made an unauthorised attempt to profit from the $1bn purchase of Apple stock with the trading group's funds. David Miller, 40, faces a maximum 25 years in prison and up to $500,000 in fines in connection to the charges. (Financial Times)
Greece on track to receive aid tranche: "Greece has identified some 15,000 public-sector workers to be let go over two years as part of a tentative agreement sealed Monday with its international lenders to unlock the next payments from its €173 billion ($226 billion) bailout." Finance minister Yannis Stournaras said Greece may ask for more debt relief. (Wall Street Journal)(Reuters)
Gold prices have suffered their sharpest fall since the 1980s, heightening fears among investors that the precious metal's decade-long bull run has ended. Spot gold prices tumbled by more than $100 an ounce, or 8.7 per cent, in a few hours on Monday amid a rout in metals markets, while silver fell 11 per cent. (Financial Times)
Markets: A bounce for gold is encapsulating the volatility across markets as worries over a slowing global economy crimp investors' risk appetite. European and Asian bourses are adding to recent declines after Wall Street had its worst day in five months. The CBOE Vix Index, known as Wall Street's fear gauge, on Monday had its biggest one-day jump in 18 months to close at 17.3 points, and on record volume too. US index futures saw further losses in after-hours trading as traders absorbed images from the Boston explosions. But a subsequent rally leaves the S&P 500 on course to open 4 points higher at 1,556, and this, coupled with the sight of commodities recovering from session lows, is helping salve investors' nerves somewhat. Supposed havens such as the yen and US Treasuries are easing back. (FT's Global Market Overview)
