Posts from Monday Oct 15 2012

The Closer


FT markets round-up: “Wall Street stocks made strong advances as investors greeted Citigroup’s quarterly results with some cheer as well as new signs that the US economy was gaining strength. In New York, the S&P 500 finished trading near its highest point for the day, up 0.8 per cent. The FTSE All-World equity index closed 0.5 per cent higher on the day. Earlier, the FTSE Eurofirst 300 climbed 0.5 per cent, seeing much of its gains arrive late in the European trading day as the US session began. Demand for perceived “havens” was muted, with the yield on 10-year Treasuries flat at 1.68 per cent. A $17 fall for gold to $1,736 an ounce suggested, however, that bullion investors thought the US data would reduce the duration of the Federal Reserve’s supposedly gold-positive QE3 efforts.” (Financial TimesRead more

Fading into the refi boom horizon?

Below is a chart from Goldman equity strategists showing that the mortgage refinancing surge is likely to flag next year, according to MBA estimates:

 Read more

Dear Samin – I resign

From the pen of Nat Rothschild…

Click to enlarge for the full letter to Samin Tan: Read more

The Greek PSI bond, charted

Clearly, the sense that Greece has stepped away from the brink of getting kicked out of the eurozone is the key driver, coupled with expectations that Brussels will give Athens a loan repayment extension.

Recent comments by eurozone officials quoted by Reuters that Athens could use funds from privatisations of state-owned assets to retire debt also don’t hurt:
“The privatisation process is finally kicking in, the structure is ready,” the official said. “You could expect a few billion euros from privatisation to buy back debt. This could happen relatively quickly.”

The debt swap plan seems to be working, then, but we wonder for how much longer… Read more

Panama hat time

You know what they say. When one door closes, another one opens.

And for the euro, that door seems to be opening in err… Panama. Read more

Dudley on mortgage market impairment

NY Fed president Bill Dudley weighs in on something written about here and many, many other places — the impairment of mortgage markets and how it affects monetary policy transmission. Read more

Dwarf-tossers and matchmakers, the economics Nobel

For the theory of stable allocations and the practice of market design

That’s the citation for this year’s Sveriges Riksbank Prize in Economic Sciences, awarded to Lloyd Shapley and Al Roth. Read more

Bernanke and Lagarde clash big in Japan

Ben Bernanke was over in Tokyo on Sunday at a BoJ-IMF seminar, explaining just how great QE in the developed economies was for the rest of the world.

It went something like this (emphasis ours): Read more

Markets Live: Monday, 15th October, 2012

Live markets commentary from 

Padraic Fallon, 1946-2012

Padraic Fallon, the man who joined Patrick Sergeant in seeing the publishing potential in European governments issuing bonds denominated in dollars, has died aged 66.

He’d been battling cancer for 12 months and was planning to retire as chairman of Euromoney Institutional Investor, the £1bn business he helped establish, in January next year. Read more

The (early) Lunch Wrap

Sir Richard Branson and Christopher Flowers are set to go head to head for hundreds of branches being offloaded by RBS. News of interest from both Virgin Money and private equity fund JC Flowers emerged as Stephen Hester, RBS chief executive, expressed confidence he would be able to extend a Brussels state aid deadline to sell the 316 branches by the end of 2013. Shares fell at the open. (Financial Times) Read more

Today’s word is ‘Staatsbankrott’

Non-german speakers should be able to guess the meaning, especially if we add the words ‘Greece’ and ‘Wolfgang Schaeuble’ by way of context.

Yes, Staatsbankrott = ‘state bankruptcy.’

Not that it’s going to happen in the case of Greece, of course — at least not according to the German finance minister. Read more

What to make of the latest round of Chinese data

Such a lot of data has come out since Friday that we’ll wrap it all here. The short version is, it’s not great but not terrible either.

Trade (all figures are year-on-year): Exports were up 9.9 per cent and imports were up 2.4 per cent in September. Nomura’s Zhiwei Zhang points out this was mostly a surprise on the upside; consensus was for 5.5 per cent growth in exports, and the growth in imports was also healthy compared to the August figure of -2.6 per cent. Read more

Further reading

Elsewhere on Monday,

– Keynesianism, left and right.

– The surprisingly effective Iran oil boycott, charted.

DowntonomicsRead more

Why iron ore prices are rebounding

After languishing well below $100 for much of August and September, spot iron ore is back in the $110+ range and not far from the $120 ‘floor’, albeit with a few hiccups of the last couple of days… So what’s going on? Here’s a theory we find plausible.  Read more

The 6am Cut London

Virgin Money, JC Flowers both set to pursue RBS branches || Bernanke tackles currency war critics at the IMF || Chinese inflation steadies || Chinese exports rise but imports highlight domestic weakness || IMF generally the scene of disharmony || Softbank to buy majority of Nextel || Vivendi considers merging SFR with Numericable || US woman takes on banks over Libor Read more