Posts from Wednesday Dec 19 2012

The Closer

ROUND-UP

FT markets round-up:”Global stocks are trading near 17-month highs even as investors are having their faith in a US budget deal sorely tested. The FTSE All-World equity index is up 0.2 per cent to 225, its loftiest level since July 2011, after the Asia-Pacific region added 1.1 per cent and as the FTSE Eurofirst 300 continued its good run of form. The Europe-wide barometer gained 0.4 per cent as Germany’s Dax index closed in on a five-year high. Wall Street’s S&P 500, though, is threatening to thoroughly spoil the party. It ended down 11 points at 1,436, accelerating into the close and dashing hopes that it will soon break to new four-year highs.” (Financial Times) Read more

Mind the rate risk

Central banks have kept rates ultra-low since the financial crisis, trying to stimulate economic growth. Whether one regards this as successful or not, one can agree that it has costs. A line item with a particularly nasty looking question mark above it is a corporate bond bubble. Read more

A grumpy Christmas video to you, from FT Alphaville

Do you know what you’re getting for Christmas?

Well, it seems that Santa has dropped off a video of bunch of bloggers who are a bit miffed at how certain stories were covered in 2012 — our gift to you, dear readers.

So turn up the volume, or get those earphones out! Clickety clickRead more

Markets Live: Wednesday, 19th December, 2012

Live markets commentary from FT.com 

The (early) Lunch Wrap

Spotlight swings to interdealer brokers || German business confidence rises again in December || Greek bond bet pays off for hedge fund || Lloyds expects Sandy hit of up to $2.5bn || US party leaders test fiscal cliff plans || Sants secures £3m package at Barclays || China dispute hits Japanese exports || Market update || UBS pays up || The three ‘muscateers’, captain ‘caos’ and Superman Assemble || What China really wants Read more

What China really wants

China announced last week that its State Administration of Foreign Exchange would remove the $1bn limit for foreign sovereign wealth funds, central banks and monetary authorities buying Chinese assets through the Qualified Institutional Investor Programme (QFII).

David referenced that this might turn out to be pretty significant as reserve managers are currently desperate to diversify their holdings out of euro and dollar.

But there’s another important factor to consider too. China is not a benevolent agent which just does things for the sake of pleasing other people. If it chooses to act you can bet your bottom yuan that it’s because it suits its own interests to do so. Read more

The three ‘muscateers’, captain ‘caos’ and SUPERMAN Assemble (at UBS)

The competition is on! Sure, UBS is already ahead of Barclays in the FSA fine stakes, but will the inevitable embarrassing communiques beat “done for you, big boy”? Opening gambit from the FSA’s Final Notice to UBS on Wednesday morning (emphasis ours):

For example, on 18 September 2008, a Trader explained to a Broker: “if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today … I will f[**]king do one humongous deal with you …

 Read more

Some colour on UBS’ ‘unquantifiable’ Libor misconduct [updated]

The FSA’s component of the UBS settlement relating to Libor and Euribor was £160m — the largest fine it has ever imposed.

The UK financial regulator made some revealing comments on the Swiss group’s transgressions, which it says “involved a significant number of employees and occurred over a period of years in a number of countries”: Read more

Further reading

Elsewhere on Wednesday,

- The dirty secrets of economics education.

- How entertainment was industrialised.

- Fiscal cliff offers and counteroffers, charted. Read more

UBS pays up

UBS will pay a total of CHF1.4bn ($1.5bn) — or, more than three Barclays — in fines and profit disgorgements related to Libor and Euribor claims. The payments will go to US, UK and Swiss regulators. The bank has also warned of losses totalling about CHF2 to 2.5bn for the fourth quarter, largely due to the settlements and provisioning, although CHF500m related to its restructuring.

Here is the statementRead more

The 6am Cut London

Asian shares rise || Hedge fund reaps $500m on Greek bet || Geithner told of Libor fears in 2008 || Japan’s exports fell in November || Knight agrees to Getco offer || Cerberus to sell gun company stake || Basel may tighten ABS risk weight models || Watching for unintended consequences in 2013 Read more