Posts from Thursday Nov 29 2012

The Closer


The Fiscal See-Saw. The S&P 500 closed up 0.4 per cent at 1,415 in choppy trading (Financial Times). Read more

Dove, actually (the sequel)

It was about this time last year that we noted how the voting membership of the FOMC would become more dove-ish in 2012. Of course, at the time we had no idea that Jeremy Stein and Jerome Powell would be appointed and confirmed this year, making the committee even more receptive to Ben Bernanke’s decisions.

Surely this made it easier, at least on the margins, for Bernanke to move in the direction of Evans/Woodford/Sumner, which he finally did at the big September meeting (also helping was what appeared at the time to be another post-winter slowdown in the US economy). Read more

You’re un-Belizeable, encore

Latin American country tells creditors they can’t be serious…

While acknowledging that the Committee’s counter-proposal provides a degree of short-term cash flow relief, the GoB considers it to be wholly incompatible with its objective of placing the country’s debt burden on a sustainable footing – a goal that the Committee itself has indicated it is committed to at various stages. The GoB believes that the counter-proposal ignores Belize’s high overall debt levels, and that it amounts to little more than a short-term fix not dissimilar to the 2007 exercise. Read more

Human sacrifice, the original negative interest rate

The abstract from the latest paper by Peter T. Leeson entitled “Human Sacrifice” (H/T Tyler Cowen at Marginal Revolution): Read more

“We’re from the SEC. Now give us all the money.”

Just make sure you check their badges first. SEC people carry badges, right? …

SEC staff is issuing this updated Investor Alert because we are aware of continuing fraudulent solicitations that purport to be affiliated with or sponsored by the Securities and Exchange Commission, Commission staff, as well as particular Commissioners (including a recent bogus email scam using the name of Commissioner Daniel Gallagher). Read more

So, who’s going to sell their Greek bonds?

Much has been made of the buyback announced as part of the latest Greek debt reduction deal. Mainly because more than half of total debt savings agreed are expected to come from the buyback, according to this leaked doc.

The details of how the scheme is might actually work are pretty thin on the ground, but we know from the leak that the plan is to spend €10.2bn (from the EFSF most likely) buying back and retiring bonds. It is expected that this will lead to a reduction of 11 per cent of GDP by 2020. Read more

Some cliffs are golden

Gold experienced a sizable wobble on Wednesday, so no surprise people are still trying to make sense of it.

The best comment we’ve seen come from Commerzbank and UBS on Thursday who suggest a fat finger or rogue computer algorithm could be to blame for the disturbance… Read more

Yenning for a counter argument

THE YEN IS DOOMED, don’t ya know? And, to be fair, the longer term arguments are hard to fight against but the risk of a near to medium-term yen bounce is significant. Read more

Markets Live: Thursday, 29th November, 2012

Live markets commentary from 

China’s over-investment problem

A new IMF working paper lays out what many China sceptics have been saying for years: the country has too much investment, and households are bearing the costs. Yes, you might have heard this many times on FT AV, from the likes of Michael Pettis and more recently, from George Magnus, but now it’s appearing in venues such as the IMF (even if the paper warns this ‘should not be reported as representing the views of the IMF’). Read more

The (early) Lunch Wrap

Fed is likely to keep buying Treasuries || Fiscal cliff update || Knight Capital subject to two rival offers || Barosso unveils Eurozone survival plan || Japan’s retail sales fall || Bankia to face large losses on subordinated debt || Rio Tinto plans to make $7bn of spending cuts || Moody’s downgrades HP || Miller out of running for SEC job Read more

The death of volatility?

Central bank puts have done a great job of removing tail risks.

Such is the conclusion of the team at Bank of America Merrill Lynch upon analysing the remarkable drop in trade conviction of late.

In FX, the move in volatility has been notable… Read more

FSA approves HKEx takeover of LME

The London Metal Exchange said that the UK’s Financial Services Authority had given approval for its $2.2bn acquisition by Hong Kong Exchanges and Clearing. The transaction is expected to close next week.

But there are still hurdles. First, a court hearing. From the statement by HKExRead more

Further reading

Elsewhere on Thursday,

– Bungee-jumping over the fiscal cliff.

– The procedure of litigating pari passu? Read more

The 6am Cut London

Asian stocks higher on fiscal cliff hopes || Fed seen likely to keep buying bonds in 2013 || Japan’s retail sales fall || Rio Tinto plans $7bn in savings || Stay granted against Argentina debt ruling || Knight Capital has two rival offers || Vivendi has four offers for GVT || Japan must revitalise the BoJ Read more