Posts from Wednesday Oct 17 2012

The Closer

FT markets round-up: “Stock markets traded on firmer ground as better US economic data helped investors gain confidence about global growth prospects. The FTSE All-World equity index rose 0.8 per cent as the FTSE Eurofirst 300 closed 0.5 per cent higher, after the Asia-Pacific region advanced 1 per cent. Wall Street’s S&P 500 gained 0.4 per cent to 1,460, leaving the index less than 6 points from a four-year closing peak, helped by news that US housing starts during September rose at their fastest pace in more than four years. Closely watched sentiment gauges are continuing to display a more optimistic mood, with copper, the industrial bellwether, up 1 per cent to $3.74 a pound.” Read more

A Cypriot seniority quirk?

S&P has downgraded (to B from BB) Cyprus, the little island which is facing a great big bank recapitalisation bill from the fallout in Greece. It could well be the biggest ever such bill in history, relative to GDP.* Read more

The hedgie’s life goes cold for Coffey

Moore Capital’s star manager and heir-apparent to founder Louis Bacon is leaving the industry:

Greg Coffey, the hedge fund trading superstar at Moore Capital Management, once assumed to be the successor to the firm’s founder, Louis Bacon, has resigned.

 Read more

On those alleged Yorkvillians

Since the end of last year, the SEC has been using a proprietary risk analytics system called Aberrational Performance Inquiry. Basically, the plan has been to spot fund managers and hedgies whose outperformance points to potential fraud – the sort of fraud they missed in the case of Bernie Madoff.

Performance that is flagged as inconsistent with a fund’s investment strategy or other benchmarks forms a basis for further investigation and scrutiny by the SEC. Read more

Mad Libs: financial innovation addition

Ever hear the word “innovation” and not be able to stop yourself from wincing? Then you probably work in financial markets.

With the above thought in mind, let’s play a special FT Alphaville edition of Mad Libs.

For those unfamiliar with the game, fill in the below blanks as per the instructions that accompany them. Then read the paragraph below, inserting the words you wrote into the appropriate spaces. Read more

The Hand of Draghi (aka Mariodona)

Let’s go back to May 2005, to a lecture delivered by Bank of England governor Mervyn King at the Cass Business School… Read more

US Markets Live – 10am New York, 3pm London

Time for another edition of our live US markets chat, at the usual place. We’ll be talking about all that data in favour of a housing-led recovery, bank earnings, the sudden disappearance of the fiscal cliff from the US election, and anything else that takes our fancy.

See you there!

How to (almost) understand China’s quarterly GDP growth rate

China’s Q3 GDP data is out on Thursday, and there’s naturally a lot of speculation about whether it will show yet another quarter of declining growth (almost certainly) and whether it will even fall below the official 7.5 per cent target, (quite possibly). However the numbers revealed won’t be suitable for an apples-for-apples comparison with most other countries. In fact, they’ll barely be suitable for comparison with previous Chinese GDP numbers.  Read more

Japan as the new Switzerland…

… just as it becomes the new China, which is no longer the old China. Ok? Probably not, but we may as well go through the argument anyway. The idea is that Japan, sick of yen strength which it struggles to combat in a risk-driven world, sticks a Swiss-style floor under its currency.

It’s not the newest idea and there are suggestions that a de facto floor is already in place anyway but the argument, from Société Générale, is worth running through as there is certainly more chance of an explicit floor being announced now than there was when we last visited the idea. Read more

Markets Live: Wednesday, 17th October, 2012

Live markets commentary from FT.com 

The (early) Lunch Wrap

Good morning, New York…

NEWS

Obama tackled Romney more forcefully in the second US presidential candidates’ debate, striving to make up for lost ground in the first round. “Romney stumbled badly at one point in an exchange over the deadly attack on the US consulate in Libya,” and was most articulate on the economy. “Obama was much sharper and more energetic than in their first debate two weeks ago.” (Financial Times)(Reuters)(FT live blog)

Vikram Pandit stands to forfeit almost $33m in cash and stock from a retention package according to the terms of a May 2011 regulatory filing by Citigroup. Whether the board gives him a payout to ease his exit may reveal more about the circumstances around his departure.  Read more

What Germany, France and van Rompuy want in a fiscal union (with optional caption competition)

We just had to highlight this excellent cut-out-and-keep guide, from today’s print FT, to the tussle over banking union, fiscal union, and debt mutualisation:

What Germany, Spain and France want ahead of Spanish bailout request/Brussels summit Oct 2012 -- FT graphic text by Peter Spiegel  Read more

EMs can handle lower commodity prices

Capital Economics ponders whether falling commodities prices will harm the emerging economies that rely most on selling them, and comes up with an answer: not much. At least, for most of them… Read more

Spanish bonds are feeling positively Moody

That’s Spain’s 10yr spread over German Bunds dropping below 400 points for the first time since the start of April:

Spanish 10yr fell to 5.547 with Bunds touching 1.5864.

Probably something to do with Moody’s qualified endorsementRead more

Further reading

Elsewhere on Wednesday,

- Segregating client money, it’s a decision. So, cyanide or arsenic?

- Prefer you honesty or deception?

- Presidents and… recency bias. Read more

The 6am Cut London

Asian shares rise strongly || Obama takes different tack in second debate || BBA considers a tough “bankers’ register” || Spain bailout request seen likely in November || Unpicking Pandit’s departure || IBM sales fell but beats 3Q estimates || Intel profits fall, shares fall too || Martin Wolf on the IMF || Foxconn hired underage workers  Read more