Posts from Friday Aug 17 2012

The Weekender

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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| Aug 17 2012 22:00 | Comment |

This week on FT Alphaville,

- Bundesverfassungsgericht was word of the week. Read more

GSEeya

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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| Aug 17 2012 21:00 | Comment |

The US Treasury chose to combine its announcement to begin receiving all of the profits from Frannie, with another that the GSE portfolio will be unwound more quickly than before.

You could interpret that as a kind of bullish long-term bet on the housing market. Read more

The decline of “real money” trading

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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| Aug 17 2012 18:44 | Comment |

So US equity trading volumes are now at four-year lows. Or five-year lows. Whatever, they’re low, but it’s also August.

Something to keep in mind as the global risk asset rally — which appears driven by some combination of better-than-expected-but-not-that-awesome US macro data and… talking from European policymakers — continues. Read more

Frannie est mort, vive le Frannie

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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| Aug 17 2012 17:27 | Comment |

So farewell then, 10 per cent Fannie and Freddie senior pref dividends.

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Reading between the swap regulation lines

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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| Aug 17 2012 15:10 | Comment |

Sigh. Banks aren’t so keen on many a new regulation. One can tell from the way that they are already avoiding them. We do mean “avoid” here, as opposed to “evade”, as some are reading new swaps regulation in the US in a rather generous way.

On October 12, a raft of new rules around swaps will take effect. Dealers, and potentially other financial institutions, will have to register with the CFTC as “swap dealers” or “major swap participants” where relevant. With the registration as a swap dealer come a host of requirements around business conduct and also trade reporting. Read more

Greece, Portugal and Spain really have benefitted most from the euro

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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| Aug 17 2012 14:21 | Comment |

Has the single currency been good to you? It’s a question sure to inflame people across Europe, many of whom seem to believe they’ve suffered while others have made out like bandits.

The answer is pretty straightforward, according to Paul Donovan at UBS. If you look at the growth in household real disposable income between 2000 and 2010, those living in peripheral countries have benefited the most. Read more

Derivatives industry no likey new margin requirements

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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| Aug 17 2012 11:25 | Comment |

A survey of financial market participants most likely to be negatively affected by new regulations on uncleared swap trades revealed that they don’t like this new-fangled way of doing things at all. No, no, they really don’t.

The completely predictable result was published in an article in Risk on Wednesday: Read more

BHP’s untimely dilemma: shrinking cash flows

| Aug 17 2012 11:03 | Comment |

As low cost producers, with arguably the best resources  in the world, it’s little wonder that BHP Billiton and Rio Tinto are shipping as much iron ore as they possible can from their mines in the desolate Pilbara region of Western Australia.  Assuming a $7/tonne freight rate, Lex estimates, the landed iron ore price in China would have to fall to $37/t before Rio lost out.

So even with the iron price at a near three-year low of $112 , Rio and to a lesser extent BHP are making a killing and will continue to do so as higher cost producers (mainly Chinese) fall by the way side. Read more

The (early) Lunch Wrap

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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| Aug 17 2012 10:47 | Comment |

Good morning New York…

FT ALPHAVILLE Read more

The cold-hearted market in Lonmin stock

Paul Murphy is the founding editor of FT Alphaville.

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| Aug 17 2012 10:04 | Comment |

Thirty five dead, shares off 3.4 per cent at pixel time on Friday…

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Further reading

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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| Aug 17 2012 08:03 | Comment |

Elsewhere on Friday,

- Things aren’t so bad, out in the country. 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.

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| Aug 17 2012 05:40 | Comment |

Most Asian stocks rose and the MSCI Asia-Pacific index rose 0.2% to near a three-month high, after US housing permits rose to a four-year high. (Bloomberg)

The White House is again studying a release of strategic oil reserves. The US administration is looking to see whether petrol prices fall after Labor Day on September 3, as they historically have done. A co-ordinated international release was discussed earlier in the year but shelved when prices fell (Reuters). Oil demand is robust despite sluggish global economic growth (Financial Times). Read more