Posts from Thursday Dec 20 2012

The Closer


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 TimesRead more

Another look at US household formation, and why it matters

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

Christmas credit caroling with Matt King

A holiday tradition from Citi’s credit strategist, hat tip to Tracy Alloway for passing along:

Walking in a credit wonderland Read more

Gary Gorton and Andrew Metrick have a few questions about securitisation

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

Decoding that Basel securitisation proposal, one annoying acronym at a time

The financial crisis demonstrated how the treatment of securitisations under the Basel framework was some combination of delinquent and a massive enabler of rating agency (and bank) mis-modelling. No wonder then that it only took until July 2009 to get the duct tape out, i.e. release “enhancements” to Basel II, commonly known as “Basel 2.5”.

Now that the committee has had time to truly, madly, and deeply think it over, it’s time for… drumrolla consultative document on which comment will be sought by March 15, 2013. Oh, it’s on now. Read more

Markets Live End of Term Special: Thursday, 20th December, 2012

Live markets commentary from 

The (early) Lunch Wrap

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

What’s bugging gold?

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

Further reading

Elsewhere on Wednesday,

– It’s a damn long list… Read more

The 6am Cut London

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