Posts from Monday Dec 3 2012

The Closer

ROUND-UP

A subpar ISM saddled stocks. The S&P 500 closed down 0.47 per cent at 1,409.46. The Institute for Supply Management survey of manufacturing fell to 49.5 in November, below forecasts of 51.3, and the first reading below 50 since July (Financial Times). Read more

Argentine jujutsu (and enter… Bank of New York)

UPDATE – Beyond the to-and-fro about stays and the Second Circuit in the post below…

Bank of New York Mellon has filed for leave to appeal Judge Griesa’s revised order for Argentina to pay (and for third parties not to assist it in not paying – including BNY). This is a significant move given the role of BNY enabling payments to restructured holders as their trustee. It was kind of stuck in the middle over the dispute between Argentina, holdouts and restructured bondholders, and had last asked courts to clarify its obligations. This filing marshals indenture trust law, Rule 65(d) of the Federal Rules of Civil Procedure, and “dangerous precedent” to seek to challenge the merits of Judge Griesa’s ruling itself. Read more

Er, wot’s a CFD?

Don’t ask the SFO, or accountants Grant Thornton, for that matter.

Here’s a long, angry letter sent by the Vincent Tchenquiz camp some months ago to Grant Thornton, forming part of the furious legal dispute between the Tchenguiz Brothers and the SFO.

At the bottom of page 19 you’ll find a section headed “Sainsbury’s proceeds.” It is allegedly the case that when the financial cops pounced — acting on information from GT, who were handling the unwinding of Iceland’s Kaupthing — neither the SFO or GT really understood how the modern stock market works. Read more

The SEC charges the (Chinese) Big Four

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BoE on HFT: “A large absolute noise contribution”

Not since Andy Haldane noted that an impatient market was not a happy market, has the BoE looked at the issue of high frequency trading and its effects on market quality – and particularly price discovery – in such depth.

From the abstract of the Bank’s latest working paper, by Evangelos Benos and Satchit Sagade, on Monday (our emphasis): Read more

Olam’s capital raise U-turn – a block on Block?

“We are very comfortable with our balance sheet position, in terms of our equity position as well as our debt position,” Sunny Verghese told Reuters in an interview on Thursday… Asked when Olam was likely to tap the markets at the earliest, Verghese said: “Definitely not in the next five to six months.”

Since that interview we might assume Olam has become less comfortable with its balance sheet position because on Monday the company announced an intriguing $750m rights issue.
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Credit Suisse finds positives in negative (rates) [updated]

Are you a Swiss bank? Do you have haven appeal? Want to make some quick, easy money? Then keep reading…

Credit Suisse has decided it will start charging negative rates on Swiss franc cash balances above a certain threshold. From CS: Read more

Raiders of the QE surplus

Right, we should have got around to this one a while ago but… we didn’t.

Last month, November 9 to be precise, something pretty notable happened in the world of central banking.  Read more

Caveating and caveating China’s upturn

November marked the first time in over a year that both the official China manufacturing PMIs and the HSBC/Markit Economics PMIs were above 50.

And they are both nearly matching! Check it out:

China manufacturing PMIs HSBC vs official - Nomura Read more

Markets Live: Monday, 3rd December, 2012

Live markets commentary from FT.com 

The (early) Lunch Wrap

UK’s euro trade supremacy under attack || Japan bank chief warns on bond exposure || Chinese property market finds its fizz || China’s manufacturing PMIs showed more expansionary growth || US raises monitoring of Iranian reactor || UBS Is Reported to Be Near a Deal on Rate Rigging || Fitch warns muni investors on downgrades || News Corp’s UK newspaper chief quits || Morgan Stanley trader probed over trades made while at Goldman || Merkel prepared to consider Greek bond losses || Fiscal cliff stalemate as Geithner challenges Republicans on budget || Delta in talks to buy Virgin Atlantic stake || French auto market faces worst year since 1997 || UK manufacturing output worst since late 2009 || Clampdown on tax dodge by multinationals || Markets summary Read more

It’s too early to call the FLS a flop, ok?

The Bank of England has published the first data from its new-fangled Funding for Lending Scheme. At first blush, the numbers look pathetic: net lending grew a paltry £500m in the three months to end-September, while total drawdowns from the FLS amounted to £4.5bn, against a potential pot of £100bn.

But that would be us jumping to conclusions, prematurely. As the Bank says: Read more

It’s PMI Monday! [updated]

It’s a data-heavy day today, with a slew of PMIs coming out. The US posted the strongest reading in six months with 52.8, which was up from 51.0 in October, suggesting manufacturing is managing moderate expansion.

There was generally solid data from China as well and no very nasty surprises in Europe. Elsewhere, Brazil saw manufacturing activity grow at the fastest rate in nearly two years with a reading of 52.2, up from 50.2 in October. Read more

Cut out’n'keep guide to prospective new BoJ governors

Japan’s election on December 16 is going to be a doozy.

It’s probably the first election where the role and independence of the central bank is a key issue, says Gavyn Davies. There’s also rather a lot of yen short positions that are riding, at least in part, on the outcome — IMM data out over the weekend shows net shorts have built to levels not seen since 2007. Read more

A Dutch auction for Greece…

Click for details.

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Further reading

Elsewhere on Monday,

- Wearing a wire… for two years!

- UBS ‘near $450m deal on rate rigging’.

- No RBS privatisation for another 10 years. Read more

The 6am Cut London

Asian stocks gained on positive China manufacturing data, with the MSCI Asia Pacific index rising 0.2% and on track for its highest close in seven months. However the Shanghai Composite continued to decline, with an 0.3% fall today. (Bloomberg)

China’s manufacturing PMIs showed more expansionary growth with the official survey for November rising to 50.6 from 50.2 the previous month, and the final HSBC/Markit PMI recording 50.5, up from 49.5 in October. However the breakdown of the official survey components indicated growth is concentrated in the state sector, with a retrenchment in smaller and medium-sized companies. (ReutersRead more