Posts from Thursday Jan 3 2013

The Closer


FT markets round-up:“US stocks fell, while the US dollar shot higher after minutes of the last Federal Reserve meeting showed policy makers are growing wary of asset purchases and may end their $85bn monthly bond buying programme in 2013. Investors bought the US currency, pushing the dollar index up 0.7 per cent, as the euro touched a three-week low against the greenback, below the $1.31 level. In contrast, gold prices sold off, with the precious metal falling 1.4 per cent after the release of the minutes, to hit a session low at $1,662.34 an ounce. The US 30-year bond sank a full point, while its yield rose to 3.10 per cent. The 10-year note yield jumped 7 basis points to 1.90 per cent. The FTSE All World index spent much of the trading day in negative territory, also dragged lower by declines in most European equity markets. The global benchmark index closed 0.3 per cent lower as the S&P 500 ended the session down 0.2 per cent on the day.” (Financial TimesRead more

FOMC minutes: hawkish hints, but not really

These minutes are for the meeting at which the Fed announced its switch to a version of the Evans’ Rule. While that change was expected, it wasn’t expected to be made as soon as it ultimately was.

The most interesting bit from the minutes below in bold, followed by some quick commentary. Read more

Fairytale of New York — in pari passu, anyway

If you thought the Argentine pari passu bond saga had taken the holiday dead period off — then you don’t know the pari passu saga very well.

Some interesting developments squeezed in before the new year… Read more

Operating leases: the old skool of off balance sheet vehicles

Operating leases may not sound all that sexy, but they are a great way to get liabilities off balance sheet. Even better, loads of companies use ’em! Everyone does it, from airlines to clothing stores, so no need to feel like the odd naughty one out. All it takes is a little structuring to ensure that a finance (aka capital) lease — which does significantly raise liabilities — is booked as an operating lease, keeping debt levels down.

Why then do accounting standard setters want to spoil the parrr-tay by requiring operating leases to come back onto balance sheets? Read more

When stimulus becomes stealth nationalisation

A big hat tip to Climateer Investing for helping us catch up on a Telegraph story from Ambrose Evans-Pritchard on Japan’s latest plan to stimulate itself out of trouble.

It, by the way, neatly sums up the problem associated with taking QE to the next level which, of course, for the Japanese authorities might have been buying equities outright rather than buying in ETF index form, which they’ve already been doing for a couple of years or so…

Think about it — a central bank en route to becoming a majority holder in a country’s primary equity ETF, is nothing more than a central bank en route to becoming the market. Read more

Fragata Libertad, the movie

Take one warship rescued from asset seizure by bond holdouts.

Add swelling music, defiant rhetoric by President Cristina Fernandez de Kirchner, the national flag stirring in the Atlantic breeze, and messages home from crewmen who remained on board while the dispute played out in a Ghanaian port and Hamburg tribunal… Read more

Markets Live: Thursday, 3rd January, 2013

Live markets commentary from 

The (early) Lunch Wrap

US budget confrontations loom || US banks seek $10bn foreclosure settlement || Buffett gives solar a boost || BofA to raise lending this year || Goldman pays out stock awards before vote || Avis Budget buys Zipcar || CVC buys Cerved || From Wall St to teaching || Markets Read more

Spanish debt, quietly on the mend…

An unlikely beneficiary of the fiscal fudge, perhaps. Here’s Spanish 10 year paper, the yield on which was threatening to drop back below 5 per cent on Thursday. Read more

Ackman vs…Albright

Via John Hempton’s Bronte Capital…

 Read more

Further reading

Elsewhere on Thursday,

– It was just another day in Beirut.

– Roubini: US has been let down by its leadership.

– So, what is the economic function of politicians? Read more

The London 6am Cut

US budget confrontations loom || Asian markets rise || China services PMI rises || US banks seek $10bn foreclosure settlement || BofA to raise lending this year || Avis Budget buys Zipcar || CVC buys Cerved || From Wall St to teaching Read more