Posts from Tuesday Apr 24 2012

The Closer

Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

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| Apr 24 2012 22:45 | Comment |

ROUND-UP

Equity markets finished modestly higher, while sales of government debt in several periphery countries earlier in the day went reasonably well, calming markets. (Financial Times) Read more

Europe’s new house

Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

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| Apr 24 2012 21:35 | Comment |

Via SocGen, click to expand, but careful not to blow on it — it gets creakier the higher up you go:

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Sterilisation, money market funds, and anti-stimulus

Cardiff writes mostly about US macroeconomic issues, with daily excursions into other topics about which he claim no expertise. Before Alphaville, Cardiff spent a little more than two years as a reporter at Dow Jones Financial News covering investment banking, asset management, and private equity. Along the way he has written freelance pieces on a variety of other topics from behavioural psychology to Muay Thai, the latter also being a personal interest that involves frequently getting kicked in the shins (and torso, and head).

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| Apr 24 2012 21:01 | Comment |

We’ve written extensively about the problems facing US money market funds, the motives behind the Fed’s adding them to its list of reverse repo counterparties, and how sterilisation of further QE was an idea likely floated with MMFs in mind.

We won’t do a full recap here, but the idea is that with rates low and their margins incredibly thin, money market funds have been competing for a limited amount of collateral against which to lend in repo markets. Read more

SEC charges Egan-Jones

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Apr 24 2012 20:00 | Comment |

Washington, D.C., April 24, 2012 — The Securities and Exchange Commission today announced charges against Egan-Jones Ratings Company (EJR) and its owner and president Sean Egan for material misrepresentations and omissions in the company’s July 2008 application to register as a Nationally Recognized Statistical Rating Organization (NRSRO) for issuers of asset-backed securities (ABS) and government securities. EJR and Egan also are charged with material misrepresentations in other submissions furnished to the SEC and violations of record-keeping and conflict-of-interest provisions governing NRSROs.

Full SEC Order here. The regulator has alleged that Egan-Jones made a material misrepresentation in claiming to have rated government debt and ABS — and that it hadn’t — when making its NRSRO application, and that conflicts of interest were present: Read more

Her Majesty’s government and M&A

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Apr 24 2012 17:08 | Comment |

Presenting Exhibit KRM 18, submitted to the Leveson Inquiry (click pic for doc):

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To bin or not to bin the FTT

Masa joined the FT in 2009 and has worked on a number of desks across the paper, including Companies, Markets and Comment. She spent much of 2010 in New York covering the US equity markets. But earlier this year she finally saw the light and moved to Alphaville.

She started her career in the investment banking division at Lehman Brothers in the summer of 2007, timing it perfectly with the beginning of the credit crunch.

She studied philosophy, politics and economics at Oxford University.

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| Apr 24 2012 15:47 | Comment |

It’s all gone a bit quiet on the financial transactions tax front but Algirdas Šemeta, the European Union’s tax commissioner, wants you to know that the idea is still very much alive.

In an interview with Die Zeit, the German daily, he said he’s not giving up on the idea that “derivatives must also be covered by the tax” in order to reach a compromise at the EU level. He also seems to think that: Read more

The Leveson inquiry — suddenly very interesting

Joseph joined FT Alphaville way back in March 2010. He likes all the politically and legally fiddly bits of finance. He also likes credit, rates, global macro, tail risk, and all that stuff. (You should email him story ideas. He’ll take anything.)

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| Apr 24 2012 15:13 | Comment |

Hurry! You’ve already missed a lot of James Murdoch’s testimony about the BSkyB bid’s travels through the corridors of the British government. Click pic for feed:

 Read more

Once upon a time in Italian banking

Lisa joined FT Alphaville in September 2011 after a tour of duty through the guts of the financial industry, having worked as an analyst at a bank and for a financial data company.

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| Apr 24 2012 13:19 | Comment |

In a land called Italia, where Savers saved, and Borrowers wanted to borrow from the Savers, there were some Banks.

The Banks took the savings from the Savers, and lent some of it to the Borrowers. And as long as the spread on the interest rate paid to the Savers was less than that paid by the Borrowers, all was well and peaceful in Italia. Read more

A super contango in fear

| Apr 24 2012 12:08 | Comment |

This is a guest post for FT Alphaville by Theo Casey, a columnist at Futures & Options World, blogging on the back of FOW’s European Equity Options conference in Amsterdam.

The year is 2017. Read more

Markets Live transcript 24 Apr 2012

| Apr 24 2012 11:01 | Comment |
This is a Markets Live transcript. Read more

Live markets commentary from FT.com 

The (early) Lunch Wrap

Masa joined the FT in 2009 and has worked on a number of desks across the paper, including Companies, Markets and Comment. She spent much of 2010 in New York covering the US equity markets. But earlier this year she finally saw the light and moved to Alphaville.

She started her career in the investment banking division at Lehman Brothers in the summer of 2007, timing it perfectly with the beginning of the credit crunch.

She studied philosophy, politics and economics at Oxford University.

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| Apr 24 2012 10:46 | Comment |

Good morning New York…

FT ALPHAVILLE Read more

Glencore, an investigative report

Izabella Kaminska joined FT Alphaville in October 2008. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP's internal magazine.

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| Apr 24 2012 10:35 | Comment |

Kudos to Foreign Policy for spending a year investigating Glencore.

Did you know, for example, that the name “Glencore” comes from: GLobal ENergy COmmodities and REsources? According to Foreign Policy, this was actually considered a secret (bizarrely enough). Read more

Political upheaval all round?

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Apr 24 2012 10:17 | Comment |

Now that austerity-related political risk has reared its unhappy head in the eurozone, it’s worth pondering yet again the fiscal goals that the area aspires — well, sort of — to reach.

Last December, we posted some charts of Eurostat data (via MacroBusiness & Naked Capitalism) highlighting which eurozone countries would have exceeded the limits set in the new European Fiscal Compact – an offense that will be punishable by fines when* the treaty is adopted: Read more

And a Spanish contrast…

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Apr 24 2012 10:09 | Comment |

Spain saw pretty good demand at its Tuesday morning auction of short-term debt, but its borrowing costs nearly doubled.

From Reuters with our emphasis: Read more

A Dutch auction and an old rivalry

| Apr 24 2012 09:48 | Comment |

Netherlands got its (very small) sale away in undramatic fashion following the collapse of its government. From Reuters:

The Netherlands sold 1 billion euros of 3.75 per cent notes maturing in 2014 at an average yield on 0.523 per cent and 995 million euros of 4 per cent bonds maturing in 2037 at an average yield on 2.782 per cent. Read more

The consummation of the Shell♥Cove romance?

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

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| Apr 24 2012 08:55 | Comment |

From this morning’s RNS (with our emphasis):

Further to the announcement of a possible offer by Shell Bidco for Cove on  22 February 2012, the boards of directors of Cove and Shell Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Shell Bidco for the entire issued and to be issued share capital of Cove. Shell Bidco is an indirect wholly-owned subsidiary of Shell incorporated in the Netherlands. Read more

Further reading

Lisa joined FT Alphaville in September 2011 after a tour of duty through the guts of the financial industry, having worked as an analyst at a bank and for a financial data company.

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| Apr 24 2012 08:10 | Comment |

Elsewhere on Tuesday,

- Wanna talk risk to the banking sector? So, interest rates… Read more

The 6am Cut London

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Apr 24 2012 05:34 | Comment |

The Netherlands is in turmoil after the government collapsed at the weekend, says the FT. The spread between Dutch and German bonds widened to 72 basis points – the highest since the eurozone crisis began. Together with the first-round French presidential election results and poor eurozone PMI data, uncertainty over Europe sent equity markets lower on Monday, with Asia also registering falls on Tuesday.

Wal-Mart is the subject of a US Justice Department criminal investigation after a report on the weekend about allegations of corruption at its Mexican subsidiary, reports Bloomberg, citing a person familiar with the probe. The company’s shares closed almost 5% lower on Monday. Read more

Overnight markets: Down

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Apr 24 2012 05:13 | Comment |

Most Asian shares lost ground for a fourth consecutive day as political uncertainty in France and the Netherlands, coupled with poor economic data from the region, revived concerns about the eurozone, says the FT.

Exporters in Tokyo were pressured by a stronger yen, with Honda Motor down 1.2 per cent, Nissan Motor off 1 per cent, and Canon 1.2 per cent lower. Financials also took a hit in  Japan and Hong Kong. Read more