Posts from Thursday Apr 5 2012

The closer


US equity markets ended the day slightly down as trading thinned going into the long Easter weekend, and earlier in the day Spanish bond yields climbed to multi-month highs to make this their worst week of trading this year. (Financial TimesRead more

Counting the collateral, Main Street edition

Our earlier post on the excellent Credit Suisse collateral note risked alerting Blogger Interpol for its verbiage, but there was one more item we thought worth noting.

Specifically the bit that covers the household collateral situation — which is obviously and inextricably linked to the collateral issue in the shadow banking system, but which also matters directly to real-economy issues like consumer spending and changes in the geography of American economic growthRead more

BlueGold, 2008-2012


We know commodities markets have been trendless… and funds’ returns have been (well) multidirectional recently in the sector… but still. Gosh. Read more

Hannam’s gotta do…

It must have come as quite a shock to the FSA apparatchiks when Ian Hannam turned on them. The accepted procedure following the ritual humiliation, fine and brutal publicity that accompanies a critical report is for the miscreant to issue a more-in-sorrow-than-anger statement, and express a desire to move on. Hannam, though, is made of sterner stuff, and the FSA will now be forced to justify its action in front of an independent tribunal.

It promises to be quite a scrap. The 24-page Decision Notice is not one of the FSA’s finest documents. The logic is thin, relying on arguments like: Read more

So farewell, Brian Sack

The man who did the Fed’s buying will – by coincidence – leave the NY Fed pretty much the minute Operation Twist finishes in June.

Full release belowRead more

When safe assets return

Like so many others, FT Alphaville has spent much of the past year thinking about collateral shortages in the shadow banking system and how safe assets function as a kind of currency.

But it’s about time someone actually calculated just how much money these assets might represent. Read more

Spanish bonds / banks / bonds / banks

Beyond Thursday’s back-up in Spanish bond yields — questions about Spain’s banks.

How could there not be when they’ve been buying so much sovereign debt since the LTRO. Ever since December’s record jump of €22.5bn in purchases in fact, as banks began washing LTRO cash through the domestic bond market. (Chart via Nomura) Read more

The mystery of Morgan Stanley’s footnote unravels – Part 2

The story so far:

In Part 1, we reminded you of Morgan Stanley’s footnote in their fourth quarter earnings, whereby the bank stated that it had reduced its exposure to Italy by $3.4bn while benefiting from a positive hit to net revenue of $600m. All of this was as a result of restructuring certain derivatives transactions with the sovereign. Read more

A rare case of par in Greece

Ha! Greek sovereign structured finance ha!

A great spot from Owen Sanderson over at IFRRead more

Is the Aussie dollar becoming a reserve currency?

The IMF’s latest quarterly update on the currency composition of official foreign exchange reserves (COOFER) is out. One person excited by the numbers is Simon Derrick at BNY Mellon.

But not with respect to what they say about the share of global US dollar reserves, but rather what they say about the world’s “other” non-dollar denominated reserves, as well as reserve growth in general. Read more

The mystery of Morgan Stanley’s footnote unravels – Part 1

Or, “This House believes all interesting things are in footnotes and FT Alphaville reader comments.”

Allow us to make the case in favour of the motion. Beginning with: Read more

Floored, but not unfloored

So…this is a follow up on the apparent collapse of the SNB’s 1.20 floor against the euro earlier this Thursday.

Whilst the Reuters chart we presented shows that the EUR/CHF rate did fall through 1.20, FX traders, as it turns out, aren’t as convinced that the floor was properly penetrated. Read more

Markets Live transcript 5 Apr 2012

Live markets commentary from 

The Swiss franc floor is under attack

There’s been some exciting action in the CHF/EUR cross in the last few minutes:

 Read more

The (early) Lunch Wrap

Good morning, New York


Spain spikes again…

Maybe it was Mario Draghi pooh-poohing the idea that the ECB might start to withdraw its support for european banks. Or maybe it was just further consideration of Wednesday’s frank words from Spanish prime minister Mariano Rajoy…

Spain is facing an economic situation of extreme difficulty, I repeat, of extreme difficulty, and anyone who doesn’t understand that is fooling themselves.

 Read more

Further reading

Elsewhere on Thursday,

– Delta-hedging explained. Read more

The 6am Cut London

Asian share markets opened lower, extending Wednesday’s losses. (Bloomberg) Markets are worried after Spain’s bond sale, and fearing there will be no further easing from the Fed or the ECB. (Wall Street Journal)

JJB Sports has a saviour: US retailer Dick’s Sporting Goods, which is investing £20m in JJB, alongside a £10m investment from existing shareholders, the companies said. Dick’s could end up with a stake of more than 60%. (Financial TimesRead more

Overnight markets: Down

Asian markets
Nikkei 225 down -85.13 (-0.87%) at 9,735
Topix down -8.23 (-0.99%) at 827.13
Hang Seng down -288.96 (-1.39%) at 20,502

US markets
S&P 500 down -14.42 (-1.02%) at 1,399
DJIA down -124.80 (-0.95%) at 13,075
Nasdaq down -45.48 (-1.46%) at 3,068 Read more