Posts from Thursday Aug 23 2012

The Closer

ROUND UP

Stocks closed down today as investors debated whether more central bank stimulus was in the works. The S&P 500 closed down 0.81 per cent. Yields on “haven” bonds fell, with 10-year Treasuries falling to 1.67 per cent and 10-year Bunds closing at 1.38 per cent. Read more

Minutes minutiae and open(-ended) questions

There was a seemingly minor item in the FOMC minutes released yesterday that didn’t get much attention but that, naturally, interested us quite a bit.

The participants noted that the Fed staff had presented an analysis showing “substantial capacity for additional purchases without disrupting market functioning”. But the staff part of the minutes offered no details of this analysis. Read more

Shorts in the rally

A couple weeks ago, FT Alphaville asked who’s “buying” the rally in US equities. We also noted that volumes are low not only because its August, but also due to a trend that’s at least a few years old. Now we ask, are the shorts hanging on or is it more a question of piling in?

Andrew Wilkinson of Miller Tabak decided that with major indices hitting multi-year highs, it’s a good time to look into which sectors have the most short interest. Here’s what he found: Read more

Mitt Romney and Man U (and PE management fees)

It’s an indirect path from one to the other.

Gawker on Thursday unloaded some 950 pages of filings from Bain Capital-affiliated offshore funds in which Mitt Romney has invested his fortunes over the years. We’re still reading through the docs, though Dan Primack (who’s already read through them) thinks there’s not much to the issue. Read more

Are platinum supply concerns overblown?

The scenes at Lonmin’s mine in South Africa and reports that labour unrest has spread to two other mines have helped push up platinum prices to three-and-a-half month highs with the focus very much on supply issues.

But what if the market is actually still suffering from too much supply, even with the latest disruptions? According to the precious metals team at Credit Suisse on Wednesday, that may indeed the case: Read more

O’mortisation

That’s Ireland getting about €1bn worth of long-dated amortising bonds away at a sale on Thursday… its latest step towards being able to tap private markets, post-bailout.

From the Irish debt office releaseRead more

Nasdaq’d

The full Citigroup blast against Nasdaq’s handling of the Facebook IPO is well worth a read. (Big hat-tip to NYT Dealbook, click to enlarge)

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The winners and losers of QE, by the BoE

This the Bank of England’s report into the distributional effects of its asset purchases. Click through the image for the full doc:

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Studies in pre-commitmentphobia: the case of the ECB

‘We’re not done yet, but we’re working on it’, a rather annoyed-looking ECB present Mario Draghi more or less told the public after the last meeting of the Governing Council. The piece of work in question was, of course, the planned intervention to support government bond markets conditional upon ailing sovereigns being part of a formal bailout. (Here’s looking at you, Spain.)

The lack of detail initially underwhelmed markets that had expectations for greater granularity around the action plan. That eventually reversed, possibly when people realised what Draghi said was actually pretty daring when measured by the ECB’s own standards and stated mandate. Read more

Germany on Greece: a dramatis personae

Ahead of  Greek PM Antonis Samaras’ meeting with Angela Merkel on Friday we thought a look at Germany’s cast and position might be worthwhile… especially since the Greek leader is set to pitch for a two-year extension to meet fiscal targets set out in the loan agreement at that meeting.

As the FT notesRead more

Some PMIs went up, but the eurozone is still headed for recession

Look into my eyes. You are feeling very positive about the economy. Things will go well. You are thinking things have improved. You are probably French and only focusing on the most recent observation in the Markit’s Flash PMI released on Thursday morning that hit a six-month high:

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Markets Live transcript 23 Aug 2012

Live markets commentary from FT.com 

The (early) Lunch Wrap

Good morning New York…

FT ALPHAVILLE Read more

An ECB “CGBPP”

We can’t get enough of these — predictions for the format that the ECB’s new, “convertibility risk”-focused bond-buying programme might take.

This one’s from Citi’s Global Economic Outlook for August, which dubs the expected ECB operation the “Conditional Government Bond Purchase Programme” (snappy!). Citi forecasts that  the ‘CGBPP’ will concentrate on buying T-bills. These are usually protected from losses during a sovereign debt restructuring: Read more

Further reading

Elsewhere on Thursday,

- When the inevitable is evitable, QE3 editionRead more

The 6am Cut London

China’s flash PMIs signal faster contraction: The preliminary manufacturing PMI from HSBC/Markit Economics was 47.8, pointing to a nine-month low and a steep contraction from July’s final figure of 49.3. All components of the index showed contraction apart from inventories of finished stock. (Bloomberg)(FT Alphaville)

Qantas has scrapped a US$8.5bn order for 35 of Boeing’s Dreamliner aircraft because of “lower growth requirements”. The airline also pushed back delivery of a further 50 aircraft by two years to 2016, as it Qantas reported a net loss since it was fully privatised in 1995, of A$244m (US$256m) for the year to June (Financial Times). Total Boeing 787 orders fell to 824 from 859 as a result (Wall Street Journal). Read more

US money market fund reform goes down

Well, it looks like all the lobbying paid off for the money market fund industry and its backers.

Mary Schapiro, chairman of the Securities and Exchange Commission, has announced that her proposal to reform the industry would not go to a vote because three of the SEC’s five commissioners had already announced their opposition to it. (Two were already expected. Until today, the position of Luis Aguilar remained unknown.) Read more

The one good note in China’s flash PMI… oh, wait.

The preliminary China PMI manufacturing survey for August is 47.8 — a fairly big fall from 49.3 in July, and a nine-month low according to HSBC/Markit Economics.

There’s not much good to see in the components of the index: Read more