Posts from Friday Jun 29 2012

Recaps, so retro

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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| Jun 29 2012 20:29 | Comment |

Spot the eurozone country that doesn’t actually have to issue bonds in these closing 5-year bond yields on Friday:

Spain 5.4 per cent Read more

How to regulate Libor, a cheat sheet

| Jun 29 2012 17:45 | Comment |

Cheat sheet — geddit, dude.

While Bob no doubt breathes a sigh of relief at having survived the morning after, the other twenty banks lawyer up and pray, and the BBA says it’ll be constructive with regulators… Read more

Regulator captured, a case study

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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| Jun 29 2012 17:27 | Comment |

The WSJ reported on Thursday that JPMorgan’s regulators will conduct a thorough review of the bank’s models, according to “people close to the situation”.

Thanks to a letter from the the Office of the Comptroller of the Currency to Senator Sherrod Brown, we know that one particular model — the VaR model that JPMorgan’s Chief Investment Office switched to in January 2012, and which failed to alert management to outsized risks the division was taking — did not require regulatory approval before being used. Read more

Barclays’ PR rating: “D”

Paul Murphy is the founding editor of FT Alphaville.

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| Jun 29 2012 16:25 | Comment |

You’re in a crisis, you want advice, right? Preferably from someone who has experienced a similar crisis.

Step forward Mark Arena. He ran investment banking corporate comms for UBS in London before moving to New York to be the bank’s head of comms there, just in time for the Great Crunch and the near-implosion of his employer. So he has frontline form. Read more

Princeling wealth, encore

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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| Jun 29 2012 16:06 | Comment |

Click the face of Xi Jinping (the top spot in the Chinese leadership is his to lose) for another Bloomberg dive into the wealth of the extended families surrounding China’s princelings:

We’d highlight this one because the authorities earlier blocked Bloomberg.com in China on Friday. Read more

A euro reaction

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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| Jun 29 2012 14:38 | Comment |

Any pessimism surrounding the eurozone’s latest deal was not being shared by the single currency at pixel time. The euro was up near 2 per cent against the dollar:

 Read more

Grice on traffic-lights and a crisis of regulation

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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| Jun 29 2012 14:15 | Comment |

As I watched the intricate social ballet that occurred as cars and bikes slowed to enter the circle (pedestrians were meant to cross at crosswalks placed a bit before the intersection) Monderman performed a favorite trick. He walked, backward and with his eyes closed, into the Laweiplein. The traffic made its way around him. No one honked, he wasn’t struck .Instead of a binary, mechanistic process – stop, go – the movement of traffic and pedestrians in the circle felt human and organic.”

The above quote is from the ever-readable Dylan Grice’s latest missive in which he argues that regulation acts much like traffic-lights, in that it lulls market participants into a false sense of security. Read more

Counting the costs of (potential) Libor litigation

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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| Jun 29 2012 13:49 | Comment |

It’s safe to say that Barclays’ £290m fine is just the start of a saga that’s going to drag on for years. More banks are going to be hit with fines, and investors will try to sue wherever they can. Corporate lawyers around the world are rubbing their hands in anticipation of all the fees coming their way (we expect).

Cormac Leech at Liberum Capital has done an analysis of the UK banks’ potential Libor-fixing liabilities should there be comprehensive class-action (as separate from the regulators’ fines). Barclays and RBS would be the most impacted banks by some way. Liabilities could reach 26 per cent of their market values. Read more

On the transfer of risk and the mystery of low yields

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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| Jun 29 2012 11:40 | Comment |

It is impossible for all investors to be invested in safe assets all at the same time.

That’s because risk can never truly be eliminated. It can only be transferred or managed. The more people pour into “safe assets” at the expense of “risky assets”, the more they transfer risk into the original “safe asset”. Read more

Markets Live transcript 29 Jun 2012

Paul Murphy is the founding editor of FT Alphaville.

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| Jun 29 2012 11:01 | Comment |
This is a Markets Live transcript. Read more

Live markets commentary from FT.com 

The (early) Lunch Wrap

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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| Jun 29 2012 10:49 | Comment |

Good morning, New York…

FT ALPHAVILLE – EU SUMMIT EDITION Read more

The eurozone crisis and the curse of the small print

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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| Jun 29 2012 10:32 | Comment |

For every announcement on how to deal with the eurozone crisis, there are as many questions that come to mind as there are statements from politicians. From Eurointelligence’s morning briefing (emphasis ours):

The following are a list of questions that immediately sprung to our mind: Read more

Some EU deal pessimism…

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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| Jun 29 2012 10:18 | Comment |

The market is moving up on the back of a quite substantive eurozone deal but, as our inboxes suggest, this is seen as more sticking-plaster than panacea. Essentially, it’s a case of low expectations being surpassed.

The main change is that Spain’s bailout loans won’t have (explicit) seniority status and that bailout funds will (eventually) be injected directly into teetering Spanish financial institutions, meaning Madrid can sweep the burden of the bailouts off its sovereign books. It also looks like rescue funds will also be used to stabilise bond markets. Read more

Further reading

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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| Jun 29 2012 08:16 | Comment |

Elsewhere on Friday,

- Undooming Britain. Read more

A late-night deal…

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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| Jun 29 2012 07:44 | Comment |

From the FT’s Peter Spiegel and Joshua Chaffin in Brussels:

Eurozone leaders agreed to radically restructure Spain’s €100bn bank recapitalisation plan, allowing EU bailout funds to eventually be injected directly into teetering Spanish financial institutions, meaning Madrid can sweep the burden of the bailouts off its sovereign books. Read more

The London 6am Cut

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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| Jun 29 2012 05:49 | Comment |

The US Supreme Court upheld the constitutionality of the Affordable Care Act, ruling that the individual mandate requiring most Americans to obtain insurance was a tax that Congress was empowered to impose, reports the FT. Some of the reactions to the ruling were… really quite funny, when they weren’t simply wrong.

Anticipated second quarter losses on the trades made by JPMorgan’s chief investment office are in a range of $4-6bn, reports Reuters, while the Financial Times pegs the number at $5bn. Read more

A Ulysees pact, on eurozone seniority

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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| Jun 29 2012 04:54 | Comment |

*EURO LEADERS RENOUNCE SENIORITY ON SPAIN LOANS

Specifically Read more