Posts from Tuesday Jan 15 2013

The Closer

ROUND-UP

Markets: Global stocks ended the session on a cautious tone as many growth-focused benchmarks hovered just shy of recent cyclical peaks. The FTSE All-World equity index, which at the start of the week hit its best intraday level since May 2011, was little changed, while the FTSE Eurofirst 300 ended the session fractionally higher. The S&P 500 recovered from earlier losses to close slightly higher at 1,472 as US retail sales for December came in stronger than expected, but the New York Fed’s manufacturing survey underperformed forecasts. (FT’s Global Market OverviewRead more

Sales, repurchases, and duct tape

Cast your mind back to the Valukas report into the collapse of Lehman Brothers. Back to Repo 105, and the immortal lines, “It’s basically window‐dressing. We are calling repos true sales based on legal technicalities.”

If it could be called a sale, it could be removed from the balance sheet whenever a reporting date — and inconvenient questions about leverage — threatened. Read more

Albert and those ‘cheapest for a generation’ equities

Sadly, FT Alphaville’s New York wing couldn’t make it to this year’s Societe Generale-run bear sighting in London — the bank’s Global Strategy conference starring Albert Edwards and Dylan Grice (who’s off to the buyside).

But we did hear that Albert had called European stocks “unambiguously cheap”. It’s a “once in a generation” buying opportunity, and so on. Is Albert, no longer a equities bear!? Read more

Debt ceilings and downgrades: who cares?

After the two sides fired shots across each others’ bows — the Republicans through Politico and Obama via satellite — Fitch released a threatening note this morning:

Fitch Ratings’ expectation is that Congress will raise the debt ceiling and that the risk of a U.S. sovereign default remains extremely low. Nonetheless, and in line with our previous guidance, failure to raise the debt ceiling in a timely manner will prompt a formal review of the U.S. sovereign ratings. … Read more

The great European bank heist reversal

LTRO repayment chat is speeding up the closer we get to the fateful day at the end of January when Euro-banks might actually start sending back once cheap cash to the central bank. How much will be repaid, by whom and when are the questions that need to be answered.

Thing is, it seems that by at least one measure, the market is mispricing the amount of cash that’ll flow back to the European Central Bank. And maybe ignoring the ECB’s motives in this whole debate. Read more

What would a post-Chávez Venezuela look like?

The state of Hugo Chávez’s health continues to be a closely guarded secret, yet his inability to attend his own inauguration last week suggests it remains delicate. While his absence from the ceremony last week is seemingly no bar to Chávez continuing his third term as president, a new election would of course have to be called in case he is unable to continue in his post due to his health, or in case he dies.

So what would happen then? What would Chavismo look like without the man himself? And how would the opposition react to this? Read more

The mixed outlook for US consumer spending

The US retail sales figures for December will be out later on Tuesday and we’ll use the occasion as an excuse to take a look at the wider picture for the American consumer this year.

The image is fuzzy. We already know that the expiration of the payroll tax cuts was an especially damaging outcome of the fiscal cliff negotiations. It will total approximately $125bn less in wage-earners’ pockets, and is showing up immediately in reduced paychecks. As Credit Suisse economists noted: Read more

Markets Live: Tuesday, 15th January, 2013

Live markets commentary from FT.com 

Commodity volatility, where art thou?

Remember the whipsawing days of 2008? The days when commodity prices couldn’t get crazier?

 Read more

The (early) Lunch Wrap

Obama warns Republicans on debt limit || Amplats outlines radical SA overhaul || Slowing German economic growth || JPMorgan under fire for ‘whale’ errors || HMV calls in the administrators || Westminster hits at Goldman Sachs bonus plan || Junk bond prices point to return of bulls || Demand fears bruise Apple’s share price || Markets: mixed but erring on the soft side Read more

JPMorgan slapped on wrists by regulators who forget to slap own wrists too. Grrr.

On Monday, the Office of the Comptroller of the Currency and the Federal Reserve issued “enforcement actions” against JPMorgan, which makes it sound a lot more exciting than it is.

The slaps on the wrist for the “London whale” trades, and failures concerning anti-money laundering procedures, come with no fines and no admission or denial of any wrongdoing. The Fed does, however, reserve the right to take further action and the UK’s Financial Services authority said it’s still looking into it. Read more

Caption competition: Ben Bernanke

Ben Bernanke was interviewed Monday by Susan Collins, dean of the Ford School of Public Policy at University of Michigan.

As the NYT’s Economix blog notes, Bernanke seemed quite relaxed and even jovial…

Screenshot from Ben Bernanke at Ford School, Uni of Michigan Read more

Further reading

Elsewhere on Tuesday,

- Steve Jobs, Steve Jobs, Steve J — oh, never mind.

- Peak coal in China?

- I HATE you, JC Penney. Read more

The 6am Cut London

Yen rises || HMV in administration || JP Morgan ordered to strengthen risk controls || EU berates China over steel subsidies || Dell shares jump on buyout talk reports || EU undoes good work on bank bailouts Read more

Iron awe

Having tracked (with some glee) last year’s gut wrenching slide in the iron ore price…

… it’s high time we made a few observations on the recent dizzying ascent of the steel making commodity. Read more