Posts from Wednesday Jun 27 2012

The Closer


Home sales and durable goods data cheered US stocks: the S&P 500 closed up 0.9 per cent to 1,331.85. The Dow Jones Industrial Average rose 0.7 per cent (Bloomberg). Durable goods orders rose 1.1 per cent in May (Financial Times). Read more

Falcone, the SEC complaints

Click the image for the full docs brought by the SEC against Harbinger Capital and Phil Falcone — containing the tax loan allegation, the client redemption restriction allegation, and the MAAX bond short squeeze allegation…

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*That* Target2 presentation

We wade into choppy waters here. But, we couldn’t help ourselves…

Karl Whelan, expert on all matters Target2 and arch nemesis of Hans-Werner Sinn, has encapsulated his views on Target2 a.k.a “why Hans-Werner Sinn is so very wrong about everything” in a 37-page powerpoint presentation on Wednesday. Read more

Suitors said to line up for Lincare…

Linde of Germany is understood to be leading the bidding for Lincare Holdings, a Clearwater, Florida based specialist in providing oxygen and other respiratory therapy services, according to FT Alphaville’s usually reliable sources.

The price? Perhaps $40 or more, according to these sources, valuing Lincare at around $3.4bn. Neither Linde nor Lincare were available for comment on Wednesday. Read more

Spanish bailout divination

Spanish prime minister Mariano Rajoy on Wednesday:

We can’t finance at current prices for too long. There are many institutions and financial entities that have no market access. It’s happening in Spain, it’s happening in Italy and in other countries, that’s why this is a crucial issue.

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Some Eurogroup statements for your consideration

Spain on the left and Cyprus on the right. Click the images for the full documents:

US Markets Live transcript 27 Jun 2012

Live markets commentary from 

US Markets Live returns to its normal time: 10am New York, 3pm London

After spending the last two weeks on special assignment for the Dimon hearing and Fed presser respectively, US Markets Live returns to regular programming today.

Join us for a tour of Libor/Barclays, the Glenstrata foul-up, the Newscorp split, a preview of the EU Summit, and more. And oh Paul’s got some bleeding RAW. Read more

LIBOR manipulation? Done for you, Big Boy

The statements of CFTC and Department of Justice in the US, and FSA in the UK, are out concerning Barclays’ $200m, $160m, and £59.5m fines respectively for “attempted manipulation of and false reporting of LIBOR and Euribor Benchmark rates”. The FSA fine is the largest the agency has ever imposed.

From the CFTC statement: Read more

Glenstrata, the tombstone

Just in case the real trophies never get cast, here are the advisers to the $90 $80 $70 $60 $55(?)bn putative merger between Glencore and Xstrata. Click to enlarge.

First there was the foul-up over competition issues. Unbelievably, Glenstrata had not factored in the likelihood of a referral to the European authorities. Read more

Markets Live transcript 27 Jun 2012

Live markets commentary from 

The (early) Lunch Wrap

Good morning New York…


Hello Brent contango

We appreciate that this will not be news for anyone who’s been watching oil markets closely.

However, we still think it’s a valuable recap. Read more

A slowing buildup of global reserves

First a chart courtesy of Kit Juckes over at SocGen:

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China’s foreign debt keeps rising

ChinaScope reports that China’s total outstanding foreign debt was $751.26bn at the end of March 2012, according to data released Monday by the State Administration of Foreign Exchange (SAFE).

Here’s the trend to date, also courtesy of ChinaScope: Read more

Towards a Brixit

Just when you had had enough of Grexits, Greuros and Drachmageddons, here’s another irritating term to add to the eurozone crisis lexicon: Brixit. Yes, the genius fusion of the words Britain and exit to describe another gloomy scenario.

The word was coined by The Economist’s Bagehot column this week (although apparently it is also the name of a Swedish shop that sells Lego) to describe an event that it argues no British political party wants but is nevertheless likely to happen. (The story of the euro crisis, surely?) Read more

Unwind? What unwind? – Part 2

In our previous post, we outlined our disappointment that the latest DTCC data released on Tuesday night did not seem to reveal any significant reductions in risk positions on major credit derivative indices and tranches. It would appear that JPMorgan hasn’t unwound its trades in a big way, as no especially remarkable movements appear in either the activity or volume data.

The reports last week that suggested JPMorgan had sold “65-70 per cent” of its “London Whale position” cited market sources. This was lent a certain credibility by a pop in activity of $31bn on the Markit CDX.NA.IG.9 — one of the few indices in which JPMorgan has a considerable position. Looking back at the data from the last week (in Part 1) showed that the pop was less remarkable than it seemed. Read more

Further reading

Elsewhere on Wednesday,

– The twilight of the central bankerRead more

Unwind? What unwind? – Part 1

FT Alphaville had a serious case of the F5 on Tuesday at 10pm London time, for it was at that hour that last week’s DTCC credit derivatives data was released to the masses.

Here we would be able to see signs of what CNBC had reported last Wednesday: that JPMorgan had sold “65 percent to 70 percent of the so-called London Whale position, a hedging strategy gone so wrong that in early May JPMorgan conceded it had already lost $2 billion.” Read more

The 6am Cut London

Qatar Holding, Xstrata’s second largest shareholder, has come out against the terms of the miner’s merger with Glencore. Qatar called for Glencore to increase the ratio of its shares it would offer for each of Xstrata’s from 2.8 to 3.25, the FT reports. Investors have also expressed dismay at retention payments for Glencore and Xstrata executives, Reuter says. Alternative pay package plans are being drawn up for Xstrata, but Glencore is likely to resist reopening talks on the ratio for the exchange of shares.

News Corp’s board will decide on Wednesday whether to split entertainment businesses from its newspaper arm, creating two publicly-traded companies. News Corp could announce a move as soon as Thursday morning, the WSJ says. The Murdoch family would retain 40 per cent voting rights in both companies, while Rupert Murdoch could remain executive chairman of each, according to the FTRead more