Posts from Monday May 13 2013

The Closer

US stocks barely budged; the S&P 500 was up 0.07 points to close at 1,633.77 (Reuters).

Bloomberg has been caught in another leak of client data. More than ten thousand confidential trader messages were left online for several years, accessible through a Google search, until taken down on Monday. Bloomberg said it was considering “all potential legal” actions after the apparently accidental leak. It emerged last week that Goldman complained to that the organisation’s journalists were able to track its employees’ activities on data terminals (Financial Times). Read more

The Fed can keep buying for a while, if it wants to

The “danger zone” referenced in the chart above by Lewis Alexander of Nomura is a kind of arbitrary area between the Fed’s owning 50 per cent of the outstanding stock of Treasuries in a certain category (and thus potentially starting to affect market liquidity) and the 70 per cent threshold at which the SOMA desk will stop buying outright.

As you can see, it will be a little while yet before the Fed approaches that threshold, even if it increases purchases to $65bn a month. Read more

CFA meme competition winners

FT Alphaville will not leave you hanging until August to find out the results of the meme competition we started on Friday. Such delay, after all, could leave you vainly trying to forget you ever entered, living in hope that the passage of time would permit friends and colleagues to also forget those anti-social times you spent staring into space before tackling a meme generator, over and over and over again. That’s just not how FTAV rolls.

Ahem.

In the top spot, a late entry Success Kid by commenter James Kane: Read more

What price, kilt-edged risk?

Alternatively, what price to taxpayers for political pride.

Spotted in HM Treasury’s collection of responses to the idea of letting Scotland issue its own bonds later this decade — a… wide range of guesses about how they might be priced: Read more

A gap-ing problem

Gavyn Davies has a great post looking at the recent work by Fed researchers and the Goldman Sachs economics team on trends in US labour force participation and their implications for US monetary policy. See also Robin Harding last month.

To recapitulate, the US unemployment rate has continued to decline steadily, and at its current pace would hit the Fed’s 6.5 per cent threshold to begin raising rates by roughly the middle of next year. Read more

A new type of growth is emerging

Earlier in May FT Alphaville attended Ouisharefest in Paris, a conference dedicated to exploring and discussing the growth of the collaborative economy.

The timing of the event coincided with the ECB cutting its benchmark refinancing rate to an all-time low of 0.50 per cent to counter economic weakness which had in the central bank’s opinion spread to the eurozone’s “core economies”. Read more

Chinese shadow banking: three different ones

That’s a big (click to enlarge) chart from Moody’s on how they define “shadow banking” in China, via a Q&A comment on the growth of the sector. Read more

NPLs and lights in dark places

Consider this chart from JP Morgan’s Flows & Liquidity team. It shows the evolution of non-performing loan ratios (as percentages of total loans) across three different Euro area blocks: Germany, core and periphery.

The definition of a non-performing loan (NPL) differs across countries but the picture is definitely not pretty. Read more

Markets Live: Monday, 13th May, 2013

Live markets commentary from FT.com 

The (early) Lunch Wrap

Dual-track Libor replacement lined up || Top hedge funds bet on Greek banks || Schäuble warns EU bank rescue agency needs treaty changes || U.S. companies are on track to raise the most money through IPOs since before the financial crisis || G7 reaffirms commitment on currency depreciation || Mittal urges EU to protect itself against China imports || Bischoff to take his leave from Lloyds || Esure hit by fallout over ex-HBOS director || Markets roundup || FTAV’s latest Read more

Is the UK facing a fiscal crisis?

Don’t mean to scare-monger, but consider this chart, plucked from a Credit Suisse note penned by Yiagos Alexopoulos and team. On the bank’s number crunching, the UK is just one of just two countries where fiscal stress has worsened this year — the other being Slovenia…

 Read more

Further reading

Elsewhere on Monday,

- Blackberry’s Plan B.

- TED’s Kellaway obsession.

- Winkler holding himself accountable

- …and a few words from another (former) newswire chiefRead more

The London Cut

Dual-track Libor replacement lined up: “The scandal-plagued Libor benchmark is likely to be replaced by a dual-track system with survey-based lending rates running alongside transaction-linked indices as soon as next year. Martin Wheatley, the UK regulator leading efforts to reform the London Interbank Offered Rate, told the Financial Times that a parallel system would provide continuity for holders of $350tn in existing contracts that reference Libor while also paving the way for a new benchmark tied more closely to objective data.” (Financial Times)

Top hedge funds bet on Greek banks: “Some of the world’s leading hedge funds are pouring money into the Greek banking sector in expectation of huge potential returns, even as the country struggles to right its economy in the face of deep government spending cuts.” (Financial TimesRead more