Posts from Monday Apr 16 2012

The Closer


A slightly unusual ‘Dow up, Nasdaq down’ day in US stocks – with Apple down for a fifth day. Cue much worry over what – carrier subsidy cuts? A rumoured iPad rival? – might be causing it (Bloomberg, WSJ Marketbeat). Apple’s up 37 per cent year to date. The Dow Jones Industrial Average closed up 0.56 per cent at 12,921, and the Nasdaq fell 0.76 per cent to close at 2,988 (Reuters). Read more

Italy/Spain and US Treasury yields

The correlation is back:

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Old-fashioned expropriation

Though the Kirchner government called it ‘hydrocarbon sovereignty’ and ‘in the national public interest’ when making its move to nationalise YPF, in which Repsol owned a stake, according to Argentina’s Clarin.

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Citi and second liens

Three’s a trend — Citi’s joined JP Morgan and Wells Fargo in reclassifying home equity (junior lien mortgage) loans as bad assets this quarter.

From a footnote in its Q1 resultsRead more

Scenic debt

We hadn’t realised – Spain’s bond issuance calendar for this year is one of those landscape-adorned affairs which the Italians have been known to do.

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The 21st century hedge

The recent coverage of JP Morgan’s credit derivative ‘whale’ trade — supposedly a market hedge rather than directional position for the bank — has seen many financial pundits wonder how it could be that JP Morgan has a short position on any of the underlying names in the credit against which it is supposedly selling protection?

The index is made up of 121 North American companies, all of which were investment grade at the time the index started trading in the fall of 2007. Read more

Return of the Stability and Growth Pact

Don’t laugh. European politicians mean it this time. True, the Stability and Growth Pact turned out to be a bit useless and toothless. The lessons of the past have been learned and now there are newer, shinier, summarisier statistics on macroeconomically imbalanced countries within the European Union. As agreed by the European Parliament and Council last November, there’s also a new procedure that comes with the statistics. The aim is to catch nations before they get too far off the path of righteousness being more like Germany economic harmony.

The first slew of statistics under the procedure, or “Alert Mechanism Report” (AMR), was released in the middle of February. Read more

Markets Live transcript 16 Apr 2012

Live markets commentary from 

China’s FX policy and the elusive rebalancing

Does China’s decision to expand the allowed trading range for the yuan signal something significant for the country’s economy? Like, everything is roses?

We’re just asking because a Reuters analysis piece argues that this is the case: Read more

The (early) Lunch Wrap

Good morning, New York…


Is China at it again?

Sean Corrigan at Diapason Commodities has sent us another fascinating chart. It shows the hot money inflows into China which are unaccounted for by the sum of the trade balance, FDI, interest earned and FX revaluations.

That’s to say there’s still a large chunk of inflows left over after all of the above is considered, the volumes of which happen to correlate very nicely with changes in the combined aluminum, copper and zinc (and lead from 2011 onwards) stocks of Shanghai and the LME. Read more

Glencore vs Panorama and John Sweeney

It’s hard being listed, huh?

In his first television interview, Glasenberg said that Glencore took corporate responsibility seriously, saying: “We care about the environment. We care about the local communities.” Read more

Banks as volume gobbling monsters

Tabb’s latest statistics on US equity volumes are really raising some eyebrows, and not just because of the share of trade heading to the old bogey man the “dark pool”.

Nope. We’re talking about the share being gobbled up by banks and broker dealers direct. Something known as “internalisation”, and discussed at length on FT Alphaville before — something we’ve referred to as dark inventory. Read more

Art attack!

Or abstract corporate finance, perhaps…

The Board of V22 would like to announce that it received an indicative, all- paper offer from an AIM listed company (“AimCo”) to purchase the assets of the Company including the V22 Collection, valuing the Company’s assets at between 1.8p to 3p per share or a total price between £ 427,561 to £ 712,602 (the “Indicative Offer”). Whilst the upper end of this offer valued the Company at 6 times its current market value, the proposed consideration payable, was to have taken the form of new shares in AimCo at an issue price equivalent to a premium of 140% to its current mid-market price.

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Bringing the debt home, Italian and Spanish banks edition

Hold the phone… something very interesting in the Spanish banks <=ECB=> Spanish sovereign nexus came up at the end of last week.

Suggesting that it’s in better shape than the Italian version of the nexus. Read more

International Power and GDF Suez agree terms

Mop up terms — Suez is acquiring the 30 per cent in International Power it does not already own:

– 418p a share Read more

We’re not sure that’s how this stuff works, Zhongnanhai

In 1996, the rule of law was written into the outline of the ninth five-year plan for national economic and social development and the long-range objectives to 2010, becoming an important principle for guiding China’s modernization drive.

— The People’s Daily, April 15, editorialising on “Bo Xilai’s serious discipline violations” Read more

Further reading

Elsewhere on Monday,

– Why Spain has lost itRead more

Overnight markets: Down

Asian markets
Nikkei 225 down -125.14 (-1.30%) at 9,513
Topix down -7.75 (-0.95%) at 807.73
Hang Seng down -142.01 (-0.69%) at 20,559

US markets
S&P 500 down -17.31 (-1.25%) at 1,370
DJIA down -136.99 (-1.05%) at 12,850
Nasdaq down -44.22 (-1.45%) at 3,011 Read more

The 6am Cut London

Asian stocks fell on Monday as concerns grew about Spain’s rising bond yields. China’s weekend decision to allow the yuan to trade in a wider band against the US dollar had negligible effect on  mostregional currencies and equities. (Wall Street Journal) The yuan itself fell the most in three months. (Bloomberg)

Goldman Sachs sold nearly half of its remaining stake in the Industrial and Commerical Bank of China before Asian markets opened Monday in its fourth large sale of the Chinese bank’s shares since 2009. (Wall Street Journal) Goldman raised about $2.5bn selling the stake to Temasek, sources said. (BloombergRead more

Weekend news catch-up

Weekend headlines from the FT and other UK media:*

From The FTRead more