Posts from Friday Apr 8 2011

Further further reading

For the commute home, where… oh forget it, we’re sick of shutdown jokes too,

- Almost sick of them: the top 10 government shutdown pickup linesRead more

BarCap on oil-fuelled global inflation

There were several points of interest (defined as “stuff we did not know”) in a new BarCap note about the potential effects on global inflation if oil prices keep rising.

After the week of oil prices we’ve had, and with Brent Crude settling well above $126 Friday and WTI just above $113 at pixel time, the note seems particularly well-timed. Read more

A guide to economic data during a shutdown

Courtesy of Nomura’s US economics team, here’s a quick guide to the data that would and would not be disrupted by an ongoing shut-show in Washington.

This list is not exhaustive, but it does cover the main indicators. The italicised releases are those due next week. Read more

Second thoughts on secondary markets [updated]

The WSJ on Friday reports that the SEC is looking to relax the regulations on share issuances by private companies.  These attracted widespread attention following Goldman’s botched effort to set up a special purpose vehicle to purchase Facebook stock.

As FT Alphaville explained in a post in January, one of the main rules under the spotlight is in section 12(g) of the Securities Exchanges Act, which requires a firm to register securities with the SEC if it: Read more

Dictator downfall derby

Aka an autocrat futures market. A snapshot from Intrade:

Agency shutdown slowdown

Looks like the SEC and CFTC will be on skeleton crew if the government shuts down, according to their contingency plans.

First the CFTCRead more

US Markets Live transcript 8 Apr 2011

Live markets commentary from FT.com 

Reminder: US markets live starts in 20 minutes

As usual, we’ll be kicking off promptly at three minutes late, or 10:03am EST, 3:03pm GMT.

Topics du jour will be the US government shutdown, the latest from Japan, oil prices, MENA, Portugal and the rest of the Eurozone. And whatever happens to break in real-time, of course. Read more

Portugal – prepare for more privatisation

The Portuguese rescue mission is progressing quicker than we thought.

The Eurogroup and ECOFIN ministers outlined the three pillars of the bailout package on Friday and notably it included an “ambitious” privatisation programmeRead more

The Bernanke 1×2 Call Spread

By Theo Casey, a columnist at Futures & Options World, blogging live from FOW’s European Equity Options conference in Amsterdam.

Presenting the best trading idea of the conference… Read more

The disputed budget cuts in perspective

From Hamilton Place Strategies, with a hat tip to Morning Money, over this might the US government shut down at midnight:

 Read more

Europe stress test benchmarks and banks revealed [updated]

Ninety banks and an own-brand core equity requirement of five per cent of risk-weighted assets…

That’s one less bank than last year and a lot of capital questions (The merged cajas of last year have reduced the tally a bit). We already had the methodology on the stress-test scenarios – this release is the pass mark: Read more

ASX/SGX: ‘no brainer’, more deal speculation

Magnus Bocker, the acquisitive chief of the Singapore Exchange, undoubtedly has his detractors. But, as we noted on Thursday, it’s hard not to feel a twinge of sympathy after seeing the cavalier way that Australia – and particularly its Treasurer, Wayne Swan – sank his ambitious bid for Australia’s ASX.

However, confirmation on Friday that the SGX/ASX merger is officially dead has already opened up a range of possibilities amid the current wave of exchange merger frenzy. As one London-based broker told us on Friday, eyeing the LSE’s planned merger with Canada’s TMX : Read more

Markets Live transcript 8 Apr 2011

Live markets commentary from FT.com 

(Under) Perform Group takes the plunge

And the latest company to brave the treacherous waters of London’s IPO market gets off to a less than auspicious start.

The price action in Perform Group, the progressive sports media company, on Friday morning. Read more

Australia kills off ASX-SGX deal

Australia has formally rejected Singapore Exchange’s $8.8bn bid for the country’s bourse, describing the decision as a ‘no-brainer’ for the national interest and financial stability, the FT says.  Within minutes of the rejection on Friday, SGX and ASX terminated the proposed deal. In response, SGX said it would continue to pursue organic as well as “other strategic growth opportunities”, including further talks with ASX. The Australian government has cited ASX’s monopoly of the country’s clearing and settlement systems, but faces criticism that the decision has really come down to politics.

 

Banks fight for ‘block’ share deals

Wall Street banks are vying to underwrite companies’ share sales in so-called “block trades”, a sign of their willingness to take on greater risks and use more of their own capital, the FT reports. The volume of block trades, which are also known as “bought deals”, rose sharply in the first three months of this year to a quarterly high, according to Dealogic. Banks briefly own block trades and hold them on accounts while seeking investors to sell them on to. The top bank for global block trades in 2011′s first quarter was Deutsche Bank with $2.2bn, followed by Morgan Stanley and Barclays Capital, Dealogic added.

 

No federal budget deal overnight

Congressional leaders have failed to strike a deal on the federal budget, making it more likely that the government will enter a shutdown from midnight on Friday, the Washington Post says. President Obama was more optimistic that a compromise will materialise before that deadline, according to the NYT: “I’m not yet prepared to express wild optimism, but I think we are further along today than yesterday,” he told reporters. FT Alphaville looks at the economic impact of federal workers being furloughed during the shutdown.

Is Bwin.PartyGaming uninvestable?

The Schleswig-Holstein question is so complicated, only three men in Europe have ever understood it. One was Prince Albert, who is dead. The second was a German professor who became mad. I am the third and I have forgotten all about it - Lord Palmerston (1784- 1865)

(H/T Numis Securities) Read more

Madoff casts blame in FT interview

Bernard Madoff has again sought to spread blame for his Ponzi scheme across banks, regulators and some of his oldest business associates in a rambling jailhouse interview with the FT. Madoff offered little evidence for his claims but insisted that JPMorgan Chase, the primary banker for his investment firm, had enough information to detect fraudulent trading. “JPMorgan doesn’t have a chance in hell of not coming up with a big settlement,” Madoff said. JPMorgan denies any wrongdoing.

  Read more

SEC looking to liberalise private share offerings

The SEC is reviewing rules on private market share offerings, which would likely make it easier to issue stock without reporting financial statements, the WSJ reports. The review could increase the number of permitted shareholders in private companies above 499. The SEC move complicates some tech companies’ plans to move forward with IPOs in order to leave the current regime’s constraints. Facebook is still set to file in 2012 and offerings by Zynga and Twitter were also expected in the near future. Private market transactions doubled in value in 2010 to $4.6bn, according to Dealogic data.

Another federal shutdown victim: IPOs

The Securities and Exchange Commission has announced that it would be unable to process company filings in the event of the government shutting down, according to a statement. This means companies in the late stages of rolling out public offerings – or who want the SEC to accelerate their applications – face an unwelcome interruption, Reuters reports. Companies facing SEC questioning following recent IPO filings, such as Linkedin and Toys R Us, may experience problems in particular.

Silver on a tear past $40

Silver is the focus of a buoyant commodity complex after the grey metal hit $40 an ounce for the first time since 1980 as traders ride the “bullion-as-inflation-hedge” bandwagon, according to the FT. Gold also pushed to gold to a fresh record of $1,467 an ounce, with investors pouring funds into precious-metal ETFs. Calls on a further gradual rise in the SPDR Gold Trust ETF have risen — but trading yesterday also saw a big bet that the fund will also see much more volatility in the months ahead, the WSJ reports. The option may be one sign that central bank tightening will now threaten gold’s run.

Jamie Dimon’s pay rises 51 per cent

Jamie Dimon has collecting a $5m bonus – his first cash pay-out in three years – as part of a $23m pay package for leading JPMorgan Chase during 2010, the FT reports. Mr Dimon’s pay, revealed in a regulatory filing on Thursday, is a 51 per cent increase on the $15.2m in cash and shares he earned for 2009 and comes after a year that saw JPMorgan’s profits rise 47 per cent to a record $17.4bn. The bank also paid $421,458 in relocation expenses related to Dimon’s sale of his Chicago home last year, Bloomberg says.

Getting one’s Vickers in a twist

Handy heat map sort of thing from Goldman’s analysts, on what Monday’s Independent Commission on Banking report (chair: Sir John Vickers) promises for UK lenders.

Click to enlarge: Read more

Further reading

Elsewhere on Friday,

- The foolishness of crowdsRead more

Pink picks

Comment, analysis and other offerings from Friday’s FT,

Thomas Mayer: Trichet must now raise rates again
Jean-Claude Trichet, president of the European Central Bank, will now face criticism for raising rates too early. But the doves are wrong: a raise in rates could not have waited any longer, and more must now follow, writes Mayer, chief economist at Deutsche Bank. By reacting to the real risk of inflation, the ECB is sending a clear message: they will stick to their mandate and refuse to let the governments off the hook by softening the euro. Read more

Snap news

Breaking pre-market news on Friday,

- TNT issues big profits warning; finalises demerger — statementRead more

Jefferies to buy Prudential Bache

Jefferies, a US investment bank, is making an aggressive push into the global futures market, with an agreement to buy Prudential Financial’s commodities and financial derivatives business for $430m in cash, reports the FT. The deal to buy Prudential Bache’s Global Commodities Group is the largest yet undertaken by New York-based Jefferies as it expands beyond its traditional equities roots after the financial crisis. The acquisition includes Bache’s UK and Hong Kong subsidiaries, which have more than 400 employees. It will be renamed Jefferies Bache. The business reported 2010 revenues of about $220m. DealBook notes the acquisition reflects the firm’s aim to transform into a full-fledged investment bank.

Overnight markets: Up

Asian shares rose on Friday, led by the Nikkei 225 average, and the yen weakened on news that Japan’s crippled Fukushima nuclear plant escaped damage from the biggest earthquake to strike Japan since March 11, reports Bloomberg.

Commodities gained as oil traded above $110 a barrel in New York. The MSCI Asia Pacific Index added 0.5% and S&P 500 Index futures had gained 0.2% at midday in Tokyo. The yen lost 0.3% to Y85.20 per dollar, heading for a 1.4% weekly loss. South Korea’s won and Taiwan’s dollar rallied against the greenback. Aluminum and corn also advanced. Read more