Posts from Friday Nov 2 2012

A short leap across the Atlantic

No doubt the California buyside was up early this morning… checking whether they had any disclosures to make under the new short-selling regulation which affects them.

That would be the European one. Read more

The peripheral threat to France

Compétitivité is a big deal in France right now.

The country’s loss of competitiveness is a serious issue, especially as its crisis-struck neighbours push on with wage cuts and labour reform.

On Monday, Louis Gallois, former head of EADS, is going to publish his report on the issue, and he’s expected to call for a “competitiveness shock”. He’s already said that he wants to see somewhere between €30bn-€50bn of taxes from the payrolls transferred to broader-based taxes, such as VAT, much to the delight of business leaders. Read more

Sharp blunted, and it’s not alone

So, Fitch junked Sharp (to ‘B-‘ from ‘BBB-‘) and the century-old technology company admitted there is “material doubt” about its ability to stay in business. According to the FT, it expects to end the financial year to March with a net loss of Y450bn ($5.6bn), worse than the Y250bn loss it had predicted in August. Last year it lost Y396bn.

And one line in the rating agency’s critique really stuck out:

Fitch does not foresee any meaningful operational turnaround in the company’s core business over the short- to medium-term due to deterioration in its market position as well as in price competitiveness as a result of a high Japanese yen.

 Read more

October payrolls 171,000, unemployment rate 7.9%


— The 171,000 increase in payrolls is a solid number and better than expected, but the upward revisions to the prior two months, a combined 84,000 jobs, is at least as big deal. And as we wrote after the September payrolls, remember both that upward revisions to previous months tend to be followed by more such revisions, and that the initial headline payroll number roughly tends to underestimate job gains during expansions, and the amount of the underestimation correlates (again, roughly) to the sharpness of the recovery. Read more

Call in the Frivolous Flub Office

On an irony scale of zero to Eliot Spitzer, where would you place this one?

From the FT:

The Serious Fraud Office has come under attack for making a secret £420,000 redundancy payment to its former chief executive, capping a year in which the UK anti-corruption prosecutor has has suffered sustained reputational damage.

 Read more

This eurozone PMI record appears to be broken

Another day, and another confirmation that the eurozone economy is struggling to gain traction. And it’s not just the small peripheral economies that are seeing factory activity slowing.

From Reuters:

Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) fell to 45.4 in October from September’s 46.1. The October figure was just up from an earlier reported flash reading of 45.3. The index has been below the 50 mark that divides growth from contraction since August 2011.

 Read more

The (early) Lunch Wrap

BoE culture criticised in reports || PPI provision pushes RBS to £1.26bn loss and faces Libor fines || Sandy’s devastation widens || Rothschild to counter Bakrie buyout, say sources || US unemployment expected at 7.9 per cent || Van Rompuy to press on with budget talks || Sharp junked || The Fed should continue QE3 until unemployment falls below 7.25 per cent || Israel to derail $15bn PotashCorp move Read more

Three banks lose systemic bad boy shirt

Many a banker has fretted about the status their employer bestows upon them by mere brand value. Exactly which firms are first tier, second tier, or even the possibly outdated ‘Bulge Bracket’ matters.

Of course the latest crisis has practically made it a requisite to roll one’s eyes when name-dropping any bank at all in the presence of friends who work outside of the financial sector. The my-employer-is-more-awesome-than-yours game works in increasingly fewer circles. Read more

Further reading

Elsewhere on Friday,

– Looking ahead to Friday’s jobs report

– It may be best to take it with a pinch of salt.

– Big Chinese banks lost deposits in October. Read more

The 6am Cut London

Asian shares higher || BoE culture criticised in independent reports || StanChart, BBVA named Gsifis || Rothschild ‘to counter Bakrie buyout’ || Sandy’s devastation || Chesapeake books loss on writedowns || Time for helicopter money? || How financial crises really spread Read more