In this installment of Alphaville’s traditionally, if not actually, infrequent podcast Robin, Joseph and Cleary Gottlieb lawyer and sovereign debt maven Lee Buchheit discuss Cyprus, capital controls, a new sovereign debt restructuring mechanism and the best place to hang out if you are a restructuring lawyer. Read more
The quote is from Gerard Minack, Morgan Stanley’s celebrated equity strategist, based in Australia.
He retired from the bank on Friday and his final thoughts are in the usual place.
Investing is an unusual profession: perhaps the only one where amateurs have a good shot at beating the pros. However, evidence suggests that amateurs don’t: flow data indicate that retail often buys high and sells low.
A slightly confusing statement on Friday out of Morgans Hotel, the group founded by Ian Schrager, who is credited with creating the whole concept of a boutique bed-for-the-night…
NEW YORK, May 17, 2013 /PRNewswire/ — Morgans Hotel Group Co. (MHGC) (“MHG” or the “Company”) today provided clarification regarding statements made in a filing submitted by The Yucaipa Companies (“Yucaipa”).
On Markets Live on Friday we offered some speculation on the level ENRC’s controlling shareholders might table to take the business private.
Once we’d zapped a few arbs amongst the ML Rabble, and got over an associated sulk, we offered a price: 340p Read more
Every now and then, we take a look at why the US housing comeback continues at a pace that has disappointed those of us who believed (and still hope) that a rebound in household formation will produce a self-sustaining acceleration in the broader recovery.
After the release on Thursday of disappointing housing starts but encouraging building permit numbers for April, we’ll do so again now. Start with this helpful chart from Capital Economics: Read more
Scott E.D. Skyrm, repo specialist and author of an upcoming book on MF Global, presented an interesting repo chart on his blog this week:
As the chart shows, so-called GC repo rates are once again trading below the Fed Funds rate. Read more
Live markets commentary from FT.com
One for the mantelpiece, Mr Abe:
(Click through the pic for the Economist article) Read more
Bove vs Bloomberg, on JPMorgan || QEnd Game || EBA delays bank stress tests || Qatar bankrolls Syrian revolt || Dell profits below expectations || US farmland prices see double-digit rise || World’s largest container shipping company downgrades view on global trade || Tony Hayward appointed chairman of Glencore Xstrata || Citigroup FX traders move away from Bloomberg Messenger || Saudi princes deny laundering claim || S&P cuts Berkshire Hathaway || Yahoo spared potential $2.7bn in legal damages || Market update Read more
Then join Markets Live at 11am on Friday. Here.
New to ML? Read on…
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Elsewhere on Friday,
- The sadomonetarists of Basel.
- A case for regulatory forbearance toward banks.
- Abenomics and the supply of safe assets. Read more
Asian stocks mixed || Osborne’s budget cuts in trouble || Dell earnings miss || Singapore Airlines reports loss || Europe bank stress tests delayed but tougher || Bolland’s M&S bonus under threat again || BoE queries IMF calculations on easing loss || BP Gulf could see late surge of compensation claims || Tett on phony QE peace || Gold bears feeling good Read more
FURTHER FURTHER READING
- Central bank competence is a technology. Read more
Dick Bove’s focus is on this?
The ex-Rochdale banking analyst, now at Rafferty, has found a hook in the Bloomberg terminal-snooping story for his latest note: Read more
Marc Ostwald at Monument Securities has spotted that an important theme is developing: a rise in the number of warnings about QE suspension and QE exit.
As he noted on Thursday regarding the recent warnings from the BIS and the IMF:
To my jaundiced eye, I would have to say that the warnings below from the BIS and IMF within one hour of each other today on QE, suggests that this is the beginning of the end for QE! Am not sure that everyone else will share that view, but this cannot be a simple coincidental warning shot that has no material consequences – watch this space!
This is one way to respond to the mess Euroland is in over who should make the calls for recapitalising banks…
The European Banking Authority is delaying its next banking stress test to 2014, to wait for both new asset-quality reviews and the ECB’s Single Supervisory Mechanism (so is it to wait for Wolfgang Schaeuble?): Read more
FT Alphaville participated in a “Gold Bulls vs Bears” event hosted by the Association of Mining Analysts (AMA) on Wednesday.
The motion being discussed was:
Is gold’s role as a safe haven asset in the global financial system outdated and redundant and if the ubiquitous QE programs have been successful and the global economic upturn is confirmed, the price of gold will continue to struggle?
The risks here are major embarrassment to the ChX, HMRC, the LBS, you and me, not least if GS withdraw from the Code
‘ChX’ = Read more
From the Skyman, writing in his CityAM column on May 2…
GLENCORE BOARD SIZING UP HAYWARD
What is it about former BP chief executives and the top boardroom post at Glencore, the commodities trader?
Live markets commentary from FT.com
Japan’s economy grew at the fastest pace in a year last quarter || Lawyers for JPMorgan Chase have demanded that Bloomberg hand over data logs || Richemont chairman to take a break || IRS chief quits over Tea Party scandal || UK High Court rules Goldman Sachs tax deal lawful || Chinese FDI misses forecasts || RP Martin has removed its chief executive and an executive director from their posts || David Cameron is “open to all ideas” for returning RBS to private ownership || Platts fought an attempt to impose new regulations on world oil benchmarks last year || Spanish banks are bracing themselves for a fresh financial hit || Banks sue Lisbon over ‘toxic’ asset allegations || Brazil raised a record Rbn in its first auction of licences for oil exploration blocks || Warning over SWF opacity || Markets wrap || FTAV’s latest Read more
So, there was evidence this week that the US authorities might finally be getting to grips with the Chinese reverse merger scandal, whereby a string of Chinese companies exploited lax listing rules to shake down naive American investors.
Executives at RINO International, a steel industry supplier, have been charged by the SEC with inflating revenues 15 fold in their US filings, while some of the proceeds from a reverse merger and $100m cash raising in 2007 were diverted to buy a house in Orange County, two Mercedes Benz cars and also funded shopping trips to the Chanel and Valentino stores in Beverley Hills. Most of the rest of the money was dispatched to China. Read more
In the M&A hall of shame, Rio Tinto’s top-of-the-market $37bn acquisition of Alcan (in CASH) is right up there. In this century, at least.
It was a truly disastrous deal that nearly killed the Anglo-Australian mining company and its after-effects are being felt to this day. Just ask Tom Albanese. Read more
Japan falls on bank forecasts || Japanese Q1 GDP beats forecasts || JP Morgan wants Bloomberg employee logs || RP Martin removes CEO and one director || Chinese FDI misses || Spanish banks brace for push on NPLs || Cameron ‘open to ideas’ on RBS || The few who set oil benchmarks Read more
Japan’s economy grew at the fastest pace in a year last quarter, with solid growth in consumer spending and exports suggesting the expansionary policies of Shinzo Abe, prime minister, are delivering quick and tangible results.
Government data on Thursday showed that real gross domestic product increased by 0.9 per cent in the three months to March, or 3.5 per cent in annualised terms. It was the second consecutive quarter of growth, after a rise in October-December that the government revised upward to 1 per cent.
That’s from the FT’s Jonathan Soble.
Of course, quite a lot happened after the end of Q1 as well. Read more
We are, of course, talking about iron ore which has slipped into bear market territory overnight (defined here as 20 per cent fall from a recent high).
All-time highs for the S&P 500, the Dow — and Google. The company’s shares hit $916.38 during trading, closing above $915, a 3.3 per cent gain. The S&P 500 rose 0.51 per cent (Reuters).
Elon Musk will buy $100m of stock in his company’s offering. Tesla Motors announced the raising of common shares and convertible notes to repay its loan from the US Department of Energy (Tesla statement). Read more
Deutsche Bank’s Stuart Parkinson and Rineesh Bansal kick off their tale of RoRo on a controversial subject: where did the phrase risk-on/ risk-off originate. We’ve had some outlandish claims sent our way in the past.
A colleague who shall remain nameless once claimed he had invented RoRo (and the question mark) but we feel there is a ring of truth to the suggestion that a company called Riskmetrics, originally a JP Morgan project born to gauge the level of risk being run by the firm, actually has the dubious honour. Read more
Quite a lot to ponder really. Members of the IMF’s executive board were set to meet on Wednesday to discuss whether to approve lending to Cyprus, more or less behind closed doors.
But maybe not so much this time. It looks like Stockwatch in Cyprus has obtained a copy of the members’ comments on the Cypriot bailout — a rather high-level internal document to find its way to the public… and it makes for fascinating reading. Read more