Posts from Wednesday Jul 11 2012

The Closer


A day for the history books in US Treasuries: the lowest-ever auction yield for 10-year bonds at 1.459 per cent, and the highest-ever demand from direct bidders for the $21bn debt sale (Financial Times). Stocks faded the Fed minutes: the Dow Jones Industrial Average closed down 0.38 per cent (Reuters). Read more

FOMC minutes for meeting of June 19-20

Everyone was curious to whether the minutes would reveal just how close FOMC members were to doing something more aggressive than extending Operation Twist at its last meeting — and if they were close, then what they were waiting for.

— “More aggressive” policy could take the shape of QE3, of course, but also could include extending the “late 2014” language to 2015. Read more

Directly Treasury

The US borrowed for 10 years at the lowest rate ever in Wednesday’s auction (technically a reopening of an existing bond).

The economics of the Olympics

As Londoners prepare for a two-week-long festival of queuing, mostly in the rain, and getting struck in traffic and on the over-crowded tube trains (otherwise known as the London 2012 Olympics), Goldman Sachs has looked into the economics of the event.

They found that stock markets of recent hosts have outperformed in the year after the Games, local houses prices have tended to rise and that dictators award the most valuable medals. Read more

Just another scary Spanish capital flight chart

How long can this go on? (Click to enlarge.)

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US Markets Live transcript 11 Jul 2012

Live markets commentary from 

Reminder: US Markets Live back to its normal time

After a break last week for Treachery Day the Fourth of July, we’re back today at our normal time — 10am in New York, 3pm in London.

We’ll be chattering about upcoming bank earnings, the FOMC minutes, that Spanish MOU, and plenty of other things besides.  See you at the usual place in just a couple of minutes…

What next for European MMFs?

Fee waivers and duration extension, according to Fitch’s Fund & Asset Manager rating group.

They’re talking, of course, about how European money market funds will react to the ECB’s decision to cut its deposit rate to zero, a fact which should soon push the Euro overnight index average (Eonia) to historical lows of between -15 and +15 bps, putting MMF yields at risk of negativity. Read more

A tale of two Chinas

There are two ways that China’s economic future is viewed today.

First, there’s the China which is going to move coherently towards a more consumption-heavy economic mix — the oft-mentioned “rebalancing” that is needed to address its unusually capital-intensive economy. An oped by GK Dragonomics’ Andrew Batson says this means the China naysayers, focusing on the woes of Sany or growing coal stockpiles, are misguided: Read more

Spooks on the payrolls

The attack diagram is shown in Figure 2. The diagram shows the various high-level attack paths an adversary might use to achieve the nightmare consequences. The adversary is assumed to be an external attacker (non-insider) for all the attacks considered in this assessment (as per the red team constraints and ROE)…

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Markets Live transcript 11 Jul 2012

Live markets commentary from 

The (early) Lunch Wrap

Good morning New York…


The pain in Spain

If German citizens are wary about the Spanish bank bail-out, we can only imagine how some Spanish are going to feel about it.

As Joseph wrote yesterday (via El Pais) the draft memorandum of understanding for the bail-out includes provision to force any bank seeking aid to compulsorily write-off their preferred shares and subordinated bonds. Read more

Further reading

Elsewhere on Wednesday,

– Another look at Spain’s funding requirementsRead more

The 6am Cut London

“Peregrine Financial Group has filed for liquidation in a US bankruptcy court in Chicago, just one day after the chief executive of the futures broker apparently attempted suicide.” (Financial Times). Earlier in the day the CFTC filed a civil lawsuit accusing Peregrine, which operated as PFGBest, had only $5.1m in a customer account that was falsely claimed to hold $220m. (Financial Times)(Wall Street Journal)

Spanish retail investors who thought they had term deposits will be forced to accept losses as part of the Spanish bank bail-out.  (Financial Times, FT AlphavilleRead more