Posts from Tuesday Apr 17 2012

The Closer


Risk appetite built after a strong survey of German economic sentiment and firm demand for an auction of Spanish government bills reduced anxiety about the eurozone fiscal crisis. A generally positive batch of US earnings reports added to the upward momentum for stocks, although Intel andIBM both fell in after-hours trading, after releasing results for the first quarter,” the FT writes
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200 years of Vikram getting paid $1

An advisory vote, but still – Pandit’s pay pack only got 45 per cent shareholder approval in Dallas. US corporate governance on a roll lately (or is that diminished expectations?).

Are Italy’s forecast revisions already out of date?

We were treated to a preview of the Italian government’s new deficit/debt/GDP projections on Tuesday, courtesy of Reuters…

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Basel III study demonstrates impact of getting rid of BS capital

Basel III is looming. There is no escape. Tougher capital requirements for banks are on the way.

But the phase-in doesn’t begin until next year, and the ramp-up process is long. Not until 2019 will Basel III be fully baked in. Read more

IMF to ECB: see you after the easing

The ECB has some room to further lower the policy rate, given that inflation is projected to fall appreciably below the ECB’s “close to but below” 2 percent inflation target over the medium term and that risks of second-round effects from high oil prices or tax and administrative price hikes appear small––WEO projections see headline consumer price index inflation falling to about 1½ percent by 2013, below the ECB’s target. Low levels of domestic inflation can hinder much-needed improvement in debtors’ balance sheets and stand in the way of much-needed adjustments in competitiveness. The ECB’s unconventional policies need to continue to ensure orderly conditions in funding markets and thereby facilitate the pass-through of monetary policy to the real economy.

Plus: “The Bank of England can further ease its monetary policy stance,” according to the Fund. Read more

Revenge of the muppets?

This isn’t ideal, in any case:

Net revenues in Fixed Income, Currency and Commodities Client Execution were $3.46 billion, 20% lower than a solid first quarter of 2011, as higher net revenues in interest rate products were more than offset by lower net revenues in the other major businesses.

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Four trends in central bank-land

1. The central bank bashing doesn’t start and end with Bernanke.

Central banks just about everywhere make fantastic political punching bags, and the popularity of this tactic is growing. For example
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Markets Live transcript 17 Apr 2012

Live markets commentary from 

The (early) Lunch Wrap

Good morning, New York…


What five years of crisis history tells us

Who doesn’t like a good dataset?

As markets wade into the second quarter of 2012, reflect for a moment on the fact that the crisis sparked by subprime mortgages now has nearly five years’ worth of observational data. This is very exciting for nerds, since the conclusions from studying the period will get progressively more meaningful and insightful — something not lost on the credit strategy team at Deutsche Bank when they published their 2012 Default Study on Monday. Read more

What the hell kind of GD company would do this?

But Mr. Smith said the company has used the same technology to resurrect several late executives.

“We’ve brought past CEOs and things that like that back to life,” Mr. Smith said, without getting more specific, citing non-disclosure agreements.

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That’s Governor Zhou to you

That’s pronounced a bit like “Joe”, but with a softer ‘g’ sound. According to Standard Chartered you need to start practising –  because People’s Bank of China governor Zhou Xiaochuan is “the world’s central banker”.

StanChart note that everyone already knows China has the world’s largest stock of M2 money. Read more

Further reading

Elsewhere on Tuesday,

– Richard Koo, via Macro Exposure, via Business Insider. Read more

The 6am Cut London

Apple’s shares plunged 4.1% on Monday, the fifth consecutive day of price falls for the electronics maker. (Wall Street Journal)

Asian stocks were flattish as concerns over Europe’s debt problems outweighed stronger-than-expected US retail sales. (Financial Times) Chinese shares recorded their biggest fall in a week after weak FDI data from China. (BloombergRead more

Overnight markets: Flat

Concerns about Europe overshadowed better than expected US retail sales in March. Retail and food services sales rose 0.8 per cent to $411.1bn, higher than analysts’ forecasts of 0.3 per cent.

Citigroup’s upbeat earnings boosted financial shares across Asia, with ANZ Bank up 0.5 per cent and Macquarie group 1.0 per cent higher in Sydney. Woori Financial Group jumped 1.6 per cent in Seoul while Daiwa Securities advanced 1.6 per cent, Nomura gained 1.2 per cent and Mizuho Financial Group rose 0.8 per cent in Tokyo. Read more

China: once again a net buyer of US Treasuries

Hey, remember when China was net-selling US Treasuries and drawing down its FX reserves? …

That was so December 2011. This hasn’t been widely discussed in recent days amid the higher-profile news that Chinese growth in Q1 decelerated by less than expected and the RMB was allowed to trade in a wider band, but: Read more