Anxious times for those involved in the Crossrail project, where key funding documents remain unsigned and the downturn and falling property values have put major question marks against some of the calculations.

There are doubts about the predicted profits from the redevelopment of land at the bottom end of Tottenham Court Road belonging to Transport for London. Meanwhile, airports operator BAA and the City Corporation have yet to finally sign off their contributions towards the £17 billion bill.
TfL is also to raise a £2.7 billion contingency fund, secured against future fares — something that looks precarious in the current climate. Then there is the planned £3.5 billion levy from London businesses. It seems hardly the right moment to be asking small shops and firms for cash when they are struggling in the credit crunch.

Over and above all that, there is the suspicion that Gordon Brown may wish to delay the development. Building a new express-link for City banks, which are hardly popular in the country at present, could be the last thing he needs as he copes with public finances that are shot to bits.
The counter-argument says that the Prime Minister would not dare to lose face with the City by backtracking on Crossrail, and that a further postponement of the long-fought-for scheme would send a terrible signal about London's claim to be the world's leading financial centre. The last few weeks have shown, if nothing else, just how vital a dynamic City is to the economy and that therefore he will push ahead.

But Brown has also got an Olympic Games to contend with, which just happen to be in the same part of the UK as Crossrail. That too is suffering, with the financing of the 2012 Olympic Village provoking alarm in Whitehall.
City Spy would not be surprised at all if Crossrail was to slow...

A crash course in CDS plays

From the bankaholic.com blog, a cute explanation of Credit Default Swaps: “Let's say you just bought a shiny new sports car for $100k. You can buy insurance on the car by paying an insurance company $500 a year. The insurance company promises to buy you a new sports car if you total your car.

“The insurance is like a CDS, except CDSs insure corporate bonds in the event that a corporation goes bust. However, with a CDS, you can buy insurance even if you don't own the bond; this is called speculation. When you buy a CDS without owning the underlying bond, you are essentially betting that the corporation will go bankrupt.
“This is like buying car insurance for your friend's shiny new Ferrari, hoping to collect in the event that he crashes. Some hedge funds even allegedly speculate in CDSs while sabotaging their underlying corporate stocks to increase the chances of bankruptcy. This is the equivalent of cutting the brakes on your friend's Ferrari.”

* Rejoice! Star stockpicker Anthony Bolton has got back into the market with his own money after a couple of years, he tells readers of his Financial Times column. Oh, but where to invest? Fortunately, half the page on which Bolton's column appears is taken up with an ad for Fidelity's Special Situations Fund (formerly run by, er, Anthony Bolton, as the ad points out).

Photo-finish for some as Aga wins

Top hats doffed to the Aga Khan, who has won Europe's most prestigious and the world's most expensive turf flat race, the Prix de l'Arc de Triomphe, with his star filly Zarkava.

The Aga was at Longchamp to collect the
£1.7 million first prize — courtesy of the sponsor, the Qatari government (who else but a Gulf State was going to be splashing out such sums in this climate?). Unfortunately, the Aga employed two extremely burly minders to guard Zarkava as she made her way out on to the racecourse and later into the winning enclosure.
The excitement surrounding the filly saw the zealous heavies knock photographers out of her path. Such, ahem, robust behaviour is not normally seen at Longchamp.

* As if the anti-gay remarks on his blog by the Rev Peter Mullen, chaplain to the London Stock Exchange, were not bad enough, their timing is embarrassing. The new Business Secretary, Peter Mandelson, is gay, as is his opposite number, Alan Duncan.

* Told you so. From this column on 20 March, writing about Stephen Carter, then the PM's strategy adviser in Number 10: “Friends think Carter's long-term aim is not to return to the private sector but to become a minister himself.”

* Definition of optimistic? An investment banker demanding he has five ironed shirts ready for Monday morning...

Vehicle runs out of road but ex-Citi duo safe and sound

What will now happen to Stephen Partridge-Hicks and Nicholas Sossidis, the ex-Citigroup bankers who pioneered the first structured investment vehicles in the mid-1980s? They went on to start their own operation, Gordian Knot, which built up Sigma Finance, a $27 billion SIV. Sadly Sigma collapsed recently, but the pair shouldn't be on the breadline. They had a good run while it lasted with Gordian Knot paying out almost £110 million in dividends in the halcyon days from 1998 to 2007.

* Dick Fuld, the hapless egotist who oversaw the collapse of Lehman Brothers, is expected to get a bumpy time in front of Congress today. It should be good sport, with the chairman of the House Committee on Oversight and Reform, Henry Waxman, predicted to lacerate the multimillionaire banker. Darrell Issa, a California Republican and member of the committee, sighs: “Henry Waxman hates rich people.” You almost feel sorry for Fuld.

* Remember all those so-called experts who talked about oil going to $200, £250 or even $500 a barrel? Now markets consultancy Business Monitor has gone the other way and become the first to call oil going below $50 a barrel.