Posts from Tuesday Jul 2 2013

The Closer

FURTHER FURTHER READING

- The case for fewer, better, measures of bank regulatory risk. Read more

A good(ish) trend in US student lending

Shahien Nasiripour and Counterparties (Shane Ferro & Ryan McCarthy) had great pieces recently about the latest trends in student lending and their potential wider implications for the economy. We also recommend this explainer from Dylan Matthews about the new jump in rates for certain kinds of student loans.

Our own view has been that the ongoing growth of student lending is unlikely to represent a systemic financial risk, but it’s hard to imagine that it doesn’t have some damaging macroeconomic effects in the short- to medium-term. Read more

More details on REITs

The handy chart above, from a new note by Fitch Ratings, shows the process by which mortgage real estate investment trusts are funded. It includes the latest estimates of the average repo yields and collateral haircuts in the financing market for fixed-rate agency REITs. Read more

When the Chinese levee breaks, aluminium edition

The following from Goldman Sachs, on what’s currently driving the aluminium market, kinda speaks for itself:

 Read more

Markets Live: Tuesday, 2nd July, 2013

Live markets commentary from FT.com 

The oil markets are in a flux

… and it’s all because, the lady loves shale oil.

Well, what we mean is that finally, the surplus stock of crude trapped in America is having a price effect beyond borders because logistical constraints have been removed and storage incentives have started to disappear. Also, because graphs like these can no longer be ignored.

The result: a major narrowing in the WTI-Brent spread. Read more

The (early) Lunch Wrap

President Morsi rejects Egyptian army’s ultimatum || Rothschild to advise on RBS split || Greece has 3 days to deliver or face consequences || Australia’s central bank left rates on hold, as widely expected || China’s credit freeze deliberate, and just badly executed? || Japanese pension fund buys into US electricity || Noble Corporation eyes move to UK || Activist investor Carl Icahn said he has raised more than $5 billion to finance his plan to recapitalize ailing personal-computer maker Dell || GlaxoSmithKline is investigated in China || Markets wrap || FTAV’s latest Read more

A Bitcomedy

Hot on the heels of the hilarious Wiklevoss Bitcoin Trust, a satirist over at The Guardian has created an hilarious virtual bitcoin entrepreneur called Kate Craig-Wood.

Kate and her friends discovered they could magic cash out of nearly nothing, simply by building bitcoin mining machines housed in plastic crates and letting them do their money-making stuff. She then learned about the world of virtual stock exchanges…. Read more

Too much appreciation too soon for the renminbi?

Thanks to Monument Securities’ Marc Ostwald for directing our attention to an interesting report from MNI on Tuesday regarding changing attitudes to the renminbi:

The PBOC made a “big mistake” in letting the yuan rise so quickly earlier this year because it has only swelled the level of foreign exchange onshore, creating potential problems when depreciation expectations rise and capital starts flowing out of the country, regulators contendRead more

Further reading

Elsewhere on Tuesday,

- China’s shadow banking sector, explained.

- China’s financial system, explained.

- True stress in the banking sector — shrinking pay packets Read more

The 6am Cut London

Asian markets higher || Rothschild to advise on RBS split || Possible explanation for China’s cash squeeze || RBA keeps Australian rates on hold || Japanese pension fund buys into US electricity || The WInklevoss Bitcoin Trust || Growing bail-in fears among eurozone periphery depositors Read more