Posts from Monday Nov 19 2012

The Closer


The Dow rose more than 200 points. It closed up 1.7 per cent at 12,795.96, while the S&P 500 gained 2 per cent to close at 1,386.89. Markets closed before news of the Moody’s French downgrade. (BloombergRead more

Moody’s cuts France’s Aaa rating, may want to check if its next baguette explodes

Moody’s has cut France to Aa1 from Aaa, maintaining the negative outlook originally conferred in February.

Pierre Moscovici, French finance minister, was stoic at pixel time. “Moodys is now giving France the same rating as Standard & Poor’s, which has allowed us to live with low interest rates for many months,” he told Reuters. S&P cut its AAA rating for France back in January. Read more

Muddy Waters’ next target: Olam

With his reputation suitably inflated from his Sino-Forest adventures, Carson Block’s next target is Olam International, the Singapore-based commodities trading group. As usual with the companies Block focuses on, it should be assumed that that his firm, Muddy Waters, is shorting the name.

Speaking at the Sohn London Investment Conference on Monday, Block questioned Olam’s accounting practices, declaring that the company was engaged in “constant ‘reclassification’” of certain parts of its balance sheet. He alleged there was a case where “office supplies became biological assets”. Read more

L’état, c’est plagued by holdouts

Mark Weidemaier at Credit Slips has been blogging up a storm lately on why the Republic of Argentina’s fight with its holdouts has become so critical to the future of debt restructuring.

Now here he is on a blast from the past… Read more

Deep thoughts, by Nassim Nicholas Taleb [updated]

This FT Alphavillian has a confession to make. When she first started working in finance, she read Nassim Nicholas Taleb’s Fooled by Randomness and was quite taken by it. She recommended it to friends. Choice quotes by the man in the FT were dutifully clipped out and pinned to the cubicle wall — right next to a chart of monoline CDS spreads widening out and a list of biggest SIVs. Such a crisis groupie, we know…

So, what happened to NNT? And at what point did he get a bit “Deep Thoughts, by Jack Handey”? Read more

Markets Live: Monday, 19th November, 2012

Live markets commentary from 

US shale oil abundance: Bernstein vs the IEA

When the International Energy Agency’s big annual report came out last week there was a big top line story picked up nearly everywhere: that US oil production will overtake Saudi Arabia by about 2020.

This is due to projected rises in oil being wrung from the sort of shale formations that have been the source of vast new supplies of natural gas in the past few years. Read more

The (early) Lunch Wrap

US tax breaks worth $150bn face axe || FSB seeks to tame shadow banking || Pressure for Gaza ceasefire grows || Obama in Myanmar reform push || EU makes budget plans without UK || HSBC considers sale of Ping An stake || SAS close to union deal || Markets update || Ocado’s ‘cashbox’ lifeline || MMF regulation gets tough Read more

Ocado moves into…central heating systems? [updated]

There’s a corporate finance wheeze known as a “cashbox”. It’s a way of getting around certain rules, regulations and conventions associated with being a London-listed stock.

NOTE — see the update at the bottom of this post, along with the comments. Read more

MMFs: Float your NAVs or be regulated like banks

A proposal by the Securities and Exchange Commission chairman Mary Schapiro to more closely regulate money market funds was abandoned back in September when three of the five commissioners opposed it. A week or so later it became clear that the Financial Stability Oversight Committee would keep advancing the cause of the MMF reforms. Read more

Further reading

Elsewhere on Monday,

– ‘If you think fiscal policy is out of control, you should welcome the fiscal cliff.’ (And some more cliff perspective.)

– An alternative to buy-and-hold.

– Offshoring fears and factsRead more

The 6am Cut London

EU goes ahead on budget without UK || FSB wants shadow banking controls || Maersk switches away from shipping || UK town centres empty, zombie business abound || Franklin Templeton owns nearly 10% of Irish bonds || Cisco buys Meraki for $1.2bn || Japanese politics is getting complicated || Five things Wolfgang Munchau isn’t worried about  Read more