May, 2009
Darwin, biology and the markets: Andrew Lo talks to John Authers
John Authers recently spent four days in DisneyWorld, where he interviewed a series of economists and financial market professionals on topics ranging from the wisdom of crowds to efficient markets theory.
Charts du jour, EM spreads edition
Emerging market sovereign spreads appear to be on a steady tightening path.
In fact, data compiled by RBC Emerging Markets Monthly Analytics show this to be the case in every regional class they follow bar Argentina.
All back to normal … or is it?
Phew, it wasn’t the end of capitalism — or the worst recession since the 1920s for that matter – after all. It was all just a bad dream. Consensus indeed seems to have it – the bull market is back,
CDS update: Markets stand firm despite declining equities
This CDS report was written by Markit’s Gavan Nolan
Credit markets on both sides of the Atlantic stood firm today in the face of declining equities. The Markit iTraxx Europe index traded at 136.5bp towards the end of the day,
SEC launches first-ever CDS insider trading case
Opponents of credit default swaps — and the chief executives of major investment banks — have long argued that vile speculators used CDS contracts to manipulate (by which they mean, drive down) share prices.
L&G and the trouble with CDOs – revisted
When FT Alphaville’s Sam Jones recently attempted to get some more information from Legal & General on its £1bn CDO holdings, the insurer either wouldn’t or couldn’t answer his questions, which you can find here.
RABid BAA
BAA, owner of London’s Heathrow airport, has just released its first-quarter results. They are not pretty.
The debt-laden airport-operator, currently under regulatory orders to dispose of its two other London airports,
CDS report: European credit derivatives tighten
European credit derivative markets tightened on Monday, helped by the strength of equities and easing concerns over US bank stress tests later in the week.
Markit’s iTraxx Crossover index, which measures the cost of insuring the bonds of 45 mostly sub-investment grade European corporate borrowers against default,
Datapoint du jour: brittle rally
From Merrill chief economist David Rosenberg, via Option ARMaggeddon:
Related link:
Market sentiment: Faber et al take on green shoot ennui – FT Alphaville
Lunch Wrap
On FT Alphaville Tuesday morning,
- Auf wiedersehen, UBS.
- Ratings, babies and bathwater, asset management edition.
- Down yields! Down!
- Les français aiment bien dormir, and other tales from the OECD.
Markets live transcript 5 May 2009
Markets live chat transcript for the chat ending at 12:18 on 5 May 2009. Participants in this chat were: Paul Murphy, FT (PM) Neil Hume, FT (NH) PM:Hello PM:Welcome to Roaring Markets Live
Market sentiment: Faber et al take on ‘green shoot ennui’
After end-of-the-world swine flu hysteria momentarily transfixed investors, sentiment appears to be shifting. The pundits are back out in droves – many predicting a robust comeback for stocks or, at the very least,
Wall Street and ZOMBIES
With apologies to Stanley Weiser and Oliver Stone.
“WALL STREET AND ZOMBIES”
Unoriginal screenplay by FT Alphaville
EXT. WALL STREET – EARLY MORNING
FADE IN. THE STREET. Once the most famous third of a mile in the world.
Germans buy new cars
Lots of them, according to the German car importers association VDIK.
From Reuters on Tuesday morning.
GERMAN NEW CAR REGISTRATIONS RISE 19.4 PCT IN APRIL – GERMAN CAR IMPORTERS ASSOCIATION VDIK
GERMAN NEW CAR SALES IN FIRST FOUR MONTHS HIGHEST SINCE 1999 – VDIK
ORDERS ON HAND SHOW CLEAR GROWTH IN CAR SALES IN MONTHS AHEAD AS WELL – VDIK
So more green shoots then? Not neccesarily.
Vive le vin de Bordeaux
Since we’re on the subject of the French savoir vivre this morning: 2008 was supposed to have been a dreadful year for claret.
So much so that a not inconsiderable number of mechants shied away from the recent 2008 Bordeaux tastings altogether.
Sell in May and go away?
Condor Options has crunched some numbers, looking at the DJIA since 1928 and comparing the Nov.-Apr. period with May-Oct. The results are below.
Full methodology here.
Les français aiment bien dormir, and other tales from the OECD
Given that few of the team on FT Alphaville seem to get enough sleep (if bleary eyes, constant caffeination and early-morning typos are any indication), we found this post over Research Recap too good to pass up:
Down yields! Down!
US Treasury yields are creeping up once again — despite the Fed’s best attempts to flatten them via quantitative easing.
And, as this chart from Deutsche Bank shows, they’re not just creeping up, they’re re-coupling with stocks — something not seen since December,
Auf wiedersehen, UBS
Net new money outflows totaled CHF 23.4 billion for Wealth Management & Swiss Bank; Wealth Management Americas reported net new money inflows of CHF 16.2 billion; net new money outflows slowed to CHF 7.7 billion in Global Asset Management.
Further reading
Elsewhere on Tuesday,
- Monsters Inc – how the big banks got too big.
- The City of London is on borrowed time.
- Does the financial sector make sense?
- Stress tests for beginners.
- So who is leaking the stress test results?
- Financial Gitmo.
Pink picks
Comment, analysis and other offerings from Tuesday’s FT,
Analysis: Optimism builds
Almost two months after Ben Bernanke, chairman of the US Federal Reserve, uttered the words “green shoots” of recovery in a television interview,
Snap news
Breaking pre-market news on Tuesday,
- Aberdeen Asset management sees aum fall to £96.3bn (March ’08: £107.3bn); looking for expansion opportunities – statement.
- Numis appoints Sir David Arculus chairman – statement.
US banks surge on test hopes
US bank shares surged on Monday as investors bet that some of the biggest banks will have to raise less capital than feared after this week’s release of the government’s “stress test” results for 19 banks.
JPMorgan seeks deals: Dimon
Acquisitions of retail banks in emerging markets remain JPMorgan Chase’s biggest “strategic issue” but the US group is also open to buying smaller lenders in its home market, Jamie Dimon said on Monday.
Porsche, VW clash over rescue plan
The feuding families that control Porsche are set for a showdown on Tuesday over rival rescue strategies for the highly-indebted German sports carmaker. Wolfgang Porsche, chairman of the eponymous carmaker,
Debt holders move against Chrysler
A New York bankruptcy court will hear arguments on Tuesday by a group of Chrysler lenders seeking to block the carmaker’s restructuring on the grounds that the process is “patently illegal”. The dissident group,
Obama takes aim at US multinationals
Barack Obama on Monday unveiled a sweeping crackdown on offshore tax avoidance by US companies, in a move likely to affect the way Britain taxes profits earned by UK companies operating abroad. Obama said the steps would raise $210bn over 10 years and “make it easier” for companies to create jobs in the US rather than off-shore.
TPG highlights buy-out woes
US buyout group TPG has highlighted the tough conditions facing the buy-out industry in a letter to investors disclosing it had considered 140 leveraged buy-out deals in recent months – and agreed to none.
PBG rejects PepsiCo takeover
Pepsi Bottling Group on Monday rejected last month’s takeover offer from PepsiCo, its largest shareholder, calling the proposed price per share “grossly inadequate”. Eric Foss, chief executive of PBG,