Barclays set to launch "bad bank"

It is being widely reported that Barclays will announce the formation of its own bad bank next week. The bank has recently exited all commodities business and continues to streamline its investment banking division. The bank announced a portfolio of assets called Exit Quadrant last year and this £54 billion pool of assets is expected to make up the core of the bad bank portfolio.
The Financial Times has also reported today that Barclays' retail businesses in Spain, Portugal, Italy and France will also be added to the portfolio.
It is expected that Eric Bommensath, the current co-CEO of corporate and investment banking at Barclays will oversee the new unit.

Miserly US GDP growth of 0.1% in first quarter

The US economy grew at a miserly 0.1% in the first quarter of the year as difficult winter conditions disrupted the economy and exports fell. Forecasters had expected a 1.2% increase in GDP according to Bloomberg. An assumption that the severe weather conditions in the first three months of the year was to blame is supported by a significant rise in consumer spending of 3% which was driven primarily by a rise of 4.4% in spending on services. including utility bills as America turned up the thermostat during extended bouts of bitterly cold weather.
Most economists expect a significant rebound in the second quarter with predicted growth levels of 3% which hasn't been seen since the pre-crisis days of 2005.

Detroit Bankruptcy Update #1

The bankruptcy of Detroit has reset the rules for municipal investors when assessing credit risk. In little under a year the city has blown the assumptions most bondholders would have adhered to over many decades when it comes to recovery given default. Kevyn Orr, the emergency financial manager for the city has played a far tougher game with institutional investors than they have been used to in previous bankruptcies and for the most part he has been successful. In the latest development, the city has reached an agreement with its public sector retiree's which is a substantial PR win. You can read the story here.
http://www.bloomberg.com/news/2014-04-26/detroit-retirees-reach-tentative-agreement-over-pensions.html
While the city could come out of bankruptcy later this year, the real legacy of the Detroit bankruptcy will be the effects it has on other large issuers struggling under enormous debt piles and increasing retirement costs. Watch this space, the bad news is not going to stop here.