FT markets round-up:“An apparent pause in the substantive negotiations on the US fiscal cliff is leaving many equity benchmarks becalmed near recent highs. The FTSE All-World equity index is up 0.1 per cent as Wall Street’s S&P 500 closes 8 points higher at 1,444, kept aloft by a rebounding Philly Fed factory activity survey and stronger-than-expected US home sales data. The FTSE Eurofirst 300 closed fractionally firmer after the Asia-Pacific region was also barely changed. The euro is up 0.1 per cent to $1.3242 – earlier flirting with an eight-month high near $1.33 – as the dollar index drops fractionally.” (Financial Times) Read more
James Sweeney of Credit Suisse has written one of the more optimistic (and convincing) notes we’ve come across about the near-term trajectory for US housing.
Its optimism is based mainly on its analysis of expected household formation growth, which Sweeney finds has been underestimated by most observers. The note includes a good discussion of the ways in which healthy household formation growth can have powerful multiplicative effects throughout the rest of the economy. We’ve covered much of this ground before, and of course don’t forget to follow Calculated Risk and Karl Smith, who anticipated these trends before anyone else. Read more
A holiday tradition from Citi’s credit strategist, hat tip to Tracy Alloway for passing along:
Walking in a credit wonderland Read more
And by “a few” we mean “fourteen”.
And by “fourteen” we mean “more than fourteen” because each “question” is more like “a bunch of questions” or in some cases “stuff that Gorton and Metrick wonder about but have not actually stated in the form of a question”.
Anyways, we bolded the main bits from each below, and you can find the full paper via NBER Read more
In April we began discussing the possible end of the Transaction Account Guarantee at the end of this year, describing it as a kind of collateral-substitute and as a pseudo-bailout for certain investors (the most extremely risk-averse) in money market funds.
Well, the expiration of TAG increasingly appears inevitable, and today the Wall Street Journal reports: Read more
Live markets commentary from FT.com
Greece faces ‘make or break’ year || BoJ adds Y10tn to easing programme || UK retail sales flat in November || Beijing criticises US ‘political checks’ || ICE in talks to buy rival NYSE Euronext || Carney to receive £250,000 for housing || Markets update || A grumpy Christmas video to you || What’s bugging gold? || Mind the rate risk Read more
We made the case a few weeks ago that the gold price may have reached its choke level and that it was arguably capped from that point on. One good indicator of this, we noted, was the divergence between the gold price — which had been flat-lining for some time — and real interest rates.
It’s also hard to ignore gold’s reaction to the latest Fed announcement, which has been intriguingly bearish to say the least Read more
Elsewhere on Wednesday,
– It’s a damn long list… Read more
BoJ expands asset purchase programme Y10tn || Asian shares fall || Fiscal cliff talks sour || NYSE/ICE tie-up talks || Carney to get £250k housing allowance || Apax gives up on €9bn target for new fund || Indian shadow banking Read more