The (early) Lunch Wrap | FT Alphaville

The (early) Lunch Wrap

Good morning New York,

FT ALPHAVILLE

Paddling in the shallows of Shibor creek: China’s seven-day bond repurchase rate is at a four-month high, notes David, but concerns of a cash-crunch are possibly premature. The “well justified” bout of tightening comes after “growth rebounded in Q3 and CPI inflation surprised on the upside in September at 3.1%”.

These houses aren’t bear traps, US optimism du jour: When long established trends turn, they can do so very quickly, notes Dan. And second, if there is a real turn in the US, there is plenty of scope for activity to pick up. And a chart from Pictet & Cie shows that the proportion of mortgaged homes worth less than the loans held against them is now at 15 per cent and falling.

NEWS

Credit Suisse to overhaul interest rates trading business: Credit Suisse said it would overhaul its struggling interest rate trading business, as it unveiled third-quarter results that fell well short of analysts’ expectations. Regulators around the world have toughened rules in the wake of the financial crisis, and the combination of higher capital requirements and subdued markets has made rates trading a less profitable exercise than its once was. (Financial Times)

Pinterest value leaps 52% to $3.8bn: Pinterest, the social network that styles itself as a scrapbook, has seen its valuation soar by more than 50 per cent in just eight months after its latest fundraising round valued the company at $3.8bn. (Financial Times)

UK peer-to-peer lender targets the US: Funding Circle, one of the largest peer-to-peer corporate lenders in the UK, is expanding into the US market by acquiring a San Francisco start-up. The move, backed by a $37m private equity investment led by Accel Partners, a venture capital group, reflects the success of Funding Circle’s focus on providing debt funding to small businesses in the UK. It has dominated that small but fast growing market. (Financial Times)

US Congress moves to tighten money laundering laws with two bills introduced in the US Congress on Wednesday, giving federal regulators enhanced powers to hold bank executives personally responsible for misdeeds. (Financial Times)

US jury rules against BoA in mortgage trial: Bank of America defrauded two government-backed mortgage companies by selling them defective home loans, a jury found on Wednesday, delivering the US government a resounding courtroom victory on a financial crisis case — the jury found BofA’s Countrywide Financial unit liable of civil fraud for defrauding Fannie Mae and Freddie Mac. (Financial Times)

Draghi warned that some European banks needed to fail a series of ECB health checks to prove the credibility of its year-long review of the region’s biggest banks. The blunt comments by the ECB president raised pressure on EU leaders to earmark public money that could in extreme cases be used to recapitalise struggling lenders. (Financial Times)

UK car output tops 1.5m for first time since 2008: UK car production has roared back to pre-recession levels as strong domestic and overseas demand for British-built cars continue to revitalise the country’s automotive industry. (Financial Times)

Angela Merkel’s mobile phone may have been the target of US surveillance, the German government said on Wednesday. (Financial Times) (NYT)

Alcoa and Rusal Are beneficiaries of warehouse logjam: “Two of the world’s largest aluminum makers reaped an estimated $1.4 billion in revenues from higher fees amid a logjam at London Metal Exchange warehouses, according to an analysis by The Wall Street Journal.”

Markets: Stocks and Treasury yields were mildly firmer after a survey of Chinese manufacturing showed the sector expanding at its fastest pace in seven months. But gains were being contained somewhat as rising interbank rates heightened concerns about bad debt levels in the world’s second-biggest economy. Europe’s Stoxx 600 were up 0.4 per cent as futures showed the S&P 500 climbing 8 points to 1,754. That would leave the Wall Street benchmark just a few points shy of its intraday record, with bulls continuing to bet that extended Federal Reserve stimulus would help underpin asset prices. Optimists also argued equity valuations were justified by the prospects for corporate profits, and Thursday sees a busy day for earnings reports – particularly in Europe and the US – including numbers from Amazon. (Financial Times)