Posts from Wednesday Jul 18 2012

The return of auto subprime lending

We were intrigued to discover on Wednesday that we are subscribed to something called the Moody’s Auto Navigator report.

When it showed up in our inbox Tuesday, we were intrigued further by what it said: Read more

The Closer


The S&P 500 edged up to its highest level in two and a half months. The index closed up 0.67 per cent at 1,372.78, emboldened by a steady earnings season. Honeywell led S&P industrials after its results, gaining 6.7 per cent (Reuters). Read more

US economic momentum, bullet-point-y version

Since we found it a useful exercise, here’s a quick, simplisticfied snapshot of the US recovery. Or non-recovery, whatever it is. Not all of these carry equal weight, naturally:

Stuff that looks good Read more


That’s one unhappy Minister-President of Bavaria venting on Tuesday. Read more

M-euro, a lesson in money supply from Kenya

If Europe = yesterday, the stuff that’s going on in Kenya right could very well = the future.

Here’s an extract from a speech by Njuguna Ndung’u, Governor of the Central Bank of Kenya, talking about the exciting developments hitting Kenya’s financial sector. Especially when it comes to “mobile money” developments and how they are impacting growth. Read more

Eurozone seniority, needling du jour

A one-liner, but from one preferred creditor to another…

Directors agreed that the ECB will have to continue to play a role in the crisis response, including through liquidity provision and securities purchases. A few Directors also noted that clarifying the seniority status of sovereign debt holdings by the ECB would help address market concerns.

 Read more

Happy 2nd Birthday, Dodd-Frank

A year ago, give or take a couple of days, former FT Alphavillian John McDermott asked the question: is it worth giving a one year-old a birthday present?

Davis Polk clearly thinks so — another year has passed and the law firm has a birthday present for the now two-year old Dodd-Frank Wall Street Reform and Consumer Protection Act. Holding itself out as a maker of infographics, this gem was offered up, excerpts of which are below. Read more

The yield negativity is spreading…

Here’s an interesting factoid by way of Bartosz Pawlowski from BNP Paribas’ CEEMEA team — Eurozone yields aren’t the only ones being haunted by negativity.

As it turns out, euro-denominated non-eurozone debt is also treading perilously close to the zero mark. Read more

We told you negative rates were a big deal

Okay. It’s true. We’ve become slightly obsessed with negative yields at FT Alphaville. Especially with regards to what they signify for the financial industry.

Though, for a long time we’ve felt very much alone with this obsession. Weirdly enough, nobody else has seemed too bothered about it. (Note, we even had to go to the ECB directly to ask Draghi what he thought about it.) Read more

US Markets Live transcript 18 Jul 2012

Live markets commentary from 

The capital spending crisis, miner edition

An interesting column from Clyde Russell at Reuters (H/T John Kemp) pointing out the key problems facing miners today. They can’t get sufficient returns on capital invested, so should they even bother trying?

From Russell: Read more

Markets Live transcript 18 Jul 2012

Live markets commentary from 

The terminal disease afflicting banking

Finding out that you are dealing with a terminal disease is never easy.

The natural reaction is to seek out a cure, no matter how bleak your chances. You will, for the most part, do almost anything to live. That includes changing your habits, your lifestyle, your friends, your profession or, for that matter, doing things you never previously considered doing. Whatever it takes to get just one more day of life. Read more

The (early) Lunch Wrap

Good morning New York…


Bob Diamond may not have been Banker of the Year, but…

This is just too easy. Like killing-dodos-with-a-automatic-machine-gun easy. (Not that we ever could, or would, do that!)

The banking industry’s PR arm(y) is the opposite of Britain’s forces, for it only continues to grow and grow, not unlike bacteria. Lob in auxiliary PR, ie industry “awards”, and frankly we’d be surprised if a disgraced chief executive didn’t have at least one “Banker of the Year” accolade to his name by the time of his (or dare we say “her”?) fall. Read more

A back office failure to put right

Or, “More power to the cupcake police”. (Bear with us)

How is pricing within banks, and in markets more generally, policed? Read more

China’s transmission mechanisms in a knot

One of the enduring arguments about China is that the government has ample firepower to sort out the country’s economic challenges. All that fiscal surplus, all those USD reserves. Firepower to burn.

Yet it’s looking increasingly difficult for policymakers to ward off a hard landing without re-igniting inflation and of course, enhancing the country’s already extreme concentration on investment rather than consumption. Read more

It’s that margin-less EFSF again

ERVV: n marginaali on nykyisin 0 korkopistettä

Which roughly translates from the Finnish as: Read more

Further reading

Elsewhere on Wednesday,

– Monetary policy: a blunt club or a surgeon’s scalpel? Read more

The 6am Cut London

Asian stocks swung between gains and losses on hopes for more US monetary stimulus and fears about China’s growth. Chinese Premier Wen Jiabao warned of a “severe” jobs outlook, fueling concern the economy has yet to bottom. Earlier, US stocks closed higher after initial disappointment in Bernanke’s testimony. (Bloomberg)(Financial Times)

China’s falling house price trend arrested. New home prices rose in 25 out of the 70 cities surveyed by the government in June. This is the largest number of cities recording a rise in 11 months. (Bloomberg) Average prices were flat, month-on-month, after eight consecutive months of decline. (Wall Street JournalRead more