Posts from Tuesday May 29 2012

Accruing better sovereign credit

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.)

Learn more

| Subscribe to Joseph's posts
| May 29 2012 22:49 | Comment |

Here’s a distinction you tend not to see on the front pages of the sovereign crisis…

Cash-based sovereign accounting: recognising a cost only when cash changes hands. Accrual-based: recognising a cost when it’s incurred in the first place. Read more

The Closer

| May 29 2012 22:21 | Comment |

ROUND-UP

The European Central Bank unambiguously rejected the Spanish government’s unorthodox plan to recapitalise Bankia. The plan would have consisted of Spain’s injecting sovereign debt into Bankia, after which Bankia would post the bonds as collateral to receive money from the ECB. The FT reports: “The ECB told Madrid that a proper capital injection was needed for Bankia and its plans were in danger of breaching an EU ban on “monetary financing,” or central bank funding of governments, according to two European officials.” (Financial Times) Read more

RIM, the limbo

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.)

Learn more

| Subscribe to Joseph's posts
| May 29 2012 21:35 | Comment |

While we are no longer giving quantitative financial guidance…

Look, advisors! Leverage something something!, says Research in Motion: Read more

Whale precursors

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).

Learn more

| Subscribe to Cardiff's posts
| May 29 2012 20:06 | Comment |

Reading through a new CreditSights note about the JPMorgan CIO trade fallout and hedge accounting treatment, we came across this historical tidbit (emphasis ours):

Back when CEO Dimon was the head of Bank One, there were episodes in the early 2000s when the company registered hefty gains, and then some [marked-to-market] losses on a CDS book designed to hedge underlying credit risk of the loan portfolio. Read more

The market still does not ‘like’ Facebook

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.

Learn more

Subscribe to Masa's posts
| May 29 2012 17:45 | Comment |

Another bad day for Facebook shareholders. It looks like the latest plunge — which took the shares below the $30 level — has something to do with the start of option trading this morning. The shares have dropped to new lows, down around 7.9 per cent at pixel time.

 Read more

Bankia in the Sunshine State

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.

Learn more

| Subscribe to Lisa's posts
| May 29 2012 17:29 | Comment |

A particularly eagle-eyed FT Alphaville reader noticed this when strolling in the heat of Miami Beach:

 Read more

The decline of US shadow banking, charted

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.

Learn more

| Subscribe to David's posts
| May 29 2012 17:18 | Comment |

The US shadow banking appears to have halved since the start of the 2008, at least according to one new estimate — which also reminded us that we still have to come up with a better way to define this very broad sector.

This is from a Deloitte report out on Tuesday (click charts to enlarge): Read more

Ten-year Bund yields below 1%? Wouldn’t faze Nomura

| May 29 2012 16:51 | Comment |

‘Have you ever wondered why none of our Bund forecasts are definitive?,’ Nomura’s European rates strategist Desmond Supple asked clients on Tuesday.

The answer…
 Read more

Barclays is one unhappy taxpayer

| May 29 2012 14:05 | Comment |

Just in case you missed it earlier — we thought it worth posting the full letter from Bob Diamond, Barclays chief executive, to Andrew Tyrie MP, Treasury Committee chairman, regarding HMT’s blocking of two tax schemes (one on buybacks of debt). This involved a rare use of retroactive legislation, if you recall.

Anyway, the letter (click image for full doc): Read more

Ireland LOVES a good referendum

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.

Learn more

| Subscribe to David's posts
| May 29 2012 13:47 | Comment |

We thought there was a solid tradition in Ireland: first referendum is a No, the second is a Yes. It seemed so simple. But the Irish government has gone and smashed that venerable tradition by saying, if the people vote No, it won’t be putting this issue to a referendum again… incontrovertibly.

Worrying. Read more

China’s mini stimulus, explained

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.

Learn more

| Subscribe to Kate's posts
| May 29 2012 12:22 | Comment |

So what is this great new Chinese stimulus that world markets are becoming solely increasingly reliant upon for a regular fix of optimism?

Two things that we know so far… sort of: Read more

Markets Live transcript 29 May 2012

Paul Murphy is the founding editor of FT Alphaville.

Learn more

Subscribe to Paul's posts
| May 29 2012 11:01 | Comment |
This is a Markets Live transcript. Read more

Live markets commentary from FT.com 

The (early) Lunch Wrap

| May 29 2012 10:49 | Comment |

Good morning, New York…

FT ALPHAVILLE Read more

The Eurepo curve spells trouble

| May 29 2012 10:31 | Comment |

Sandy Chen at Cenkos has drawn our attention to an interesting development in the repo market: the Eurepo curve has inverted.

 Read more

England and the eurozone: channel tunnels

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.

Learn more

| Subscribe to Lisa's posts
| May 29 2012 10:04 | Comment |

The pound has been the strongest performing G10 currency so far this year, even though it has been weakening of late against the US dollar and Japanese yen.

 Read more

Further reading

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.

Learn more

| Subscribe to Kate's posts
| May 29 2012 07:50 | Comment |

Elsewhere on Tuesday,

- European Union, Soviet Union: compare and contrast. 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.

Learn more

| Subscribe to Kate's posts
| May 29 2012 05:39 | Comment |

Spain’s prime minister insisted the country’s banks won’t need an international rescue. The FT reports investors recoiled at a €19bn rescue of Bankia, sending the country’s borrowing costs over Germany’s to the highest level since the start of the euro. Bloomberg looks at the ‘delay and pray’ approach of Spanish banks over their soured property loans.

Russian billionaire Mikhail Fridman has resigned as CEO of TNK-BP, reports the FT, plunging relations between BP and its Russian partners into fresh turmoil. A person close to the Russian stakeholders said the partnership “appears to have run its course”, while an industry insider said the move could precede a state takeover of the Russian stake driven by Russia’s energy tsar Igor Sechin. Read more

Overnight markets: Up

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.

Learn more

| Subscribe to Kate's posts
| May 29 2012 05:27 | Comment |

Asian stocks inched up on hopes for China’s policy easing to boost the slowing economy, despite concerns that Europe’s debt crisis may worsen, says the FT.

The MSCI Asia Pacific index gained 0.1% with Australia’s S&P/ASX 200 up 0.3% and South Korea’s Kospi Composite index 0.6% higher. But Japan’s Nikkei 225 Stock Average shed 0.5% after the country’s jobless rate rose last month for the first time since January. Read more