May, 2009
Mon dieu! Retour à 1957
In April, the UK’s retail price index decrease headed back to a level last seen in 1960.
For the French, it’s now back to 1957.
As Dow Jones reports:
PARIS (Dow Jones)–The French annual inflation rate in April dropped to its lowest level for over half a century on a sharp fall in energy prices,
Lunch Wrap
On FT Alphaville this morning,
- CDOs claim another victim: Dutch Belgian bank KBC.
- BoE sees inflation swinging both ways.
- Time for another toxic pubco investigation.
- Way of the Samurai (bond).
Los covered bonds, por favor
The ECB announced last week that it was intending to buy eurozone covered bonds as of June in its version of quantitative easing. However, it appears one ECB-bank member may already have beaten them to it – at least in terms of playing the covered bond market.
BoE sees inflation swinging both ways
The Bank of England’s latest inflation is out and the top line is that the Bank sees inflation just above 1 per cent in 2 years time and the economy shrinking sharply in the coming months before recovering at a slower pace than previously thought.
Markets live transcript 13 May 2009
Markets live chat transcript for the chat ending at 12:07 on 13 May 2009. Participants in this chat were: Neil Hume, FT (NH) Paul Murphy, FT (PM) NH:Okay NH:It’s 11.03
Samurai-ed: Japan ‘would avoid dollar bonds’
Japan voiced some anti-dollar/US Treasuries remarks and a future preference for samurai bonds late Tuesday.
From the BBC:
Japan’s opposition party says it would refuse to buy American government bonds denominated in US dollars,
Time for another Toxic Pub Co investigation
That’s the conclusion of the House of Commons Business & Enterprise Committee report on pub companies published on Wednesday morning.
MP’s on the committee are of the opinion that abuse of the tenant occurs under the “tied”
The beautiful and the damned, Madoff feeder fund edition
Attention is turning to the family of Walter Noel, he of Madoff feeder-fund, Fairfield Greenwich Group.
His daughters, you see, were something of high society fixtures before Madoff’s Ponzi scheme came to light.
KBC and wild rumours
Err, this doesn’t look good:
KBC Group NV has requested to have its share suspended for today, Wednesday, 13 May. Yesterday, several wild rumours circulated the market. Since it is currently in its pre-earnings black-out period (the period prior to its earnings release when the group does not disclose any information),
Further reading
Elsewhere on Wednesday,
- Tweets, twendz and stocks.
- Capitalism is not broken.
- Meredith Whitney is a contrarian indicator.
- The broker’s view of nuns and teachers.
- FDIC planning for a huge bank failure?
- Forget the Great Depression.
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Martin Wolf: Why Obama’s conservatism may not prove good enough
The more the crisis unfolds, the more evident it is that incentives in the financial system were (and are) badly distorted.
Snap news
Breaking pre-market news on Wednesday,
- UniCredit posts 58 per cent drop in Q1 net profit — statement.
- MUFG to increase acquisition of Morgan Stanley common stock by 17 per cent — Reuters story.
Notice: Due to technical problems
This edition of the 6am Cut can only bring you the headlines, apologies to readers:
- Porsche faces fresh probe over VW deal
Porsche shares fell sharply on Tuesday after the German financial watchdog launched a new market manipulation probe into its attempted takeover of Volkswagen and VW’s chairman publicly attacked the sports carmaker’s management.
CDS update: Indices underperform in leaden trade
This CDS report was written by Markit’s Gavan Nolan
High-yield credit underperformed investment grade in the European CDS market today in a leaden trading session. Both indices underperformed flat stock markets.
Falling Fal of global trade
The river Fal in Cornwall is one of South England’s great beauty spots. Normally.
Because of its depth and close links to major Atlantic shipping lanes, in times of economic crisis, the Fal estuary is also a cheap place to park massive container ships:
The China copper effect
Despite a sharp fall in Chinese imports and exports in April, China has remained a major force within the metals market. As FT Alphaville reported earlier on Tuesday, both copper and aluminum imports hit record highs in the month,
Baaaaaaafin: Porsche, nochmal
Porsche is in the spotlight again. German regulatory titan BaFin is investigating the former car maker-cum-arbitrage opportunities fund once more.
Unfortunately though this isn’t a reopening of the brief,
CDS report: Stress test hangover
The appetite for risk in Europe dwindled on Tuesday, before finding fresh impetus as the market for insuring against the possibility of corporate default fluctuated in the wake of global equity movements.
Whitney: “I call this the great government momentum trade”
Meredith Whitney appeared on CNBC Monday afternoon with some insightful comments on the recent rally in banks.
Via Clusterstock:
They were overdone all the way into this rally. What happened was the government — I call this the great government momentum trade — the government enabled the banks to have better than expected,
United States Oil Fund, redux
We noted on Monday to what degree the United States Oil Fund (USO) ETF had reduced its positions in WTI front-month futures since February and how that has coincided with a not disproportionate build-up in positions of the United States Natural Gas fund (UNG),
Lunch Wrap
On FT Alphaville this morning,
- Introducing… the square root-shaped recovery.
- Solutions to the China dollar problem.
- Time for a dollar crisis (Rogers)?
- China’s “metal consolidation plan”.
Markets live transcript 12 May 2009
Markets live chat transcript for the chat ending at 12:17 on 12 May 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello NH:Welcome to Markets Pause Live
Erstwhile Dreamliners of RBS Aviation
On Monday, we mentioned RBS’s role in financing the purchase of Phenom aircraft for a new business jet operator.
Dublin-based RBS Aviation Capital leases and finances aircraft and engines, with ownership of 372 aircraft and loans secured against some 320 planes,
Rogers: Time for a dollar crisis
Amid some undoubtedly premature waves of optimism in the markets about economic, corporate and financial trends, the dollar’s recent rally has generated some bullish speculation about its medium-term trajectory.
TIPS for China on its dollar problem
Ah, the “dollar trap”.
How can the US protect itself from China’s mass holdings of dollar-denominated securities, which it can dispose of at any time, if it wants to.
From the other perspective, how can China protect itself from a US incentive to inflate itself out of debt,
The latest alternative asset class: cows
This will not be familiar to listeners of Radio 4′s Whingers’ Corner, broadcast in Britain each morning at 5.45am. But cows are considered a hot new investment – in France. From the NYT:
For Pierre Marguerit,
China’s metallic grab
China has released the details of its long-awaited “metal consolidation plan”, which basically amounts to a stimulus/nationalisation package for non-ferrous metal producers in the PRC.
From Steel Guru:
The square root-shaped recovery
Has been mentioned in Merrill Lynch’s latest European economic note – aptly entitled “Alphabet Soup”.
As long as world financial markets do not suffer a second heart attack, a full “W” looks unlikely.
Further reading
Elsewhere on Tuesday,
- How not to learn from history.
- Google Earth explains the financial crisis.
- Street Fighters: read it to believe it.
- Art is a poor hedge against inflation.
- The White House is letting hedge funds off lightly.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Gideon Rachman: Hungarian lessons for a world crisis
At the Group of 20 leading nations’ summit in London last month, Hungary’s name was whispered in the corridors,