Posts from Monday May 20 2013

The Closer

FURTHER FURTHER READING

- A debate on helicopter dropping as a legit policy option.

- The Atlantic with an in-depth look back at the Facebook IPO.

- How big money bets for and against ratesRead more

Collateral crunch-counting gets sophisticated

The sum and substance, in a couple of slides:

HQC stands for “High Quality Collateral”, and FTQ is “Flight to Quality”. Click to enlarge.

The charts are from a special presentation included in the fiscal Q2 report by the Treasury Department’s Office of Debt Management. Read more

Pump up, debase

Despite all the talk of rampant physical precious metals buying, in dollar terms it’s only getting worse for the “gold HAS INTRINSIC value” brigade.

Another way of looking at it, of course, is that the dollar’s value is being rebased. Read more

In which the FTSE puts the crisis behind it

The FTSE 100 has closed at 6755, cruising past its 2007 pre-crisis peak to its highest level since 2000:

Rally monkey and suitable pessimism after the jump. Read more

Bernanke weighs in on robot wars; brings Keynes for backup

Many factors affect the development of the economy, notably among them a nation’s economic and political institutions, but over long periods probably the most important factor is the pace of scientific and technological progress.

That’s Ben Bernanke addressing a graduating class at Bard College at Simon’s Rock, Massachusetts, on Saturday. He goes on to say that not everyone believes this advancement is going to continue at such a great pace.

Yes, he is talking about Robert Gordon and Tyler Cowen, and their arguments that much of the low-hanging fruit has been plucked and we face a lower-growth future, as evidenced by the incremental advancements of recent years. Read more

Over in the gilt repo corner…

From ICAP’s Gilt Repo Comment on Monday:

The announcement by the DMO of further supply of UKT4T 15 (1.75 bln on the 29th May) is welcomed in light of the issue’s “tightness” in the REPO market. The bond overnight has averaged 11 bps through DBV to date in May and was tight in the 1st quarter. However, post Friday’s announcement the bond held its premium in term and it is not certain the additional supply will cheapen the issue despite the free float increasing.

 Read more

Assessing Abenomics

Today in Abenomics, we saw some yen strengthening after Japan’s economy minister Akira Amari made remarks interpreted as indicating the yen had weakened enough:

“People say the excessively strong yen has corrected quite a bit. If the yen continues to weaken steadily from here, negative effects on people’s lives will emerge,” Amari told a Sunday talk show.

All very exciting and the yen strengthened accordingly, allowing us the space to take a longer look at the progress Japan’s reflation experiment has made. Read more

Markets Live: Monday, 20th May, 2013

Live markets commentary from FT.com 

The (early) Lunch Wrap

Yahoo buys Tumblr for $1bn || Portuguese banks fear ‘Cyprus virus’ || Chesapeake taps Anadarko executive Lawler as CEO || The yen gained as much as 1.1% || Chinese house price data raises overheating fears || Concern is growing that US banks are making risky corporate loans || King warns Osborne on Help To Buy risk || Cohen is subpoenaed || Silver is at its lowest price level in more than two and a half years || M&A lending remains meagre despite low interest rates || Co-op’s retiring chief skips meeting || Markets summary || FTAV’s latest Read more

The risk of a Japanese VaR shock

JP Morgan’s always interesting Flows & Liquidity team have weighed in on the great Japanese yield panic. Japanese government bond yields have jumped since the Bank of Japan launched QE on steroids at the start of April and volatility has risen with them — the 60-day standard deviation of the daily changes in the 10 year JGB yield jumping to 4bp per day, the highest since 2008 (that’s longer term yields on the right for a bit of context):


That has understandably scared people who remember the volatility-induced selloff shock of 2003. From JPM: Read more

A Kazakh muddle

London’s Takeover Panel has clearly thrown a murphy…

MESSRS CHODIEV, IBRAGIMOV AND MACHKEVITCH AND THE COMMITTEE OF THE STATE PROPERTY AND PRIVATISATION OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN AND JSC SOVEREIGN WEALTH FUND “SAMRUK-KAZYNA” Read more

Further reading

Elsewhere on Monday,

- It’s all about the 60-year-old men.

- … who are living in the wrong 1970s.

- Meanwhile, in the currency unionRead more

The 6am Cut London

Asian shares rise || Yen strengthens on economy minister’s comments || Yahoo to buy Tumblr || Portuguese banks warn of Cyprus ‘virus’ || Chinese house prices rise || Fears grow over US corporate lending risk || Steve Cohen subpoenaed || Co-op’s Marks skips AGM || George Magnus on Chinese local governments  Read more